OMG, guess who I ran into today at the Supermarket...it was none other than...

[Ankesh]

Thanks Gordon.

My view is a bit different.

My opinion: economy is not about the money at all. Instead, economy is all about Confidence.

If people are over-confident about the future, they will spend money they don't have. Creating a bubble. And the bubble will burst sometime. Because every bubble bursts.

On the other hand, if people are not so confident about the future, they will save more than consume (eg: Japan). And the economy will suffer as people don't exchange goods and services with one another. And as the economy suffers, people's confidence drops furthers - and thus it creates a downward trending spiral loop.

So the trick has always been: make sure the people remain confident about the future. But that they don't become over-confident.

Doesn't matter how things are screwed up right now, or how much debt a country has. If the leaders can imbibe confidence in the people - while making sure there are checks and balances in place that prevent bubble creations, the economy won't suffer.

Its my personal opinion that Obama can maintain that fine balance. But I may turn out to be wrong.

(Personally - I like Ron Paul's ideas the most. But he can't game public confidence like Obama can.)

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From the other side of the world, things look very rosy even though we are seeing record inflations. Indian population is very young. And youth brings its own exuberance and confidence. As the population matures over the next 40-50 years, I see India becoming richer and richer. Mainly because Indian leaders are very conservative and do a very good job of making sure we don't see bubbles.

(Eg: India didn't see its banks collapsing from the sub-prime crisis. http://www.nytimes.com/2008/12/20/bu...cera.html?_r=1 )
(Note: the above article asks for a NYTimes password to read further. You can skip that by searching for "How India Avoided a Crisis" in Google and then clicking on the NYTimes link. People visiting NYTimes from Google don't require a password...)

It is a good time to invest in India and China and other countries with young populations.