Macdonald Realty

INTERESTING ARTICLE on Current Account Balance (please read the article

below).  If you understand Cantonese, click my Podcast & listen to the live interview again.

Rank Country Current account balance (million US$)

1 People's Republic of China (PRC) 179,100

2 Japan 174,400

3 Germany 134,800

4 Russia 105,300

5 Saudi Arabia 103,800

6 Norway 63,330

7 Switzerland 50,440

8 Netherlands 50,170

9 Kuwait 40,750

10 Singapore 35,580

11 Venezuela 31,820

12 Sweden 28,610

13 United Arab Emirates 26,890

14 Algeria 25,800

15 Hong Kong 20,900

16 Canada 20,560

17 Malaysia 17,860

18 Libya 14,500

19 Brazil 13,500

20 Iran 13,130

21 Nigeria 12,590

22 Qatar 12,510

23 Taiwan 9,700

24 Finland 8,749

25 Iraq 8,134

26 Angola 7,700

27 Oman 7,097

28 Belgium 6,925

29 Austria 5,913

30 Argentina 5,810

31 Chile 5,063

32 Denmark 4,941

33 Philippines 4,900

34 Luxembourg 4,630

35 Trinidad and Tobago 3,259

36 Azerbaijan 2,737

37 Egypt 2,697

38 Korea, South 2,000

39 Bahrain 1,999

40 Gabon 1,807

41 Botswana 1,698

42 Yemen 1,690

43 Indonesia 1,636

44 Peru 1,515

45 Israel 1,643

46 Uzbekistan 1,410

47 Burma 1,247

48 Republic of the Congo 1,215

49 Vietnam 1,029

50 Ecuador 727

51 Bolivia 688

52 Papua New Guinea 661

53 Namibia 572

54 Ivory Coast 460

55 Cameroon 419

56 Morocco 389

57 Bangladesh 339

58 Turkmenistan 321.2

59 Equatorial Guinea 175

60 British Virgin Islands 134.3 (1999)

61 Kazakhstan 113

62 Cook Islands 26.67 (2005)

63 Palau 15.09 (2004)

64 Tuvalu 2.323 (1998)

65 Samoa -2.428 (2004)

66 Tonga -4.321 (2005)

67 Comoros -17 (2005)

68 Kiribati -19.87 (2004)

69 Swaziland -23.13

70 São Tomé and Pr íncipe -24.4

71 Vanuatu -28.35 (2003)

72 Federated States of Micronesia-34..3 (2005)

73 Anguilla -42.87 (2003)

74 Cape Verde -44.43

75 The Gambia - 54.61

76 Burundi -57.84

77 Haiti -58.72

78 Tajikistan -73..95

79 Lesotho -75.44

80 Seychelles -78.59

81 Antigua and Barbuda -83.4 (2004)

82 Guyana - 84.3

83 Rwanda -104.1

84 Honduras -160

85 Zambia -165.4

86 Republic of Macedonia -167

87 Belize -173.4

88 Malawi -186

89 Ghana -219

90 Armenia -247.3

91 Togo -261.9

92 Zimbabwe - 264.6

93 Kyrgyzstan -287.3

94 Paraguay -300

95 Chad -324.1

96 Benin -342.7

97 Guinea -344

98 Cambodia -369

99 Mexico -400.1

100 Uganda -423

101 Eritrea -440.5

102 Mozambique -444.4

103 Fiji -465.8

104 Panama -467

105 Madagascar -504

106 Laos -404.2

107 Belarus -511.8

108 Syria -529

109 Moldova -561

110 Uruguay -600

111 Burkina Faso -604.6

112 Mauritius -651

113 Albania -679.9

114 Georgia -735

115 Tunisia -760

116 Slovenia -789.2

117 Nicaragua -883

118 Senegal -895.2

119 Thailand - 899.4

120 Tanzania -906

121 Malta -966.2

122 Jamaica -970

123 Cyprus -1,051

124 El Salvador -1,059

125 Sri Lanka -1,118

126 Kenya -1,119

127 Dominican Republic -1,124

128 Costa Rica -1,176

129 Cuba -1,218

130 Guatemala -1,533

131 Bosnia and Herzegovina -1,730

132 Estonia -1,919

133 Ukraine -1,933

134 Colombia -2,219

135 Serbia -2,451 (2005)

136 Latvia -2,538

137 Lithuania -2,572

138 Jordan -2,834

139 Croatia -2,892

140 Iceland -2,932

141 Ethiopia -3,384

142 Slovakia -3,781

143 Czech Republic -4,352

144 Sudan -4,510

145 Poland -4,548

146 Bulgaria -5,100

147 Lebanon -5,339

148 Pakistan -5,486

149 New Zealand -7,944

150 Hungary -8,392

151 Ireland -9,450

152 Romania -12,450

153 South Africa -12,690

154 Portugal -16,750

155 Greece -21,370

156 Italy -23,730

157 Turkey -25,990

158 India -26,400

159 France -38,000

160 Australia -41,620

161 United Kingdom -57,680

162 Spain -98,600

163 United States -862,300

Japanese save a lot. They do not spend much. Also Japan exports far more

than it imports. Has an annual trade surplus of over 100 billions. Yet

Japanese economy is considered weak, even collapsing.

*

Americans spend, save little. Also US imports more than it exports. Has an

annual trade deficit of over $400 billion. Yet, the American economy is

considered strong and trusted to get stronger.*

But where from do Americans get money to spend?

They borrow from Japan, China and even India.

Virtually others save for the US to spend. Global savings are mostly

invested in US, in dollars.

India itself keeps its foreign currency assets of over $50 billions in US

securities. China has sunk over $160 billion in US securities. Japan's

stakes in US securities is in trillions.

Result:

The US has taken over $5 trillion from the world. So, as the world saves

for the US, Americans spend freely. Today, to keep the US consumption

going, that is for the US economy to work, other countries have to remit

$180 billion every quarter, which is $2 billion a day, to the US!

A Chinese economist asked a neat question. Who has invested more, US in

China, or China in US? The US has invested in China less than half of what

China has invested in US.

The same is the case with India. We have invested in US over $50 billion.

But the US has invested less than $20 billion in India..

Why the world is after US?

The secret lies in the American spending, that they hardly save. In fact

they use their credit cards to spend their future income. That the US

spends is what makes it attractive to export to the US. So US imports more

than what it exports year after year.

The result:

The world is dependent on US consumption for its growth. By its deepening

culture of consumption, the US has habituated the world to feed on US

consumption. But as the US needs money to finance its consumption, the

world provides the money.

It's like a shopkeeper providing the money to a customer so that the

customer keeps buying from the shop. If the customer will not buy, the shop

won't have business, unless the shopkeeper funds him. The US is like the

lucky customer. And the world is like the helpless shopkeeper financier.

Who is America's biggest shopkeeper financier? Japan of course. Yet it's

Japan which is regarded as weak. Modern economists complain that Japanese

do not spend, so they do not grow. To force the Japanese to spend, the

Japanese government exerted itself, reduced the savings rates, even charged

the savers.

Even then the Japanese did not spend (habits don't change, even with taxes,

do they?). Their traditional postal savings alone is over $1.2 trillions,

about three times the Indian GDP.. Thus, savings, far from being the

strength of Japan, has become its pain.

*

Hence, what is the lesson?*

*

That is, a nation cannot grow unless the people spend, not save. Not just

spend, but borrow and spend.

*

Dr. Jagdish Bhagwati, the famous Indian-born economist in the US, told

Manmohan Singh that Indians wastefully save. Ask them to spend, on imported

cars and, seriously, even on cosmetics! This will put India on a growth

curve. This is one of the reason for MNC's coming down to India, seeing the

consumer spending.

'Saving is sin, and spending is virtue.'

But before you follow this neo economics, get some fools to save so that

you can borrow from them and spend!!!

As you see, Canada not bad at all. No.16 in the world ranking. We are richer than we think! It has been showing very clear how much money actually has been sitting on the side and now is being injected back into the housing market. If you don't want to get into the multiple offers situation like we have been having over the Summer. Winter purchase is the best. Psychologically, buyer tends to shy away from the market because of the wet weather. Therefore, instead of thinking the market will go down due to the traditional slower sales Fall/Winter stats, take advantage of this market!

Should you wish to contact me to discuss the market condition, feel free to email me at tinamak@tinamak.com or call me at 604-412-5860.