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

SamuelRSmith on 25 May 2011
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.



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libellule on 25 May 2011
SamuelRSmith 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 ???


That isn't what a current account it. It's a measure of everything that a country exports, subtracted by everything that the country has imported.

So, if a country exports £250m worth of goods, but imports £300m, they will have a current account deficit of  ... -£50m.

The reason why China's is so high, is because they export loads, and import very little (relatively), and the USA is the reverse - it exports little, and imports lots (indeed, it's one of the largest exporters in the world... but it just imports a fuck-tonne).

But the crucial fact of the matter is that, in the long run the current account always averages £0. That means, over time, the amount of imports will always be equal to the amount of exports (I won't go into the economics of why, unless somebody asks). This means that, at some point in the future (probably between 20-30 years away), the USA will begin exporting more stuff than it imports, and China will begin importing more stuff than it exports.

Thus, both China's and USA's surplus/deficit will shrink to £0.

wow

I understand your point about the balance import/export
BUT
when you start saying it will go, with time, to 0 at some point : that I dont get
how could it possible for US to import less (they need so much ressource to live like any big developped countries) and start export a lot more (I doubt their industry will start skyorocketing ....)

so, how is it possible ?



Time to Work !

libellule on 25 May 2011
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" ...



Time to Work !

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


That isn't what a current account it. It's a measure of everything that a country exports, subtracted by everything that the country has imported.

So, if a country exports £250m worth of goods, but imports £300m, they will have a current account deficit of  ... -£50m.

The reason why China's is so high, is because they export loads, and import very little (relatively), and the USA is the reverse - it exports little, and imports lots (indeed, it's one of the largest exporters in the world... but it just imports a fuck-tonne).

But the crucial fact of the matter is that, in the long run the current account always averages £0. That means, over time, the amount of imports will always be equal to the amount of exports (I won't go into the economics of why, unless somebody asks). This means that, at some point in the future (probably between 20-30 years away), the USA will begin exporting more stuff than it imports, and China will begin importing more stuff than it exports.

Thus, both China's and USA's surplus/deficit will shrink to £0.

wow

I understand your point about the balance import/export
BUT
when you start saying it will go, with time, to 0 at some point : that I dont get
how could it possible for US to import less (they need so much ressource to live like any big developped countries) and start export a lot more (I doubt their industry will start skyorocketing ....)

so, how is it possible ?


I don't know where you get this idea that the USA doesn't make anything? They're the largest manufacturer in the world, by quite some margin. The problem is, they manufacture things that are expensive: weapons, pharmaceuticals, vehicles; and things that are non-essential - entertainment products, luxury foods, etc.

Their exports will go up when China gets richer. When China gets richer, they'll want to buy the entertainment products, and the luxury foods. They'll be able to afford the vehicles, and expensive health products, and all of the other expensive gear that the USA produces.

The USA won't import less, it's always going to import low-end manufactured goods, and the ilk. But, when the developing world get rich - THEY'll import more, and those imports will be coming from countries like the USA.



Lostplanet22 on 25 May 2011
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..

And also this


The announcement by credit rating agency Standard and Poor’s that it had downgraded its outlook on US debt to “negative” has sent a shudder through global financial markets. The decision means there is now a one in three chance that US debt itself will be downgraded over the next two years—an event without precedent.
More than the state of the US economy and government finances, however, is being called into question by the S&P decision. With US debt considered the safest in the world, any downgrading means that the role of the US dollar as the world’s reserve currency will be severely undermined, if not ended altogether.



 

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libellule on 25 May 2011
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



Time to Work !

SamuelRSmith on 25 May 2011
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.



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..

And also this


The announcement by credit rating agency Standard and Poor’s that it had downgraded its outlook on US debt to “negative” has sent a shudder through global financial markets. The decision means there is now a one in three chance that US debt itself will be downgraded over the next two years—an event without precedent.
More than the state of the US economy and government finances, however, is being called into question by the S&P decision. With US debt considered the safest in the world, any downgrading means that the role of the US dollar as the world’s reserve currency will be severely undermined, if not ended altogether.

LOLLLLLLLLLLLLLLLLLLLL

It is because dollars have close to no real valuue that countries like China and Japan stop buying the US debt, not the opposite



Time to Work !

SamuelRSmith 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..

And also this


The announcement by credit rating agency Standard and Poor’s that it had downgraded its outlook on US debt to “negative” has sent a shudder through global financial markets. The decision means there is now a one in three chance that US debt itself will be downgraded over the next two years—an event without precedent.
More than the state of the US economy and government finances, however, is being called into question by the S&P decision. With US debt considered the safest in the world, any downgrading means that the role of the US dollar as the world’s reserve currency will be severely undermined, if not ended altogether.


Yes, I'm well aware of the S&P outlook downgrading, which is why I said that the USA will be getting its debt habit dead within a few years. As for the end of the dollar world-currency... doubt it, very much so. Who's going to replace it? The Euro's dying, Yen is a complete mess, and China's currency is inflating through the roof (faster, even, than the USA).

However, this is discussing future debt. Libellule seems to be of the impression that the USA won't be able to deal with its current debt, I do not believe this to be the case. Future debt is a completely different beast, and the USA won't be able to fund deficit spending as easily, which is why the USA will start more severe cuts.



SamuelRSmith 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

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