Rational Optimist The Rational Optimist: How Prosperity Evolves By Ridley, Matt Published By Harper Hardcover On Amazon

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What Makes Creative People Creative?

You often hear the term "Creative Genius" when referring to an individual who has created something extraordinarily different.Whether it's a new fashion line, cooking a meal a different way, designing an ad, or developing the next social network.It's dynamite! It's electric! It's inspired! What ever your definition, you want it but you don't think you have it.The first step in understanding a creative mind is knowing that you have the potential to have one.Experiments show that 80% of children, before entering school, use their right brain skills such as creativity and imagination.Once in school, the programs used to educate children place a higher value on the left brain skills - such as mathematics, logic, and language.By age 7, only 10% of these same children will rank highly creative.By adulthood, only 2% remain highly creative.Ask the right questions.Lets explore this 2%.What is creativity? To me creativity is exploring the possibilities of "what if"- what if I use a different color or font.What if I used a new flavor I never used before.What if I use a different shape- it's asking yourself the right questions that expand your possibilities to solve daily problems while never allowing yourself to go down that dark road towards tunnel vision.For example, lets take creating a website for a client.These are some questions that I may ask myself..What's the trend for this industry?-its very important to see what the competition is doing and what the market trends are.Do some research.How can I make this stand out above the competition? How can I expand on the uniqueness of the product? What imagery could I use that would be catchy but yet represent the message? What layout could I create? Instead of laying out the website like the competition, try different ways to lay it out.Don't expect creative genius to happen with the first go around.There will be times you will need to go back to the drawing board and rethink, reshape, reposition things to make it work.The important thing is not to get discouraged; forge ahead and you will see the rewards.The Future.Creativity is based on the premises that everything can and will continually get better.Making life more comfortable, efficient, and exciting.Creative minds are constantly following market trends trying to see what direction it will take.By doing this it puts you ahead of the creative game.Progression.Webster defines it as gradual advancement, moving forward and onward.Creative minds always have the mind set of always moving forward.Always looking beyond the current situation.They realize they can always improve the situation.Abstract Thinking.Characterized by the ability to use concepts and to make and understand generalizations, properties, or patterns shared by a variety of specific items or events.For example a concrete thinker may see just an apple, while an abstract thinker will see what he can do with the apple.Concrete thinkers are surface thinkers while abstract thinkers are more in-depth.By thinking this way it allows you to approach situations from different angles allowing yourself to see the potential in all areas.Positive Thinking.Not only does positive thinking reduce stress and increases health, but it allows you to see the good in everything.Being optimistic about the way you think creates an incubator for creativity to nurture and grow.It's been proven that positive thinking people are happier.As Winston Churchill says "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty".Positive thinking is what makes creative minds shine above the rest.Take Risks.Creative minds are open minded people.They thrive on taking risks.Picasso has said "I am always doing that which I cannot do, in order that I may learn how to do it".That is what life is all about, venturing into the unknown to see and learn the possibilities it may hold.According to a study conducted by the University of Bonn, out of 20,000 people surveyed, the ones who enjoyed taking risks were more content and happy with their lives.Another study by psychologists Dellas and Gaier, in their frequently cited review, "creative individuals have less fear than the average person of making mistakes, of social disapproval, or 'the anxiety of separateness.' They have a strong enough ego to admit when they're wrong or in trouble, and to analyze and learn from their errors." A well- known psychoanalyst and author named Roolo May (Courage to Create, Love and Will), observed. "Creative persons are precisely those that take the cards that make them anxious.Of course, they're constantly shuffling these cards; they hate standing still.You could say these folks really do best playing with a loose deck." So in short, you will never know the rewards if you don't take the risk.Have Fun.Creative people by nature are fun people to be around, they keep things interesting and exciting.They're usually the life of the party, always coming up with wacky ways to do things.Aside from the day to day grind, make sure you set time aside to have fun! Explore new hobbies you have always thought about doing, read a book you are interested in, vacation to a place you have been thinking about, do a family activity that creates great memories for everyone.Whatever it is that you like to do; do it! And do it regularly! It's a great way to relieve stress and clear your mind; and with a clear mind comes creativity.So now that you know what creativity is, you may ask yourself "Where do I start?" Through my years of experience within the creative service field, I've come up with several things that may help you regain your creative status.So the next time someone says "creative genius" they're referring to you.Step 1. Start with the basics.It's like building a house, you need a firm and solid foundation first, before you can build the rest.Same with creative thinking; laying a solid foundation of basic creative principles will allow you to have a solid house of creative thinking.Exercise #1-When was the last time you laid on the lawn, stared up at the sky, and tried to find images in cloud formations? If you haven't done it since you where a child I suggest you stop reading right now and go outside and do it.Starting with the basics means that-starting with the basics as a child would.Things, places, colors, and shapes are seen differently from a child's abstract point of view than an adults.Most children are not concrete thinkers they don't just see a cloud, they see dragons, butterflies, dogs, and bunnies-children are great resources when it comes to understanding basic creative principles."As a child we saw clouds, painted across the sky, as our first creative inspiration.Today let us not forget that lesson learned; for he who sees inspiration in something as simple as a cloud, has laid the foundation for him self to see inspiration in all things.".-Author Unknown.Exercise #2-Experimentation has shown that the two different sides, or hemispheres, of the brain are responsible for different manners of thinking.The following list illustrates the differences between left-brain and right-brain thinking..Left Brain-logical, sequential, rational, analytical, objective, mechanical.Right Brain-creativity, random, intuitive, risk taker, artisitic, subjective, abstract thinking.So lets tap into the right side of the brain.Take a coloring book and being as creative as you can, color the picture.But don't color the sky blue because that's how your left brain would color it, color it how your right brain would (pink, orange, purple, any color); add things to the picture that aren't originally there, a rainbow, birds, trees, etc.Let you mind wonder! There's no wrong way to being creative, it's how you see it or want to see it.These basic exercises will help train your right side of the brain and spark a hidden creative energy that will be unstoppable.Step#2. Awareness.A misunderstood myth is that creative people can pull ideas out of thin air.This is hardly ever true, most of the time creativity is based on something they've seen, smelt, touched, heard, or tasted.They become very in tune with their five senses allowing them to be aware of their surroundings.We call this our "source".Creative minds always have a source that triggers creativity, and we usually have more than one source to fit any situation.You need to find your creative sources.As you do you may ask yourself some simple questions..What is it that I like about this? What situations could this help me with? What sense does this apply to? Once you've found your source, start collecting or keeping a journal of your finds.For example, when I see a website design I like I usually will archive it for a later date.I'll also collect magazine ads, pictures, and articles that spark my interest.By keeping a collection or journal of what you find, this will allow you to lay the ground work to creativity, with the only thing to add is your own creative flare.Exercise #1. Blindfold yourself while having someone place food items in front of you.Try and guess what they are.Do the same exercise with sound, smell, and touch.Exercise #2. A creative person has a great memory which allows them to recall their sources at any given time.To practice, take a picture of something- anything.It could be boring or interesting, study it for 3-5 minutes.Once 3-5 minutes are up, turn the picture over, on a piece of paper write down what you've seen.But just don't say trees, rocks, leaves, be specific.How many trees, what kind of trees are they, what color are the leaves, what season is it, what size of rocks are present, are they boulders or pebbles or both, be as detailed as you possibly can.Once you've mastered 3-5 min, up the ante by doing it for 1 or 2 minutes.This exercise will teach you to use your memory quickly in any situation.

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Investing In A Structurally Unbalanced World

1.US Net Exports Have to Pick Up -- Since 1992 the US has been registering ever larger current account and net export deficits.(Net exports are the major item in the current account.) At the same time other so-called developing countries, notably China in recent years, have registered massive current account and net export surpluses.This trend was only partially reversed by the cyclical fall off in US imports during the Great Recession in 2008.These massive current account and trade deficits have to be financed and this financing has resulted in equally massive dollar reserve holdings by China and other so-called developing countries.They also are also consistent with the view that American manufacturing jobs have suffered from this process.Simple economic theory would suggest that capital intensive developed countries like the United States run current account surpluses with the relatively less capital intensive developing world.Developing labor intensive countries like China would run current account deficits.Admittedly this simple picture is complicated by the role the dollar plays as the world's international currency.The United States needs to provide dollars to the world (something it has done with unbridled enthusiasm.).Still on a structural basis one would expect that this trend of large US current account and net export deficits cannot go on forever.One might expect that the economic signals-including a cheaper dollar against the countries of East Asia-- would favor US exports.My forecast would be that US companies that have an international scope and are able to access capital will fare relatively well in the coming years (assuming no major global recession).Moreover US has an expertise in technology.Approaching this from a macro top down perspective, I would conclude that larger companies with comfortable cash positions, global brand names and preferably technology niches would be well positioned as this necessary structural change in the global economic order unfolds.2.Buy Gold, Sell Treasuries -- The international monetary and domestic banking systems will continue to provide an inflationary global bias.In issue after issue of The Dismal Optimist I have argued that the global and domestic financial systems are inherently inflationary and dysfunctional and lack automatic mechanisms to correct imbalances.Thus China can hold down the value of the renmimbi by buying dollars thereby inflating Chinese high powered money supply, increasing Chinese holdings of US dollar assets and lowering US interest rates.Thus the Federal Reserve can get away with reckless printing of US high powered money, aka QEII, and finance the burgeoning US government debt.Several respected economists, notably Gary Shilling, have argued persuasively that the US will be in a real estate driven debt deflation for the next several years and that long term Treasuries are a good investment.I might agree with this if the United States operated in isolation.But I think the global picture is inflationary thanks to the dysfunctional international monetary system and the army of money printing and currency manipulating central banks around the world.Inflation will creep into the US from abroad even as painful debt deflation continues to affect the domestic consumer.The worst of all worlds.One can argue about the real factors affecting global inflation and their effects on commodity prices.One can argue that continued technology driven productivity enhancements combined with the addition to the global economy of giant labor pools from countries like India and China will provide what Shilling calls "good deflation." Offsetting that is the view that all these new Indian and Chinese consumers will add to global demand on agricultural, energy and industrial commodities and thereby provide an inflationary commodity price bias.I tend towards the later view although a Chinese hard landing in 2011 could cut global demand and temporarily slow down the commodity story especially in the non-agricultural area.But either way, the massive increases in global money supplies thanks to our dysfunctional international monetary system are going to push commodity prices up.I continue to believe gold should be in the typical investor's portfolio.Fiat money is not trustworthy as the inflationary record of the US shows.For example, what you could buy for $1.00 in 1914-the year the Federal Reserve began operations and the gold standard was by and large abandoned - would cost $21.16 in 2009.What you could buy for $1.00 in 1871-the year financial historians assign to the advent of a universally accepted gold standard - would have cost $.84 in 1914.I also think nominal interest rates globally will trend up in 2011 in response to the global monetary inflation and disastrous US fiscal situation.The market's response to QE2 has been higher long term US Treasury interest rates.The world has started to mistrust the US government and its debt.The alternative explanation, paraded endlessly in the financial media, that long rates have risen because QE2 was going to be so successful in stimulating the economy, belongs in the realm of standup comedy.3.Get Ready for Troubles with US State and Local Governments Over a year ago I wrote that public sector wages, benefits and pension plans would overwhelm the finances of many states and municipalities.This is now old news.The so-called stimulus package last year helped bail out the states.But this year with a Republican House and burgeoning Federal deficits there will be tremendous political resistance to further bailouts.The financial media has now caught up with this issue.Meredith Whitney, the only sell side equity analyst to have correctly called the subprime crisis, is raising warnings on this issue.There's a lot of pain ahead on this and cuts in public sector wages, benefits and pensions will have to come but they won't come easily.New York, California and Illinois in particular are three large states in very large fiscal trouble.My question. Can the stock market do well when bombs are going off in the state and municipal sectors? Will stocks become a place of refuge or do we go back to the "everything goes down" mode of 2008.My best guess is that well capitalized, large cap, export oriented, technology oriented US companies will be seen as a place of refuge.As will gold.Stocks of banks that own large quantities of municipal bonds are another matter.4.2011 Looks to Be a Difficult Year for China - Chinese interest rates though still negative in real terms are going up, massive bank lending in 2009 and 2010 must have brought with it significant yet-to-be-revealed non-performing loans, the country has over invested in infrastructure projects and real estate, the currency is still undervalued, inflation is a real problem thanks to strong money growth, environmental problems are legion.The list goes on.Most analysts are debating whether China will have a hard or soft landing in 2011.Nobody knows the answer to this, especially for a country where statistics are sparse and unreliable and transparency is lacking.It is no accident that in renminbi terms the Shanghai A share market was down almost 17% in 2010.The market doesn't like what it sees.Longer term I remain very bullish on China.For the last few thousand years, China has gone through long cycles of increasing power, national unity and expansion, followed by slow decline and then national disintegration.And then the cycle repeats.With the ascent of Deng Xiaoping in the late 1970s and the disaster of the Cultural Revolution imprinted on all minds, the national disintegration phase ended.China is now in the up-phase of increasing power, national unity and expansion.I have no doubt that a nation of 1.3 billion hard working talented people with a religious craving for material improvement is a great long run place to put your money.I regard forecasts of China collapsing due to social unrest or regional problems as fundamentally at variance with the long run historical trend.The US in the nineteenth century was the world's rising economic power.But it wasn't all smooth sailing.Occasional crises were experienced along the way such as the defaults of the states in the 1840s, the Civil War of 1860-65, the Panics of 1873 and 1893.Foreign investors from time to time lost their collective shirts as the US marched on to greatness.But the US emerged stronger after each crisis as economic and political imbalances were corrected.Crises correct imbalances and force the resolution of heretofore unsolvable political problems.For example, India's early 1990s ditching of the so-called "License Raj" only came response to a foreign exchange crisis.I am not wishing a crisis on China.But China in my opinion needs to make some tough decisions and these decisions will benefit investors in the long run.China is following what has been called the East Asia Model, i.E.A high degree of protectionism with all kinds of administrative and tariff restrictions on imports, an undervalued exchange rate, an over-emphasis on investment, an over-emphasis on exports, a massive interference in the markets, a predatory approach to foreign technology, an over-accumulation of dollar reserves and over-investment in designated favored industries.This fundamentally mercantilist model takes advantage of the international monetary system which allows countries to hold their currencies below equilibrium levels and the expense of employment in the United States.The East Asia Model may have reached the end of its usefulness for China.It certainly has for Japan.The time to really load up on Chinese stocks will be when it appears the government has decided to turn away from this model.Whether the government will take the necessary decisions in a gradual, rational way or whether it needs to be forced to do so by a crisis remains to be seen.5.The Euro Will Survive - Spanish pesetas, Italian liras, Maltese liras, French francs, Belgian francs, Luxembourgian francs, Dutch guilders, Portuguese escudos, German deutschmarks, Finnish markkas, Irish pounds, Cypriot pounds, Danish krones, Austrian shillings, Greek drachmas - yuk! Who needs them all.In fact, Europe does not.The euro represents huge financial value added as compared with the bewildering smorgasbord of currencies that existed before.History, politics, technology and geography are all lined up in support of the euro.The euro represents a tremendous step forward in European integration.The Europeans spent a good part of the twentieth century killing one another.It's an unpleasant experience they don't want to repeat.At the same time telecommunications and transportation technology are bringing the already geographically contiguous European nations even closer together.Don't underestimate the power of a fiber optic cable! The Germans will pay and pay to support the euro, however contrary to their self interest some of their actions may appear from time to time.And in my opinion, no countries will leave the euro.If you think Greece is having problems now with street demonstrations, just imagine if one day Greeks woke up to find their bank accounts were suddenly denominated in drachmas (draculas?) instead of euros.Of course the euro does suffer from the same fault as all fiat currencies.Gold is still an investment alternative for euro area investors.But against the dollar the euro will play musical chairs.When Ireland, Greece, Portugal or Spain are in the headlines (Belgium and Italy?) the euro will decline against the dollar.When California, Illinois or New York take center stage, the dollar will down against the euro.I see plenty of opportunities for traders but no trend here.6.Take a Look at India -- India is an emerging market story in its own right.It's the odd man out in the BRIC thesis.Brazil and Russia supply commodities to China and are part of the China story.To a large extent the fate of Brazil and Russia (and numerous other emerging markets) depends on how China does in 2011.India's not a major part of this China picture although India-China trade has been growing.India and China may be in Asia and have a lot of people coming off the countryside, but that's where the similarity ends.China is homogeneous (92 % Han), relatively monolithic with one national language and with a government that is, in its own mercantilist way, pro-business.India on the other hand is a heterogeneous collection of peoples, cultures and languages.Indian technology firms are global and among the best in the world.The Indian business sector operates in English and compared to China is transparent and follows the rule of law.But from an economic/business viewpoint the bureaucratic, populist Indian government although democratic can be a major obstacle.It is often said that companies succeed in China because of the government while they succeed in India in spite of the government.Still longer term that could be a positive for India.Governments usually support losers and in fact create them by insulating companies from competition and offering subsidized access to capital which encourages low productivity.Examples of this abound in China.With the exception of some state owned firms, Indian companies are private and have to compete for capital and customers without any government coddling.Indian stocks compared to other emerging markets are not cheap.But I think typical portfolios should have some Indian exposure.In addition, because the India/China stories are not so interwoven, India offers some advantages of diversification.

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Winning Relationships - A Powerful Way of Succeeding With the People in Your Life

The world can be a dark place.The news is full of stories of loss and suffering.It isn't easy for anyone to remain positive or upbeat with all the problems plaguing our society.But anyone can create a small haven of peace in the world by treating people well and using simple but effective strategies for conducting winning relationships -- stubbornly optimistic strategies that will make any person or business prosper.If people enjoy your company and find that having relationships with you is enjoyable and fulfilling, you will always be loved.You will make the world a better place by giving your special gift of personality and good will to others.The simplest and most effective way of winning with people is to be a persistent optimist.When we are positive and hopeful people NOTICE.And they react accordingly.A genuinely positive person can actually influence the brain states of others for the better.Two Radically Different Case Scenarios.First, think about how you feel when someone who is always complaining and talking about the world's unsolvable problems comes along.Their bitterness shows.And their pain spills onto all who will listen.This type of person paints the world in dark colors.It is hard to resist feeling a little depressed.Second, now picture how you respond when a really positive and upbeat person walks into the room.The world appears light and airy, and full of sunshine.How do you feel? You feel good and the serotonin is flowing in your brain again.Let's imagine this positive person has an uplifting conversation with you.The two of you talk about good things, you smile and laugh.This person's energy is contagious.You are surrounded by good vibrations.Not anger and hopelessness.Nor feelings of despair and doom.You find this individual's optimism thoroughly intoxicating!Isn't it interesting how some people drain you or make you feel exhausted .Whereas others give you an emotional boost and make you feel as though you are on top of the world?OK, I know these are extremes, and most people fall in the middle somewhere.And that's my point.If you fall in the mediocre range are you really going to succeed famously with people?What will distinguish you from the next person?Action Step.Now ask yourself a question. how do you affect others? Do people truly look forward to seeing you? Do you fill them with good cheer or bring them down? Do people tolerate you because they have to, or do they truly want to be with you?Most people don't stop long enough to reflect on the impact they are having on others.But it is a good habit to develop.And, since circumstances in our lives are always changing, it is a good idea to engage in self reflection fairly often.Even a typically positive person can have a temporary setback.Yet, if he/she is aware of the problem, he/she can usually fix it.It's especially important to be positive and strong with people who treat you negatively.If you don't inject a positive energy into the situation, how will it ever improve?To begin winning with people in a powerful way, ask yourself what impact you want to have on your close friends and associates, your family and other members of your community.Look for honest answers.Evaluate your behavior critically and muster the courage to see whether you are behaving in a way that is consistent with your goals.If you're like most people, you'll find room for improvement.A Shining star.Norman Vincent Peale, whom I met a few years before his death, believed there was no rational argument for not staying positive in all things.When you are consistently positive and optimistic, you are like a magnet, or a shining star, and you draw people to you.I know I will never forget the impression Mr.Peale made on me .Just being near him was akin to walking on air.When you find every conceivable opportunity for shining your light on someone, for being upbeat, optimistic and hopeful, you are providing a much needed service.You are making people feel better and giving them a little bit of your strength.In return, they will believe in you .And follow you.People will want to be with you and they will be there for you when you need them.By constantly striving to have a more optimistic and beneficial impact on others, you grow your own resiliency and improve your relationship with yourself and the world.You become more focused on the good than bad.And you become stronger and happier.By going through each day trying to be more positive in your interactions with others, you can make a big difference in the outlook of other people.And, yes, you will leave the world in better shape than you found it at the start of the day.And what an impressive accomplishment!Follow These Tips To Improve Your Daily Impact.1.If you want to succeed with people in a big way, do your part in counteracting the overwhelming negativity in the world.Begin by evaluating yourself and making improvements in both your attitude and behavior.When you do so, everyone wins.Including you.2.Realize that when you find fault with others, or blame them for your misery, you make it almost impossible for them (and yourself) to be optimistic.It is better to train yourself to focus on the strengths of others and to find the positives in difficult situations.It will be much easier to remain optimistic, which will make you more successful in the long run.3.Give yourself the gift of positive action.Remember, you can win with people if you begin with yourself, and behave in ways that inspire them to be their best.That's the crux of leadership.Care about people, act favorably and responsibly toward the individuals and groups you influence, and together they will be able to accomplish more.Some may think optimists are fools.Others may feel that keeping a positive mental attitude is old fashioned.In reality, nothing will make you more successful or get you quicker results with people than being stubbornly optimistic.

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Economics, Happiness and Optimism - It's Natural For Humans - A Book Review

If you are tired of reading all the negative news in the newspaper, and watching all the economic doom and gloom in the cable TV media, then boy do I have a decent book to recommend to you! This book is written by a very knowledgeable scientist who has spent a lifetime studying human civilization, societies, and evolution.The name of the book is.."The Rational Optimist - How Prosperity Evolves," by Matt Ridley, Harper Publishing, New York, NY, (2010), pp 448, ISBN. 978-00614-5205-5.It turns out that the rich actually are happier, but not by much, Ridley suggests that if you are 10-times as rich, you are not ten-times as happy.Nevertheless you are somewhat happier overall."We should judge wealth not only by money in the bank, but rather we should be also counting the benefits received," and he explains that if you get free health care, what is the relative value of that? If you get a housing allowance, or are fortunate enough to rent from a landlord under rent control, what is the benefit of that, and how does that attribute to your standard of living, or quality of life.The book has many themes, it seems to discuss similar issues to "The World is Flat" and "Tipping Point" and even a little "Black Swan" and since it is written by Matt Ridley you know he comes from a evolutionary perspective, and is well studied in human historical migration.He speaks specifically to the reality of billions living with very little, even challenged for water, and the number of people living in less than a dollar a day.He shows how religious people seem to do better with regards to commerce and capitalism - fairness in buying and selling.He appears to be a capitalist as well, showing how capitalism has done quite well for lifting people out of poverty.He shows how it is the mission of human beings to build a better life for himself and his family, and in this quest we should see future optimism for ecology, economics, and happiness.Improvements in modern first world environment are extremely better today, than they were 50 years ago.As people have more money, they tend to demand a better quality of air and water, and food.And as the society does more industrialization and commerce in the beginning - things are problematic to a point, then there is a shift.He discusses Chinese Cities, and Mexico City and India, and how in the future they will clean up their acts, cities, and environment and Matt, shows how this is a natural progression.Matt Ridley gave a great talk in NY City at the New York Academy of Science for Book CSPAN2 TV on May 18, 2010.You can view this on YouTube, CSPAN, or the Rational Optimist (dot) com.Please consider all this.

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Economics, Happiness and Optimism - It's Natural For Humans - A Book Review

If you are tired of reading all the negative news in the newspaper, and watching all the economic doom and gloom in the cable TV media, then boy do I have a decent book to recommend to you! This book is written by a very knowledgeable scientist who has spent a lifetime studying human civilization, societies, and evolution.The name of the book is.."The Rational Optimist - How Prosperity Evolves," by Matt Ridley, Harper Publishing, New York, NY, (2010), pp 448, ISBN. 978-00614-5205-5.It turns out that the rich actually are happier, but not by much, Ridley suggests that if you are 10-times as rich, you are not ten-times as happy.Nevertheless you are somewhat happier overall."We should judge wealth not only by money in the bank, but rather we should be also counting the benefits received," and he explains that if you get free health care, what is the relative value of that? If you get a housing allowance, or are fortunate enough to rent from a landlord under rent control, what is the benefit of that, and how does that attribute to your standard of living, or quality of life.The book has many themes, it seems to discuss similar issues to "The World is Flat" and "Tipping Point" and even a little "Black Swan" and since it is written by Matt Ridley you know he comes from a evolutionary perspective, and is well studied in human historical migration.He speaks specifically to the reality of billions living with very little, even challenged for water, and the number of people living in less than a dollar a day.He shows how religious people seem to do better with regards to commerce and capitalism - fairness in buying and selling.He appears to be a capitalist as well, showing how capitalism has done quite well for lifting people out of poverty.He shows how it is the mission of human beings to build a better life for himself and his family, and in this quest we should see future optimism for ecology, economics, and happiness.Improvements in modern first world environment are extremely better today, than they were 50 years ago.As people have more money, they tend to demand a better quality of air and water, and food.And as the society does more industrialization and commerce in the beginning - things are problematic to a point, then there is a shift.He discusses Chinese Cities, and Mexico City and India, and how in the future they will clean up their acts, cities, and environment and Matt, shows how this is a natural progression.Matt Ridley gave a great talk in NY City at the New York Academy of Science for Book CSPAN2 TV on May 18, 2010.You can view this on YouTube, CSPAN, or the Rational Optimist (dot) com.Please consider all this.

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Another Economic Bubble Burst Ahead - China? (Part 1)

Most economists would agree that just as there is much euphoria surrounding an economic boost for a country, there is also an implicit economic phobia with regards to its authenticity and sustainability in the longer term.Historical analyses of economic empires depict a cyclical trend of economic mayhem and plummeting after attainment of the pinnacle of distinctive economic super power status.As a matter of fact, the demise of these economic empires has been observed to occur immediately after certain macro-economic factors characterizing "super heating" of these economic icons becomes evident.In actuality, the epoch of economic cataclysm of the empires dates as far back as the time of the Persian empire to now a period of time during which the world has witnessed the downfall of many economic empires including but not limited to the Roman empire, U.K, Japan and possibly U.S.A.Apparently, there is a high degree of consecutiveness between the emergence of economic empires and their subsequent economic debacle.That means the world continues to see the rise of economic empires as well as their demise in fulfillment of biblical prophecy and also in conformity with one of the sayings of King Solomon which states that "To everything there is a season, a time for every purpose under heaven".Now, the objective of this article is not to explain the rational behind the prophetic and proverbial tendencies but to assess and enlighten the world about the need to be wary of the emerging economic super power China and the possibility and ramifications of its demise in the near future.China according to analyst is expected to overtake the U.S in economic output based on GDP in the early years of 2020.China currently has managed to increase its market share of the world market economy with leading economic indicators all pointing to a positive outlook.For example, China has comparatively higher range of GDP figures such as from a value of 13.0% (2007) to a value of 8.4 %( 2009 forecast) in spite of the fact that U.S still maintains its position as having the largest economy in the world.In 2006, the Chinese economy was about $2.68 trillion worth and this was about a fifth of the size of the US economy [OECD 2009].Also, its current account balance as percentage of GDP has changed from 11.0 %( 2007) to 5.6 %( 2009 forecast); fiscal balance as percentage of GDP from 0.7 %( 2007) to -3.3 %( 2009 forecast); consumer price index from 4.8(2007) to -0.8(2009 forecast) and changes in inflation from 7.4(2007) to -3.1(2009 forecast).The country also experienced increase in foreign exchange rate reserves from $1528 billion (2007) to $2392 billion (2009 forecast) [China Economic Report, 2009].The current account balance which comprises of balance of trade, factor income payments and transfer payments experienced a drop due probably to the worldwide recession.Balance of trade covers payments for export and import of goods and services whilst factor payments encompass income from foreign investments in financial assets or securities.Transfer payment is the net worth of grants, aids given and received internationally.In fact, a major part of the country's current account is dependent on the net exports (balance of trade) and this is likely to have a ripple effect on its GDP as that also depends greatly on net exports.Ultimately, the drop in balance of trade presupposes that much of the GDP growth is coming from domestic or consumer spending just like it happens in the United States economy.In addition, it is likely that the country exported goods and service as much as it imported with a resultant minimal change in balance of trade.Nevertheless, the good news is that at least the current account is a surplus and not a deficit which means the revenue from trade, income and transfer payments at least exceeds the expenditure from these transactions.Consequently, this is a cash inflow for China's economy.Generally, the country rely more on trade to boost its economic growth and any global slump is likely to affect its economy seriously unlike the U.S that relies on consumer spending.The repercussion in the decreased current account balance is likely to retard the investment climate in the country and subsequently the GDP growth.The negative fiscal imbalance (predominantly vertical imbalance) suggests the negative impact of fiscal decentralization and the monetary imbalance between the Chinese federal government and the provincial governments from the perspective of expenditure and revenue disbursements.Again, it implies an increase in transfer payments from governments to provinces because of less revenue available from the provinces coffers to meet its expenditure.China also experienced a reduction in consumer price index to a near zero value of 0.8 in 2009 forecast signaling technically a decrease in demand or in other words deflation.The deflation is yet again reflected in the negative inflation in 2009.Also, the country has the largest amount of foreign exchanges reserves (more than $2000 billion) in the world which makes it assume the status of the largest exporter of capital in the world.This also means that in terms of hot cash inflow into a country, China is ahead of the world.Analytically, these comparatively stunning economic figures suggest the prospect and inevitability of China becoming the epicenter of the world economy.Added to these fact is that the country is playing a leading role in manufacturing, technology and financial sector of the world as it is fast spreading its tentacles in these sectors into almost every part of the world from Africa to Asia.Much as this is encouraging for the world, disappointments are plausible should any economic quake occur at this epicenter.Such a quake would definitely spread to every part of the world starting from Asia and spreading all the way to America.In fact, a lot of financial redeployment has occurred in the last few years for China.For example due to the low interest rate in the U.S and other western countries, a lot of Chinese investors have borrowed funds from these places where interest rate are low and reinvested it in the Chinese economy where interest rates are comparatively high.Some of these funds have also been used to buy US securities predominantly bonds and bills.In addition, there has been a massive government fiscal and monetary stimulus in support of its economy.A greater percentage of this stimulus found itself in the infrastructural sector and in the pockets of domestic consumers boosting domestic demand including the housing sector.Also recently, China embarked on the depreciation of its floating currency the renminbi (whose basic unit is the yuan) as a means to increasing net exports in the midst of the global recession.Next, in spite of these encouraging developments, what is non-trivial is whether China would be able to implement and maintain appropriate effective fiscal and monetary policies to erase any imbalances in its economy and explicitly imbalances with the rest of the world.This calls for policies that can prevent the creation of bad debts and an "economic bubble burst" with spill overs to the rest of the world.Furthermore, policies that would incorporate the cost of a better environment in its industrialization to ensure compliance with the targets set at the recent climate change conference in Copenhagen.Also of significance are policies that would promote political freedom, investment freedom, labor freedom and freedom from corruption.Frankly, what the world needs from China in future are policies that can produce a cooling effect on its "heating" economy and a breaking effect which provides safe landing with avoidance of worldwide economic catastrophe.Optimist may argue that the expected slow recovery of the world's economy in the next few years would produce a breaking effect on the Chinese economy as global demand for goods, services and raw materials would barely increase stabilizing prices and keeping inflation low.Unfortunately, such economic figures analyses with respect to economic growth of economies have been continuously revised substantiating the degree of uncertainty surrounding its veracity.Finally, the question that needs to be asked is whether China is susceptible to an economic bubble burst now or in future and should the world be worried about that.In the next part of this article the author would give some reasons why the world should be wary of the pace of economic growth for China and the amendment the country needs to make to reduce the negative impact on the world should there be any failure.Watch out for part 2 of this article!!Source. Charles Horace Ampong [MSc(Eng), MBA(Finance)] GLG Councils Consultant Blog. http.//charliepee.Blogspot.Com.

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