5/10/2013
The young bailing out the old
With the inflation game to stimulate growth and provide liquidity, the housing Ponzi Scheme will get an added boost and prices will spiral even higher over time. The fact that a $20k HDB flat can fetch $400k or more is already a norm, even when the remaining lease is getting shorter and shorter. And when new buyers got to pay for higher and higher prices, any fall in housing prices is going to hurt the these buyers. And in order to protect the buyers, the late buyers and later buyers would have to bail them out.
The young of today will have to bail out the buyers of yesterday. And the buyers of tomorrow will have to bail out the buyers of today. The ultimate buyers will have to pay the ultimate price for their purchases.
In between, those who are able to jump out of the scheme will benefit from this Ponzi when the prices are artificially kept to go one way, up up and away. And the people benefitting from this will be the foreigners who come and go, buy and cash out. A guaranteed investment promising guaranteed great returns! It cannot go wrong. The FTs know the game plan and they have the options. They can game the Ponzi and laugh all the way to the bank.
And who are the suckers left to buy the ever higher priced flats but those that have no where to go, ie the Singaporeans. Like it or not, they will have to buy the flats no matter how expensive they are. They cannot pitch tent at the beaches or in the parks.
These captive buyers in a market that is carefully crafted to move up, will end up the biggest suckers. The current prices of HDB flats are cheap, really. If no serious effort is taken to prick the bubble, which would hurt mort people, the prices can only go higher and higher. Don’t ask me who created this problem. Don’t tell me they did not know.
Who is going to save the young from this enforced ransom of their lives, to bail out the early buyers, speculators and property developers? It is highly irresponsible to make the young to be the victims of the Ponzi Scheme. It is outrageous!
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10 comments:
Most of the current generation already own homes. Only the young and future generation will have to pay the price
I agree that it is very irresponsible for the Govt to just let the the property prices spiral out of control.They should do some thing effective not some luke warm measures.They should know that in a small island like
singapore, land is a premium and with the current loose monetary policy and strong S$, foreigners will just park their money here and watch it gow.
Throwing away good assets for bad money.
Hi rb,
Let me paint a slightly different scenario.
1. The property bubble will never be pricked by the Government. It would be suicidal for them.
2. Singapore is a uniquely managed economy, one of a kind. It is all controlled, that is whatever that is in their control.
3. For the bubble to burst, an external factor would have to come in to do the job and that the Government can put the blame on.
4. In the meantime, while waiting for this external factor to arrive, the Government is managing a slow "release" - with little success.
5. When the property bubble does eventually collapse, the young and old alike would have to bear the burden. The retirement nest-egg in the house would be severely affected. The young would continue to pay for their overvalued homes.
6. Worse is the hidden reserves would be used to bail out the property sector. Bear in mind, substantial part of the reserves are monies collected from land sales, etc. So, its monies already paid and collected from young and old.
7. Local banks would be first to get some rescue relief. Foreigners (PRs and new citizens) may likely drop their house keys at the airport and head home to their home country, once their speculative investments go pear-shaped. The house keys would be with the car keys - a la Dubai. Bad debts would pile up.
8. Foreign banks would also stretch out their hands for some relief. Don't be surprised if monies are doled out to them to save the financial centre and jobs.
9. The young and old should not expect the Government to use the reserves to save their butts. The huge reserves are meant to protect the system, warts and all. A system supported and funded by the young and old.
10. The system resets for another iteration. And the young and old continues to feed it and replenish the reserves.
So clever. So daft.
faber
That is a reasonable scenario, faber. It is not far fetch. The property bubble is just too big, like the elephant in the classroom.
It is now being supported by more foreigners taking up the slack with ill gotten money printed elsewhere. These money may end up as banana currency while they hold on to the properties and we holding on to worthless papers.
No one can "save you" from a Ponzi scheme.
The best way to avoid being burnt is not to engage in a Ponzi scheme to begin with...UNLESS you are one of the "early birds" who get in at the top (beginning) of the scam; OR you have positively identified a large pool of "suckers" all ready and willing to participate thus allowing you to "cash out" not only unscathed but also richer than you were before you entered "The Game".
In illegal Ponzi schemes, there is law enforcement and the law courts to bring an end to the ruse and punish the guilty.
In LEGAL Ponzi schemes which are ALL run by the government, there is no one to stop. To stop means people lose money. So the scheme continues UNTIL SOMETHING BREAKS.
Ponzi schemes pitch children against parents, friends vs friends. i.e.it make "enemies" out of peaceful individuals simply minding their own business and getting along with one another. People who used to trust each other, no longer do...because you don't know who is going to sabo who.
Ever thought of killing your parents? Maybe they're thinking of killing you...first :-))
Got your "game face" on? You'll need it?
The astute Sinkies have cashed out and boarded their planes to a far better place.
Those who are left are the greedy, stupid and inert ones hoping for the Ponzi scheme to snare more daft Sinkies into the trap.
The Foreign trash so beloved by you know who and who had the brains to steal jobs from Sinkies and cashed out as well are now land owning rich men in their little villages in India or China.
In the end, who paid for these trashes' status and their wealth? Poor next generation Sinkies slogging like dogs until they take the last lorry journey to Mandai.
That's what the whole evil scheme is all about.
Since they cannot reduce the price of HDB, they can always introduce subsidy for HDB based on a certain % (say 50%) rather than a fixed amount. Even if BTO HDB is $4ook, locals still pay around $200k.
Any gov in this world engaged in some type of ponzi scheme to con their people. Thats the reason why they want to be elected as govand not because they truly want to serve the people. People must learn to stop voting for the most greedy party to lessen their sufferings.
One day, singaporeans will end up like the israelites getting out of the hands of the egypt pharaoah to end their lives of slavery. People must learn to stop voting for the most evil party to stop such incident from happening.
Until today the Sinkies are still not thinking. Some don't even bother to think.
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