The Next Big Crash - Are You Prepared?

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(10-10-2013, 02:24 PM)freedom Wrote:
(10-10-2013, 02:13 PM)Clement Wrote: I think more along utilitarian lines. The rich sometimes seem to forget that the poor are still potential customers at the very least. There is no way an economy can prosper if a larger proportion of wealth is in the hands of a smaller proportion of people. The rich can have the resources to invest and help that way, but too much investment and too little consumption leads typically to asset bubbles and bridge to nowhere situations.

May I ask a question? How could investment not turn into consumption?

Does the investment not provide job and income for the people? Does the investment not produce tax for the government?

To me, every investment eventually turns into consumption somewhere. Of course, some stimulate more consumption and some stimulate less. But no investment curbs consumption.

Sorry for being unclear, i mean a lower income person would have a large propensity to consume and therefore putting money in his pocket tends to lead to more consumption. A poor person might spend up to 80% of his annual income on essentials and other lifestyle needs driving up aggregate demand, while i doubt a billionaire consumes even 10% of his annual income (except maybe Roman Abramovich and Larry Ellison). Therefore the feedback mechanism is stronger when wealth is put in the hands of the poor, within reason of course.
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Messages In This Thread
It's a correction. - by chialc - 15-06-2013, 07:10 AM
Ah.. Crash lai liao - by BlueKelah - 30-09-2013, 02:58 PM
RE: The Next Big Crash - Are You Prepared? - by Clement - 10-10-2013, 02:32 PM
BlueChip is the way to go - by chialc88 - 03-04-2014, 12:19 PM

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