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.
Subscribe to:
Post Comments (Atom)
I agree with you that the current economy has made China a better investing country than the U.S. From what I see in this few years, the number of people learning Chinese is increasing and it shows that many people wants to work in China. In contrast, lot of people is losing confidence in the U.S. economy and confidence from people around the world is a significant factor to build a strong economy. The Americans failure to manage their money had made a bad impression to lots of people and I think it is one of the main reasons that people don't trust the U.S. economy anymore. China is a country that is developing very fast and we can all see that China has improved a lot from the past but there are still many things that China needs to change. From my point of view, China has the best qualities of being the world leading nation in the future because of their huge population and their stable economy.
ReplyDelete-Vanessa Lo
I think you make a very good point Vanessa, there is an increase in people learning Chinese now. For example, in school, we see different races taking Mandarin. That is an example of the importance of Chinese. Jacky, I also see the US economy falling, and also our economy is not doing so good either.At this time we often look to other economies that are working well to invest in. I see the Americans as a strong and highly developed country, but we also see that countries like China, is emerging while Us ia suffering this fall.
ReplyDelete-Michael Li
Ch.1 Redo Comment
ReplyDeleteUS banks are having trouble with debts and this cause their customers to lose confidence in the US economy. Banks are having scarcity of capital, because they have insufficient amount of money. This weakens the US economy and discouraging people to invest in US. People would start to invest in other countries, like China. I see China has been developing very fast and improving because they have changed lots of policy and rules. The China right now has a huge contrast from the past China. The US failure of managing their money has lead people lose confidence in the US economy and many people are seeking other country to be the world leader to help recover the economy.
Vanessa Lo
Economics
D1 P3