Who say we don't print money.

[Arcachon]

[radha08]

oh no another cm coming...banks can only loan a maximum of $1...

[kane]

Just look at the M3.

[phantom_opera]

it is hard to get M3 chart in public domain for obvious reason .. of course MAS has published all the data but no chart :-)

[sgbuyer]

If Singaporeans are so rich, why still need loan?

Can anyone help to explain?

[Sam88]

If Singaporeans are so rich, why still need loan?

Can anyone help to explain?

you have 600k spare cash after you pay down payment. if you take a loan of say 600k @ 1.1%, you still have 600k spare cash. u can use this spare cash for investment or even put in fix deposit. some foreign banks so 'gian' the money 9because they do not have full banking licence. they can pay you >1.2% on your fixed deposit. you still get net gain. if you can save >600k, you technically should be quite savvy to invest. you can go into bonds as well. you can further leverage on the bonds to make more. all this comes with 'risk', see if you can swallow. the key is to make the money work harder.

just giving some examples. not endorsing the above. up to your risk profile.

[Arcachon]

If Singaporeans are so rich, why still need loan?

Can anyone help to explain?

Money equal Debt.

[Arcachon]

They don't have debt, they are the richest man on earth.

They sleep where they like, they eat what they can catch.

[minority]

If Singaporeans are so rich, why still need loan?

Can anyone help to explain?

Its call the power or leverage. Why will u do wat 1 dollar can do. If u can use 1 dollar n spend like 10.

Do it right its very powerful. F up then u are screwed.

[buttercarp]

If Singaporeans are so rich, why still need loan?

Can anyone help to explain?

Few months ago I learnt about equity loan from the gurus of this forum and I remembered bro chestnut scolding me for saying that I hope that I will not need to use that kind of loan.

I learnt that I should make use of it.

Usually this type of loan has low interest rate maybe slightly above 1%.
Then you use this money to invest in other things which can generate more than 1% interest and lo and behold, you get extra money.

Equity loan can be obtained from private property, hdb cannot.
Equity loan cannot be used to buy another property.

Sigh..... having said that, I have yet to get an equity loan.

[teddybear]

By asking those question, we know the person has almost zero investment knowledge and experience...
Yet the person is dispensing advise to others that properties are over-valued!
Wait some more and it will become more over-valued still, then can come back to ask why?

you have 600k spare cash after you pay down payment. if you take a loan of say 600k @ 1.1%, you still have 600k spare cash. u can use this spare cash for investment or even put in fix deposit. some foreign banks so 'gian' the money 9because they do not have full banking licence. they can pay you >1.2% on your fixed deposit. you still get net gain. if you can save >600k, you technically should be quite savvy to invest. you can go into bonds as well. you can further leverage on the bonds to make more. all this comes with 'risk', see if you can swallow. the key is to make the money work harder.

just giving some examples. not endorsing the above. up to your risk profile.

[dtrax]

If Singaporeans are so rich, why still need loan?

Can anyone help to explain?

Leveraged Yield Formula

L = (R – (1-N)*C)/N

where
L = Leveraged Return
R = Yield on asset e.g. rental yield, yield on bond
C = Cost of borrowing e.g. interest from bank
N = % owner have to put down

[kane]

just make sure whatever leverage play you are playing, you can keep pace with asset inflation. and for an annualised figure just take the average 12 months ago and compare. i have seen anything between 10-15% from a home owners perspective.

scary stuff.

[hyenergix]

What is this?! China has printed so much $ again. It seems that many central banks have found the magic bullet to counter economic slowdown, and I'm afraid it is like opium addiction. $ is becoming cheaper than toilet paper. No wonder inflation never comes down. I'm switching out of cash into properties.

PBOC injects record 450b yuan into money markets
Move to keep rates stable as liquidity tightens in runup to festive season
PUBLISHED FEBRUARY 06, 2013

[SHANGHAI] China's central bank injected a whopping 450 billion yuan (S$89 billion) into the money markets yesterday. the largest single-day injection on record, showing Beijing's increased confidence in its ability to use short-term precision tools to manage the money supply.

Traders told Reuters that the infusion of cash was made during ordinary open market operations, using 14-day reverse bond repurchase agreements, which will drain money back out of the system in two weeks.

The People's Bank of China (PBOC) has increasingly relied on such tools to maintain short-term liquidity and hold down interest rates, instead of making longer term adjustments such as cuts to bank reserve requirement ratios (RRR) that regulators fear could provoke inflation.

Liquidity typically tightens with the approach of the Chinese Spring Festival holiday, as individuals withdraw cash to spend on gifts, food and travel.
Some analysts had speculated that the central bank might be forced to cut the RRR before the holiday to prevent a squeeze, but instead authorities leaned more heavily than ever on short-term open market operations.

"With the Spring Festival drawing near, short-term liquidity in the money market is relatively tight," said a senior trader at a Chinese state-owned bank in Beijing.

The central bank has steadily been injecting cash since last week to stabilise short-term rates, he said, which often spike in the runup to traditional festivals. Markets will be closed for a week starting on Feb 9 for the Chinese Spring Festival holiday.

This time around it appears the PBOC has found the right formula to keep rates relatively stable, said Frances Cheung, strategist at Credit Agricole CIB.
"We have not seen the spikes in repo rates that we usually did see ahead of the Chinese New Year, likely upon willingness from the PBOC to provide liquidity," she wrote in a research note distributed yesterday.

The benchmark 7-day repo rate began moving upward as the Spring Festival approached, but yesterday's massive injection has signalled to the market the bank's determination to keep rates in check by lowering the price of money.

A total of 198 billion yuan in maturing instruments are set to drain cash from the markets this week, which will be more than offset by yesterday's injection, and the bank has the option to inject even more funds during upcoming open market operations tomorrow.

"Now that the central bank has announced that it will more frequently use open market operations to adjust liquidity, the market widely expects that money market rates will stabilise and will not spike too much even during holidays or at the end of months or quarters," said the senior trader in Beijing.

Market participants said the PBOC's recently announced decision to allow select institutions to bid for reverse repos on a daily basis, instead of just on Mondays and Wednesdays, shows that it is planning to intensify the tempo and precision with which it moves money in and out of the interbank market.

"We believe interbank rates will only climb a little bit the rest of this week and the PBOC is unlikely to cut RRR as it avoids sending easing signals," wrote Ting Lu and Xiaojia Zhi, economists at Bank of America Merrill Lynch, in a research note yesterday.

Yesterday's injection overturns the previous record of 395 billion yuan injected on Oct 30, 2012. - Reuters

http://www.businesstimes.com.sg/prem...rkets-20130206

[roly8]

What is this?! China has printed so much $ again. It seems that many central banks have found the magic bullet to counter economic slowdown, and I'm afraid it is like opium addiction. $ is becoming cheaper than toilet paper. No wonder inflation never comes down. I'm switching out of cash into properties.

PBOC injects record 450b yuan into money markets
Move to keep rates stable as liquidity tightens in runup to festive season
PUBLISHED FEBRUARY 06, 2013

[eng81157]

What is this?! China has printed so much $ again. It seems that many central banks have found the magic bullet to counter economic slowdown, and I'm afraid it is like opium addiction. $ is becoming cheaper than toilet paper. No wonder inflation never comes down. I'm switching out of cash into properties.

PBOC injects record 450b yuan into money markets
Move to keep rates stable as liquidity tightens in runup to festive season
PUBLISHED FEBRUARY 06, 2013

[SHANGHAI] China's central bank injected a whopping 450 billion yuan (S$89 billion) into the money markets yesterday. the largest single-day injection on record, showing Beijing's increased confidence in its ability to use short-term precision tools to manage the money supply.

Traders told Reuters that the infusion of cash was made during ordinary open market operations, using 14-day reverse bond repurchase agreements, which will drain money back out of the system in two weeks.

The People's Bank of China (PBOC) has increasingly relied on such tools to maintain short-term liquidity and hold down interest rates, instead of making longer term adjustments such as cuts to bank reserve requirement ratios (RRR) that regulators fear could provoke inflation.

Liquidity typically tightens with the approach of the Chinese Spring Festival holiday, as individuals withdraw cash to spend on gifts, food and travel.
Some analysts had speculated that the central bank might be forced to cut the RRR before the holiday to prevent a squeeze, but instead authorities leaned more heavily than ever on short-term open market operations.

"With the Spring Festival drawing near, short-term liquidity in the money market is relatively tight," said a senior trader at a Chinese state-owned bank in Beijing.

The central bank has steadily been injecting cash since last week to stabilise short-term rates, he said, which often spike in the runup to traditional festivals. Markets will be closed for a week starting on Feb 9 for the Chinese Spring Festival holiday.

This time around it appears the PBOC has found the right formula to keep rates relatively stable, said Frances Cheung, strategist at Credit Agricole CIB.
"We have not seen the spikes in repo rates that we usually did see ahead of the Chinese New Year, likely upon willingness from the PBOC to provide liquidity," she wrote in a research note distributed yesterday.

The benchmark 7-day repo rate began moving upward as the Spring Festival approached, but yesterday's massive injection has signalled to the market the bank's determination to keep rates in check by lowering the price of money.

A total of 198 billion yuan in maturing instruments are set to drain cash from the markets this week, which will be more than offset by yesterday's injection, and the bank has the option to inject even more funds during upcoming open market operations tomorrow.

"Now that the central bank has announced that it will more frequently use open market operations to adjust liquidity, the market widely expects that money market rates will stabilise and will not spike too much even during holidays or at the end of months or quarters," said the senior trader in Beijing.

Market participants said the PBOC's recently announced decision to allow select institutions to bid for reverse repos on a daily basis, instead of just on Mondays and Wednesdays, shows that it is planning to intensify the tempo and precision with which it moves money in and out of the interbank market.

"We believe interbank rates will only climb a little bit the rest of this week and the PBOC is unlikely to cut RRR as it avoids sending easing signals," wrote Ting Lu and Xiaojia Zhi, economists at Bank of America Merrill Lynch, in a research note yesterday.

Yesterday's injection overturns the previous record of 395 billion yuan injected on Oct 30, 2012. - Reuters

http://www.businesstimes.com.sg/prem...rkets-20130206

oh, i believe there are hare-brains in this forum who don't see such acts as a currency war threats. the next should be the korean won or euro

[roly8]

oh, i believe there are hare-brains in this forum who don't see such acts as a currency war threats. the next should be the korean won or euro

indeed the currency war for 2013..

[eng81157]

indeed the currency war for 2013..

not yet......just pre-cursors that create threats for a currency war. if america and europe decide so to grow their economies by exporting stuff, then it's GG

[sgbuyer]

Its call the power or leverage. Why will u do wat 1 dollar can do. If u can use 1 dollar n spend like 10.

Do it right its very powerful. F up then u are screwed.

Yeah, I see one opportunity. US bank stocks, but maybe after the correction.

.

[taggy]

indeed the currency war for 2013..

this article say currency wars are good, true or not huh?
http://www.theatlantic.com/business/...ssions/272846/

[roly8]

not yet......just pre-cursors that create threats for a currency war. if america and europe decide so to grow their economies by exporting stuff, then it's GG

google and apple already have plan to manufacture own stuffs..

some of the iphone stuffs & i forgot what google is making..

[hyenergix]

My sense is many shops and companies are making use of CNY opportunity to raise their prices. Get ready for another round of inflation during CNY, and I don't think prices will go back to original level after CNY.

[stl67]

Few months ago I learnt about equity loan from the gurus of this forum and I remembered bro chestnut scolding me for saying that I hope that I will not need to use that kind of loan.

I learnt that I should make use of it.

Usually this type of loan has low interest rate maybe slightly above 1%.
Then you use this money to invest in other things which can generate more than 1% interest and lo and behold, you get extra money.

Equity loan can be obtained from private property, hdb cannot.
Equity loan cannot be used to buy another property.

Sigh..... having said that, I have yet to get an equity loan.

do it soon as it takes a few months to get it done..
remember that lawyer fees and valuation fees are not subsidise.

[hyenergix]

this article say currency wars are good, true or not huh?
http://www.theatlantic.com/business/...ssions/272846/

Interesting article, but I agree with the outcome as what we are experiencing now is recovery. However I believe there is a cost, and it lies in inflation. Hence we are borrowing our future generation's wealth to stage the current recovery, since they have to pay more for everything in their life-time.

[eng81157]

this article say currency wars are good, true or not huh?
http://www.theatlantic.com/business/...ssions/272846/

there is no absolute, depending which side of the fence you are sitting on

[eng81157]

google and apple already have plan to manufacture own stuffs..

some of the iphone stuffs & i forgot what google is making..

if there are plans to do so, it's primarily a business strategic decision. although i can't imagine them owning the entire supply chain like zara. it's highly risky, unless well executed

[cavaliver]

Few months ago I learnt about equity loan from the gurus of this forum and I remembered bro chestnut scolding me for saying that I hope that I will not need to use that kind of loan.

I learnt that I should make use of it.

Usually this type of loan has low interest rate maybe slightly above 1%.
Then you use this money to invest in other things which can generate more than 1% interest and lo and behold, you get extra money.

Equity loan can be obtained from private property, hdb cannot.
Equity loan cannot be used to buy another property.

Sigh..... having said that, I have yet to get an equity loan.

For 1st property, loan amount is 80%
But for 2nd or more property, loan amount is 50%

For eg,
For your 2nd property
Valuation = $2,000,000
50% Loan amount= $1,000,000
Say, your outstanding loan = $500,000
Minus your CPF contribution plus interest say =$400,00

You can only loan $100,000

Not sure if it is worth all the trouble....
Unless it is your property is fully paid and gone up a lot in valuation.

Maybe some gurus have something to add or say ? TIA

[buttercarp]

For 1st property, loan amount is 80%
But for 2nd or more property, loan amount is 50%

For eg,
For your 2nd property
Valuation = $2,000,000
50% Loan amount= $1,000,000
Say, your outstanding loan = $500,000
Minus your CPF contribution plus interest say =$400,00

You can only loan $100,000

Not sure if it is worth all the trouble....
Unless it is your property is fully paid and gone up a lot in valuation.

Maybe some gurus have something to add or say ? TIA

It is good for people who have fully paid up their property.

In the above case if fully paid up and minus CPF used plus interest will be
$1 600 000.
80% of 1.6 mil = $ 1.28 mil (loan amount)

If you have a second property which is not fully paid up, will you still be able to loan 80% of the first property?

Also how long is the longest tenure for equity loan?

[Arcachon]

http://www.youtube.com/watch?v=dxMlm2smRAg

郎咸平