Why inflation will be a big problem going ahead

[phantom_opera]

After I posted the golden era thread, many people agree but there are also many skeptics

Let me present you why inflation will be huge problem for next few years:

1. MAS's surprise move to maintain gradual appreciation of SGD ... what does that tell u ... although in last 2m, inflation rate seems to go down to 3.9% ... why MAS surprised the market?? That means they anticipate inflation will remain elevated even next year.

2. Government drastic measure to mandate min 3.2k salary for EPs has huge implication ... many companies are hit very hard ... if this is not highly inflationary what is. Imagine you are 3r HDB owners last time your tenants holding EPs make 2.3k pm ... now suddenly their salary goes to 3k+ ... what would u do?

3. After sleeping for a few months, M3 is again increasing at alarming rate ... August M3 has grown almost 8% year on year but our GDP growth is predicted to be only 2% this year

4. REITs are borrowing money, taking advantages of low interest rate, acquire assets like no tomorrow ... whenever REITs return very high while GDP growth is stagnant, the net effect is again inflationary as big REITs MUST raise rental every year to continue dividend growth

5. Future MRT lines ... properties around future MRT lines are asking higher resale prices now

So don't be fooled by high property prices ... 1million profit today is same as 500k profit 10y ago only in terms of purchasing power

[Arcachon]

That is why they give me 6 years.

[phantom_opera]

ECO- OVER 480 UNITS SOLD!!!!!

My friend said this must be most useless CM ever

[Arcachon]

It encourage those sitting on the fence to jump in. They stop a hundred and thousand wake up.

[phantom_opera]

It encourage those sitting on the fence to jump in. They stop a hundred and thousand wake up.

well said ... many fence sitters must be around 40+ ... mai tu liao to ECO showflat now !!!

[yowetan]

Hi..Inflation is indeed a worrying monster linger back in my mind.

I am thinking of exchanging 3 HDBs to a Mt Sinai landed to combat the inflation monster.

[phantom_opera]

Hi..Inflation is indeed a worrying monster linger back in my mind.

I am thinking of exchanging 3 HDBs to a Mt Sinai landed to combat the inflation monster.

how does that help u in combating inflation?! by having more debt?

[yowetan]

how does that help u in combating inflation?! by having more debt?

I will be eliminating an outstanding HDB loan of 450k, in exchange of a healthy loan from Mt Sinai Residence/landed.

[buttercarp]

It encourage those sitting on the fence to jump in. They stop a hundred and thousand wake up.

What will happen now ?

With more people buying,
there will be less liquidity, more people will take loan (but less loan is given out because of the latest CM).
In summary will there be more people borrowing and less liquidity?

So Sibor go up?
People find it hard to service the loan, forced to sell their units, prices of home come down?

I don't have any financial knowledge so this is how a financial dummy thinks .

[Arcachon]

What will happen now ?

People will have less liquidity, more people will take loan (but less loan is given out because of the latest CM).
In summary will there be more people borrowing and less liquidity?

So Sibor go up?
People find it hard to service the loan, forced to sell their units, prices of home come down?

I don't have any financial knowledge so this is how a financial dummy thinks .

People will have less liquidity,

Liquidity is 40 billion a month.

http://seekingalpha.com/article/9217...and-currencies.

So Sibor go up?

Interest rate remain low till 2015.

http://www.forbes.com/sites/louiswoo...lready-failed/

[phantom_opera]

China's central bank governor has warned that quantitative easing policies worldwide could cause inflationary risks, state news agency Xinhua said on Saturday.

The remarks by People's Bank of China (PBOC) Governor Zhou Xiaochuan come even as analysts credit policy easing from G4 central banks - the U.S. Federal Reserve, the European Central Bank (ECB), the Bank of Japan and the Bank of England - in the third quarter of the year as underpinning business confidence.

Ironically, unlike before when the West benefited from Chinese easing during periods of stress such as in the Lehman aftermath, this time around it is China who is sowing the fruits of others' relentless easing tactics. Only last night China reported that its trade surplus came well ahead of expectations, at $27.7 billion versus a consensus of $20.5 billion, with exports coming coming nearly double the expected 5.5%.

Chinese data on Saturday offered a sign that G4 policy easing was being felt in the world's second biggest economy, with trade numbers showing exports grew at roughly twice the rate expected in September while imports returned to the path of expansion.

"The data shows both imports and exports are improving - especially a rebound in export growth reflects a rising confidence after the U.S. and European countries launched further easing policies last month," said Xue Hexiang, an analyst at Guotai Junan Securities in Shanghai, after the trade numbers were released.
In other words, China is now perfectly happy with the status quo, and is delighted that for once it does not have to be marginal provider of global growth impetus. Instead, it will continue resorting to ultra short-term liquidity intervention strategies such as a reverse repos, which it has been doing for the past several months, and will do no RRR or rate cuts for as long as the threat exists that some other bank will do it for them.

Across Asia, central banks are wary about the potential inflationary impact of the Fed's latest quantitative easing, dubbed QE3, as well as policy stimulus unveiled by the ECB.

Central banks "should consider draining excessive liquidity injected into the market and eliminate inflationary pressure in the long-term", Zhou was quoted as saying by Xinhua, which cited the Journal of Public Research, a magazine published by the People's Bank of China.

China's central bank said in September that it would "fine tune" policy to cushion the economy against global risks while closely watching the possible impact from recent policy loosening in the United States and Europe.

[yowetan]

People will have less liquidity,

Liquidity is 40 billion a month.

http://seekingalpha.com/article/9217...and-currencies.

So Sibor go up?

Interest rate remain low till 2015.

http://www.forbes.com/sites/louiswoo...lready-failed/

Will the low interest rate goes beyond year 2015?

[buttercarp]

People will have less liquidity,

Liquidity is 40 billion a month.

http://seekingalpha.com/article/9217...and-currencies.

So Sibor go up?

Interest rate remain low till 2015.

http://www.forbes.com/sites/louiswoo...lready-failed/

So you predict that the property prices will continue to rise?
So it is a good time to buy now?
Btw, haven't seen your vote in richwang's Buyer Attitude Index yet.

[Arcachon]

So you predict that the property prices will continue to rise?
So it is a good time to buy now?
Btw, haven't seen your vote in richwang's Buyer Attitude Index yet.

Only got 6 years how to vote, no more in the game.

[Arcachon]

Will the low interest rate goes beyond year 2015?

QE3 unlimited, how to raise interest rate. QE1, QE2 and operation Twist still have timeline, QE3 is unlimited.

[carbuncle]

Only got 6 years how to vote, no more in the game.

bro is sore indeed about it. I think today seen at least 6 posts where the 6yrs is mentioned lol

let it go.... got other banks right

[Laguna]

Hi..Inflation is indeed a worrying monster linger back in my mind.

I am thinking of exchanging 3 HDBs to a Mt Sinai landed to combat the inflation monster.

please go ahead to support the property market

[Arcachon]

bro is sore indeed about it. I think today seen at least 6 posts where the 6yrs is mentioned lol

let it go.... got other banks right

When I start to understand a bit about property investment, the bank game over for me.

[Secretariat]

After I posted the golden era thread, many people agree but there are also many skeptics

Let me present you why inflation will be huge problem for next few years:

1. MAS's surprise move to maintain gradual appreciation of SGD ... what does that tell u ... although in last 2m, inflation rate seems to go down to 3.9% ... why MAS surprised the market?? That means they anticipate inflation will remain elevated even next year.

2. Government drastic measure to mandate min 3.2k salary for EPs has huge implication ... many companies are hit very hard ... if this is not highly inflationary what is. Imagine you are 3r HDB owners last time your tenants holding EPs make 2.3k pm ... now suddenly their salary goes to 3k+ ... what would u do?

3. After sleeping for a few months, M3 is again increasing at alarming rate ... August M3 has grown almost 8% year on year but our GDP growth is predicted to be only 2% this year

4. REITs are borrowing money, taking advantages of low interest rate, acquire assets like no tomorrow ... whenever REITs return very high while GDP growth is stagnant, the net effect is again inflationary as big REITs MUST raise rental every year to continue dividend growth

5. Future MRT lines ... properties around future MRT lines are asking higher resale prices now

So don't be fooled by high property prices ... 1million profit today is same as 500k profit 10y ago only in terms of purchasing power

What is the relationship between SGD movement & M3?

[Arcachon]

Investopedia explains 'M3'

This is the broadest measure of money; it is used by economists to estimate the entire supply of money within an economy.

Read more: http://www.investopedia.com/terms/m/...#ixzz29GiTz38G

The printing press of the country.

Not this M3



http://en.wikipedia.org/wiki/Money_supply

[Arcachon]

http://asiasingapore.blogspot.fr/201...inflation.html

http://therichkidwannabe.blogspot.fr...-grows-in.html

[radha08]

Only got 6 years how to vote, no more in the game.

you are 59 years old...

[buttercarp]

you are 59 years old...

No, he is 48 years old.
Cos he celebrated his 12th birthday this year but he is an adult.

[price]

No, he is 48 years old.
Cos he celebrated his 12th birthday this year but he is an adult.

hmm why 6 years? because of existing loans etc..?

[Arcachon]

hmm why 6 years? because of existing loans etc..?

When your salary is $44,000 a year and your got outstanding loan of 1.8 million then I think the bank is a bit worry.

[buttercarp]

When your salary is $44,000 a year and your got outstanding loan of 1.8 million then I think the bank is a bit worry.

If bank not worried, I will be worried.
Btw, your total annual income is about $120k after you add in your rental, right?

[price]

When your salary is $44,000 a year and your got outstanding loan of 1.8 million then I think the bank is a bit worry.

wow u did well saving up for those rental apartments u own

[carbuncle]

If bank not worried, I will be worried.
Btw, your total annual income is about $120k after you add in your rental, right?

plus he got those pepsi cola thingies??

[chestnut]

If bank not worried, I will be worried.
Btw, your total annual income is about $120k after you add in your rental, right?

Sis, bank typically loan 11-12 x annual salary.

[Arcachon]

wow u did well saving up for those rental apartments u own

I was force by my father to get marry and buy my first HDB because he don't believe in property investment, he begin through the Japanese occupation and lost his father at the age of 9 years old.

I got my first HDB through priority scheme in 1984 for 83k with minimum CPF, at that time gov service don't need to pay the deposit just need to pay whatever you have in the CPF. Then borrow 20k from my father to pay for the deposit for my second HDB after 7 years. Sell my 4 room and collect a cheque of 180,000 in 1996. Save most of the money and do nothing for 10 years till June 2006.