Been very busy the day I stepped in Zurich and so ofcourse have been unable to write any new articles. I will continue the articles specifically on options trading and China once I return back to India. Anyways this article is a bit of digression but one important insight that I have gained from my visit.
I expected Zurich (financial capital of Switzerland) to be a very modern city, however it turned out to be just another town, totally shocking. The buildings are old, well maybe because Switzerland was a neutral country during WWII and so unlike most of Europe the city survived with its legacy. Anyways two important things that I observed here are:
- People are not very rich in the west, ofcourse Indians would find the place expensive but thats purely due to purchasing power parity ( which anyways would vanish in the next 30 years) though the people are not very poor unlike in India. So the GINI index (level of disparity) is smaller here compared to India. What is the reason behind this I am yet not sure. The government taxation and social security system might be one answer but certainly there must be some more important reason to ponder over.
- Also one thing to think over is how such a small country with negligible natural resources became developed. Well the answer to this question is relatively easier. One reason is that the surrounding countries were richer so it automatically boosts the economy of your country as labour and trade arbitrage processes are quicker and this transfers and creates wealth in that country (switzerland in this case). The second reason is that during the WWII many of rich jews and other people kept their money in the swiss banks ( this is what made UBS and Credit Suisse) and most of that money was never claimed as their owners lost their lives during the war. This money in turn got channeled into the Swiss economy and created the growth momentum..............