Unrest in ME, China and Russia at risk?

This is the way western analysts are thinking and hoping everyday. Tomorrow if there is a health epidemic, a financial meltdown, and industrial or manufacturing mishap, it will be China and Russia or any other country except the US and Europe that will be next in line. These silly no hopers are praying and praying everyday to see the demise of Russia and China but forgetting that the next big collapse could be the US and Europe. The US is all ripe for a revolution with the income gap widening, the middle class becoming poor and beggars, and a national debt that they may not be able to repay short of turning the greenbacks into banana currency. They are still trying to keep the lid close and hoping for a miracle. The whole can of worm could splash out tomorrow and the US could be the beggar overnight. And Europe with several countries already in the critically ill list, and many more to go but not yet disclosed. As long as Russia and China can keep on feeding its people well and improving their standard of living, the West can keep on hoping and praying for their downfall. But before their prayers are answered, the West could have gone to the rubbish dump of history first. All Empires will have to call it a day. The West is no exception. The revolution in the ME is a revolution not only against dictators but a revolution against corruption and poverty, and against Western domination. When the West loses its grip on the ME and its oil, they will come tumbling down like a house of cards.

No growth better than growth

Yes, it sounds contradictory. Growth is the essence of our economy and the vital ingredient to the good life we are having. How can no growth be better than growth? The old mature economies are flowing along with lower growth rate but maintaining a high quality of life. We have experienced many years of high growth and the quality of our life has improved by leaps and bounds. The thing is that we are now witnessing diminishing returns from our growth. In fact, while the rich are getting richer and enjoying real growth, the middle income and lower are not getting better, and many are not enjoying any real growth or bettering their living condition, despite good economic growth. A simple illustration, if economy grows by 5% and income grows by the same amount, broadly speaking, the people should enjoy a 5% growth in their disposable income or spending power. Or at least they should be slightly easier in their pockets. But not everyone got a 5% increase if the economy goes up by 5%. Yes, some got 10% or more increases. That’s why some are doing very well and very happy. Another problem is that the inflation beast that we have today is eating away everything. If inflation is 5%, everyone is back at status quo. If inflation is double or more, though the economy looks good, though the income goes a bit higher, there is really a net contraction in the spending power. It is negative growth to those whose income does not keep pace with inflation. On the other extreme, low economic growth with low inflation could be better when inflation is lower than economic growth and income growth. How much of our growth has been translated to the wealth of our people in the middle and lower income bracket? Are they really better off, sharing the growing economic pie, or are they starting to feel the strains in their pockets? A $100k increase in property price means many will have to work 5 to 10 years for nothing, not improving their income at all. This goes to the prices of cars, of high medical bills and other big ticket items. The couple of hundred dollars of salary increases are easily eaten up by the high cost of living of everything, from basic necessities, transportation, food on the table, and consumer durables. We may be in a situation when no growth or low growth is better off than high growth if the standard and cost of living can be maintained. At the rate inflation is eating up everyone’s income and savings, we should think carefully of chasing high economic growth for its sake. It could be an effort in vain. What is important is real improvement in standard of living, cost of living, not fictitious dollar increases when the value is depreciating by the days.

No child be denied an education

This is the assurance by the govt. No money never mind, just ask and will be given. Any small prints to read? Any conditions attached? Will the parents be subject to mean testing? What income level is considered as affordable and disqualified from govt handouts? A $2000 household income for one child or $5000 income for four children qualified? I think the first thing is to prove how challenging the family life is. The term challenging and affordable can mean anything to anyone. Nevermind, when a family is in that condition, no need be shy, just go and ask for help. The govt will be most happy to help. The devil is in the details. Something like no one will be denied medical treatment in our hospitals. Then why are citizens going to Malaysia for treatment? Fail the mean testing, or too shy to ask or beg?

If only Malaysia agrees…

If Malaysia agrees to let us build all the facilities we need in Johore, like hospitals, schools, housing etc etc, we can save a lot of money from paying sky high prices for these facilities and services in the island. There are obvious competitive advantages in terms of land costs. And if that happens, Singaporeans can all move over, hopefully can still work in their own country. And the whole country can be sold or lease to foreigners who can afford the high prices. As a hotel, there is nothing sentimental about this place. Let it go to the highest bidders. Singaporeans can go and park somewhere else. The cheaper land and labour costs will make living in those places much more affordable for the 21st century nomads. And we can extend the work in progress in nation building forever. No sweat, as long as Singaporeans can be shifted out and rent out their expensive HDB flats and earn rentals to live cheaply in Johore. Medical and hospital services would also be cheaper. Come to think of it, renting out the whole island and live on the rentals is not a bad idea. Our beautiful island paradise can be home to the rich and famous, our world class hospitals to serve the rich and famous…. Provided Malaysia is willing. We can truly become the modern nomads, people without a home in their own country. Oops, got homes, but need to rent out to live on the rentals outside the island as the high cost of living becomes prohibitive to the average Singaporeans. OK, the average Singaporeans can also call themselves landlords, till the lease expires. Isn’t this a damn great idea? No need to worry about nation building, no need to worry about country and citizens. Just treat the whole place as a hotel to make money for nobody. The concept of renting out our homes to collect rents and live simpler is already being in practice by some Singaporeans. Some have rented their private properties and live in HDB flats. And Singaporeans are already going to Malaysia and Thailand or elsewhere cheaper for medical treatments while our hospitals are doing fine business treating the rich from all over.

Haunted by a living myth

Singaporeans are asset rich. Those who live in bigger flats, 5 rms and above, are better off. A Pavithran Vidyadharan, welcome to Singapore, wrote to the ST, ‘ I hope on Friday, when Finance Minister Tharman Shanmugaratnam announces this year’s Budget, he will be more generous with goodies for five room and HDB executive flat owners. There is a misconception that such owners are high income earners, and they don’t need much help. It is not necessarily so. They could be living in the bigger HDB flats because their family is large; some could be taking care of their aged parents and in laws; and some could even be taking care of divorced or widowed siblings and their children.’ There are many other reasons why those living in bigger flats may not be better off. The older policies and pricing allowed many average Singaporeans to buy bigger flats as they were ‘really, truly’ affordable in every sense of the word. Some of them could now be retired and have lesser or no income. And with the great inflation Singapore Style, with no money in the pocket, life can be equally tough for those living in bigger flats. The demons of inflation and false wealth will be knocking at the doors of these asset rich Singaporeans. The only solution is to down grade and down grade and down grade. This will also apply to the wealthy scions who have inherited wealth and big properties. If they don’t inherit a business to generate the same wealth to maintain the high living lifestyle, and not professional enough to command million dollar incomes, they too will join the down grade queue. Just to repaint a house can be tens of thousands. And this is likely the main reason why the very rich do not think a few hundred millions would be enough for their children as the cost of living and inflation will soon erode whatever wealth there is there.