While getting gas (petrol for our international readers) this morning, I heard on NPR (National Public Radio) that China released it’s numbers this morning. Their economy grew by over 10%! There was a discussion about whether China would beat-out Japan in 2010 to be the #2 economy in the world; the US being #1. Well, I have to say: not bad for a bunch of communists. Oh, did we all forget? One consistent thing that I hear about China is that things happen gradually. So I’m wondering when their form of government will catch-up to their economy.
Now you may ask yourself: how did the Chinese do that in 2009—the year of pain and intense pucker-factor? Well, their Government pumped $1.44 Trillion (with a capital “T”) into their banks which in turn pushed it into the hands of the consumer and small business. Hey, didn’t we do that in the US? Why yes; yes we did. Except that the US banks horded the cash and kept a tight lid on credit. So, small businesses (which really fuel the economy and have the greatest affect on unemployment) still can’t get any credit, which means that they have diminished working capital and are stuck in survival mode. Also, this morning on the TV I saw a snippet with my idol Warren Buffet . He said that the current US “Stimulus Package” was like “taking 1/2 a Viagara” and that now we need to do the rest. Man, I love this guy!
In the interest of full disclosure; I have owned Berkshire-Hathaway for over 15 years.