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Forums - General Discussion - WHAT IS THE POOREST COUNTRY OF THE WORLD ?

libellule on 25 May 2011
SamuelRSmith said:
libellule said:
SamuelRSmith said:
libellule said:
SamuelRSmith said:

This is exports-imports. This doesn't rank wealth, at all. In fact, as current accounts will always, by definition, end up balancing, this implies that in the future, the USA will have one of the largest trade surplusses in the world, and China, the largest trade deficit (either that, or minimal surplus/deficit for very, very, very long periods of time).

This is, in no way, a measure of how rich or poor a country is.

I do not get what u are saying. Wealth ? what are the wealth that US possess outside a debt ?

I... err.. don't get what you're saying. I didn't even mention the wealth of the USA, I'm just saying this isn't a measure of wealth (which you implied it was, through your title).

But, if you want to know, the USA has more wealth than any other country in the world by just about every measure - it's the most resource-rich country in the world, its workers are the most productive (The average American is 40% more productive, each year, than the average European... and the average American produces the same amount as 11 Chinese people, or 43 Indians!), also, 90% of the world's largest corporations and brands are based in the USA. And, somewhere along the line, pretty much every major non-American corporation has a lot of American money invested in it.

Remember, the only reason the USA was able to accumulate such a debt, is because the lenders are confident that the USA are capable of paying the debt back.

wait, but all this is possible because of the infinite  debt.

and lenders are not confident, lenders work fo the US. Nobody would be confident to continue to give that much money to people that will never be able to give back the money lent ... At the opposite, the grec debt is, in % of PIB, a lot smaller that the US one ... but because rating agency work agaisnt Grece and because there are a lot of speculations, they explain everybody to NOT give money to Grece because it is supposed "risky" ...

Huh? Resource-rich land is not a product of debt, it's a product of the land. High productive workers isn't a product of debt, it's a product of education and training. Being home to the largest corporations and brands isn't a product of debt, it's a product of decades of business-friendly laws (low taxes, low regulation).

Greece IS a risky place to invest, compared to the USA. Greece's current economic situation is FAR worse than the USA's, Greece have a very high chance of defaulting on their debts... the USA, at this point in time, does not (not that the debt binge can go on forever, but American politicians HAVE started to see the light now... rather than Greece, where they didn't see it until the debt collectors were knocking on their door) .

Nobody is forced to lend money to anybody, it's all done optionally. People have stopped lending to Greece (I say "lending", I /mean/ buying Greek bonds) because they no longer trust that they'll get all the money back. Investors still think that they have a very, very good chance of getting their money back from the USA.

As a side-comment, I do believe that, as the USA starts repaying its debts, we will see a rebirth in the US economy, as the State is going to have to draw back to a level that it used to be, back when the USA was in its golden days.

from what I get I think your wake up is gonna be ASTOUNDINGLY HARD man ...

I do not see how you can judge Grec economy "not sure" vs US economy "sure" while the biggest debt ever is the US debt indeed ad the % over the PIB is also the biggest.

Also, I do not see which mesure is gonna allow US to repay their debt particularly since, from now, people are starting to not trust them anymore realizing they will never get pay back, making the situation even worst. I doubt US will recover from this. It is not PuppetObama that is gona change anything.

And if China and others are still buying the US debt it is becuase they still need the US customers that buy so much of their "low end" products. It is indeed a big circle, but it is by no mean virtuous IMO ...



Time to Work !

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libellule on 25 May 2011
SamuelRSmith said:
libellule said:
Lostplanet22 said:
libellule said:

but it is an account ? if it is negative it means you are .... poor because you have money to give back to someone ???


Us citizen rents 200.000$ to buy a house.
Tunesiant Citizen rents 10.000$ to buy a house..

Does that make the Us citizen more poor???

Debt has hardly anything to do about being poor.  Having debt means that you need to cut some of your expenses if it is not possible to pay it back.

citizen are poor or not, sure, I see what u mean

but US, as a whole, is poor IMO

That's not an opinion, it's a misunderstanding.

but, if the balance is negative, it means the country is losing money right ? so in term of economy ... it is a poor country in a way ?

Well, i m guessing I should say "unbalanced" country ?



Time to Work !

libellule on 25 May 2011
Lostplanet22 said:
SamuelRSmith said:
libellule said:
SamuelRSmith said:

This is exports-imports. This doesn't rank wealth, at all. In fact, as current accounts will always, by definition, end up balancing, this implies that in the future, the USA will have one of the largest trade surplusses in the world, and China, the largest trade deficit (either that, or minimal surplus/deficit for very, very, very long periods of time).

This is, in no way, a measure of how rich or poor a country is.

I do not get what u are saying. Wealth ? what are the wealth that US possess outside a debt ?

I... err.. don't get what you're saying. I didn't even mention the wealth of the USA, I'm just saying this isn't a measure of wealth (which you implied it was, through your title).

But, if you want to know, the USA has more wealth than any other country in the world by just about every measure - it's the most resource-rich country in the world, its workers are the most productive (The average American is 40% more productive, each year, than the average European... and the average American produces the same amount as 11 Chinese people, or 43 Indians!), also, 90% of the world's largest corporations and brands are based in the USA. And, somewhere along the line, pretty much every major non-American corporation has a lot of American money invested in it.

Remember, the only reason the USA was able to accumulate such a debt, is because the lenders are confident that the USA are capable of paying the debt back.

That was true for quite some time because they also believed a few years ago that USA would take measures to stop the growth of the debt but that didn't happen. That is why some countries who owe some of the USA debt have transferred some of the dollars to Euro's/and other currencies creating the weak dollar that we know now compared to Yen and Euro..

 

IMO it is because dollars is weak (because of the mass borrowing) that people are starting to not lent anymore money to the US : they realize dollar as no value



Time to Work !

SamuelRSmith on 25 May 2011
libellule said:
SamuelRSmith said:
libellule said:
SamuelRSmith said:
libellule said:
SamuelRSmith said:

This is exports-imports. This doesn't rank wealth, at all. In fact, as current accounts will always, by definition, end up balancing, this implies that in the future, the USA will have one of the largest trade surplusses in the world, and China, the largest trade deficit (either that, or minimal surplus/deficit for very, very, very long periods of time).

This is, in no way, a measure of how rich or poor a country is.

I do not get what u are saying. Wealth ? what are the wealth that US possess outside a debt ?

I... err.. don't get what you're saying. I didn't even mention the wealth of the USA, I'm just saying this isn't a measure of wealth (which you implied it was, through your title).

But, if you want to know, the USA has more wealth than any other country in the world by just about every measure - it's the most resource-rich country in the world, its workers are the most productive (The average American is 40% more productive, each year, than the average European... and the average American produces the same amount as 11 Chinese people, or 43 Indians!), also, 90% of the world's largest corporations and brands are based in the USA. And, somewhere along the line, pretty much every major non-American corporation has a lot of American money invested in it.

Remember, the only reason the USA was able to accumulate such a debt, is because the lenders are confident that the USA are capable of paying the debt back.

wait, but all this is possible because of the infinite  debt.

and lenders are not confident, lenders work fo the US. Nobody would be confident to continue to give that much money to people that will never be able to give back the money lent ... At the opposite, the grec debt is, in % of PIB, a lot smaller that the US one ... but because rating agency work agaisnt Grece and because there are a lot of speculations, they explain everybody to NOT give money to Grece because it is supposed "risky" ...

Huh? Resource-rich land is not a product of debt, it's a product of the land. High productive workers isn't a product of debt, it's a product of education and training. Being home to the largest corporations and brands isn't a product of debt, it's a product of decades of business-friendly laws (low taxes, low regulation).

Greece IS a risky place to invest, compared to the USA. Greece's current economic situation is FAR worse than the USA's, Greece have a very high chance of defaulting on their debts... the USA, at this point in time, does not (not that the debt binge can go on forever, but American politicians HAVE started to see the light now... rather than Greece, where they didn't see it until the debt collectors were knocking on their door) .

Nobody is forced to lend money to anybody, it's all done optionally. People have stopped lending to Greece (I say "lending", I /mean/ buying Greek bonds) because they no longer trust that they'll get all the money back. Investors still think that they have a very, very good chance of getting their money back from the USA.

As a side-comment, I do believe that, as the USA starts repaying its debts, we will see a rebirth in the US economy, as the State is going to have to draw back to a level that it used to be, back when the USA was in its golden days.

from what I get I think your wake up is gonna be ASTOUNDINGLY HARD man ...

I do not see how you can judge Grec economy "not sure" vs US economy "sure" while the biggest debt ever is the US debt indeed ad the % over the PIB is also the biggest.

Also, I do not see which mesure is gonna allow US to repay their debt particularly since, from now, people are starting to not trust them anymore realizing they will never get pay back, making the situation even worst. I doubt US will recover from this. It is not PuppetObama that is gona change anything.

And if China and others are still buying the US debt it is becuase they still need the US customers that buy so much of their "low end" products. It is indeed a big circle, but it is by no mean virtuous IMO ...


My wake up? I actually think I know a fair bit more than you. You posted a BoPCA table as some kind of measure of wealth.

Unless the US economy majorly sours, every penny that the USA has borrowed to this day, they will be able to pay back. As for borrowing money in the future? Yeah, it's going to be more expensive for them, which is why they will cut back... I mean, have you even been watching the news, in the past few months? The literature in D.C. has very much changed from "spending" to "cutting".

As for your last statement: why do you think China buys dollars? They can't spend 'em on anything in China, can they? The reason why China buys dollars is so that they can buy stuff from the USA, in the future. That's how international trade works.



Seece on 25 May 2011

Wow, people that don't have a clue on this sort of stuff really shouldn't embarass themselves and pretend they do ... which is why I'm not saying anything



 

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Lostplanet22 on 25 May 2011
libellule said:
Lostplanet22 said:
libellule said:

but it is an account ? if it is negative it means you are .... poor because you have money to give back to someone ???


Us citizen rents 200.000$ to buy a house.
Tunesiant Citizen rents 10.000$ to buy a house..

Does that make the Us citizen more poor???

Debt has hardly anything to do about being poor.  Having debt means that you need to cut some of your expenses if it is not possible to pay it back.

citizen are poor or not, sure, I see what u mean

but US, as a whole, is poor IMO

If you understand what I mean you would not say it is poor.. 



 

SamuelRSmith on 25 May 2011
libellule said:
SamuelRSmith said:
libellule said:
Lostplanet22 said:
libellule said:

but it is an account ? if it is negative it means you are .... poor because you have money to give back to someone ???


Us citizen rents 200.000$ to buy a house.
Tunesiant Citizen rents 10.000$ to buy a house..

Does that make the Us citizen more poor???

Debt has hardly anything to do about being poor.  Having debt means that you need to cut some of your expenses if it is not possible to pay it back.

citizen are poor or not, sure, I see what u mean

but US, as a whole, is poor IMO

That's not an opinion, it's a misunderstanding.

but, if the balance is negative, it means the country is losing money right ? so in term of economy ... it is a poor country in a way ?

Well, i m guessing I should say "unbalanced" country ?

If you're still referring to the table you posted, that is not the country losing money, as it will return to 0. That's basic fact.

 If you're referring to the Government debt, yes, that is a nasty business. And, yes, depending on how much of that debt is held by foreign investors, there will be a transfer of wealth... but it's by no measure enough to make the country "poor", it's still the richest country in the4 world.



mrstickball on 25 May 2011

*edit*

I know Sam and others tried to explain trade balances and how they aren't an indication of wealth, so I won't go there.

Just remember: The reason we're able to run such an insane trade balance is that during and after World War 2, we ran a surplus for ~40 years straight. That helped us grow and bring in a considerable amount of resources and wealth to surpass every other country.

I am of the opinion that trade deficits are bad because they can potentially suck wealth out of a country - which is what we're essentially doing right now (having a very high trade deficit while increasing the amount of debt held by the US government). However, they are cyclical which means that there is only so much debt that can be incurred by a nation - by trading, you are exchanging one resource for another. If you have an imbalance for too long, then you have nothing to trade, as your trading partner will own everything.

There are naturally-occurring ways to ensure that never happens, mostly due to currency devaluations - as you spend more than you take in, your currency tends to become debased, which acts as a hedge against purchasing more goods from outside your country, as they become more expensive, and conversely cheaper for people to purchase your goods for their country.

 

So in the end, real wealth has to be defined by PPP or other measures - showing the relative earning and living standards of one nation vs. another. That is why the US is near the top of the list. We have one of the highest average incomes in the world and exceptional living standards, which means we're certainly not poor (poverty is the absence of wealth, which is something that few Americans really experience).



Back from the dead, I'm afraid.

SamuelRSmith on 25 May 2011
mrstickball said:
libellule said:

citizen are poor or not, sure, I see what u mean

but US, as a whole, is poor IMO

Explain how the US is poor.


It's the debt. For some reason, the only reason the USA can afford to be the richest country in the world, is because it's bought it all on debt.

Well, that's his angle.



mrstickball on 25 May 2011
SamuelRSmith said:
mrstickball said:
libellule said:

citizen are poor or not, sure, I see what u mean

but US, as a whole, is poor IMO

Explain how the US is poor.


It's the debt. For some reason, the only reason the USA can afford to be the richest country in the world, is because it's bought it all on debt.

Well, that's his angle.

I edited to include a bit more :-p



Back from the dead, I'm afraid.