How long the low interest rate environment will remain?

[richwang]

Low interest rate is another drive for the property market. How long would you think the low interest rate environment will reamin? The market seems to forecast a very long period. USD 5-year is yeilding at 1.46%. In other words, it will remain low for at least 5 years. For Japan it was almost 20 years.
The marekt is also talking about QE2 (printing money to buy Tresaury, so the rates will remain low). Fed is also hoping to have a higher inflation.
With USD weaking, the funny things is those money will actually come to Asia.
You can see Singapore government is puting billions of IPO to absorb those money. Singapore Airlines is issuing bond at a 2.15% yield. Amazingly "low".
Can we expect a low interest rate environment for another 10 - 20 years?

Thanks,
Richard

[gn108]

This is a very good and relevant question.

Not sure - but I reckon will last for 1-2 more years unless food/energy inflation comes in too high. But over the longer terms eg 4 -5 years I expect rates to normalise to a higher band. But who really knows!

[rattydrama]

Difference between SIBOR and SOR

Quoting from the SIBOR wikipedia entry (http://en.wikipedia.org/wiki/SIBOR),
SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate (http://en.wikipedia.org/wiki/Reference_rate) based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (http://en.wikipedia.org/wiki/Money_market) (or interbank market (http://en.wikipedia.org/wiki/Interbank_market)).
On the other hand (http://www.sgx.com/psv/derivatives/futures_options/interest_rates/SGX_SOR_Pricing_Model_Singapore_Dollar.shtml),
The Swap Offer Rate (SOR) represents the effective cost of borrowing SGD synthetically through borrowing USD for 3 months and swap out the USD in return for SGD for the same maturity.
Source: http://www.yenkai.net/content/difference-between-sibor-and-sor


I am a non financial person. My question, which rate one will go up first when interest rate up? Why?

[richwang]

Difference between SIBOR and SOR

Quoting from the SIBOR wikipedia entry (http://en.wikipedia.org/wiki/SIBOR),
SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate (http://en.wikipedia.org/wiki/Reference_rate) based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (http://en.wikipedia.org/wiki/Money_market) (or interbank market (http://en.wikipedia.org/wiki/Interbank_market)).
On the other hand (http://www.sgx.com/psv/derivatives/futures_options/interest_rates/SGX_SOR_Pricing_Model_Singapore_Dollar.shtml),
The Swap Offer Rate (SOR) represents the effective cost of borrowing SGD synthetically through borrowing USD for 3 months and swap out the USD in return for SGD for the same maturity.
Source: http://www.yenkai.net/content/difference-between-sibor-and-sor


I am a non financial person. My question, which rate one will go up first when interest rate up? Why?


I am not financial either. So my answer will make you disappointed: they will go in tamdem. I guess you are more interested in knowing why.

Just look at how banks work: they lend you long (30 years) and borrow short (1 month or 3 months). Where do they get the money from? Two sources: local and overseas.

When they get money from local, SIBOR is the rate. They will either borrow from other banks (if they think SIBOR is low) or lend to other banks (if they think SIBOR is high). Everyday 11:30AM, there is SIBOR fixing. Something like the stock market opening. Banks will be able to reach a price (in this case SIBOR rate for different tenor: 1M, 3M, etc).

They can also source the money from overseas, that is to borrow USD and convert it into SGD. That is SOR. The current low interest rate is driven by USD low rate, so SOR could be slightly lower than SIBOR in the short run. But the global market is efficient, so in the long run, they move in tamdem. (Otherwise, some professional will trade on the differences.)

SIBOR is more a local event, so it tends to be more stable. SOR involves USD (altough you don't see the USD), so it might fluctuate more.
That's also why 3m might be better than 1m because it fluctuates less.

http://www.smartloans.sg/pages/the-choice-between-sibor-and-sor-rates

http://smp-consulting.com.sg/smpc/?option=com_content&view=article&id=62


The most important thing is to find a decent bank, so no hidden agenda. By the way, if you want to save cost, use the bank's lawyer to act as your buying lawyer as well. Again, decent bank will recommend you professional lawyers.

Thanks,
Richard

[Localite]

Low interest rate is another drive for the property market. How long would you think the low interest rate environment will reamin? The market seems to forecast a very long period. USD 5-year is yeilding at 1.46%. In other words, it will remain low for at least 5 years. For Japan it was almost 20 years.
The marekt is also talking about QE2 (printing money to buy Tresaury, so the rates will remain low). Fed is also hoping to have a higher inflation.
With USD weaking, the funny things is those money will actually come to Asia.
You can see Singapore government is puting billions of IPO to absorb those money. Singapore Airlines is issuing bond at a 2.15% yield. Amazingly "low".
Can we expect a low interest rate environment for another 10 - 20 years?

Thanks,
Richard

Good points albeit in poor English.

[mantrix]

Good points albeit in poor English.

Don't be mean lah :)

[richwang]

Good points albeit in poor English.

Thanks for the comments. English is my 2nd launguage. I was declined a global manager's role due to poor English. I've spent a few thousand with British Council, still no much hope - in particular for my spelling.

Thinking of introducing "spelling bee" to Singapore. Any sponsors?

Thanks,
Richard
PS. Would you mind to rephase it in good English?

[isaaclim]

Thanks for the comments. English is my 2nd launguage. I was declined a global manager's role due to poor English. I've spent a few thousand with British Council, still no much hope - in particular for my spelling.

Thinking of introducing "spelling bee" to Singapore. Any sponsors?

Thanks,
Richard
PS. Would you mind to rephase it in good English?

Cool... A smart move. :spliff:

[paul phua]

Thanks for the comments. English is my 2nd launguage. I was declined a global manager's role due to poor English. I've spent a few thousand with British Council, still no much hope - in particular for my spelling.

Thinking of introducing "spelling bee" to Singapore. Any sponsors?

Thanks,
Richard
PS. Would you mind to rephase it in good English?

Richard,dont be disheartened,I also have problems with my English as Chinese is my 1st language.However,the key to success in any investment(particularly property),language only constitutes to being a mode of communication,wisdom still plays a pivotal role in ensuring success.As i am a "chinese helicopter",i have invested in propety for over a decade.It was wisdom and precise analytical skill which allowed me to own 10 propety,including condos and shop spaces.Please continue posting any ideas pn propety investment that is beneficial to all the netizens here.Cheers and Good Luck to your propety investmend odyssey.:)

[rattydrama]

As you can see my English is no good either. I blame that I was in Chinese Primary School with Chinese at first language. My whole family speaks hokkian. My parents are not educated and we are too poor to engage tuition teacher. Worst I was a slow leaner during my school days. I worked very hard but was not able to score well for my English.

Able to write proper English is important in Singapore. So we shall write more to irritate our fellow forummers and improve ourselves along the way.

[Geylang OKT]

my engrish is the most worstest tok kong speaking here. hope everybodies can good correcting my english. many thank yuo hor in advancing ant wishing one and all a goods day ahead. geylang environment good for piak piak, notch good for learnings english. :o

[rattydrama]

my engrish is the most worstest tok kong speaking here. hope everybodies can good correcting my english. many thank yuo hor in advancing ant wishing one and all a goods day ahead. geylang environment good for piak piak, notch good for learnings english. :o

funny man E8 score for you!!:scared-1:

[proud owner]

As you can see my English is no good either. I blame that I was in Chinese Primary School with Chinese at first language. My whole family speaks hokkian. My parents are not educated and we are too poor to engage tuition teacher. Worst I was a slow leaner during my school days. I worked very hard but was not able to score well for my English.

Able to write proper English is important in Singapore. So we shall write more to irritate our fellow forummers and improve ourselves along the way.









i am not any better .. very often errors after i post

i m english ed, but my ENTIRE family was chinese ed ... no one could help me when i was schooling ...

but hor ... you will be surprised .. alot of ang moh here in NY think i am ABC ... american born chinese ...

when i told them i am born and bred in spore ...they were amazed ..

so .. we are all not that bad lah

[Geylang OKT]

funny man E8 score for you!!:scared-1:

wahahaha... lucky not F9 :D :D :D

[richwang]

Richard,dont be disheartened,I also have problems with my English as Chinese is my 1st language.However,the key to success in any investment(particularly property),language only constitutes to being a mode of communication,wisdom still plays a pivotal role in ensuring success.As i am a "chinese helicopter",i have invested in propety for over a decade.It was wisdom and precise analytical skill which allowed me to own 10 propety,including condos and shop spaces.Please continue posting any ideas pn propety investment that is beneficial to all the netizens here.Cheers and Good Luck to your propety investmend odyssey.:)

Thanks for all the support. I have encouraged my son to study English Literature - a subject not easy to get A. His English is much better than mine. But Chinese is now his worst subject.

Wow! 10 properties in 10 years! Have you fully paid them up? If not, have you done some what if analysis? My friend used to won a property in Orchard Road in 1994. The rental went up from S$3k to S$4.8K, and then dropped to S$1.5K during Asia financial crisis. He then sold it.

Thanks,
Richard

[richwang]

Good points albeit in poor English.

Localite,
I've got my Indian friend to edit for me. Does it sound better now? Could you further edit it?

Thanks,
Richard

How long the low interest rate environment will remain?
=========================================

Low interest rate is another boon for the property market. How long do you think the low interest rate environment will remain? The market seems to forecast low interest rates for the foreseeable future. USD 5-year is yielding at 1.46%. In other words, it will remain low for at least 5 years. For Japan it was almost 20 years.
The market is also talking about QE2 (printing money to buy Treasury, so the rates will remain low). Fed is also hoping to have a higher inflation.
With USD weakening, it is more likely that this money will actually come to Asia.
You can see Singapore government is putting billion dollars in IPO to absorb this money. Singapore Airlines is issuing bonds at a 2.15% yield. Amazingly "low"!
Can we expect a low interest rate environment for another 10 - 20 years?

[valkri]

What does QE2 stand for?

[sleek]

Think its referring to the British Pounds. :beats-me-man:


What does QE2 stand for?

[JuzMe]

What does QE2 stand for?
QE: Quantitative Easing a type of monetary policy

[2824]

Last year it was predicted was ard 3Q 2010, couple months back it was ard 3Q 2011/or early 1Q 12, now with QE 2 coming who knows?

AS long as the US economy takes 3 steps forward and 2.5 steps back, we shd be able to enjoy the low interest rate for some time more. :rolleyes:


QE: Quantitative Easing a type of monetary policy

[stalingrad]

What does QE2 stand for?

QE2 is quantitative easing round 2. it is also known as the Ben Bernanke maneuver.

[stalingrad]

frankly, I believe interest rates in the US will hover around zero for many many years to come. same thing for Singapore.

[eng81157]

in my opinion, rates will stay low in the near term. QE2 will flood the market with cheap USD and US treasury rates and interbank swap rates stay close to zilch.

if local rates increase and become more attractive comparatively, it will attract money inflow from global -> viola, asset price inflation! this is a little simplistic, hope it suffices

[devilplate]

in my opinion, rates will stay low in the near term. QE2 will flood the market with cheap USD and US treasury rates and interbank swap rates stay close to zilch.

if local rates increase and become more attractive comparatively, it will attract money inflow from global -> viola, asset price inflation! this is a little simplistic, hope it suffices

same here...i actually wish MAS to tighten liquidity by increasing the interest rate

metals booming now...silver almost 25!!! any silver guru here?:D

[stalingrad]

my golden agri just zoomed up 10% in two days.

[rattydrama]

my golden agri just zoomed up 10% in two days.

keep moving:banana: :banana: :cutedoggy: :santana: . :im-so-happy: :im-so-happy:

[eng81157]

same here...i actually wish MAS to tighten liquidity by increasing the interest rate

metals booming now...silver almost 25!!! any silver guru here?:D

just remember to diversify your risk and spread it across your invested asset classes, rather than plunge wholeheartedly into metals and commodities.

all you need is for china to come out saying that lots of their municipal bonds are at the risk of default and bam! commodities will be amongst the hardest hit

[valkri]

Thank you, I learnt something.

So QE round #1 was in 2008 and now we are expecting another round so soon after? Would that mean we should buy into gold even at its high current price?


QE: Quantitative Easing a type of monetary policy

[vino7272]

Difference between SIBOR and SOR

Quoting from the SIBOR wikipedia entry (http://en.wikipedia.org/wiki/SIBOR),
SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate (http://en.wikipedia.org/wiki/Reference_rate) based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (http://en.wikipedia.org/wiki/Money_market) (or interbank market (http://en.wikipedia.org/wiki/Interbank_market)).
On the other hand (http://www.sgx.com/psv/derivatives/futures_options/interest_rates/SGX_SOR_Pricing_Model_Singapore_Dollar.shtml),
The Swap Offer Rate (SOR) represents the effective cost of borrowing SGD synthetically through borrowing USD for 3 months and swap out the USD in return for SGD for the same maturity.
Source: http://www.yenkai.net/content/difference-between-sibor-and-sor


I am a non financial person. My question, which rate one will go up first when interest rate up? Why?


SOR is more volatile than SIBOR in crisis as SOR invloves USD. In comparison, I would say SOR is less interest rate sensitive than SIBOR and more 'market sensitive'.

[richwang]

The 5 year Inflation linked US fixed income instrument is trading at high price, meaning the market is expecting the inflation will eventually come very high. When employment rate improves, Fed will raise the rate. I've just talk to a guest from Boston, he says the risk is it can be earlier than most people have expected - as early as 2nd half of next year.
Let's keep an eye on it.

Thanks,
Richard

[Jadey]

If you look at the past SIBOR SOR trend chart, they both seems to move in tandem. So I am guessing that if US raise interest rate, SIBOR rate will also likely to go up.

[kane]

at the rate of progress in US unemployment, we'll probably have low interest rates for another year.

[devilplate]

at the rate of progress in US unemployment, we'll probably have low interest rates for another year.

beginning of this yr, almost every1 wud tot tat interest rate will raise 3rd qtr of this yr which is NOW....

even if US raise interest rate, it will be gradual and small increment:2cents:

now i tink US worry more on deflation rather den inflation:2cents:

[Localite]

The US will not raise interest rates in a jobless recovery. To answer the question when will the interest rates rise, I will ask the question when do you think unemployment in the US will drop to a pre-crisis level. And since MAS controls exchange rate and not interest rates, our SG rate will also stay low. Nothing to do with our economy really.

[kingkong1984]

Maybanks 5 yr fixed is pretty gd if u r paying for self stay.

[Lord Anus]

that US will not raise interest rates (at least while obama administration still in charge) is a foregone conclusion

you should watch out even more for QE2 and QE3 and QE4, etc. not only from the US Federal Reserve but also European Central Bank and Japan. Prepare to drown in banana currency!

luckily MAS tighten monetary policy, other wise your char kway teow will cost $10 by now and your MM apartment in Little India will cost $2m by now.

[Condo Collector]

that US will not raise interest rates (at least while obama administration still in charge) is a foregone conclusion

you should watch out even more for QE2 and QE3 and QE4, etc. not only from the US Federal Reserve but also European Central Bank and Japan. Prepare to drown in banana currency!

luckily MAS tighten monetary policy, other wise your char kway teow will cost $10 by now and your MM apartment in Little India will cost $2m by now.

For a short while. If US continue to devalue their currency, China and Japan will follow. Then, what MAS can do?

[hopeful]

For a short while. If US continue to devalue their currency, China and Japan will follow. Then, what MAS can do?

strengthen S$ some more. MAS fight inflation via forex, not interest rates.
good time to tour those countries.

[Lord Anus]

strengthen S$ some more. MAS fight inflation via forex, not interest rates.
good time to tour those countries.


strengthen S$ any more and singapore economy will definitely go into recession.

in fact, i want to see how long more MAS can hold on to the current SGD strength and policy. sooner or later they will have to capitulate and loosen the SGD to match traditional FX rates with USD and Euro. China and Japan already cannot tahan and are printing more currency to match USD. soon singapore will follow. they must, because they have no choice.

and that is when hyperinflation finally comes to our shores, property prices will shoot up into a bubbled frenzy, and all this will happen after the PAP election. it is no secret that the current prevention of inflation, property price suppression and the relative strength of SGD are artificially controlled by govt to placate the voters. left to the free market, properties should have crossed the $10,000 psf mark by now, like in HK before the govt stepped in.

you have no idea what cheap cash and liquidity can do.

[devilplate]

strengthen S$ any more and singapore economy will definitely go into recession.

in fact, i want to see how long more MAS can hold on to the current SGD strength and policy. sooner or later they will have to capitulate and loosen the SGD to match traditional FX rates with USD and Euro. China and Japan already cannot tahan and are printing more currency to match USD. soon singapore will follow. they must, because they have no choice.

and that is when hyperinflation finally comes to our shores, property prices will shoot up into a bubbled frenzy, and all this will happen after the PAP election. it is no secret that the current prevention of inflation, property price suppression and the relative strength of SGD are artificially controlled by govt to placate the voters. left to the free market, properties should have crossed the $10,000 psf mark by now.

wow...smthing to look forward to next yr?

[hopeful]

strengthen S$ any more and singapore economy will definitely go into recession.

in fact, i want to see how long more MAS can hold on to the current SGD strength and policy. sooner or later they will have to capitulate and loosen the SGD to match traditional FX rates with USD and Euro. China and Japan already cannot tahan and are printing more currency to match USD. soon singapore will follow. they must, because they have no choice.

and that is when hyperinflation finally comes to our shores, property prices will shoot up into a bubbled frenzy, and all this will happen after the PAP election. it is no secret that the current prevention of inflation, property price suppression and the relative strength of SGD are artificially controlled by govt to placate the voters. left to the free market, properties should have crossed the $10,000 psf mark by now, like in HK before the govt stepped in.

you have no idea what cheap cash and liquidity can do.

why would it goes to recession? exports expensive?

Anyway, what is traditional USD/SGD rates? It has been going downhill for decades.

So how do we normal folks have access to cheap cash besides lower mortgages rates?

So after election, govt print more money > SGD value down > import more expensive > inflation goes up.
will government control inflation? if yes, interest rates goes up. if not, still low rates. High rates, more hot money flows in, S$ value up.

So what specific actions can we take to profit from the coming situation?
I want to go along for the ride.

[sh]

strengthen S$ any more and singapore economy will definitely go into recession.

in fact, i want to see how long more MAS can hold on to the current SGD strength and policy. sooner or later they will have to capitulate and loosen the SGD to match traditional FX rates with USD and Euro. China and Japan already cannot tahan and are printing more currency to match USD. soon singapore will follow. they must, because they have no choice.

and that is when hyperinflation finally comes to our shores, property prices will shoot up into a bubbled frenzy, and all this will happen after the PAP election. it is no secret that the current prevention of inflation, property price suppression and the relative strength of SGD are artificially controlled by govt to placate the voters. left to the free market, properties should have crossed the $10,000 psf mark by now, like in HK before the govt stepped in.

you have no idea what cheap cash and liquidity can do.

I think the government is deliberately keeping our currency rate high, precisely to attract hot money. It is no secret that the government wants to make singapore a financial centre. With all the other countries lowering their currency, the SGD welcomes very attractive.

Yes, it is at the expense of our exporters, but we are moving away from manufacturing anyway.

Hyper-inflation:- with the stronger dollar, imports are actually cheaper, so imported goods will be cheaper. Singapore imports everything so, that will hold inflation in place

The issue is not inflation across the board but asset inflation, ie property. The government will probably control this via sector specific measures, such as what we recently saw. If prices goes up further, the cash to loan ratio may go up to 40%, 50%. There's a lot the government can do to control the market.

Singapore wants to attract cash to become a financial centre, and keeping the currency strong is a way of doing so. The interest rates will stay low, with all this liquidity.

That's me humble opinion.

[Lord Anus]

1. Govt is keeping SGD high to control inflation. Yes. However we shall see if they care enough to do that after the elections.

2. You say Govt is keeping SGD high to attract hot money and foreign direct investment?? Errr...you mean you think foreigners want to shift currently weak USD, CNY and Yen into an unsustainably strong SGD? Sell low buy high? Wow that goes against all investment theories. You da champion.

3. Yes we are moving away from exports but are still very dependant on foreign direct investment, especially for MNCs using Singapore as regional hub for many industries, banking being one of the more important. How is a high SGD beneficial to these? Singapore consumer market is so small that making small profit from SGD priced products in local market means nothing to these MNCs. What they are more concerned about is the cost of doing business in Asia, and especially the cost of locating Asian headquarters in expensive Singapore. When it gets too painful to operate regional HQ in Singapore, they'll up and leave for KL or HK.

4. Properties. Govt will definitely try to control property prices before the electioons. Anything after that is anyone's guess, if you track the behaviour of property prices vis a vis elections and govt policy in the past few decades. Complaining about high property prices is nothing new to Singapore, having had its population doing so since the 1960s.

[Localite]

STI already at all time high in USD terms. just do your sums.

My prediction: STI will hit 3,500 by year end.

Ppty mkt for high end and landed will continue to rise for another 2 years. Incredible liquidity and loan rate 70% does not impact most of the UHNWI.

SGD will hit 1.25 to USD by year end. And interest rates will stay at current levels (ZERO!).

[sh]

1. Govt is keeping SGD high to control inflation. Yes. However we shall see if they care enough to do that after the elections.

2. You say Govt is keeping SGD high to attract hot money and foreign direct investment?? Errr...you mean you think foreigners want to shift currently weak USD, CNY and Yen into an unsustainably strong SGD? Sell low buy high? Wow that goes against all investment theories. You da champion.

3. Yes we are moving away from exports but are still very dependant on foreign direct investment, especially for MNCs using Singapore as regional hub for many industries, banking being one of the more important. How is a high SGD beneficial to these? Singapore consumer market is so small that making small profit from SGD priced products in local market means nothing to these MNCs. What they are more concerned about is the cost of doing business in Asia, and especially the cost of locating Asian headquarters in expensive Singapore. When it gets too painful to operate regional HQ in Singapore, they'll up and leave for KL or HK.

4. Properties. Govt will definitely try to control property prices before the electioons. Anything after that is anyone's guess, if you track the behaviour of property prices vis a vis elections and govt policy in the past few decades. Complaining about high property prices is nothing new to Singapore, having had its population doing so since the 1960s.

2) Singapore is so far the only economy that has openly allowed the SGD to strengthen, as opposed to other economies that has deliberately intervened to lower their currencies. If your an investor and of the longer term view that the SGD will stay strong relative for other currencies, then you'll park your money here. if you think that the SGD is going to crash, then, by all means stay away.

3) Agreed that cost of doing business is important, but, relative to other developed financial centre, like HK, we're still competitive. This has to be weighed against the benefits being perceived as a stable economy with a strong currency. If the MNC's investments here gain in value because a strong currency, wouldn't they welcome that.

Fundamentally, it's a question of whether the SGD will stay strong in the long term (my view) or that the SGD will lose value in the short term (your view).

[Localite]

2) Singapore is so far the only economy that has openly allowed the SGD to strengthen, as opposed to other economies that has deliberately intervened to lower their currencies. If your an investor and of the longer term view that the SGD will stay strong relative for other currencies, then you'll park your money here. if you think that the SGD is going to crash, then, by all means stay away.

3) Agreed that cost of doing business is important, but, relative to other developed financial centre, like HK, we're still competitive. This has to be weighed against the benefits being perceived as a stable economy with a strong currency. If the MNC's investments here gain in value because a strong currency, wouldn't they welcome that.

Fundamentally, it's a question of whether the SGD will stay strong in the long term (my view) or that the SGD will lose value in the short term (your view).


SGD has got to appreciate vs USD. That will be the case for most Asian currencies. We have been undervalued compared to our worth, and the US has been overvalued. You call a house which is worth 200k and make it look like 500k and that inflates perception of wealth, now with the US housing market wind down, reality bites and we will reach East vs West financial equilibrium.

[Lord Anus]

SGD has got to appreciate vs USD. That will be the case for most Asian currencies. We have been undervalued compared to our worth, and the US has been overvalued. You call a house which is worth 200k and make it look like 500k and that inflates perception of wealth, now with the US housing market wind down, reality bites and we will reach East vs West financial equilibrium.

nope. asians are by and large still export oriented economies. too soon to declare east vs west equilibrium. even lee ky predicted it will take at least till 2030- 2050.

we will start to devalue by middle of next year i gather.... 2 or 3 consecutive quarters of diminished growth will see to that.

[Localite]

nope. asians are by and large still export oriented economies. too soon to declare east vs west equilibrium. even lee ky predicted it will take at least till 2030- 2050.

we will start to devalue by middle of next year i gather.... 2 or 3 consecutive quarters of diminished growth will see to that.

It is not just abt export and import, it is abt valuation. I believe the US and their dollar has been wrongly valued vs the Asian currencies. If millions of home are wrongly overvalued and now being reset to their appropriate values and the govmt prints money to make up for shortfall then obviously their currency will have to be reset. iMHO

[sh]

There's no need for further argument. We agree to disagree. Let's review this thread in a year's time to see who is right?

Let's look at the SGD against the USD on 2 Nov 2011. Let's see if it's higher or lower than 1USD to 1.29SGD and we'll declare a winner!

:)

[Localite]

There's no need for further argument. We agree to disagree. Let's review this thread in a year's time to see who is right?

Let's look at the SGD against the USD on 2 Nov 2011. Let's see if it's higher or lower than 1USD to 1.29SGD and we'll declare a winner!

:)

OK the bet is on my friend. We'll see in a year.

[hopeful]

There's no need for further argument. We agree to disagree. Let's review this thread in a year's time to see who is right?

Let's look at the SGD against the USD on 2 Nov 2011. Let's see if it's higher or lower than 1USD to 1.29SGD and we'll declare a winner!

:)

Anybody want to be house? Or setup a pool?
Let's put money where our mouth is :)

[Localite]

Aiyah no one really knows for sure. All just guessing.....including me :-)

[sh]

if anyone knew for sure, will be rich..... flirty rich....:D

[proud owner]

if anyone knew for sure, will be rich..... flirty rich....:D

seems that both of you are experts ...

i just read an article re a recent meeting with IMF ..

apparently a couple of asain CBs brought up 'capital control' as a potential measure to curb inflow of 'hot money' ...

asian CBs are afriad of asset bubble .. and it seems IMF is 'ok' with cap control ..

it may not happen at all .. but fact that its brought up .. it shows that it indeed crossed the mind of some CBs ..

lets say ..indonesia implement cap control ...

will the rest of asian countries NOT affected ?

any thoughts ?

[sh]

seems that both of you are experts ...

i just read an article re a recent meeting with IMF ..

apparently a couple of asain CBs brought up 'capital control' as a potential measure to curb inflow of 'hot money' ...

asian CBs are afriad of asset bubble .. and it seems IMF is 'ok' with cap control ..

it may not happen at all .. but fact that its brought up .. it shows that it indeed crossed the mind of some CBs ..

lets say ..indonesia implement cap control ...

will the rest of asian countries NOT affected ?

any thoughts ?

What's "CBs"... oh central banks....:doh:

The issue is not about other asian countries, it's about singapore. Singapore with it's aspirations to be financial centre will not and cannot impose cap control. If the other countries do impose capital controls, it will make singapore look even more attractive....

I am of the long term view that the US and Europe is in decline relative to asian countries. The flow of so called "hot" money may not be that "hot", but rather permanent shift of funds into growing economies. Hence my bullishness on the SGD.

If you draw a analogy between the legacy airlines eg the Pan Am and TWA and the american (& european) economies. They got bogged down by their pensions and unions and eventually went bankrupt. The moment the airlines made any money, the unions will demand for more perks, or go on strike. So, whatever profits quickly evaporated. Their diminishing revenue went towards feeding their ballooning pensions for their retired staff. How can they compete with newer airlines without unions and pensions. The US and the European economies are like these airlines. Just look at the strikes in Europe over the removal of the overwhelming benefits that they cannot afford.

[proud owner]

What's "CBs"... oh central banks....:doh:

The issue is not about other asian countries, it's about singapore. Singapore with it's aspirations to be financial centre will not and cannot impose cap control. If the other countries do impose capital controls, it will make singapore look even more attractive....

I am of the long term view that the US and Europe is in decline relative to asian countries. The flow of so called "hot" money may not be that "hot", but rather permanent shift of funds into growing economies. Hence my bullishness on the SGD.

If you draw a analogy between the legacy airlines eg the Pan Am and TWA and the american (& european) economies. They got bogged down by their pensions and unions and eventually went bankrupt. The moment the airlines made any money, the unions will demand for more perks, or go on strike. So, whatever profits quickly evaporated. Their diminishing revenue went towards feeding their ballooning pensions for their retired staff. How can they compete with newer airlines without unions and pensions. The US and the European economies are like these airlines. Just look at the strikes in Europe over the removal of the overwhelming benefits that they cannot afford.


i understand

when indo implemented cap control last time ... spore was not spared ..although we DID not have cap control then we were affected badly too

thats my concern .. we will get dragged into it ..

when mkt needs to UNWIND ..the whole region get affected

[sh]

you meant the last asian financial crisis, 1998. Hopefully, we learnt our lessons from there.

Watch out for bubbles.... the government is mindful of that, hence the cooling measures. expect more if asset prices continues to grow. The government will act fast and furious.... (maybe even 50% loan to cash ratio if necessary)

A slow growth in asset value is welcome. it encourages investments and growth. Nobody wants the deflationary cycle japan is experiencing. The government is controlling price increases that via the measures. Nobody also wants the prices to crash either and the government will act if that happens.

[amk]

I wish ccy movement is that simple. Whenever something bad happens in US economy, USD went up. This does not make any sense from macro economics perspective. There is this political factor. USD is till the world reserve currency. Oil and gold are still quoted in USD. AAA rating by definition is the creditworthness of the US government. As long as US remains as the only superpower in the world, the above will remain unchanged. So USD will track lower, but will not be gone paper. Euro zone is not much better than US. There is absolutely no reason why EUR should not be 1.1. China is not printing less money than the US. So nothing is what it seems. When USD cary trade unwinds, u will see ppl realizing suddenly USD is not as dead as it seems.

[Localite]

Today's papers say USD to further depreciate.

As I said before it is about resetting valuations. You can bring down the USD and create jobs in America.

If there is 10% unemployment and you drop the dollar you are effectively making everyone earn less, but then you will create more jobs.

Anyway that is just my opinion.

[Localite]

I wish ccy movement is that simple. Whenever something bad happens in US economy, USD went up. This does not make any sense from macro economics perspective. There is this political factor. USD is till the world reserve currency. Oil and gold are still quoted in USD. AAA rating by definition is the creditworthness of the US government. As long as US remains as the only superpower in the world, the above will remain unchanged. So USD will track lower, but will not be gone paper. Euro zone is not much better than US. There is absolutely no reason why EUR should not be 1.1. China is not printing less money than the US. So nothing is what it seems. When USD cary trade unwinds, u will see ppl realizing suddenly USD is not as dead as it seems.

Yes agreed, question is when will the current trend change? If the trend will change after 5 years then frankly no one cares for now.