Friday, September 12, 2008

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Economic Outlook 2008: US Exporting Subprime Problem to the World

I may be no expert in economics, but one thing I do know, there is a universal law of conservation of energy.

Money can be seen as a surrogate of energy, so the principle of conservation of energy applies to wealth/debt.

US has been using more money than it actually earns (boom). This has been going on for years. But all that debt doesn't disappear. It merely gets hidden. Sooner or later, the equations have to balance (bust).

Because wealth like energy doesn't come from nothing, all that debt cannot just disappear. What the US government is doing now is simply redistributing that debt around, first from the bank to Fannie/Freddie, then the US treasury, then the US dollar, and hence to all who own US dollars, including Asia.

Posted by Ann in the Singapore Property Forum

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)