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.
