3/24/2013

Could the island survive a major economic crisis?





Would PAP be remembered as the rogue Govt in the future for bringing about the collapse of the country through its high property price, high cost of living and high dependency on immigrants? The formula for a crash in the economy and property price need no guess work. The writing is on the wall that the international finance and the monetary systems are waiting to hit ground zero. There are so many frauds and corruption in the world’s financial institutions and systems that it is now being sustained by the continuing printing of paper money by most of the developed countries. And Singapore is in the thick of this hazy and corrupt financial system that when it collapses, there is no where to hide and no where to run. Every Singaporean is part of this money matrix, tied up in huge loans through housing and a disappearing CPF that is good only on paper.

When the world’s financial system stops functioning, it is as good as dysfunctional now at the rate it is going, cheating all the investors of their hard earned money to benefit a few crooks, it is simply unsustainable. When it goes down, the economies of most countries will go as well. Our Raffles Place and Shenton Way and the new financial centre in Marina Bay will become ghost towns. All the high salaried finance FTs will have to pack their bags and return home. With half a million to a million foreigners that are here because of jobs, and will flee when the jobs are gone, the population will shrink overnight. Instantly the whole property market will be like a house of cards. No tenants, owners unable to service the loans, everyone scrambling to get out by selling whatever they have, bank foreclosures…. The more properties one owns, the more heavily one is mortgaged and in debt.

This spiral will hit every sector of the economy and everyone, including HDB owners. FTs and FWs will be evacuating like locusts migrating to greener pastures after a feast and leaving waste behind. Construction companies and developers will all go bust. The whole economy will be in ruins and so will be the lives of a people depending solely on unproductive pursuits of churning properties and stocks and derivatives. Everything will burn like all papers will burn.

The highest risk and heavily leveraged industry today is the finance industry. And we are deeply in it. And the people are all highly geared in properties, private or HDB, all in big debt and needing more money to service the debt. When jobs are gone, when easy money from high finance is not there, where will it lead to? Our economy is too highly reliant on the finance industry and properties, and on more foreigners being here. They are intertwined like triplets, when one goes, the others go as well. With 40% or 2m transient workers here, their departure can be traumatising and financially crippling.

When that day comes, don’t worry, economic systems are designed for boom and doom, like the great depression, it is a matter of when. And the good thing, it seems so near. The Govt will have no more tricks to pull out from the bag. In fact it is living on one last trick, growing population to boost up property prices and the economy. How long can this trick last?

I know, this is a very pessimistic doomsday forecast. Pray it doesn’t happen.

18 comments:

  1. This comment has been removed by the author.

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  2. This comment has been removed by the author.

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  3. Corrections, Financial and economic "crises"...call it what you want...are necessary "evils" of the natural process of purging the system of "greater evils" of the misallocation of resources, credit-driven insanities, fraud, "something-for-nothing" mentality and self-delusion from the systems.

    Singapore economy is very fragile. It depends on exports and trade.

    As to the question:
    "Could the island survive a major economic crisis?"

    My answer is "yes". It will be nasty, and people will have to accept less for a painful period, but Singapore -- due largely to its "open economy" and strong private sector with vast amounts of private cash, will survive.

    Assets will be re-priced (downwards) and there'll be vast transfers of ownership for assets. "Value seekers/ opportunists" (i.e. folks who carry ZERO debt) like me will do alright.

    Those highly-leveraged, will unfortunately suffer the most, some will die or commit suicide due to the unbearable stress.

    I like collapses. It is "creative destruction" come to mete out JUSTICE.

    The downside is that there is a very good chance of social unrest, and if it gets really bad: civil war. Which means there's also (unfortunately) political opportunity, which means "a real asshole" could rise to power. This is unpredictable -- it can go any which way.

    The People Get The Crises They Deserve, because they drank the Kool Aid, greedily sucked their leader's dicks for the "benefits" and sold out the principles they never had in the first place. (Matilah says: "Serves you the fuck right, you stupid non-critical thinking cunts!")

    ...and remember, in crises, there is danger and opportunity. :-))

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  4. When hot money flows in, there is a sense of well being as everyone is making money. When it goes the other way, the stock market and things related to the presence of hot money will crumble.

    The same theory applies to human trafficking. Now so many foreigners and many industries were built on the premise that they would be here. When they run, scoot, these industries will collapse in unison.

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  5. The first signs of collapse is already here - second hand car dealerships. Out-of-control COE prices resulted in second hand car prices rising in tandem. The dealers who bought their stocks at high prices now find themselves stuck with high inventory bought at inflated prices with little hope of liquidating them even at cost due to the new loan restrictions. Imagine the repercussions if they run road

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  6. /// Imagine the repercussions if they run road ///

    Singaporeans will so lucky if they run road.
    We will all finally wake up.
    And finally see the HARD UNTRUTHS.

    And we will have to rebuild afresh.
    But this time on solid foundations.
    Instead of an old man's hot air.

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  7. One shop closes means another shop's business will be better.
    Or
    some others better will be able to take over.

    There is always opportunity in bad situation.

    Matilah will agree.

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  8. Generally i felt that Singapore has increasing become more vulnerable due to influx of migrants into the Republic. Social setting and culture has changed, and many others.

    I don't regard this place as a country, rather it is no different from a hotel, and bonding between people is getting weaker.

    Should something terribly wrong happen, those 'affordable lots' are able to leave and resettle elsewhere.....

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  9. Bubble will burst naturally but a certain familee will grow stronger and richer each time. This is the irony.

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  10. Mr Chua you have brought out some good and insightful though unpopular points.

    Singapore asset/economic structure has becomes more vulnerable with a higher percentage of fluid foreign capital and foreigners introduced over the past years in a world supported by aggressive money printing from major central banks.

    The next economic crisis; local and global likely will be simultaneous.
    It is going to be very difficult for everyone, as major economy governments are near bankrupt and have nearly exhausted their monetary & fiscal bullets.

    My practical defences are: be not leveraged, be not in debts, be prepared, be contented with what we have. Look and keep God's love, joy and peace in our hearts. Enjoy and appreciate simple created things and relationships.

    Personally, I think a hybrid type of bear-range market of Japan (1990-2012) will generally be faced by major global economies like EU, China and to a lesser extent the US for some years. This maybe compounded by many earthquakes, sporadic wars & rumors of wars, more frequent natural disasters and flu epidemics in major crowded cities (My background reference is the Holy Bible).

    We are probably into a big last hurrah of a "setting sun" bull leg globally. Bull market usually last longer than I usually think. I guess this bull may end by mid 2014or early 2015. Unless Uncle Sam comes up with a New Deal build infrastructure program (bullet trains all over US plus aggressive immigration policy & use/export natural gas strategy).

    As long as many men are still around, bull & bear market cycle remains. Be patient. As a side note at this moment Vietnam seems a better regional bet.

    With best regards,
    Soon Hock

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  11. STForum

    [TTSH on patients who go shopping]

    "WE THANK Ms Lee Soh Hong for her feedback
    ('Patients who go shopping pose infection risk'; last Thursday)
    on our patients leaving the hospital to patronise the nearby shopping areas,
    and how such patients may pose an infection risk to the public.

    Jeremy Pakiam
    Executive, Corporate Communications
    Tan Tock Seng Hospital"

    http://www.straitstimes.com/premium/forum-letters/story/ttsh-patients-who-go-shopping-20130325

    ReplyDelete
  12. ST Forum

    [HEALTH CARE:
    Prevention key to lower costs]

    "Leong Choon Kit (Dr)

    I AGREE with the writers
    ('Health care in Singapore: Primary ways to boost the system'
    by Dr Tan Wu Meng; March 16,
    and
    '3Ms are outdated, says professor'
    by Professor Feng Pao-Hsii; last Thursday).

    First,
    a society must recognise that the way to lower health costs is prevention.

    Second,
    there are many patients in the tertiary hospitals who do not need to be there.

    Third,
    the 3Ms - Medisave, MediShield and Medifund -
    need to evolve to cater to this shift of focus to primary care.

    Fourth,
    the importance of medical insurance needs to be emphasised more frequently."

    http://www.straitstimes.com/premium/forum-letters/story/prevention-key-lower-costs-20130325

    ReplyDelete
  13. Tattler

    [A Policeman's Code Of Conduct]

    "Why on earth is the Commissioner of Police blowing his own trumpet in nearly 2 full pages of the Sunday Times?

    Then there's this curious bit about an unsolicited commentary on another law enforcer.

    'Boon Gay has been found not guilty...
    but certainly his acts are reprehensible,'
    he says.
    'He has broken every one of our values
    and he has tainted the whole police force by his behavior
    and that is very disappointing.'

    Wow, that's gotta be judge, jury and executioner pronouncement on a fellow officer who has been proven innocent by our legal system."

    http://singaporedesk.blogspot.sg/2013/03/a-policemans-code-of-conduct.html

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  14. Ng Kok LIm's latest

    [Correcting Mr Stiglitz’s article
    "Singapore’s lessons for an unequal US"]

    "Dear Mr Stiglitz,

    I refer to your New York Times article
    'Singapore’s lessons for an unequal US'
    which was published by the Straits Times on 20 Mar 2013.

    Your assertion
    that Singapore has had the distinction of having prioritised social and economic equity over the past 30 years
    is not supported by facts.

    The diagram below charts the GINI coefficient of developed economies over 30 years.. "

    http://trulysingapore.wordpress.com/2013/03/24/correcting-mr-stiglitzs-article-singapores-lessons-for-an-unequal-us/

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  15. Hi Soon Hock, welcome to the blog.

    Everyone is caught in this big casino and gambling with big stakes. Unfortunately there will be no winners. The collapse is going to be very painful and widespread. Many will have lives changed beyond recognition.

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  16. Hi Chin Leng, Good morning. I always enjoyed your sincerity and concern for fellow Singaporeans and this nation. We are more or less the oldies and experienced poverty to comfort and have fewer years to live.

    Younger Singaporeans who will live longer are going to face a lot more tribulations. May God bless them especially with peace in their hearts in the face of coming turbulences.
    With best regards, sh

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  17. PAP will be remembered as freak party ($2 company in AIMgate) engaging in freak election (vote buying, fixing opp party, gerrymandering, vote support by converting foreigner to citizens )

    What do you think ?

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  18. When it goes the other way, the stock market and things related to the presence of hot money will crumble.

    ReplyDelete