The trillion dollar question
A very interesting article in the Telegraph talks about the shift in economic muscle taking place between China and America in the current economic crisis.
To simplify the story, think of an unhappy marriage in which one partner does all the saving, while the other does all the spending. (We all know at least one couple like that.) But then the partner with the retail therapy habit maxes out on his/her credit cards. At the same time, the parsimonious partner finds her/his job under threat. What previously was a stable relationship is suddenly on the rocks.
To me, it's not a question. People who work hard and save money always do better than fly-by-nights who borrow, spend, and then borrow more. The same will apply for nations. If an American bank predicts China's GDP to overtake America's by 2027, my bet is that we won't have to wait that long.