Rolf’s View of the World and Singapore’s Economy – The Artificial Harvest of the Past (Part 2 – continued)

This post
directly continues from the previous post – Part
1
.  
The
financial world did unexpectedly well in the last seven years after the GFC!
Many
argued, “Isn’t this good news that everything is just fine? If Big Ben did not
“print” the world out of recession, perhaps we would be seeing one of the worst
crises since the Great Depression on the 1930s.”
So everything
is great now! I should be happy right?
Why am I still
writing all these melancholy articles? In the last one year or so, I had been acting
like a doomsayer sounding alarms.  I am
not even a financial expert, maybe just having a little edge in the Oil &
Gas industry.  It is not just me merely by
word of mouth, but also the immense motivation from within to spend remarkable
huge amount of time and effort devoted in researching and then writing it here on
my blog. No specific agenda, nothing material to gain out of it too. Yet, I did
it! Even I cannot comprehend where is the strength behind?  But strangely, there seems to have a colossal
force within me coercing me to sound out what I come to know of.
By the way,
please look at the above chart showing the unprecedented growth of US total public
debt over the years to >19 trillions today. Note the step up in the rate of
increase.
In any
case, total public debt is only the debt owed by the central government. If we
add up the combination of government, business, mortgage and consumer debt, total
US debt today is >$63 trillion. 40 years ago, it was only $2.2 trillion.
Today the
global debt is so remarkably huge, that my fear is that if ever this big bubble
is to burst one day, it’s going to be not just undesirable but painfully
scarier and longer lasting than even both Great Depression and GFC combined.
Imagine you are sick and need
to have one leg amputated to save your life. It is going to be painful in the
short term. However, if you are strong mentally, chance of recovery to lead a
normal life is high. Instead you choose that the doctor prescribed you with
some kind of unproven drugs or steroids to artificially prolong your life. In
the short run, you seems to recover and able to lead a normal life. You are
happy and cheer the doctor (or Fed) as your savior! Yet, one day some years
later, it is only inevitable that the virus in your body is going to became so
widespread that they will be entirely immune to the steroids. The steroids
intending to cure the initial virus actually also cause severe harm to other
parts of your body. The damage is non-repairable and you either die or become
forever bedridden. You wish you should just have the courage to amputate your
leg since the beginning. It is too late!
If this is
true, which I pray it is not! Then wouldn’t you prefer that Fed Reserve just
let the “too big to fail” companies failed during GFC or will you still prefer
Fed to inject the economy with the artificial support!
Still want
to thank Big Ben for bring us out of recession so quickly in 2008?
The longer
the artificial support, the worst it gets later! 
George Soros
Even
legendary investor George Soros concur during a lecture at the Central European
University in October 2009 concur that he failed to anticipate the extent
of the rebound. Nonetheless he warned that,
“The longer the turnaround lasts the
more people will come to believe in it but in my judgment, the prevailing mood
is far removed from reality. This is characteristic of far-from-equilibrium
situations when perceptions tend to lag behind reality. To complicate matters,
the lag works in both directions. Most people have not yet realized that this
crisis is different from previous ones-that we are at the end of an era.”
Alan Greenspan
Alan
Greenspan who is Ben Bernanke’s predecessor as Fed Chairman is often being
accused to be one of the main creators of the housing bubbles leading to the
GFC. This is the man who ran the Federal Reserve for close to two decades and
who knows exactly what happened inside out. Interestingly, Greenspan had been
sounding alarms of the economy ever since he stepped down as Fed Chairman in
2006. In a very recent interview, Greenspan warned that US is running to a
state of disaster. He further adds,
“We have a global problem of a shortage
in productivity growth and it’s not only the United States but it’s pretty much
around the world, and it’s being caused by the fact that populations everywhere
in the Western world are aging, and we’re not committing enough of our
resources to fund that. We should be running federal surpluses right now not
deficits. This is something we could have anticipated twenty five years ago and
in fact we did, but nobody’s done anything about it. This is the crisis which
has come upon us.”
Note that
Greenspan blamed it mainly on the low productivity growth of the world today
rather than explicitly pointing finger at the unrestrained creation of currency.
You should know why? LOL!
Others warning too
Other
financial experts such as Ray Dalio, Robert Schiller, Jim Rogers, Carl Icahn,
Bill Gross, Marc Faber, Robert Kiyosaki, Mike Maloney, Peter Schiff and many
more are all cautioning about the excessive global currency supply causing
potentially BIGGER problems than the GFC in the roads ahead.
Rolf’s
thoughts 
I am not
saying that George Soros and the rest of those aforementioned will definitely
be right in their opinions or predictions. However most of them are the
vanguard of the industry who possess vast experiences and successful track
records in the financial market. It is definitely worthwhile to pay some
attention to it. 
Singapore economy in general 
As for
Singapore, it is without any doubt we did exceptionally well economically
in the last decade. On the other hand, while not discrediting
Singaporean’s hard work and productivity growth in the last ten years, we
should be not over-conceited with our remarkable success attributed entirely
based on our capability and effort. A large part of it, are due to
both easy global monetary and loosed local immigration policies. This in my
opinion cannot be continued in such an explosive and unrestrained manner.
If we take
a trip down to memory lane, our National growth from year 1965-2000, is based
on improving skills, raise productivity, increase knowledge, attract foreign
investments, build factories, infrastructure, develop ports and airports,
improve education, healthcare, housing etc.
How about
in the last decade or so? Can you recall specifically what the main impetuses
of growth were? Population growth from loose immigration policy! Real estate
boom! Banking sectors thriving with some much global liquidity flowing to
Singapore, yes… includes 1MDB as well. The inertias of growth are totally
different. This is exactly what Ray Dalio mentioned about the different stages
of economy.
Undoubtedly
I admit that Singapore have exceptional strong governance and leadership.
Furthermore attracting foreign talents is essential due to our aging
population. I am also not asking Singapore to stop growing, stagnate or even go
backwards. However everything should be in moderation and within a more
reasonable pace for all people also to adapt. The focus on economic growth
versus productivity and education should be tilted correctly and carefully. As I
see now, Singapore appears to have already learned our lesson in the last ten years
of exuberance, because of governmental change of focus in recent times. Apparently
our Prime Minister Lee Hsien Loong had since contracted cancer again last year and
had since recovered too! Perhaps there is a more divine message within on PM
Lee’s illness and recovery.   
Be happy, but be grateful and humble
Therefore,
in the last decade, if you think that you are very capable and successful, let
it be in your business, investments in stocks or real estates or job in
Singapore, you ought to think again! For those who never go through either
one of the AFC, SARs GFC, it was an even more smooth-sailing ride assisted by
the rising tides of the global economy fuel by the cheap credit from a series
of Quantity Easing.  This is not to mention those whose wealth grew
exponentially from excessive leverage. Leverage can be a double-edged sword.
During good times, you thrive. During bad times, you dive.
I am not
asking that we should entirely allay our own success. Maybe it is good to have
a tad of gratefulness and humility.
My own career
By the
way, my own career in the Oil and Gas industry had benefited greatly from the economic
boom too since 2003/4, which resulted in my own bucket of gold. The GFC though
brought back painful memories of colleagues being retrenched. Nonetheless GFC
was short-lived so are any of our painful memories of it. The market rebounded
fast and re-employment was easy. On the contrary the current oil crisis edging
close to a two year period now is expected to be a longer and harsher one. Despite
still employed in the industry, I am also experiencing one of the most
challenging times ever in my career. 
Final thoughts
I
definitely feel indebted to have enjoyed the economic boom in the last decade
or so, not just growing my wealth. More importantly, the joy of seeing the
growth of my beloved family is something no wealth can exchange for.  
My
personal taste of SARs, GFC and Oil Crisis and other personal crisis within
just slight more than 10 years also instill in me a great sense of resilience
going forward.
I also
believed I am blessed with the right age to benefit from this experience which
will definitely come in handy one day in the future. 
In any
case, I am still very positive about the world of tomorrow. With humility
and prudence, I believe those armed with proper financial knowledge and vision
of the long term future will stand out and thrive. Above all, you just need patience
and the right temperament!  
I leave
you with my core values in life. Read:
Defining My Core
Values – Rolf Suey
Then there
is also my new found
AAA theory: Anticipate, Adapt,
Action!

Thank
you for reading and stay tuned to Part 3. 

PS: If you think you have benefitted in any ways (big or small) from my blog or this article, do subscribe to my blog and also help to spread the beliefs. Thank you. 

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7 thoughts on “Rolf’s View of the World and Singapore’s Economy – The Artificial Harvest of the Past (Part 2 – continued)

    1. Not proselytizing, but just convinced about the truth.
      The truth is hardest to accept, even flintstones doubted!
      Follow my heart, and most of the time it is not what most love to hear!

      LOL.

    2. Hmm… SMK do not know what u mean leh!

      U mean character of Flinstone or Barney Rubble? Shorting rubble?

  1. The motto of the blog is the best one. When we read such articles as the one above, we also become the investors in our own financially independent future. Before our country starts living the Singapore’s economy, we’d better find out about instant loans no credit check now. Perhaps I didn’t understand some of the finance terminology. But I surely enjoyed reading Rolf’s thoughts on the subject. I will be waiting for more revealing Part 3 now. Final thoughts of the post are the most powerful and calling us to start thinking for ourselves.

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