A case of if you cannot beat them, join them?

[stalingrad]

MAS does not have control over bank interest lah ...

M3 up 20% since 2009:

2009 (million)
Jan 346,731.0

2011 (million)
Jan P 413,235.9

but MAS control exchange rates. by allowing the SGD to appreciate rapidly against US dollar, domestic interest rates will rise rapidly to kill all speculators, and quickly deflate the property bubble.

if SGD appreciates by 5% overnight against USD, domestic inflation will drop to zero, and interest rates will shoot up, and kill off all speculators. One rock, and two birds killed.

[phantom_opera]

but MAS control exchange rates. by allowing the SGD to appreciate rapidly against US dollar, domestic interest rates will rise rapidly to kill all speculators, and quickly deflate the property bubble.

if SGD appreciates by 5% overnight against USD, domestic inflation will drop to zero, and interest rates will shoot up, and kill off all speculators. One rock, and two birds killed.

What are you talking about?? If SGD appreciates 5% overnight, it does not necessary mean petrol price will drop 5% and inflation will drop to 0% ...

[devilplate]

SGD appreciates and domestic int rates will rise too? why?

[teddybear]

Ai yoh, why you so stupid say these things that can already prove you wrong?
SGD has been appreciating for the past 2 years! However, instead of interest rate increasing, it has been dropping until current super low rate!

but MAS control exchange rates. by allowing the SGD to appreciate rapidly against US dollar, domestic interest rates will rise rapidly to kill all speculators, and quickly deflate the property bubble.

if SGD appreciates by 5% overnight against USD, domestic inflation will drop to zero, and interest rates will shoot up, and kill off all speculators. One rock, and two birds killed.

[stalingrad]

SGD appreciates and domestic int rates will rise too? why?

when the MAS buys up extra liquidity from the US, there are more sing dollars circulating around in the banking system. the extra sing dollars available reduce the interest rates. that has inflated the bubbles.

to reverse the damage, the only way is to mop up all the sing dollar liquidity by selling US dollars and buy Sing dollars, which will reduce the Sing dollar liquidity and raise the interest rates. the other effect is that the sing dollar exchange rate will go higher, thus reducing the inflation rate.

so, one rock and two dead birds.

[devilplate]

when the MAS buys up extra liquidity from the US, there are more sing dollars circulating around in the banking system. the extra sing dollars available reduce the interest rates. that has inflated the bubbles.

to reverse the damage, the only way is to mop up all the sing dollar liquidity by selling US dollars and buy Sing dollars, which will reduce the Sing dollar liquidity and raise the interest rates. the other effect is that the sing dollar exchange rate will go higher, thus reducing the inflation rate.

so, one rock and two dead birds.

but wat teddy says true also wor....

or u mean SGD appreciates too slow for the past 2yrs? i seriously dun tink MAS can anyhow push up SGD overnite? got any other side effects?

[westman]

when the MAS buys up extra liquidity from the US, there are more sing dollars circulating around in the banking system. the extra sing dollars available reduce the interest rates. that has inflated the bubbles.

to reverse the damage, the only way is to mop up all the sing dollar liquidity by selling US dollars and buy Sing dollars, which will reduce the Sing dollar liquidity and raise the interest rates. the other effect is that the sing dollar exchange rate will go higher, thus reducing the inflation rate.

so, one rock and two dead birds.

If that happened....Manufacturer's exports karpoooos...
With lesser demand for SG products from overseas, i think it killed not just two birds but every birds in SG...

[devilplate]

If that happened....Manufacturer's exports karpoooos...
With lesser demand for SG products from overseas, i think it killed not just two birds but every birds in SG...

tats a gd one

[stalingrad]

If that happened....Manufacturer's exports karpoooos...
With lesser demand for SG products from overseas, i think it killed not just two birds but every birds in SG...

but inflation expectations getting higher and higher, the damage to the economy is getting more and more serious. Workers will be unhappy seeing their pay checks shrinking by the day. so, MAS must take a balanced approach, with priority given to fighting inflation. that means allowing sing dollar to appreciate more rapidly. at this moment, sing dollars are not appreciating faster than the currencies of the neighboring countries. MAS should take a bolder approach to tamp down inflation expectations.

[amk]

As Teddy mentioned, MAS is *already* doing SGD appreciation. Right now it's almost 5% a year priced in, as observed in forward mkt. If not Sibor wouldn't have been 0.45, it would have been 0.1. In April the slope will probably be adjusted steeper, but no way it can bring up the inteest rate to 2.

U severely underestimated the role of SG export economy. It's far more important than pty bubble. Pty bubble can simply be prevented by admin measures. Inflation of SG is imported. There is no way you can shield SG from a worldwide problem. For workers, the most important thing is they must have jobs. Therefore the economy must be competitive. You have no choice.

[stalingrad]

As Teddy mentioned, MAS is *already* doing SGD appreciation. Right now it's almost 5% a year priced in, as observed in forward mkt. If not Sibor wouldn't have been 0.45, it would have been 0.1. In April the slope will probably be adjusted steeper, but no way it can bring up the inteest rate to 2.

U severely underestimated the role of SG export economy. It's far more important than pty bubble. Pty bubble can simply be prevented by admin measures. Inflation of SG is imported. There is no way you can shield SG from a worldwide problem. For workers, the most important thing is they must have jobs. Therefore the economy must be competitive. You have no choice.

but are these "administrative measures" working? if they are, we wouldn't be here talking about the "problem", would we?

[amk]

but are these "administrative measures" working? if they are, we wouldn't be here talking about the "problem", would we?

So do it again !
Redas is even preempting this by "recommending specific measures to target specific segments".

For example, MM should be banned.
And set a *floor* for loan rates. HK is already doing that.

[phantom_opera]

Setting a floor for loan rate?! Then banks how to compete with each other, surely they will give other goodies right e.g. setting a lower margin? Then back to square one.

e.g. if bank A offers SIBOR or SOR + 0.5%, if change to floor rate where floor rate is higher than SIBOR or SOR, then banks will simply change to floor_rate + 0.3% or floor_rate + 0%. If floor rate is high e.g. 2%, then bank A can offer floor rate fixed for 5y and bank B can offer floor_rate fixed for 10y provided that SIBOR is below floor_rate etc ... so won't work one.

[DaytonaSS]

but inflation expectations getting higher and higher, the damage to the economy is getting more and more serious. Workers will be unhappy seeing their pay checks shrinking by the day. so, MAS must take a balanced approach, with priority given to fighting inflation. that means allowing sing dollar to appreciate more rapidly. at this moment, sing dollars are not appreciating faster than the currencies of the neighboring countries. MAS should take a bolder approach to tamp down inflation expectations.

They already did, Mac fillet o fish meal is $4.50, revert to 10 yrs ago price.

[teddybear]

Don't talk nonsense lah. Inflation getter higher and higher damage the economy? Then why Singapore GDP grow at >15% in 2010 when there is a super high (vs historical) inflation of 5%? Why we don't see Singapore got high GDP grow with inflation at 1+% in 2009?

You talk as though you are an expert! MAS need to invite you to be their Managing Director instead since what they are doing are not right?

but inflation expectations getting higher and higher, the damage to the economy is getting more and more serious. Workers will be unhappy seeing their pay checks shrinking by the day. so, MAS must take a balanced approach, with priority given to fighting inflation. that means allowing sing dollar to appreciate more rapidly. at this moment, sing dollars are not appreciating faster than the currencies of the neighboring countries. MAS should take a bolder approach to tamp down inflation expectations.

[phantom_opera]

Don't talk nonsense lah. Inflation getter higher and higher damage the economy? Then why Singapore GDP grow at >15% in 2010 when there is a super high (vs historical) inflation of 5%? Why we don't see Singapore got high GDP grow with inflation at 1+% in 2009?

You talk as though you are an expert! MAS need to invite you to be their Managing Director instead since what they are doing are not right?

I think he may have sold his condo and seller remorse

[DaytonaSS]

but are these "administrative measures" working? if they are, we wouldn't be here talking about the "problem", would we?

Sometimes it's about the lesser of 2 evil. Wanna solve the problem? Easy, call obama n tell him stop printing $$$$ n create all these problems, or call china n India to stop using so much oil n resources all everything will be well?

Can we do that? Can measures prevent those things? What can we do? Create jobs, boom town the economy, use $$$$ to suppress problem for the poor. Help the next generation escape proverity thru education.

Seriously pple here are talking inflation hitting you? U mean u having problem eating 3 meals? Or u unhappy now u got to pay more $$$ to drive big car n that big house u one is too expensive?

The truth is inflation hits the low income group, jeopardize the living conditions. These are the pple govt must help, n help their next generation escape the poverty trap. Subsidize the poor, help them get a roof over their head. Need be heavily subsize their flat n put a huge MOP on it.

[mcmlxxvi]

They already did, Mac fillet o fish meal is $4.50, revert to 10 yrs ago price.

Ha ha ha good one

[westman]

but inflation expectations getting higher and higher, the damage to the economy is getting more and more serious. Workers will be unhappy seeing their pay checks shrinking by the day. so, MAS must take a balanced approach, with priority given to fighting inflation. that means allowing sing dollar to appreciate more rapidly. at this moment, sing dollars are not appreciating faster than the currencies of the neighboring countries. MAS should take a bolder approach to tamp down inflation expectations.

I second Teddy opinion.

What would happen if you attempt to cook/throw a live frog straight into a pot boiling soup? The frog will jump out straight away.

However, if you let the frog swim in the pot at room temperature and then gradually increase the heating temperature, the frog will adapted with each gradual increase in temperature thus no jumping out from the pot.

Of course, you can argue the frog will die at the end of the day because of high boiling temperature. Question is, who else in the other part of the world will not get affected? Gradual increase might not be the best approach but may be the best alternative approach for now. Anyway, Singaporeans are good at adapting to harsh environment, right?

For this, guessed we need not our multi millions garment to suggest "it's tough, let bite the bullets". Am happy if it is not a mortar round.....






Back

[Wild Falcon]

I think we should look at real growth and not nominal. GDP growth may be 15% but real household income only increase by 0.3%. Clearly the distribution of wealth is not ideal, and the majority of the growth is driven by foreigners and going to foreign pockets. Obviously many of us here have benefited from our property investments and even car purchases due to inflation but that shouldn't stop us from thinking about the wider effects of runaway inflation. If income cannot keep up with inflation (as in the case last year), can we go around saying that the 15% economic growth and 5% inflation is a good thing? Has the economic growth resulted in increase in household income for Singaporeans? An economist has to think about the effect on the wider population, and not his own personal gains. So I think the bros here are supporting "high inflation" because many are leveraged with multiple property investments, but high inflation cant' be a good thing, esp when income levels are lagging way behind.

[Laguna]

I What would happen if you attempt to cook/throw a live frog straight into a pot boiling soup? The frog will jump out straight away.

However, if you let the frog swim in the pot at room temperature and then gradually increase the heating temperature, the frog will adapted with each gradual increase in temperature thus no jumping out from the pot.


Back

Haha, ur version is frog, and Andy Xie's version is hairy crab...

[devilplate]

Haha, ur version is frog, and Andy Xie's version is hairy crab...

but frog version better....crab cant jump

[devilplate]

I think we should look at real growth and not nominal. GDP growth may be 15% but real household income only increase by 0.3%. Clearly the distribution of wealth is not ideal, and the majority of the growth is driven by foreigners and going to foreign pockets. Obviously many of us here have benefited from our property investments and even car purchases due to inflation but that shouldn't stop us from thinking about the wider effects of runaway inflation. If income cannot keep up with inflation (as in the case last year), can we go around saying that the 15% economic growth and 5% inflation is a good thing? Has the economic growth resulted in increase in household income for Singaporeans? An economist has to think about the effect on the wider population, and not his own personal gains. So I think the bros here are supporting "high inflation" because many are leveraged with multiple property investments, but high inflation cant' be a good thing, esp when income levels are lagging way behind.

vy tough to strike a balance....u see china/india....china not as bad compared to india though...lol

to add....its actually vy good to hf 3-5% inflation for SG....however, this yr might be exceptionally high due to US.........

US will continue to print $$$$ and force china to let their yuan appreciates faster....everyone knows it...hehe

[proud owner]

when i cautioned all about measures last yr .. many didnt believe

i cited china/hk/taiwan/korea as example and that spore would have to follow as well .. still some didnt believe and said spore was unique and didnt need to follow them ..

i was right ... we had CM3 then 4 ..


now i want to warn all of a potential rise in interest rates...

many have posted their reasonings ... so i need not repeat

but be warned

[hopeful]

I think we should look at real growth and not nominal. GDP growth may be 15% but real household income only increase by 0.3%. Clearly the distribution of wealth is not ideal, and the majority of the growth is driven by foreigners and going to foreign pockets. Obviously many of us here have benefited from our property investments and even car purchases due to inflation but that shouldn't stop us from thinking about the wider effects of runaway inflation. If income cannot keep up with inflation (as in the case last year), can we go around saying that the 15% economic growth and 5% inflation is a good thing? Has the economic growth resulted in increase in household income for Singaporeans? An economist has to think about the effect on the wider population, and not his own personal gains. So I think the bros here are supporting "high inflation" because many are leveraged with multiple property investments, but high inflation cant' be a good thing, esp when income levels are lagging way behind.

1) Are we in runaway inflation situation? what are the wider effects of runaway inflation?

2) Why can't high inflation cant' be a good thing, esp when income levels are lagging way behind? In the context of multiple-property owners?

[devilplate]

when i cautioned all about measures last yr .. many didnt believe

i cited china/hk/taiwan/korea as example and that spore would have to follow as well .. still some didnt believe and said spore was unique and didnt need to follow them ..

i was right ... we had CM3 then 4 ..


now i want to warn all of a potential rise in interest rates...

many have posted their reasonings ... so i need not repeat

but be warned

aiya...u sounds irritating leh....
be warned!??!!?!

instead of saying be warned as interest rate will rise eventually which ANYBODY knows tat...u shd give a timeline......

i can aso say BE WARNED: PPTY 20yrs later will cost higher den current prices....buy now or regret 20yrs later

[hopeful]

when i cautioned all about measures last yr .. many didnt believe

i cited china/hk/taiwan/korea as example and that spore would have to follow as well .. still some didnt believe and said spore was unique and didnt need to follow them ..

i was right ... we had CM3 then 4 ..


now i want to warn all of a potential rise in interest rates...

many have posted their reasonings ... so i need not repeat

but be warned

Assuming you are right, should we start switching to fixed 3 years loan?
Or take up SOR + 0.65% loan?

[proud owner]

Assuming you are right, should we start switching to fixed 3 years loan?
Or take up SOR + 0.65% loan?

sorry not writing anymore

cos i am irritating ...




and petty too

[stalingrad]

I think we should look at real growth and not nominal. GDP growth may be 15% but real household income only increase by 0.3%. Clearly the distribution of wealth is not ideal, and the majority of the growth is driven by foreigners and going to foreign pockets. Obviously many of us here have benefited from our property investments and even car purchases due to inflation but that shouldn't stop us from thinking about the wider effects of runaway inflation. If income cannot keep up with inflation (as in the case last year), can we go around saying that the 15% economic growth and 5% inflation is a good thing? Has the economic growth resulted in increase in household income for Singaporeans? An economist has to think about the effect on the wider population, and not his own personal gains. So I think the bros here are supporting "high inflation" because many are leveraged with multiple property investments, but high inflation cant' be a good thing, esp when income levels are lagging way behind.

Inflation may be dangerous to social stability. Just look at egypt, tunisia and now libya.

I am sure the government is worried about inflation and is effect on social stability as well, what with inflation's effect on the gap between the have and have not. but I hope it will do something to tamp down inflation and its expectations.

[teddybear]

But I doubt Redas will say their new launch at price >20% compared to surrounding resale comparable units considered be over-priced? (though we know they are, regardless of whatever excuses they want to give).

So do it again !
Redas is even preempting this by "recommending specific measures to target specific segments".

For example, MM should be banned.
And set a *floor* for loan rates. HK is already doing that.