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12/25/2005

how to unwind 15 years of reckless policies of grandeur?

the coe prices are crashing down. so are the prices of cars. but these come with a price. people and businesses will be hurt. we are seeing the new buyers happily buying new cars. the people who have paid for expensive cars of yesteryears are bleeding. the secondhand car dealers are bleeding. fortunately the pain in this industry is not so severe as there are some residue values for scrap cars. also people are used to the 10 year lease. the more serious areas will be housing and high pay. housing is one area that is a huge problem that can never be unwind without hurting all the house and flat owners. the bigger the investment cost, the greater will be the lost. and the problem of negative assets will be massive. the inability to unwind the high cost of properties will also mean that high wages cannot be unwind as hdb flats are priced to affordability. then there are the high cost of essential services and hospitalisation. without unwinding the high wages, our workers are going to be uncompetitive. and the political cost is also going to be very high. cutting wages is going to cost a lot of votes. without cutting wages, we are suffocating ourselves to death, slowly. money and businesses will gravitate to where value can be found. we will price ourselves out of businesses in shopping, office space, manufacturing etc if we think that we are of great value when reality speaks otherwise. then there is the slow cooking of the stock exchange, dying without knowing. a neighbourhood roti shop selling 100 brands of roti to 100 customers has thoughtlessly and rapidly been transformed into one selling 100 local rotis, 100 foreign rotis, 100 muffins and 100 tarts to the same 100 customers. actually 30 customers left, as the other 70 either died or faded away. and they are still going to bring in another busload of rotten rotis from malaysia. this would only turn all the local rotis and foreign rotis into mould. and the muffins and tarts will be left to dry on the shelves. and the beauty of it all is that they did not know why the roti shop is dying a slow death. why there are no customers? they even formed committees to try to revive the roti shop, trying to be creative and innovative to stimulate more businesses. on the other hand they are strangling it with their own hands. anyone who studied econ 101 will tell you that with supply increasing by 3 or 4 folds but with demand dwindling, the system will collapse on its own. a small neighbourhood roti shop must not pretend to be the 5th avenue of new york or bond street of london. the year is coming to a close. can we see light at the end of the tunnel? or are we spiralling deeper into darkness? the leader is shouting that there is light everywhere. but the followers are only seeing dark clouds. perhaps the followers are all blind.

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