Friday, November 14, 2008

Revisit your changed mind

The Mint column Mr Niranjan Rajadhyaksha writes “The second old-new issue that may be discussed this weekend is how to rebalance the world economy. Economists had noted the dichotomy at least six years ago—and warned that it is a threat to global economic stability. In short, the US spends too much and saves too little while China spends too little and saves too much. This fault line was papered over by capital flows. China ran up a huge trade surplus with the US—thanks to an undervalued exchange rate—then sent the dollars thus earned back into the US, which kept interest rates there low and allowed American consumers to borrow further to buy from China”.

He would have written three years ago about the thread not after the dog comes to eat away the meal. And how far the decisive mind allows him to say nations should ‘rebalance’ it must be noted here that the individual only can balance their plan not the nation!

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