Right now this is the fight that's going on....It's interesting (and will take time) to see who'll win!
Borrowers (see PIIGS and other postings below) have come to point where living beyond their means is not becoming easy and getting difficult more as each day passes and interest payments are getting due. The current euro-crisis and upcoming crisis in US is a testimony to this fact. Instead of cutting spending (slowing growth ofcourse) and raising income (by raising taxes, raising import taxes at ports, etc) which are both painful, western countries are postphoning these actions and taking the easy path (which is kicking the can down the road, i.e borrowing more )!
Savers (east, primarily, china and india) are watching in horror and saving more for the coming eventuality!!
Borrowers (see PIIGS and other postings below) have come to point where living beyond their means is not becoming easy and getting difficult more as each day passes and interest payments are getting due. The current euro-crisis and upcoming crisis in US is a testimony to this fact. Instead of cutting spending (slowing growth ofcourse) and raising income (by raising taxes, raising import taxes at ports, etc) which are both painful, western countries are postphoning these actions and taking the easy path (which is kicking the can down the road, i.e borrowing more )!
Savers (east, primarily, china and india) are watching in horror and saving more for the coming eventuality!!
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