Can Someone Explain This Economy In Simple Terms

Depending on whom you talk to about the economy, global imbalance, world markets, Oil prices etc you will get to hear stories that are horrifying.

They are usually filled with emotions than substance.

Lately I had been meeting more and more people who seem to feel the economic distress but are not able to understand what exactly is going on? How we got here in the first place? how US will bail itself out? and what this $700 Billion Dollar Package will do to the economy?.

Now ignorance leads to fear and fear invariably leads to panic, we all know that.

Here is a video that my brother-in-law forwarded to me about three weeks ago. I do not agree with everything that Mr Venkatesh has to say here, but I am not an economist. I am not endorsing this video nor I refuse to believe the pessimistic story it paints.

Mr. Venkatesh has a passion for what he is talking about. He is sincere and certainly has some good points. He also acknowledges there is no quick way out. He argues that all the best economists in the world get together and find a solution to this problem.

Thats my Disclaimer. Watch this video for educational purposes only and do share your thoughts here.


Did I say this thing is going to be simple :)-

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19 thoughts on “Can Someone Explain This Economy In Simple Terms”

  1. Avatar

    Th speaker is totally correct. He left out the greed factor which has destroyed the United States. It is all based on the bigger fool theory which has gone bust.

    Wall Street in the United States has sold worthless derivatives around the world and bankrupted every financial market in the industrialized world

    All thanks to the Republican party Phil Graham and John McCain an unethical narcissistic delusional man who would be king.

    It was done in the middle of the night and speaks for the basic ethics and integrity of the people who have done this.

  2. Avatar

    Most US companies out source their labor to the other countries to cut costs……with that said how can the US sustain its own supply/demand? We to suffer from the same situation India is looking to resolve but on the flip side. And it started from the US.
    We are the youngest country with a 200 year history………should our parents (Europe) help us for being the runaway child who go into drug addiction,credit card debit and theft and have our neighbors Canada/Mexico/South America make sure we “behave”. I know my example is an over simplification.
    I know as anywhere in the world in order to make a difference globally we must act locally and until our local community is running well there is no way we could help anyone else. In a sense if everyone worked to improve their own communities then the entire problem will be fixed before we know it. But until the little wheels can function its hard to get the big wheel to turn or even to change direction.
    I agree that it takes spending money to stimulate the economy to promote job growth and thats why we had the 300/600 tax rebate thing this year to help stimulate the economy but I don’t think that is enough to jump start it as a nation. Most people probably held on to it. I know I did.

  3. Avatar

    This guy is an absolute bozo.

    He says that he will not bash America and he lamblasts America.

    Most of the stuff he talks is absolute CRAP.
    No body is forcing the rest of the world to invest in America. They can invest in Euros if they want.

    These emerging countries do export all around the world, not just America – see export statistics.

    No body asked these countries to buy these loans.

    Even during this crisis, caused by America, people still invest in $ – safe haven currency.

    This guy probably lost a ton of money in the stock market. Who is this guy anyway?

    Please don’t post stuff like this.

  4. Avatar

    Hi Anonymous,

    I debated a lot before posting this video, as you see my post..I clearly say I am not convinced with what this economist M.R. Venkatesh has to say. He sounded very passionate and I saw something hence as a true blogger published it here.

    My intent is not to offend anyone in any manner.

    Srini

  5. Avatar

    Hi Srini,

    Man what a video, it gets to the core of every possible aspects of economy and financial market place.

    I appreciate you sharing it with your readers.

    Thanks,
    -Gaj

  6. Avatar

    On one side, he talks about money is moving to america (dollars). Later he says, money is rushing to india because of high interest rates.

    He says $ is a tissue paper. He is confused.

  7. Avatar

    Face the facts. Listen with your brains not with your ears.

    Srini: keep this post alive. This video is from google. let google take this video down, it will go away from this site.

  8. Avatar

    Srini. This is a debatable issue. Your disclaimer is perfect. Don’t take away the video. Let people come and say something. Every body says about the crunch. Let some one say how to repair. Speaking from the rooftops is easy. I agree with Anil.

  9. Avatar

    I have only had the time so far to listen to half of the speech, but what I’ve heard so far does not sound so shocking to me. We Americans need to face the facts that we are quickly losing our status in the world on so many levels. We cannot continue to spend beyond our means, waste our resources, and consume like we’re the only people in the world and not expect consequences. Perhaps a moderate crash will wake us up to the fact that we need to rethink our economy and find a better balance between spending and saving. I try to live optimistically, but I am not so optimistic about people getting their heads out of the sand before it is absolutely, positively necessary. By then, it may be too late for some. I do believe there is always a positive outcome, but like the caterpillar, the American economy may be in for a substantial transformation before it can become a beautiful butterfly. The world is in for a transformation, no doubt, but I think Americans will feel it the most. Don’t get me wrong, I love my country, but I am willing to see its faults and failures, and thus, willing to work to make it better.

  10. Avatar

    Wow! Great comment Cassie.

    I think this video was recorded a while ago. Its such a coincidence that we are seeing it at a time when some of the stuff he is talking about has come true.

    I am under a lot of pressure to take down this post.

    As I mentioned in the email, Personally I am very optimistic about our recovery and success. Thats my feeling. No hard facts to prove.

    I don’t agree to all that he has to say here. His intensity and focus on some wrong aspects in the speech makes the entire thing questionable.

    Srini

  11. Avatar

    Hi Srini,
    I, too, am optimistic our our recovery… “This, too, shall pass.” But I think it may hurt for awhile. For some, anyway. Actually, for those of us who have had to learn to do well on less will probably do better than those who have lived with more abundance! LOL I love the line a friend said when she sent an unrelated email, but the statement is still applicable… “When Mother Earth takes a breath, shift happens.” The pendulum has reached its apex and is about to swing the other way. In the process, well, shift happens. 🙂 Don’t take down the post. We cannot afford to take a Pollyanna view of America or the world economy anymore. Perhaps the speaker is wrong on many points, but we need to evaluate everything with open eyes if we hope to improve. Question everything.

  12. Avatar

    SHOPPING CART METHOD!!!!!
    Take what you want leave the rest behind!!!!
    Do you go grocery shopping and buy the whole store?
    I know Srini posted it to provoke thought not to spead some propaganda. He even said in a disclaimer. I think reading comprehension is lacking.

  13. Avatar

    Great analogy RYOKO! Once again your simple explanations say more than complicated pontification. Knee-jerk reactions such as these are exactly the reason we are in deep doo-doo. We must study all sides, give it thoughtful attention and then make a decision on where we stand. Then we must continue to observe and learn always re-evaluating our stand.

  14. Avatar

    The video was very interesting. I hope you leave it up as I have not had the chance to view all of it. If you decide to take it down, please send me or post the web address.

    Here’s to breaking the U.S. from its xenophobia.

  15. Avatar

    Ryoko and Cassie were absolutely right. Dont take it as nagative but try to be optimisitc on whats going on. We have to follow a single currency to trade and it is dolloars. But in economic words where there is no balance between supply and demand, income and expenditure, saving and investment economy will collapse. And this is what happened. And whole world knows root of this situation- Subprime Morgatge. This is where this R Venkatesh is right.

    But again just listean what is fact and leave other things.
    Good luck,

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