Mq:
>>Jay, that sort of calculation is the way I like to look at things. Add in how long people expect to live and the risk that they will die in an untimely way before they spend their USD 500k and the hourly rate which people earn in the USA and around the world and we have a situation which doesn't make sense to me.<<
I humbly suggest that both you and Jay are making the mistake of looking at the nominal return on your 500K rather than the real return. We are in a period of sustained downward pressure on pricing for tangible goods. What matters is the purchasing power of your 500K a year from now versus today.
>>What this tells me is that human life as measured by USD is out of kilter.<<
No-one has aid that the USD measures the value of human life. That is between you and your family, or you and your God. What it does measure is economic potential - the ability of an individual to produce goods and services. The reason that the Indian life that you refer to appears to have so little value in monetary terms is because that (hypothetical average) individual has virtually zero ability to produce goods and services. The reasons are many: no education, no opportunity to work for a business that is organized to produce goods and services efficiently, no investment in productive capacity, a marginal transportation infrastructure, a marginal communications infrastructure, minimal access to markets, etc., etc., etc.
>>I think the answer is that Americans [and those enmeshed in the American system such as USD holders] are living on borrowed time, or, more accurately, borrowed money, or, another way of looking at it, borrowed effort.<<
Wishful thinking/sour grapes, imho, and demonstrably untrue. "While hours spent on the job have been increasing for American workers over the past two decades, they have been declining in countries ranging from Canada to Britain to Japan, the study reports."
ncpa.org
>>Foreigners supply the USA with goods and services in vast quantities and Americans supply USD in exchange, but don't actually work to produce something the foreigners want.<<
With the minor exceptions (in no particular order) of two thirds of the world's commercial aircraft, electrical power generating equipment, machine tools, diesel engines, heavy equipment, a vast array of value-added electrical and electromechanical products, communications and networking equipment, telecommunications switches, mountains of software, a dizzying variety of financial services products and expertise, most of the world's new therapeutic drugs, vat quantities of wonderful, high quality ;-) movies and tv shows, enough agricultural products to feed a billion people, satellite launch services, the opportunity to sit at the table at the Nasdaq casino, the trifling matter of global security (purchased with copious quantities of American blood) and the global positioning system (no charge). Oh yes, and the world's preferred medium for storing the value of human labor.
>>But what happens if everyone decides that the USD isn't worth 1 million Indian years of labour [or software programming etc] and they start trying to get rid of the hot potatoes so they aren't left getting their fingers burned?<<
So that they can invest in Indonesian government bonds?
>>But, the game has been going on for decades, so maybe it'll carry on for quite a long time yet. I'm not betting on it.<<
I'm not betting against it. In the 20th century America defeated the forces of European fascism (twice), spent the Soviet bloc into self-destruction in the Cold War, led dozens of countries to a system of representative democracy and began the conquest of China with free market capitalism and McDonalds french fries. There's more where that came from. |
