U.S.A. Going Bankrupt? What About You?

The economic and business news since September 2008 has been concentrating on the U.S.A.'s economic meltdown. Caused by their so-called efficient market-driven policies, which are not so efficient after all.

It seems that the U.S.A borrowed US$3 billion every working day because the savings rate of its citizens was negative. Yes, 80 percent of the world's savings is being used by the U.S.A.. As the saying goes, "If you borrow $10,000 from the bank and you forgot to pay, you are in big trouble. If you borrow $1,000,000,000 from the bank and you forgot to pay, then the BANK is in BIG trouble!". So now you know why the global financial system is in turmoil?

Leading to a financial crisis which has infected other countries around the globe. Government involvement appears to be still needed to control unbridled greed amongst some sections of the human race.

Does the so-called de-coupling of national economies to the U.S.A.'s economy exist?

All the while we have said that the world is one big happy "glocal" (global and local at the same time) economy. So the coupling should actually be greater or tighter (whatever term turns you on). Results show that de-coupling is an illusion.

That's why Europe and Australia and New Zealand etc are now having pneumonia after the U.S.A. sneezed badly. That's why every nation will be affected (unless they are in complete self-subsistence and self-communication isolation in Antartica or the Saharan desert or a deserted island in the Pacific Ocean).

As individuals, we will also be affected. The majority will be affected negatively. Business re-alignments, re-organisations, re-engineering ... the end result being "re-ducing" your income.

A minority will be positively affected. Those with Cash. No debts.

Everything is at rock-bottom or fire-sale prices. Bargain prices of stocks in the share-market, and cheap real estate. I saw a $440,000 town-house (1770 sq. ft.) being offered for $340,000. A 484 sq. ft. office suite with market value of $65,000 being offered at $35,600. These are good times indeed ... for those having liquidity (not the one you pour through your mouth type of liquid, though).

Good time to buy. Save tonnes of money. Make tonnes of money. But only for those with cash.

The moral of the story? If you have no money to pay for what you want, should you borrow? If you do, one fine day you will have a terrible day. Just like the U.S.A. Then you won't be singing "Surfing U.S.A.", but "Submerging U.S.A.".

Cash is King! And Queen. And Prince. And Princess. And Beautiful. And warm. And comfortable.

I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!