Friday, January 09, 2009

US vs Japan

Japan had a huge foreign currency reserve when it plunged into recession in 1990. It kept throwing the reserves at the economy in the hope to revive it and yet did not succeed.

US on the other hand has a huge credit line with the rest of the world. It does not have much reserves to talk about but it can borrow from the entire world to revive its economy till? Till the world no longer believes its worth losing their hard earned money on someone who longer has the same credit worthiness as it once had and a bigger debt than it can service.

Give US another 4 years, by the time Obama completes his 4 years US will be in a worse mess than its today.