A layman’s view on the US financial crisis
Continued from last week
The hard working American population slowly started to assume the
well dressed corporate executive role and started to operate through
lavish office compounds. Most of the hands on production work were
slowly palmed over to other countries.
Americans pursued more glamour in their lifestyles. They receive
enormous salaries as remuneration for their corporate executive role.
This promoted less work and more glamour.
The American population who unconsciously took the reins of managing
a huge portfolio of hard earned Japanese Investments and Middle Eastern
petrodollars did not realise that they started to spend much more than
they earned through their speculative businesses.
Enormous gas - guzzling luxurious vehicles became ubiquitous on US
highways. Spacious, luxurious and energy consuming American households
became the Icons of American neighbourhoods. Lavish and uncontrolled
spending became the order of American life.
A large portion of food and beverage served on American dining tables
started to go waste after every meal. Funding large international
bodies, International policing, glamour, overseas travelling, paying of
largest salaries, staying away from consumer goods production and ultra
luxury living on earth full of unnecessary waste became the passion of
Americans instead of hard work, modesty, thrift and honesty.
This wasteful behaviour of a nation reached the peak by consuming 40%
of the world’s total crude oil production by less than 5% of the world
population living in America.
Large corporations which borrowed from investment banks had only
their wasteful executives and marketers on American soil. All their
productions were located elsewhere. It took a couple of decades to
realise that most of these corporations produced more losses than
profits due to very high overheads incurred by the American employees.
It is doubtful whether Americans are conscious about this phenomenon
that is taking place within America even today. The whole of America is
similar to an individual who lavishly spends somebody else’s money
irresponsibly.
Today America has already consumed and wasted many trillions of USD
which is much more that the actual value of their goods and services
taken in total for many consecutive years. The George Bush
administration accelerated the process during his tenure by pumping
additional trillions to fight completely unnecessary wars.
American gamble
The American gamble culminated by the declaration of bankruptcy by
bank after bank in 2008 at the latest. Large corporations which obtained
loans from investment banks cannot repay them with interest as they
incurred losses over the years instead of profits.
The American government decided to immediately intervene and bail out
the troubled banks which are a necessity to secure the confidence of
those who invest on American soil.
It is the only way to continue the ‘new American way of life’ which
is living beyond the mens at the expense of others. Definitely, the
Americans will manage to convince the world that all is well and they
will keep attracting more hard earned money until the culmination of the
next financial crisis.
On each occasion, the results of the game came to light as different
forms of financial crisis in the past; it was simply called recession
and covered up. But the, total losses keep accumulating and each
financial crisis is many times bigger than the previous in terms of
total value.
The outwardly appearance of American glamour backed by the Hollywood
is a black hole that attracts hard earned money concentrations
channelled to America mainly through the Middle East and Japan.
When the CNN announces job cuts in troubled financial institutions,
our attention is deviated and feels pity for those who lost jobs. We try
to forecast the impact on our economies in terms of reduced consumption
of those who lost their jobs in US.
This impact is negligible and it is not likely to have a sizable
impact on small economies such as Sri Lanka. In general this financial
crisis will not affect even the global economy at large making severe
hardships at any particular corner of the world.
The Middle East will continue to sell petroleum and Japan, Korea,
Taiwan and Hong Kong will keep producing. What Americans have wasted was
the savings of both worlds.
They will soon cover it up with their glamour and printing of more
green bucks. The trend will continue until the petroleum producers and
industrialised nations realise it otherwise.
American culture which doesn’t have deep roots to a specific religion
or culture is virtually out of control in terms of spending. It will not
consider ethnics in trying to grab the riches that they need to maintain
their way of life. It can become more dangerous and ruthless when the
going gets tough.
The greatest lesson that we can learn from this analysis is that we
should genuinely contribute for production and must consume only the
minimum requirement.
Preservation and practice of our culture with religious teachings
that promote modest living in the only long term solution to face the
woes that can paralyse a nation if gone uncontrolled. Switching off an
additional light, cutting down an additional kilometer of travelling,
planting a vegetable plot and avoidance of borrowing all contributes to
our long-term survival as individuals or as a nation.
If the Americans do not slow down, they will keep wasting the
accumulated savings of the world until their glamour lasts
Concluded
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