"Asians have lived below their means so that Americans could live beyond theirs"

Japan has invested $55 billion in US firms in the past few days, in addition to the massive amounts of money spent on "infusions" to the market. Hope America appreciates the effort. We are all in this great act together.

Leading research firm Thomson Reuters says Japanese firms have spent over 55 billion dollars - a record-high amount - to buy out or invest in overseas companies so far this year, capitalizing on the financial turmoil that severely affected US firms, notes NHK World.

Over at Treehugger, one of my collegues notes:

Matt Simmons, head of the oil investment bank Simmons and Company, has long been a prophet of peak oil, silencing the Fast Money team with his dire warnings to move to the country and grow your own food. And he’s busy stirring things up again, warning in a conversation with Peak Moment TV that gasoline reserves are so low in the US that if everyone topped up their tank we would see “a run on the bank”, literally running dry – running out of food within 5 to 7 days...

The title of this post is a quote from the Financial Times, where David Pilling talks to Chinese and Japanese finance experts, wondering if this is America’s chance to kick its Asian addiction:

Did America hang itself with Asian rope? I put this to a Chinese official last week and, quick as a flash, he responded: “No. It drowned itself in Asian liquidity.”

Asia’s part in America’s financial downfall has been two-fold. First, shiploads of cheap goods from China and other low-cost producers helped keep a lid on US prices. That lulled the Fed, with its tight focus on the consumer price index, into thinking it could have it both ways: high growth with low inflation.

Second, FT notes, Asian bank reserves, particularly from Japan, funded buy-now pay-later consumption in the US.

I can't help but wonder why. "Asians have lived below their means so that Americans could live beyond theirs" - a classic quote.

Treehugger: A Great Act: Living Beyond One's Means

Oh, and as part of the very unusual $700 billion taxpayer-assisted US bailout of banks and market players, there was also a sign of relief:

Wind power tax credits have been extended for one year; other types of renewable energy such as small-scale hydro or tidal power have been extended for two years. The bigger news is that solar tax credits for businesses and residential installations have been extended for eight years. The entire package amounts to $18 billion in tax credits and will be partially paid for by closing tax loopholes for the oil and gas industry.

A comment I got from Crossroads in China (much appreciated!):

I too will be interested to see if Americans will be able to manage through this period. The Chinese call it "eating bitterness", and unfortunately there are some that will have to do just that before times improve.

through this episode in our economic and social evolution, one can only hope that the concepts of conspicuous and green consumption patterns will take hold. Otherwise, nothing will have been learned, and the opportunity to make big steps will have been lost.

(Photo - of a real great act - from from Blogtorira, a great act from an ancient Kagura performance)