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Friday, May 21, 2010
The West must try to age gracefully
HSBC's Stephen King says that the US should age gracefully in his latest book. He is pointing to the tectonic shifts in global power that are evident in the the current financial crisis in Europe - which he says - just like the US - has borrowed too much money for too long (over 40 years of living on deficit budgets) and supporting an unsustainable way of life.
Will the Western Europeans with money (Scandinavians, Danes, Dutch and Germans) bail out the rest of their colleagues in the EU if the USD950 billion bailout announced on May 9 by the EU Finance Ministers does not restore confidence in the Euro? As Time magazine points out (May 24 2010, page 19) - this bailout amounts to a massive 8.2% of the EU Gross Domestic Product.
More voices all saying similar things (refer my earlier post about Standard Chartered Bank's commentary about the future being with countries with cash, commodities and creativity - or at least one of these).
The only countries with cash now are the Gulf States, Russia and the strong emerging nations of East Asia - lead by China.
Indeed, the West - at best - will do well to age gracefully!