11/26/2008

The unsustainable high inflation road

High property prices are good. High salaries are good. So we continue to raise the cost of properties, rentals and of course salaries, and also the cost of everything. The cycle is unsustainable as the payers cannot afford to keep paying. The salary portion of the equation cannot keep going up. Now that salary is coming down, would high prices come down? Would the cost of living come down, prices of property and rentals, will they come down? Or shall they be propped up to give the impression of wealth? The artificially high prices of properties, by fidgeting with the supply of land cannot be sustained for long. The truth will break it apart. The American model of printing money and living on borrowed money is breaking down. Living from future income is only passing the buck. But the music will stop some time in the future. The music has stopped and the high cost model, when high cost is deemed as high quality, and good, is going to crumble. Are we still living in the beliefs that salaries can go up and up, and prices can go up and up? The higher the better?

12 comments:

Anonymous said...

Our PAP govt will see to it that everything turns out OK. Don't worry, they have been doing a fine job so far, so stop bitching and let them do their job.

If you feel uneasy in Singapore, you know what you can do don't you.

redbean said...

i must thank you for your support and dedication to this blog. you have helped to turn the counter everyday and the hit rate is going up faster.

Anonymous said...

We are already passing the buck to the next generation by way of higher property prices and cost of living. Redbean, some people choose to see nothing, hear nothing and do nothing, so let them be.

redbean said...

high living, low thinking.

somehow told me this phrases many years ago.

Anonymous said...

Redbean, are you saying that you have not enjoyed living in Singapore all these years? You must have enjoyed the high living too. So, does it also follow that you have low thinking also?

Just be very grateful you have such a caring govt to see to all your needs so far.

Stop complaining all the time and just say thank you.

redbean said...

i think we all know that you will have a hard time trying to figure what we are saying. but never mind. we won't blame you.

i will give you 3 months to think about the phrase, 'high living, low thinking.' my advice is not to think too hard. sometimes it is not how hard you think.

you need more time let me know : )

Anonymous said...

Haha, in Indonesia there are people who still think Suharto did a wonderful job. So too in Philippines with Marcos, in Thailand with Taksin, in USA with Bush, in Malaysia with Mahathir etc. And I have no doubt that here in Singapore there are many people who will also feel the same way.

Blessed are those who cannot see!

Anonymous said...

I do not need any time to figure out your whinging and whining. Life is too precious to waste on all the negativities you spew out all the time. I am OK and I am happy with my lot. Thanks to the PAP.

Matilah_Singapura said...

Don't worry. Price are already coming down.

The market is working as it should.

Anonymous said...

costs will only go up,
it MUST be that way.
7% of nothing..
is nothing.

redbean said...

the market is working, but all the govts are interfering and pumping it with more morphine. the govts should do nothing and let the market forces do the necessary.

then we can have another brave new world. looks like the free market mechanism will not be allowed to work its way free from govt interferences.

Matilah_Singapura said...

redebean:

Other govts might be pumping money, but so far the sg.gov has been "well behaved", and left the market and all the whinging cry-baby losers alone, instead of interfering with the market — like imposing short sales restrictions — and bailing-out the sore losers.

It'll be interesting to see the next budget, or if "off-budget" strategies are imposed.

If the budget is in deficit (a bad thing), then the govt does 1 of 3 things or a combination to fund their deficit:

1. Tax (bad, but the best choice though politically unpopular)

2. Borrow (badder, debts have to be re paid some day)

3. Inflate (the absolute worst, once new money is created, severe distortions in the capital structure is caused which eventually ends in catastrophic failure)

But so far... great job! (do nothing)