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If you have been following IMDb 250 you would have realised that The Godfather I was the best rated movie(No.1 movie) for a long time until The Dark Knight(TDK) by Christopher Nolan was released. There was so much Batman fan following(fanatism) that it changed IMDb 250 forever. continue

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Wikipedia defines disruptive innovation as an innovation that improves a product or service in ways that the market does not expect, typically by being lower priced or designed for a different set of consumers. continue

I had earlier promised to explain how the US has a savings rate of -7% (yes negative) and how it is funded.

The most important factors are :

1. USD as a Global Reserve Currency:

The US has a spectacular credit rating which has enabled the dollar to become the globel reserve currency, meaning that the probability of the US Govt defaulting on its loans is very low which in turn means US Dollar will be a very strong and stable currency. Every country has to hold reserves of some foreign currency/gold in order to save itself from potential political/financial crises. Hence most of rest of the world holds US dollars. Holding US dollar in terms of currency notes don’t give any returns, so they are used to buy US Treasury bonds. The bondholder has actually lent money to the US Govt. continue

To understand this we need to know about the history of US consumer spending. The US in the past 10-15 years has been a borrow and spend economy, evident from their evergrowing National debt. For every 100$ earned, they have been spending 107$. The remaining 7$ gap is bridged by other countries.( I shall explain this in a later article.) We all know this model is unsustainable, since one can’t keep spening more than one’s income. The house bubble burst was the trigger(not the cause) for this impending recession. continue