Western world has very different fiscal management styles from emerging economies in Asia.
(1888PressRelease) October 03, 2011 - MIAMI, FL - Ben Bernanke's rather preachy (albeit true) remarks that the US needs to learn budget discipline are very interesting considering the very different budget and investment styles in the emerging economies of India and China, versus those of more developed nations in the western world. 'Fiscal responsibility' is not too popular a concept in modern day North America, or Europe, Canada, or Australasia for that matter. For decades now, many families have existed purely on credit - often credit that they could not realistically ever repay. And how can families and individuals be expected to behave responsibly when their governments do not?
The euro is in jeopardy due to a few of the countries in the euro zone having serious debt issues; a situation that must be galling in the extreme to those member countries who do not have such problems but are expected to shore up the weaker economies. Part of the US' problems stemmed from people having 100% mortgages on houses that were soon worth less than the amount they owed on them. Whether you choose to blame the individuals who took on mortgages they could not afford, or the banks that knowingly lent out these funds, knowing that the recipients would likely default, we are certainly not seeing fiscal responsibility. But what happens when countries get into debt? The US raises its debt ceiling - akin to raising the limit on your credit card so that you can borrow more money and afford to make payments. Greece, on the other hand, is bailed out by other countries within the European Union. Of course, it is not quite that simple but it is interesting to look at the speculative nature of many investors in the West, and their reasons for investing; either to make a quick profit or to protect their wealth against inflation.
Now consider the emerging economies. Despite the continued existence of extreme poverty in both nations, India and China have emerged as powerful, rapidly growing economies. Their growth puts that of the US to shame and their burgeoning middle classes buy gold, not to speculate, but for the intrinsic worth of the precious metal. These people are not living on credit, they are savers, and their governments behave with fiscal prudence. Yet China has the world's second largest economy. Perhaps there is a lesson to be learned after all, at least about our expectations of how precious metals investments should behave.
Bill Hionas runs Pan American Metals of Miami, a precious metals brokerage located in Miami, Florida.
About Bill Hionas:
Bill Hionas is CEO of Pan American Metals of Miami, LLC, a group of traders, investors and account executives who combine many years of experience to help clients invest in bullion. PAMM provides an individual investment service and is based in Miami, Florida for convenient access to both North and South American investors.
Western world has very different fiscal management styles from emerging economies in Asia. 
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