http://www.thejakartapost.com/news/2009/11/14/govt-restore-11-rivers-prevent-water-scarcity-and-flood.html
Summary
On November 11th, 2009, the government of Jakarta announced their plan to restore 11 rivers around the Jakarta area to prevent water scarcity and flood. Because of global warming and the approaching rain season, the government initiated the plan to prevent any damages that might be brought by the flood. Currently, water in these biggest rivers in Indonesia is conteminated with chemical from agriculture, households and factories and it is not longer consumable. The government’s ultimate goal is to allow people to use this water in the agricultural sector and can use it as a source of clean water. Government has also unveiled the plan to main the quantity of water flow by replanting trees along the river banks.
Connection
This topic is closely related the topic, scarcity, in Chapter 1. Water is never a scarcity in our lives. However, because of excessive pollution, clean water has become rarer every single year. Water in Indonesia will get more expensive if the government does not enforce plans to enhance the water quality and quantity. In the future, there might be a time when water is more expensive than oil because scarcity is the greatest support for high price. By that time, Canada might emerge as the strongest country in the world as we have an enormous storage of clean water. People need water to survive, but not oil.
Reflection
Because there are abundant water resources on earth, we usually tend to ignore the importance of saving water. As the world is developing, we are also harming the environment by disposing poisonous chemicals in our waters. This contaminated water is hard to purify and lots of it is not reusable. It has become a very difficult problem for courtiers’ leaders as economic development and pollutions seems to be standing at the two extreme of the spectrum. Economic development improves citizens’ lives; however, on the other hand, it is the damaging the environment and the ultimate victims will be the human-beings. It is impossible to abandon the economic developments or environment. Trying to find the balance between these two is always the most troublesome problem for leaders around the world.
Sunday, November 15, 2009
Friday, October 9, 2009
Australia Interst Rate
http://www.bloomberg.com/apps/news?pid=20601080&sid=aJlTmyIGLPBc
Summary
In October, Australia has become the first G20 Nations who increased interest rate by 0.25 percent. Australian central bank governor Glenn Stevens is expected to add extra quarter percent of interest rate in November, said by analysts. According to Statistic issued in October, the unemployment rate of Australia has reduced for the first time this year to 5.7% signalling a recovery from economic recession. In addition, the Australian currency reaches its 14 month high which indicates investors' optimistic forecast of Australia's future. In 2009, Australia has out-performed most of the G20 nations by gaining 1% of expansion as world's demand for natural resources continue increase in the past year. Strong stastics are the significant evidence of Australian’s recovery.
Connection
The adjustment of interest rate is a perfect example of supply and demand law. As the central bank raises the interest rate, there will be a greater demand for Australian dollars because potential investors are expecting a better future for Australia. In addition, Australia is more of an import than an exports country. An increase in interest rate costs Australia more in exports, but benefit Australian imports by raising the purchasing power of Australian dollars. However, because of an increase in interest rate, credit acquisition for Australian businesses will be harder because of the greater interest expense; as a result, there is less demand for extra credit.
Reflection
Australian central banks decided to raise the interest rate in order to slow the economic activities. In my opinions, the Australian central banks had made the right choice of raising interest rate because excessive lending will result a “w” recovery path for their economy. A low interest rate stimulates people’s demand for extra credit. If line of credit is not constrained, people will start lending more than they can pay off. Once the cycle is started, people will lend more to pay of f their previous loan. The fear of losing will cause a panic in the market and another wave of credit collapse will devastate the country. Should Australian central raise its interest rate more given the fact that it is still comparably low to the regular standard?
Summary
In October, Australia has become the first G20 Nations who increased interest rate by 0.25 percent. Australian central bank governor Glenn Stevens is expected to add extra quarter percent of interest rate in November, said by analysts. According to Statistic issued in October, the unemployment rate of Australia has reduced for the first time this year to 5.7% signalling a recovery from economic recession. In addition, the Australian currency reaches its 14 month high which indicates investors' optimistic forecast of Australia's future. In 2009, Australia has out-performed most of the G20 nations by gaining 1% of expansion as world's demand for natural resources continue increase in the past year. Strong stastics are the significant evidence of Australian’s recovery.
Connection
The adjustment of interest rate is a perfect example of supply and demand law. As the central bank raises the interest rate, there will be a greater demand for Australian dollars because potential investors are expecting a better future for Australia. In addition, Australia is more of an import than an exports country. An increase in interest rate costs Australia more in exports, but benefit Australian imports by raising the purchasing power of Australian dollars. However, because of an increase in interest rate, credit acquisition for Australian businesses will be harder because of the greater interest expense; as a result, there is less demand for extra credit.
Reflection
Australian central banks decided to raise the interest rate in order to slow the economic activities. In my opinions, the Australian central banks had made the right choice of raising interest rate because excessive lending will result a “w” recovery path for their economy. A low interest rate stimulates people’s demand for extra credit. If line of credit is not constrained, people will start lending more than they can pay off. Once the cycle is started, people will lend more to pay of f their previous loan. The fear of losing will cause a panic in the market and another wave of credit collapse will devastate the country. Should Australian central raise its interest rate more given the fact that it is still comparably low to the regular standard?
Wednesday, September 16, 2009
Scarcity
http://www.bloomberg.com/apps/news?pid=20601068&sid=aJCoTwrPc1QE
Global investors have started losing their confidence on U.S. equity as investors' purchases dropped one-third compare to the prior month. U.S. is no longer the safe heaven for money as its budget deficit is expected to exceed $1.5 trillion. There is a huge concern about states' capability of paying off these debts. Also, the Chinese premier Wenjiabao expressed his worries and concerns on U.S. equity safety in March as China is the biggest foreign holder of U.S. national bonds. The U.S. market is not appealing as before because emerging economies like Russia and China are "rewarding harbour" for investors. Not only these economies are safer to investors, its potential of continuing development also attracts money around the globe.
After the detonation of this most severe financial crisis since World War II, people around the world have started to use their money wisely and carefully. They are reluctant to invest their money because they have already lost their confidence on the economy. This scarcity of confidence delays economic recovery and prolong the hardship. If there is no money cycling in the economy, all the trades and economic activities will stop and every one is on their own. Reviving investors' confidence is crucial on recovering the economy. Governments around the worlds have taken billion of dollars to encourage investors to invest in the economy. As the investors notice governments' effort on revitalizing the economy, their confident will be built and they will be willing to take their money out of their saving account. Scarcity of confidence is the core reason for economic downfall.
Unlike U.S. and other developed countries, China and India are the two fastest emerging economies in the world. They are the countries of oppotunities and treasures. I personally prefer to invest in China because of its population. There are 1.6 billion people living in China. If I am to gain a dollar from each of them, I can be a billionaire easily. This financial crisis is mainly started by the Americans as they failed to manage their money wisely. They kept lending money but didn't realize their inablities of paying off their debts. In the next few centuries, U.S. might not be the domineer of the world; maybe China or India will take its place in the world leading nation.
Global investors have started losing their confidence on U.S. equity as investors' purchases dropped one-third compare to the prior month. U.S. is no longer the safe heaven for money as its budget deficit is expected to exceed $1.5 trillion. There is a huge concern about states' capability of paying off these debts. Also, the Chinese premier Wenjiabao expressed his worries and concerns on U.S. equity safety in March as China is the biggest foreign holder of U.S. national bonds. The U.S. market is not appealing as before because emerging economies like Russia and China are "rewarding harbour" for investors. Not only these economies are safer to investors, its potential of continuing development also attracts money around the globe.
After the detonation of this most severe financial crisis since World War II, people around the world have started to use their money wisely and carefully. They are reluctant to invest their money because they have already lost their confidence on the economy. This scarcity of confidence delays economic recovery and prolong the hardship. If there is no money cycling in the economy, all the trades and economic activities will stop and every one is on their own. Reviving investors' confidence is crucial on recovering the economy. Governments around the worlds have taken billion of dollars to encourage investors to invest in the economy. As the investors notice governments' effort on revitalizing the economy, their confident will be built and they will be willing to take their money out of their saving account. Scarcity of confidence is the core reason for economic downfall.
Unlike U.S. and other developed countries, China and India are the two fastest emerging economies in the world. They are the countries of oppotunities and treasures. I personally prefer to invest in China because of its population. There are 1.6 billion people living in China. If I am to gain a dollar from each of them, I can be a billionaire easily. This financial crisis is mainly started by the Americans as they failed to manage their money wisely. They kept lending money but didn't realize their inablities of paying off their debts. In the next few centuries, U.S. might not be the domineer of the world; maybe China or India will take its place in the world leading nation.
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