Eight times the size of the Magellan Fund!
China’s New Government Fund to invests $400 billion in commodities…
Like a fat kid on a teeter-totter, the global economy is in a state of imbalance.
Like a pudgy boy, the United States is consuming massive amounts of goods and building ever-larger trade deficits. The developing world is the skinny kid, legs kicking in the air, promising cake to the stout one because, after all, his family runs the bakery.
This metaphor is bolstered by the fact that emerging markets are following the Japanese path to first-world status: export-led growth. The baker just makes bread, lots of it, and will worry about balancing his books later.
Guns and Butter: Appetite for Destruction
In the late 1960s and early ’70s the U.S. government ran a war in Vietnam and a war on poverty at home. This led to massive inflation -- some of you remember mortgage rates in the teens. Today, the U.S. government is running a never-ending war on terror that is estimated to cost some $1.3 trillion. We now have troops in 100 countries -- that’s almost half the world, by the way.
Here is the debt as of 10:43 a.m. on March 19, 2007, according to the U.S. Treasury web site…
Current
Debt Held by the Public
Intragovernmental Holdings
Total Public Debt Outstanding
03/19/2007
5,032,628,085,890.53
3,801,827,726,066.37
8,834,455,811,956.90
The U.S. economy runs at a 3% annual growth rate and makes about $13 trillion in GDP. But it owes $3.8 trillion to other countries… |
