Crisis? What crisis?
The effect has yet to be felt by many. Most are right now
hoarding their money and not spending, not that
there is NO money. Those that continue to do so will only see their
savings wipe out in a matter of time, as companies close down,
meaning competition roll over and die, leaving the stronger
companies around to cut throat.
Singapore's unemployment rate is till below 10%, which means
there are still more than 90% whom are employed and have money to
spend, that is, if they do not hoard up money
instead. But as they hoard up money, companies
will have to close and the unemployment rate will climb.
The world had reacted quickly in October and threw an obsene
amount of money to shore up over leverage banks. Now that the banks
are cash rich, they hoard up money and are very
very stringent with lending, if they lend at all.
They are hoarding up money, and letting companies die. Continue
along this line, when existing companies default more and new
companies are not given loans to expand, people will draw out
their savings and banks, like any other commercial entity will die
too.
The only bright ray of hope is the money govts will spend on the
people instead. China had reacted fast and started on
infrastructure projects worth billions and will keep many china
citizens employed.
US had approved spending, but the money has yet to go into the
hands of consumers. Once that happens, it is trillions of dollars,
and would certainly drip our way.
Singapore, as usual, cautious to the point of kiasu, has yet to
do anything concrete about actual spending, prefer to wait until
legislated. To their credit, they did offer up thousands of govt
jobs that will keep unemployment low, so long as those employed
DONT HOARD MONEY!
So when will the crisis be over? Depending on how long actual
World govt spending on citizens and infrastructure will come. Eu is
a basket case right now, cant even get their act together to decide
on anything.
Planet Earth's fundamentals are still fine. Plenty of resources
to tap and food to be grown and harvested. People still have needs
and must spend eventually to satisfy those needs.
As for Singapore, the 90% employed will keep the domestic
economy humming, as long as they DONT HOARD MONEY!
For those who are retrenched, govt jobs await. For those in foreign
companies, majority are awaiting their govt's spending and easing
of credit by their banks. If that doesnt come fast enough, they
will close down.
The stock market is now normal, with its regular ups and downs.
It is afterall just another gambling centre, more high class and
called 'investments'. All kinds of people play the stock market,
some go for long, some go for short. Unlike black october when it
was a total disaster of panic scrambling out of the market at all
costs.
In summary, there WILL BE NO CRISIS if Singaporeans spend
normally. I aint kidding. Our external trade is currently being
diversified to other nations instead of depending heavily on uS. It
may not be much, but it is still revenue for social spending and
jobs.
PS: For those who worry about running up huge
deficiets, rest assured, Planet Earth's resources combined with
scientific technology advances will reap back those money
spent. Better cheaper and more productive use of land and
mining, fertilisation, etc, etc. The world's economy is after
all - resource based.
The only worry is that we may discover how to live forever. But
that would probably come with technological advances on how to tap
the vast universe with its abundant planets' resources. But first,
we need to evolve as a species and not as individual
barbarians.
