Baba
Namaskar,
To understand this section one, please first section two which was swirling around the internet.. And finally read section three which is a more refined of section one. After reading all three sections, kindly tell which of the three sections was the most clear.
Namaskar,
You must have heard that when consumers get scared and do not spend, then economic crisis comes.
You must have also heard that the majority of US citizens do not have savings. So they borrow and spend. And that is the way their economy runs.
From where do they borrow. They borrow from credit card but ultimately that money is coming from China, India, Japan, or from those who have faith in the US treasury, banks, economic institutions, hedge funds, or various bonds and cds etc. They deposit the money. In this way the US gets money and citizens spend money they do not have.
Commonly you must have heard that economists guide to borrow and spend. Otherwise the economy will collapse. But according to Prout borrowing for daily consumption is wrong.
In a Prout article, "Keep the money rolling" (appended below). Baba says that an economic depression comes when money stops moving from one hand to another hand. In a real world scenario if laborers are paid properly and they are producing the goods, and then there will not be any accumulation or hoarding in any individual's pocket / capitalists will not get opportunity to accumulate.
The problem comes when people are working hard and people are not getting paid their fair wages. And the profit of hundreds of billions of dollars gets accumulated by exploiters. So exploiters have money, far more than they need for their existential requirements. Laborers do not have money and they need food to eat. So laborers rely on bank loans and their credit cards for their daily needs. By that way this cycle moves.
But in due course because of any reason if exploiters who have tens of billions if they become fearful of losing money if they invest, then immediately they will start withdrawing from the bank, stock market, investments etc and then there is widespread panic, and everything collapses.
To keep the economy rolling, the formula of borrowing and spending will not always work. Because in certain scenarios like billionaires when they get nervous and take out money from the bank, stock market, investments etc then everything collapses. The cycle does not move. Those economists who are preaching borrow and spend are wrong.
According to Prout borrowing and spending should only be allowed to produce something, not regular consumption. So what is the ideal way to run the economy.
Society should not allow middle men to cheat the working class and hold money. So if money is not accumulated then naturally money will roll from one hand to another hand. Laborers will produce the goods and consumers will purchase the goods. And fair wages will come back to A to B to C to D to E, and ultimately back to A and whole society will be benefited. Money will keep rolling and it will not accumulate anywhere. When there are fair wages at every step then everyone has proper money to spend and there will not be a situation where a lot of money is accumulated in the hands of the few. Money gets accumulated due to exploitation. So when people have purchasing capacity and economy will run smoothly, and the capitalistic formula to borrow and purchase is flawed and that has been described above. That is the only way out to save the present economic melee.
In Him,
Kalpataru
(Courtesy of comment on Internet Article)
Amazing logic indeed. This is a crazy world! Interesting article written by an Indian Economist
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 billion. 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 billion 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 - It's The Americans who 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. It 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 trillion. 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 !!!
The world is in a economical mess 😅- interesting read😜😜😜😜
(Courtesy of comment on Internet Article)
Namaskar,
It is commonly known that when consumers get scared about the state of the economy then they do not spend their money. That slows the economy even more and spurs an economic crisis. Most are also aware that the majority of US citizens do not have any savings. So they borrow and spend. That is the way their economy runs.
Those US consumers borrow directly from their credit card, or from their bank, but ultimately that borrowed money is coming from China, India, Japan, or from those who have faith in the US treasury, banks, economic institutions, hedge funds, or various bonds and cds etc. Those investors deposit their money in those various institutions. In this way the US gets money and their citizens spend money they do not have.
One of the slogans of economists is: “borrow and spend.” Otherwise the economy will collapse. But according to Prout, borrowing for one’s daily consumption is wrong. In a Prout article, “Keep the Money Rolling”, Shrii Prabhat Ranjan Sarkar says that an economic depression comes when money stops moving from one hand to another hand. In a real world scenario, if laborers are paid properly and they are producing goods, then there will not be any accumulation or hoarding in any individual's pocket. Then capitalists will not get opportunity to accumulate.
The problem comes when people are working hard yet are not getting paid their fair wages. Instead, all the profits of hundreds of billions of dollars gets stockpiled by the exploiters. In that case, the exploiters have far more money than they need for their existential requirements. While laborers do not have the requisite money to maintain their day to day lives. So laborers rely on bank loans and their credit cards for their daily needs. In this way the cycle moves, but it is a slippery slope.
Because in due course, if for any reason the exploiters become fearful of losing money on their investments, immediately they will start withdrawing their tens of billions from the banks, stock market, and various holdings etc. This results in widespread panic, and everything collapses.
To keep the economy rolling, the formula of borrowing and spending does not work over the long haul. Because in certain scenarios such as when billionaires get nervous and take out money from the bank, stock market, others investments etc, then the whole economy nosedives. The cycle does not move. Those economists who preach “borrow and spend” are wrong. According to Prout borrowing and spending should only be allowed in order to produce something, not just for regular, daily consumption.
So then what is the ideal way to run the economy? Society should not allow middle men to cheat the working class and stockpile money. If money does not over-accumulate in the coffers of the wealthy elite, then naturally money will roll from one hand to another hand. Laborers will produce goods and consumers will purchase those goods. And fair wages will come back to A to B to C to D to E, and ultimately back to A and whole society will be benefited. Money will keep rolling and it will not accumulate anywhere.
When there are fair wages at every step of the economy, then everyone has adequate money to spend, and there will not be a situation where a lot of money is accumulated in the hands of the few. Money only gets over-accumulated due to exploitation. So when people have purchasing capacity the economy will run smoothly. The capitalistic formula of “borrow and spend” is flawed. Following the principles of Prout is the only way out to save the present economic melee.
In Him,
Kalpataru
Keep Money Rolling – Excerpt B
21 December 1986, Calcutta
The value of money increases with its mobility. That is, the more that money changes hands, the greater its economic value. On the other hand, the more that money is kept immobile in a safe, the more it loses its utility, and thus its economic value decreases. This is the most fundamental principle of economics.
The banking system is indispensable for promoting both collective welfare and the all-round economic advancement of people. The maxim, “Keep money rolling,” is as true as the proverb, “Keep the wagons moving.”
The banking system must be vigilant about two important points. First, the intrinsic demonic greed of the banks must not be allowed to jeopardize the life of the common people. In the past in most countries of the world the banks threatened the life of the common people. This more or less still occurs today not only in undeveloped countries, but also in developing and developed countries. Secondly, the banks must not allow unwise administrators or governments to print monetary notes indiscriminately without reserving the proportionate amount of bullion in their treasuries.
The first defect not only ruins low and middle income groups, but also impoverishes wealthy people. The second defect destroys the very life of society. It leads to widespread inflation, which in turn jeopardizes internal trade and commerce as well as foreign trade and barter. Even if there is abundant production in a country, the common people do not benefit. The rich become richer and get more scope to continue their merciless exploitation. In state capitalism, the exploitative rulers tighten their grip over society even more. State capitalism may call itself capitalism, socialism or communism, but ultimately it stands before the masses as more dangerous and bloodthirsty than bloodsucking ghouls and demons.
The banking system must continue, otherwise the mobility of money will be hindered. If people oppose the banking system because they are guided by selfish whims or any other sentiment, then their economy will stay in the dark ages. They are bound to lose equipoise and equilibrium in the physical sphere, remain lopsided in the psychic and spiritual spheres, and reduce themselves to objects of ridicule. It is very sad to imagine such a state.
So you see, the fundamental aim of the banking system is, “Keep money rolling.” Let governments be active. Let people purchase as much rice, pulses, vegetables, oil, salt, sugar, etc., as they can with money. Let money go to the grocers, the sugar cane vendors, the confectioners, the factory workers, the labourers and the weavers. And let the colourful saris of the weavers be purchased and worn by the newly married brides, adding to the beauty and prosperity of society.
- Shrii Prabhat Ranjan Sarkar
21 December 1986, Calcutta
Recent postings
Other topics of interest
Why countries work hard, earn money,
and give it to the US to spend
and give it to the US to spend
Namaskar,
To understand this section one, please first section two which was swirling around the internet.. And finally read section three which is a more refined of section one. After reading all three sections, kindly tell which of the three sections was the most clear.
== Section 1 ==
Namaskar,
You must have heard that when consumers get scared and do not spend, then economic crisis comes.
You must have also heard that the majority of US citizens do not have savings. So they borrow and spend. And that is the way their economy runs.
From where do they borrow. They borrow from credit card but ultimately that money is coming from China, India, Japan, or from those who have faith in the US treasury, banks, economic institutions, hedge funds, or various bonds and cds etc. They deposit the money. In this way the US gets money and citizens spend money they do not have.
Commonly you must have heard that economists guide to borrow and spend. Otherwise the economy will collapse. But according to Prout borrowing for daily consumption is wrong.
In a Prout article, "Keep the money rolling" (appended below). Baba says that an economic depression comes when money stops moving from one hand to another hand. In a real world scenario if laborers are paid properly and they are producing the goods, and then there will not be any accumulation or hoarding in any individual's pocket / capitalists will not get opportunity to accumulate.
The problem comes when people are working hard and people are not getting paid their fair wages. And the profit of hundreds of billions of dollars gets accumulated by exploiters. So exploiters have money, far more than they need for their existential requirements. Laborers do not have money and they need food to eat. So laborers rely on bank loans and their credit cards for their daily needs. By that way this cycle moves.
But in due course because of any reason if exploiters who have tens of billions if they become fearful of losing money if they invest, then immediately they will start withdrawing from the bank, stock market, investments etc and then there is widespread panic, and everything collapses.
To keep the economy rolling, the formula of borrowing and spending will not always work. Because in certain scenarios like billionaires when they get nervous and take out money from the bank, stock market, investments etc then everything collapses. The cycle does not move. Those economists who are preaching borrow and spend are wrong.
According to Prout borrowing and spending should only be allowed to produce something, not regular consumption. So what is the ideal way to run the economy.
Society should not allow middle men to cheat the working class and hold money. So if money is not accumulated then naturally money will roll from one hand to another hand. Laborers will produce the goods and consumers will purchase the goods. And fair wages will come back to A to B to C to D to E, and ultimately back to A and whole society will be benefited. Money will keep rolling and it will not accumulate anywhere. When there are fair wages at every step then everyone has proper money to spend and there will not be a situation where a lot of money is accumulated in the hands of the few. Money gets accumulated due to exploitation. So when people have purchasing capacity and economy will run smoothly, and the capitalistic formula to borrow and purchase is flawed and that has been described above. That is the only way out to save the present economic melee.
In Him,
Kalpataru
== Section 2 ==
(Courtesy of comment on Internet Article)
Amazing logic indeed. This is a crazy world! Interesting article written by an Indian Economist
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 billion. 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 billion 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 - It's The Americans who 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. It 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 trillion. 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 !!!
The world is in a economical mess 😅- interesting read😜😜😜😜
(Courtesy of comment on Internet Article)
== Section 3 ==
Namaskar,
It is commonly known that when consumers get scared about the state of the economy then they do not spend their money. That slows the economy even more and spurs an economic crisis. Most are also aware that the majority of US citizens do not have any savings. So they borrow and spend. That is the way their economy runs.
Those US consumers borrow directly from their credit card, or from their bank, but ultimately that borrowed money is coming from China, India, Japan, or from those who have faith in the US treasury, banks, economic institutions, hedge funds, or various bonds and cds etc. Those investors deposit their money in those various institutions. In this way the US gets money and their citizens spend money they do not have.
One of the slogans of economists is: “borrow and spend.” Otherwise the economy will collapse. But according to Prout, borrowing for one’s daily consumption is wrong. In a Prout article, “Keep the Money Rolling”, Shrii Prabhat Ranjan Sarkar says that an economic depression comes when money stops moving from one hand to another hand. In a real world scenario, if laborers are paid properly and they are producing goods, then there will not be any accumulation or hoarding in any individual's pocket. Then capitalists will not get opportunity to accumulate.
The problem comes when people are working hard yet are not getting paid their fair wages. Instead, all the profits of hundreds of billions of dollars gets stockpiled by the exploiters. In that case, the exploiters have far more money than they need for their existential requirements. While laborers do not have the requisite money to maintain their day to day lives. So laborers rely on bank loans and their credit cards for their daily needs. In this way the cycle moves, but it is a slippery slope.
Because in due course, if for any reason the exploiters become fearful of losing money on their investments, immediately they will start withdrawing their tens of billions from the banks, stock market, and various holdings etc. This results in widespread panic, and everything collapses.
To keep the economy rolling, the formula of borrowing and spending does not work over the long haul. Because in certain scenarios such as when billionaires get nervous and take out money from the bank, stock market, others investments etc, then the whole economy nosedives. The cycle does not move. Those economists who preach “borrow and spend” are wrong. According to Prout borrowing and spending should only be allowed in order to produce something, not just for regular, daily consumption.
So then what is the ideal way to run the economy? Society should not allow middle men to cheat the working class and stockpile money. If money does not over-accumulate in the coffers of the wealthy elite, then naturally money will roll from one hand to another hand. Laborers will produce goods and consumers will purchase those goods. And fair wages will come back to A to B to C to D to E, and ultimately back to A and whole society will be benefited. Money will keep rolling and it will not accumulate anywhere.
When there are fair wages at every step of the economy, then everyone has adequate money to spend, and there will not be a situation where a lot of money is accumulated in the hands of the few. Money only gets over-accumulated due to exploitation. So when people have purchasing capacity the economy will run smoothly. The capitalistic formula of “borrow and spend” is flawed. Following the principles of Prout is the only way out to save the present economic melee.
In Him,
Kalpataru
== Section 4 ==
Keep Money Rolling – Excerpt B
21 December 1986, Calcutta
The value of money increases with its mobility. That is, the more that money changes hands, the greater its economic value. On the other hand, the more that money is kept immobile in a safe, the more it loses its utility, and thus its economic value decreases. This is the most fundamental principle of economics.
The banking system is indispensable for promoting both collective welfare and the all-round economic advancement of people. The maxim, “Keep money rolling,” is as true as the proverb, “Keep the wagons moving.”
The banking system must be vigilant about two important points. First, the intrinsic demonic greed of the banks must not be allowed to jeopardize the life of the common people. In the past in most countries of the world the banks threatened the life of the common people. This more or less still occurs today not only in undeveloped countries, but also in developing and developed countries. Secondly, the banks must not allow unwise administrators or governments to print monetary notes indiscriminately without reserving the proportionate amount of bullion in their treasuries.
The first defect not only ruins low and middle income groups, but also impoverishes wealthy people. The second defect destroys the very life of society. It leads to widespread inflation, which in turn jeopardizes internal trade and commerce as well as foreign trade and barter. Even if there is abundant production in a country, the common people do not benefit. The rich become richer and get more scope to continue their merciless exploitation. In state capitalism, the exploitative rulers tighten their grip over society even more. State capitalism may call itself capitalism, socialism or communism, but ultimately it stands before the masses as more dangerous and bloodthirsty than bloodsucking ghouls and demons.
The banking system must continue, otherwise the mobility of money will be hindered. If people oppose the banking system because they are guided by selfish whims or any other sentiment, then their economy will stay in the dark ages. They are bound to lose equipoise and equilibrium in the physical sphere, remain lopsided in the psychic and spiritual spheres, and reduce themselves to objects of ridicule. It is very sad to imagine such a state.
So you see, the fundamental aim of the banking system is, “Keep money rolling.” Let governments be active. Let people purchase as much rice, pulses, vegetables, oil, salt, sugar, etc., as they can with money. Let money go to the grocers, the sugar cane vendors, the confectioners, the factory workers, the labourers and the weavers. And let the colourful saris of the weavers be purchased and worn by the newly married brides, adding to the beauty and prosperity of society.
- Shrii Prabhat Ranjan Sarkar
21 December 1986, Calcutta
== Section 5:
Links ==
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More important letters
