The year 2004 has been a great learning experience for us, a year in which many old and obsolete economic notions were finally overcome and the stage set for the birth of a shining new paradigm.

It's time to give up those outdated ideas which old fogeys drilled into you at school and understand what the new economics is all about. For your convenience, we have outlined below the main lessons of the past year.

It's okay for the poor to give to the rich. 2004 saw the building up of massive foreign exchange reserves by developing countries such as China and India. It is a mark of our status as emerging economic superpowers that we sent those dollars right back to the United States.

Seen from this perspective, the government's decision not to accept international help for tsunami victims makes perfect sense. If we did accept US aid, all that would happen is that the dollars that we invested in the US would come back.

Big deal. We may be poor and one in five of us may be malnourished, but that doesn't stop us from helping the rich.

If, in this noble effort to lend to the rich, you start losing money, don't let that put you off. Keep lending money to them.

In 2004, the dollar depreciated against emerging market currencies, but that didn't stop large-hearted Indian and Chinese governments from continuing to put their money in US treasuries. The economic lesson -- it doesn't matter if your assets depreciate, don't pull money out.

God has proclaimed that we should produce, and the United States should consume. In order to uphold this universal moral law, it may so happen that poor countries need to lend to the United States.

But how else will they consume, if we do not finance them? And if Americans do not consume, who do we sell to? To indigent Indians and Chinese? Don't be silly.

It's okay for one country to live beyond its means. The US, despite being the world's richest nation, desperately needs to consume more goods and services and to keep up its living standards.

If, in the course of that conspicuous consumption, it has to run up a huge current account deficit, that's unfortunate but necessary. The International Monetary Fund's structural adjustment programmes, which call for a drastic curtailment of living standards, are, of course, for countries other than the US.

It's okay to print money. Who're we to argue when the US Federal Reserve says so. If, while printing money, the money supply grows by leaps and bounds and creates a stock market bubble -- why, that's even better, as many of us would get rich, spend more and keep the economy going.

The important thing is not to save and invest, as we were wrongly taught by old fogeys at school, but to consume more and more. Central banks have a duty to keep blowing bubbles that boost asset prices and make sure that people are neck-deep in debt so that consumption can be sustained.

If American businesses lose out while competing against other countries, it's the duty of other nations to make sure that they appreciate their currencies and restore American competitiveness.

If, in the course of doing so, their economies stagnate for a decade or so, as happened to Japan, that's a pity. As the Americans like to say to the rest of the world, "The dollar may be our currency, but it's your problem."

Speculative activity, especially activity by hedge funds, has nothing to do with volatility in commodity, oil or stock prices. These funds perform a useful hedging function, and the fact that they are leveraged is neither here nor there.

So all those proposals for regulating them, like an international tax on speculative transactions, are misguided.

Yes, we know that Lord Keynes did say that "when the capital development of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done", but we must remember that Keynes was a left-wing extremist.