tag:blogger.com,1999:blog-50140750069699171492024-03-19T11:57:49.248+08:00Economic PolicyThe Side ViewUnknownnoreply@blogger.comBlogger441125tag:blogger.com,1999:blog-5014075006969917149.post-4994990083247852212023-11-26T17:28:00.001+08:002023-11-26T17:28:33.821+08:00Meritocracy<p>Meritocracy is a system of operating a society whereby those who put in effort and strive to the best are rewarded for their effort. The purpose of meritocracy is to push the frontier of society towards advancement, to go where we have not gone before. It is with meritocracy that new investments can be made, additional investments made in new areas of technology - and this, by definition, means growth.</p><p>Is meritocracy an instrument for achieving a more equal society? Yes, if meritocracy is clearly shown to be implemented without inequality, ie with favouritism towards the less capable, so that there is great incentive for effort and striving to be the best, for the sake of the whole of society. No, if meritocracy does not excite young people to work and be the best in the world - because one can still go ahead in society and be successful in terms of money made and personal prosperity without trying very hard in technology but in finding other ways around meritocracy such as by political action.</p><p>A society that does not value meritocracy is doomed to mediocrity because the society is not being run by the best brains but by those who are easily satisfied with whatever they already have. There could be a case for mediocrity, for one can question the benefit of trying very hard and pushing oneself as if against the wall, when the status quo is sufficient. Certainly, we human beings have a higher standard of living today than the kings of yesteryears. </p><p>However, we must remember that where we are now is the result of the people who had lived before us (especially our parents) and those of us in the current generation who happened to be working very hard and are achieving great advancement in technology. Those who are shouting for mediocrity are precisely those who are enjoying the fruits of meritocracy.</p><p>By degrading the importance of meritocracy, it becomes easy to steal by its merits by engaging in the corruption of the system. Corrupting means sabotaging, by creating faults in a well-functioning machinery with all kinds of hindrances - for the purposes of stealing benefits from the system that is working very hard, by putting in parts that do not do any work in the system but create obstacles by demanding toll.</p><p>Nothing in this world is equal in all aspects. Trying to create complete equality is a foolish idea, an idealism nonetheless. The earth is not flat. Our faces are not flat. But we can try to emulate those whom we admire because we envy what they have, by putting in effort to be like them, by working very hard. </p><p>There are suffering of all kinds in this world. It is noble to try to reduce all suffering; this must be encouraged. But to degrade the entire system by putting incompatible parts in the structure just for the sale of equality is nothing but foolish.</p><p>The answer is that we should encourage meritocracy so that we can create an efficient economic system. We should also give opportunity for mediocrity so that it can also strive, by creating an alternative system where the emphasis is not on excellence. No everyone prefer excellence. Many may be content with mediocrity. There is nothing wrong with mediocrity, except probably the idea of it. We all think we are clever. Even thieves and gangsters think they are clever - and indeed they are. But it cleverness of another kind.</p><p>It will be sad to live in a society where excellence and meritocracy is not respected - for we then have nothing to strive for.</p><p><br /></p>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-5014075006969917149.post-84385250505723855492023-11-03T00:57:00.004+08:002023-11-03T00:57:49.874+08:00Economic Conditions: November 2023<p> It is a mistake for ringgit interest rate not to close its gap with the global interest rate which is the US dollar interest rate. With the differential of about two percentage points, it is inevitable that local ringgit funds will flow into US dollar funds for very obvious reason - to earn a higher interest rate. If the central bank for the ringgit refuses to act, as a matter of good policy, then inevitably, as more and more the ringgit are converted into the US dollar, there will be a local liquidity crunch in ringgit and the ringgit interest rate of Malaysian banks will have to rise to attract liquidity. While at the same time, there will have been a loss of US dollars which are being held as our international reserves. Maybe the higher global oil price have given the central bank more US dollars which it thinks it can afford to lose on the currency depreciation as a result of bad forex policy.</p><p>It is quite interesting to note that the government is always willing to challenge the workings of the macroeconomy at the global level. This has been shown in the past to be detrimental to the local economy.</p><p>In the meantime, the lower local interest rate (compared to the global determinant, the US interest rate) and the resultant lower ringgit, along with the higher price of oil (and hence of all operating costs), has led to a massive increase in inflation, namely, a rise in the rate of local prices increases. There is also no way that the government can cap market prices because to do so will result in a shortfall in production and supply as it becomes not profitable for goods to be brought to the market. Supply shortages will accompany price caps. Imports to make up for the loss of local production due to local price caps will inevitable result in imports being substituted for local output which, if this is long term, then the local economy especially of food production will be rendered incapable of competing with its equivalent imports. This is a serious situation for the long term when there is now realisation of the need to increase local food production in order to contain imported inflation. This will require a complete revamp of the local food supply chain to ensure that the whole chain is completely sourced locally. Local food production and its local supply chain should be a major of policy intervention by the government also a source of employment of the local workforce.</p><p>The government cannot continue to be a major source of employment for local graduates given that the cost of running the civil service is now very high and eats up the bulk of operating expenditure. Worse still, not a small sum is being used to fund pensions. It is a good idea for the civil service to be put on the local employment provident fund for two reasons. One, to ensure that civil servants also pay for their own retirements just like the private sector. Two, so that civil servants can be fired when they have proven to be not suitable for the jobs they are employed for. The downsizing of the civil service will be a step in the direction to reduce the layers for the corruption of the efficiency of the civil service system. Ministries and departments can be streamlined. </p><p>The economic structure of the global economy is now quickly being re-engineered as the major global powers fight for dominance and a shift in the global economic axis. As a result, the global interest rate cycle is being reversed. The global economy has been slowing down ever since the advent of Covid, and the two structural changes in the global economy will ensure that the slowdown will continue. Higher interest rates and higher food prices will be the main features of the current global economy. For this small local economy to pretend that it can insulate itself from the tsunami of global macroeconomic adjustments is a foolhardy stance to take. </p><p>It will still be painful, but there may be pain in fewer areas if the government allow the ringgit interest rate to track the US dollar interest rate and solves half the local economic problem in (a) local liquidity tightness, (b) threat to the international reserves, (c) higher imported prices. The other half of the problem still remains: (a) difficulty borrowers are facing with repayment as a result of lower income and now higher interest payments. The economic slowdown and the resultant weakness in the stock market is also causing problems to the property sector. Of course, the banks are also now being challenged through their loan portfolio to the property sector. The adjustments in the property and banking sectors are inevitable, and a higher local interest rate will aggravate the problem but it is not the cause of the problem in the first place. It is just a question of time for the macroeconomic adjustment to take place locally. The economy also seems to have a mind of its own as to how it will react to external signals and internal conditions.</p><p>Global superpowers have decided to make a change. The local economy must take precautions to mitigate as much as possible the coming consequences. Times will be tough.</p><p>Take care and all the best.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5014075006969917149.post-81708251475531099892023-07-26T04:59:00.001+08:002023-07-26T04:59:18.535+08:00The Mess In the World<p>It is obvious that the world is in a mess.</p><p>I thought I would set down my thinking of how we got here.</p><p>For decades, it was obvious that the relentless pumping of money into the world economic system would one day lead to massive inflation - in the minds of old-fashioned economists.</p><p>The main counter-arguments was that extra liquidity was needed to fuel the new economy that was the digital boom. This was indeed correct, and for decades the world economy could grow rapidly with little or no inflation. At the same time, technological advances and economies of scale drove down prices of electronic goods.</p><p>While relentless investments in the digital economy was driving advances in that part of the world, the liquidity that had resulted in those investments had got bankers excited and they worked in cahoots with real estate developers, leading to the real estate boom around the world. There was obvious massive asset inflation in the real estate sector and everybody was happy because they felt richer and richer.</p><p>The key question I have been having in my mind for those decades is this: under what circumstances would the economy explode? There must be a point where asset prices cannot go up very much further. The point must be when householders cannot afford to buy houses based on their prevailing incomes. Commercial properties can still be driven by corporate profits, so long as the real economy is doing well. So I was waiting for real wages to fall, meaning that prices are rising faster than wages - that this probably would have to go on for quite a while, several years or decades. It is quite funny that when the money illusion sets in, the illusion could be sustained for a long time. Households are able to get extra credit from their banks based on the real estate inflation - the difference between the current house prices and their respective current loan outstanding. Inflation feeding on itself.</p><p>When it looks like economic theory is not doing its job in curtailing or moderating the runaway economy, the impact of the excessive printing of money comes out in the politics of the beneficiary economies - China and Russia. The liberals might have thought that the printing of money might liberate the world of totalitarian states. But the accumulation of wealth by totalitarian states has made them confident, an increased belief in themselves and their superiority. China began to defy the orthodoxy of western democracy. Russia wanted to reclaim its lost empire glory.</p><p>The world economy that was working almost working like a well-oiled engine was beginning to splutter.</p><p>Not going into the question of how did the covid come about, the issue of interest to us is that the advent of covid and the political reaction to the public health concern was to disrupt the global supply chain, whereby factories everywhere were asked to shut down. With the total shutdown of supply, it is not surprising that there should be inflation due to a sub-optimal operation of the global supply chain. Cost of operations shot up and so the prices at the retail stores.</p><p>But the most significant cause of the current inflation problem is the escalation in the price of oil, and that higher cost is pushed through the entire supply chain. As the cost of oil takes up a substantial portion of the household budget, the quantity that can be consumed on the non-oil budget must surely be sharply reduced. This is where the present cry by the public is.</p><p>It does not help that the war affects the supply of grains and other foodstuff.</p><p>The central bank of the reserve money, ie, the US Federal Reserve, then decided to raise the interest rate from near zero to now more than 5% pa. This cannot be a proper response to the cost-push inflation. But its immediate impact is to worsen the budgets of households directly. In the rest of the economy, firms who are all indebted with massive loans have to find cash to service them, at a time when cost-push inflation and the disruption from covid is causing problems for businesses. </p><p>In Malaysia, the attempt by Bank Negara to slow the rise of the local interest rates in relation to the global interest rates has the effect of sending the ringgit into depreciation as local funds leave to enjoy better returns abroad. This is the price to pay for trying to prevent the inevitable adjustment to the real estate sector, for trying to ease the problem of their major borrowers who are mainly the real estate borrowers, and for trying to ensure that banks themselves should loans begin to become non-performing on a massive scale.</p><p>Is it possible for the Malaysian policy makers to avert the macroeconomic adjustments that are inevitable in the economy without too much pain? This is the time for the local central bank must act boldly in accordance with basic economic policy principles. It is just a question of when.</p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5014075006969917149.post-60829023653495864712019-03-08T15:50:00.001+08:002019-03-08T15:50:57.482+08:00Not Inflation, Not DeflationThe key focus for monetary policy is always price stability. In technical terms, it is called zero inflation, zero deflation.<br />
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Make sure that prices do not change, so that people can concentrate on increasing volume to satisfy rising population in an efficient manner meaning with less use of scarce resources at each increase in scale.<br />
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In stockbroking, I was shocked that the master market players were saying to clients that there was going to be inflation and it would be good for the market. Shock for proper economists; money for stockbrokers. Technically, this means negative interest rates: inflation rate higher than interest rates. The main goal of running quantitative easing is to create negative interest rates so that savers are punished and speculators borrowing cheap money think they are making money. In real estate, every idiot bought four properties: one for the wife and one each for the three children. They thought are set for life; no need to work and only collect rent.<br />
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The famous Japanese asset bubble burst in 1992 which meant it underwent deflation for more than two decades - that was how far assets had inflated and how long it took for asset prices to come down to be affordable for ordinary people. In the meantime, the economy underwent a recession which means more unemployment and lower wages until they created a category of workers called the working poor. In recent years, there has been some price increases due to increased government tax on consumption (which makes life harder for people with fixed incomes) and the attraction of tourists as well as foreign property ownership.<br />
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In Malaysia in January 2019, the consumer price index fell by 0.5% from December 2018 and 0.7% from a year ago when compared with January 2018. This was the first time in recent history and the media was calling this deflation. Sorry, no, this was just a decline in the CPI for the month.<br />
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Technically, deflation is a persistent decline in prices over a period of time, not a flash in the pan. So we do not know yet whether we are in a deflation period. We have just to see.<br />
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It is only logical that after several decades of inflation, ie persistent price increases culminating in the escalation in prices in recent years caused by outflow of cash which led to a sharp declining in the ringgit and now the refusal for ringgit interest rates to rise accordance to the rise in US interest rates, that we can only expect deflation to follow in the coming years and even decades. We may not like it but I think it is inevitable. Think of all the smart guys with there three extra properties for their children's future education now facing tenancy problems and loan repayments especially as interest rates on their loans start to climb.<br />
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It is one thing to not to wish for bad things to happen, but it is a different thing to ignore the inevitable. It is much better to be prepared. Well, I suppose many of us just love the cosy warm sand around our heads even if our arses are still sticking out.Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-5014075006969917149.post-66466426520511524482019-02-21T18:40:00.002+08:002019-02-21T18:40:55.653+08:00EPF & Housing MortgagesIt will be one of the greatest errors of social policy if the current proposal by housing developers for individuals to use their EPF to fund the mortgage repayments of their houses.<br />
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1. If demand for housing is poor and houses are not affordable to the ordinary person in the street, the logical thing to happen is for houses prices to fall and developers to lose money. We cannot afford to ask ordinary people to pay good money to overpriced properties so that profits from real estate projects can be sustained.<br />
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2. To release the bulk of the EPF to real estate will maintain property prices higher than warranted by the market, ie the incomes of the people. By not doing so, property prices will be lower and at a level that ordinary people can afford without having to raid the bulk of their EPF.<br />
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3. If EPF is used to fund housing mortgages, when there is a crash in the property market which it surely will, then ordinary people will be the victim of real estate speculation perpetuated by real estate developers.<br />
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4. I take the view that the real estate market, not only in Malaysia but around the major cities of the world - now happening in London, Brexit not withstanding - will take a major crash - put conservatively at at least 40% down. The situation is akin to the Japan asset bubble which has taken more than 30 years to recover.<br />
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5. I think the current EPF policy on housing should stay as it is. The EPF policy is probably one of the best conceptualised schemes in the world for the ordinary person. The only problem now is that wages have been too low and inflation due to the mismanagement of the economy since 1980 has a most devastating impact on the cost of living and the standard of living of the wage earning population.<br />
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6. Why is the government bolstering the profits of corporations and not taking a more social oriented stance on relative prices in Malaysia? Time to end politicking for profits for the elite.<br />
<br />Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5014075006969917149.post-27397535322967396352018-11-22T15:13:00.001+08:002018-11-22T15:19:03.749+08:00World Today November 2018<br />
There are few trends going on around the world which I think are interesting.<br />
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1. Malaysian Economics<br />
The Malaysian politicians seem to have stopped having any interest in the growth of the economy. Their prime concern has been on witch-hunt - which is a crucial enough job for cleaning up the house after the mess of a five decade prolonged party of hubris. Who is to blame? It doesn't matter, economically, for the impact is also being paid for by the ordinary people through high prices and a weakened currency as well as a slowdown in growth of economic activities. The bankers have also had a good time in playing the real estate market. It is now interesting to see how they are going to unravel the piles of tall bricks sitting in vacancy. They say developers have deep pockets, but then no one can live forever.<br />
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2. End of QE<br />
Of course, the Malaysian economy has not been so clever as Malaysian politicians and policymakers who like to be imagine themselves to be. we are all being influenced by the mother of all policy, the US monetary policy. I am happy that at long last, the US Fed has decided to raise interest rates and slow down the growth of the money supply. We are now beginning to see the impact of this monetary tightening. Bitcoin crashed. Tech stocks plunged. Banks are beginning to see problems. The problem of monetary tightening is that it is impossible to do a soft landing. When the crack appears, the crash will follow. The US Fed has the tough job of having to raise interest rates which ensuring that there is sufficient liquidity to keep ordinary businesses going.<br />
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3. US-China Trade War<br />
The problem of the world economy is that China, having expanded aggressively in the past, is now left with massive production over-capacity which it must sell. Because of their massive over-capacity, their cost of production is likely to be the lowest anywhere in the world, to which Trump is accusing them of dumping. For the US to produce its own basic industrial inputs now is not viable. So the US-China trade war will leave everyone very unhappy and possibly a global recession.<br />
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4. China Economy<br />
The China economy is in a very bad state of health, with overspending by the GLCs and imprudent lending by its financial institutions, all funding over-capacity in industrial production and real estate. As we have seen elsewhere in Asia before, it is often that public institutions will suffer while gains will be made by private individuals. This is where the fight against corruption in China is so intense. It is a matter of national security as well as political vendetta. Punishing individuals is one thing. The crucial thing is to focus on the flow of money and see whether any new money is going into new economic activities. If not, recession.<br />
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5. Mass Migration<br />
As with the massive flows of money around the world, there are also massive flows of people around the world, people looking for a better way of life. This was what the great Washington Consensus was out to do, to liberalise the world. It was a good idea, a good thing. In practice, however, when the great rush of people into a country is not officially recognised and followed by a massive programme of social housing and creating of jobs as well as of taxing new incomes, then the system will not be sustainable. There will be massive budget debts for social development which must some how be paid. It's an irony if the immigration does not boost GDP growth and raise government revenue. These massive migrations cannot in no way be unconnected to the previous massive increase in the supply of money in the world, which leads to greater economic disparity, greater flow of money into military weapons, and the maintenance of regimes by force because there is good money to be made.<br />
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6. Brexit<br />
Theresa May comes out as such a tough cookie. Brexit becomes more complicated than as I have earlier imagined. It was supposed to be a simple case of immigration control. It spiralled out to be a total departure from the customs union, which may be so wise. Then, to checkmate the immigration control, the Europeans brings up in the border issues with Northern Ireland and Granada. If Brexit is seen as an economic issue, it may not have been that wise to bring it up in the first place. But if Brexit is seen as a fight for political independence, then it should be worth every penny of it.<br />
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Conclusion<br />
It is good to be alive. But it is not wise to be influenced by the collapse of the total whole picture into a few stories in a blog or a website. Like chilli, you have to take a small dose of the real stuff at a time. Sorry for this summary of world events.Unknownnoreply@blogger.com10tag:blogger.com,1999:blog-5014075006969917149.post-72700162571136554232018-11-03T16:16:00.001+08:002018-11-03T16:16:36.651+08:00Malaysian Budget 2019Let me give a brief analysis.<br />
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1. The Malaysian Budget 2019 is contractionary on the economy because the government will take more from the general public than to pump money into it as it undertakes to reduce the federal deficit from 3.7% in 2018 to 3.4% in 2019, 3% by 2020 and 2.8% in 2021.<br />
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2. With the economy expected to grow slightly from 4.8% in 2018 to 4.9% in 2019. This means that the private sector has to do a lot of the heavy lifting of the economy. If the government continues to politicise its policies by behaving as if it is still doing election campaigning rather than managing investor confidence, it is unlikely that the private sector will invest in amounts that will overcome the fiscal consolidation. The world economy is slowing down and there are attacks on palm oil. The only consolation in the horizon is the oil price.<br />
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3. The budget is an eye-opener for those who had hoped for a miracle to happen to their lives in the last general elections. The sore truth is that life for ordinary people are going to be hard hit by the attempt by the government, any administration, to try to raise its revenue. It is a rotten state of affairs in Malaysia that the government thinks that it is the great determinant of our prosperity. No, it is no, any administration. The government has been good in taking from the general public to line the pockets of the elite. This is not changed.<br />
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4. Times are going to be hard for a long time as the US is determined to reverse the Quantitative Easing of the money supply raising interest rates. Malaysian monetary policy will continue to be "accommodative" (the central bank has no new word for its monetary policy since its opened its doors) which means keeping local interest rates unchanged which in turn means the ringgit will continue to tank, just purely on interest rate differentials. Investor confidence has not been fully discounted yet.Unknownnoreply@blogger.com6tag:blogger.com,1999:blog-5014075006969917149.post-24034867852770963772018-10-08T16:44:00.003+08:002018-10-08T16:44:59.978+08:00US-China Trade WarI must apologise for being long absent from here, by desire. As the political loop now goes through its second iteration, there is nothing to hope except the recycling business.<br />
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I must thank walla and James for keep faith with this blog. I have reclaimed the links for you walla and I am writing this for James and everyone else who are interested in the above topic. I do not profess to be the expert on the subject matter, but I have my views which are formed quite ephemerally.<br />
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The trade war is started by Trump who as a businessman does not give any shit to the economics of interest trade. He thinks that if I have a trade deficit, then I am on the losing end. I must make profit and therefore I must accumulate international reserves.<br />
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This is where knowledge of economic theory triumphs business common sense. (Some MBAs may think they are economists and the current state of Malaysian economy is to some extent the influence of these business administrators influencing greedy politicians. I had argued with that administrator in person when he first mooted the implementation of the GST.)<br />
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The problem for Trump is that he does not realise that the current US deficit is financed by US printing money. This money was printed by Greenspan who has been panned as the man who knew everything. If Trump were to reduce the US trade deficit, then he has to take back all the US dollars that Bush, Clinton, Obama had printed. You start that by stop printing money and raise interest rates. This I am glad the US Federal Reserve has already started doing this, raising US interest rates for the third time this year and which Mr Trump is very unhappy about.<br />
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Trump wants to reverse the trade deficit because he wanted to jobs back in the US. This is true. You run a trade deficit because you can afford to consume without having to work. Americans are almost all obese except for those in movies and TVs. There is the privilege of consuming without having to work because the government can afford to give unemployment benefits. The privilege of being the issuer of the international currency.<br />
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Now he wants Americans to work and be great again. Good for Americans who want to work.<br />
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Strategically, the stage is now being set for the turning point in global economy history - the rise of the China economy as a world economic power. As the US reduces its trade deficit, it reduces the volume of US currency circulating around the world. This is now time to give the US dollar back to the US as the US interest rates go up. This should flush the US banks with cash. Whether small businesses should do well depend on how they are going to create their new domestic markets or to try to export to China which may not be easy. The stronger US dollar does not help.<br />
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The Chinese has been trying to dump the US dollar by buying up real commodities such as land and minerals around the world which dismayed the governments of the free world. This is of course strategic. By controlling global resources, they are positioning for future growth.<br />
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The China economy is slowing down because of the political spring cleaning that Xi Jinping has been doing for so many years. This cleanup is necessary for long term growth, as you cannot have multiple factions in the undercurrents disturbing your long march. The old guards who benefited from the previous economic surge of China are the real political masters as they have money to buy power. This needs to be "rebalanced" in favour of the incumbent regime. This is a significant makeover. (Which by the way is what seems to be happening in Malaysia in order that the original UMNO can come back in a different guise and it will champion the Bumiputra Policy.)<br />
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The China economy will take a dip for a few more years. This does not matter, for China typically takes a long term view. The China economy will recover by fueling its own domestic markets through the production of needed goods with resources that are already in place globally. The infrastructure is now being built through the One Belt Road which is none other than rekindling the golden age of China in days gone by. When the pieces are in place, China will wake up again and come into action like a newly minted sex doll. When the global economy is in the depth of recession, the China economy will smell like a rose.<br />
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We have only about two kingdoms. The third kingdom is not EU or UK, although the EU like to think that they have a solidarity that can conquer the world. The current of the UK with the UK is the unfinished business of WWI and WWII. The EU as originally conceived is the dream of Germany and France to make the UK an appendix. But the British will always find a way to survive, being islanders.<br />
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The third kingdom is Russia and Putin is now acting up. On the fringe but not to be left out. Our Cao Cao? Russia is trying to come into the world picture and they can always work with China being of similar ideology and probably psychological twist. That paints half the world red. The fight with the "free war" than goes on in earnest again. The US will rope in its allies - EU+UK and Japan - and I think the dynamics will work first at the economic level and if fails, then militarily.<br />
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This may be a good time to be prepared to be a Tao or Zen master.<br />
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Hope this satisfies you James. I have been meaning to meet up with walla but I am wallowing in my own mud for now. One day.<br />
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<br />Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-5014075006969917149.post-89147735167384665732018-06-25T11:17:00.001+08:002019-06-02T20:49:11.600+08:00Malaysia Policies: New First StepsI am sorry if I am stating the obvious. But sometimes what is obvious is not obvious when we are inclined to delude ourselves.<br />
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1. Basic Premise<br />
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Where Malaysia is now at is the result of bad thinking - that the Malays are the rightful inhabitants of Malaysia and that Chinese and Indians are immigrants.<br />
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Even this simple statement is erroneous if you take into consideration the orang aslis, the babas and the nyonyas and others in Malaya and not excluding the 30 to 40 ethnic groups in Sarawak and Sabah.<br />
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There is a correction to be made in the basic premise of the nature of Malaysia - that obviously Malaysia is the homeland of each and every Malaysian, i.e., anybody who is born in Malaysia and anybody whom one parent is a Malaysian or any foreign born who has been granted Malaysian citizenship.<br />
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If we can't get this simple sentence right in our head, then I don't think we are going to get this country right in any direction but self-destruction.<br />
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2. NEP<br />
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First, they said get the colonists out so that Malaysians could rule ourselves and enjoy the keep the fruits of our own labour. Let us fight the colonists together. Independence was won.<br />
Second, by year 12, it was decided that the Chinese were doing too well and the Malays were not. Therefore, redistribute wealth as a matter of national policy. We control all policies and use government tax revenue to acquire Chinese assets for the Malays, i.e., the UMNO elite.<br />
Third, the eventual purchase by Petronas of the KL Twin Towers woke up the Sarawakians and the Sabahans that they had also been plundering the wealth of the Borneo states.<br />
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The rot started in 1970 with beginning of the systematic replacement of Chinese and Indian bureaucrats with Malay ones, coinciding with the replacement of English with Malay as the medium of instruction in schools. This created an insular civil service and brought about the closing of the Malay mind. With that began the Malayanisation of Malaysia. As the East Coast rejected KL and with the ascent of PAS, this evolved into an Islamisation of Malaysia when UMNO strived to be more Islamic than PAS.<br />
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There is a need now to level the playing field for everyone and abolish the NEP immediately. Except social services for the very old and very young and those who are incapacitated. Pursue economic efficiency as the instrument for economic restructuring, not restructuring while championing inefficiency.<br />
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The rise of the power of senior civil servants and political dynasties led to the creation of GLCs who are now monopolising the entire economy, in the name of NEP. The cost of living in Malaysia has escalated because of these monopolies which must pay annual dividends to the government for the politicians spend on big projects. The GLCs should be privatised or dismantled and the government should retreat from business. There should be a clear separation of politics from business and business from policies. While politicians will operate according to the law, businesses must operate according to policies.<br />
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3. BNM<br />
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The head of the central bank is called the Governor. The designation is given to signal that the politicians including the Prime Minister or the Fiance Minister cannot intrude upon the duties of the Governor. There is a separation of the central bank from the finance ministry.<br />
<br />
The job of the central bank is to protect the value of the local currency. The key method is to ensure that there is no excessive supply of the local currency as well as that there is no excessive and unproductive borrowing of foreign currencies. The central bank can implement monetary policies and the foreign exchange policy to protect the value of the ringgit, without resort to the government. If the government intervenes, the Governor can bring its case to parliament.<br />
<br />
The deterioration of the value of the ringgit by 60% from 2.50 in its prime days to 4.00 today is a clear case of the bad management of the ringgit and poor monetary policies. We have been suffering from a prolong period of central bank silence, probably except on non-monetary issues.<br />
<br />
I hope things will change and improve from here onwards.<br />
<br />
For a start, raise ringgit interest rates in line with the US interest rates. BNM had said in the past that it cannot differ from the US Fed when rates fell. Ditto, the reversal. Otherwise, we will see another bout of ringgit deterioration, regardless of what the PM may say about its fair value. I would say the fair interest rate is 5% pa.<br />
<br />
4. Growth, Growth, Growth<br />
<br />
This cannot be over-emphasised. We heard in the 1980s that the government was prepared to sacrifice growth to achieve "fair" distribution. Today is what that looks like, and this is not what we want.<br />
<br />
There are rich Chinese and there are poor Chinese. There are rich Malays and there are poor Malays. There are rich Indians and there are poor Indians. There are rich Ibans and there are poor Ibans. There are rich Kadazandusuns and there are poor Kadazandusuns. The same applies to all races.<br />
<br />
Every population profiles fall into a natural distribution. You cannot create a perfect profile for your race at the expense of every other races because it will not happen.<br />
<br />
The challenge for any government is to raise the economic profile of everyone so that Malaysia can really boast itself it be a nation that creates that the best economic opportunities for everyone. This will make Malaysia an attractive place for people to come and we should welcome them so that we can build the society together.<br />
<br />
The urban-rural divide occurs everywhere because of the investments that are poured into the urban centres. The rural areas will always be caught in a material dilemma as they struggle to hold on to their traditional ways of life which have been encapsulated as their traditional cultures, which is correct, by definition. It is a good strategy if a good urban-rural balance can be maintained. I see the key instruments are education and technology.Unknownnoreply@blogger.com17tag:blogger.com,1999:blog-5014075006969917149.post-73073099108759465982018-06-18T11:13:00.001+08:002018-06-18T11:13:36.261+08:00Back To Square One?<br />
We have a new old regime in Malaysia, where the old men (and old women) now have a second chance (what about young men and women do not?).<br />
<br />
I am unsure what the current political agenda is all about. Is it to develop a new model of economic growth, or to continue to find fault with the preceding regime. Sometimes, it doesn't appear that they have realised that they have won the election and is not the government. They continue to behave like they are still in the opposition. An old opposition against the new opposition. Does it mean that there is now no government as such that we can rely on to look forward to? Apart from a zero GST, zero price reduction and another national car that we have to overpay.<br />
<br />
Last time we had an immense oil reserve (amidst high oil prices). Now less, and therefore less degree for policy error to play with. After nearly forty years of one-man domination of a singular idea of a one-race supremacy without economic merit and the loss of one generation, the younger generation now have no idea how they have got to such dazzling heights, only to come crashing down when the hot air cools.<br />
<br />
If all the wealth of the world has been made by the old generation, then the new generations do not have to work. The only thing they will need is labour-saving services which can either be machines or human services produced by poor or less rich third-world foreign workers. This dialectical process means the slave will eventually takeover the master's household and wealth.<br />
<br />
The new situation requires a new infrastructure on which the new economy must be built. The new economy will need the banks and finance industry to re-skill themselves to know how to finance projects with feasibility and good prospects for success in order to create good jobs for the new generations. The handling of finance in the economy must now return from the government to the private sector if there is going to be any real prospect for growth of the economy on a sustained basis in future. We should get the politicians to lay out a level playing field for everybody, and stop creating a crooked frame which collapses under the slightest weight or pressure.<br />
<br />
We have to move on. The perspectives of the old generations are now obsolete and irrelevant. The young must struggle to find their niche in the new world of technology. The global economy has changed. It will be sad if we here are still stuck in the mud of post-colonial preconceptions.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-5014075006969917149.post-46578525934794664342018-05-16T16:30:00.001+08:002018-05-16T16:30:34.855+08:00GST and All That - One Last TimeYou know I had had my misgivings over the GST all the while. There are of course very good reasons for being apprehensive.<br />
a. GST is a transfer payment, like all taxes. It does not boost the economy, if it is really used to plug the whole in the public budget. But if the government then went on a spending spree, the spending spree will boost economic activities (although not quite if they are mostly foreign in origin). By getting deeper into debt, it violates the original intention of the imposition of the GST of reducing the budget deficit. The argument then went on to talk about a reduction in the debt/GDP ratio which is quite another thing.<br />
b. The GST by itself at 6% does not sound like much, as had been argued by critics here before. But it was argued here that this will lead to an escalation of prices; not purely because of the 6% but because the imposition of the GST is a desperate measure to try to stop a sinking ship. Added by the expectations of higher US interest rates and the reversal of quantitative easing, the outflow of fund which led to further ringgit depreciation exacerbated an already bad situation. The shit hit the fan.<br />
c. Do we zerorise the GST when we want to abolish it? Well, abolishing it means no more GST as an idea, not 0% GST. Sometimes, it's hard to find good English in this part of the world.<br />
<br />
When you have an economy that had been focused on the unequal distribution of the petroleum windfall, you know that you are setting up the economy for a long-term reduction in economic efficiency. So much of the policy errors are being disguised by pouring money to gloss over the cracks. Contracts are no more being enforced; they can be renegotiated because of cost overruns and what not. This is paying good money for bad and incompetent work.<br />
<br />
It would suggest that by the way we are going to unroll previous policies, which basically is to reexamine and then probably dump bad projects, things are going to slow down while we are trying to do spring cleaning. We need to brace ourselves for a time of quieter activities. The traffic seems to be fairly quiet, for a start.<br />
<br />
I am sure most people feel a sigh of relief now that a certain thorn has been removed from our side. After that will be the healing process, of the politics as well of the economy. I am not too sure whether the same old medicines can be used for new diseases. But like the new digital economy we are all immersed in, we should be quite used to disruptive changes. While these are interesting times, let them not be a time of the disruption of the good old peace. God bless us all.Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-5014075006969917149.post-56598484642766891422018-03-27T11:52:00.001+08:002018-03-27T11:52:27.232+08:00Fake NewsYesterday, an anti-fake news bill was tabled in the Malaysian Parliament.<br />
<br />
Fake news are now defined as "inaccurate news" which are "any kind of news, information, data and reports published which, in part or whole and in whatever form including write-ups and visual or audio recordings are false.<br />
<br />
This presents a very interesting philosophical issue for us to try to resolve - what is truth?<br />
<br />
Wise men throughout the last few thousands of years had tried to find out what is the truth and no one has the one and right answer.<br />
<br />
Fake news as inaccurate news is a double-edged sword for the legislator.<br />
<br />
The government has never been known to be accurate in the information that it presents to the general public, ostensibly to maintain "public calm" in times of unsettling emotions. More realistically, the government is also composed of ordinary people who have the difficult jobs of having to have a complete picture of the national situation as well as having to forecast the future when managing national economic and financial affairs.<br />
<br />
Will the government be charged with fake news if its economic forecast for next year turned out not to be precisely on the dot?<br />
<br />
The whole exercise of establishing the truth has drawn upon much of the best resources of any nation. This is where the modern institutional triangulation of the legislative, executive and judicial is laid out in order to ensure that what we have is not further from the truth even if it is not the truth.<br />
<br />
Truth as conceived by the anti-fake news act is a point of truth and not a range or an idea of truth.<br />
<br />
It is very difficult to have a point hit on anything. This is why when surgeons operate on the tumour in the brain, you either leave some of the tumour in in order not to cut away some part of the brain (Type I error in statistics) or you cut away some bit of the good brain in order to not leave any bit of the tumour around (Type II error).<br />
<br />
The implementation of the anti-fake news act, if it is passed in parliament, is likely to commit the sins of Type II error, whereby those who are innocent are also charged in the hope that the fear will scare people from writing anything at all, be it accurate or not. This Type II error has been seen in the implementation of the GST when GST amount are imputed for retailers when there is no information to prove things one way or the other.<br />
<br />
It is not inaccuracy that the act will the fighting - it will be ignorance that will be punished and at the same time fostered.<br />
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Now, for the poor bloggers who are writing opinions of which much of them are sentiment rather than facts. They could be charged for having aroused the wrong sentiment, or should we now say inaccurate sentiment.<br />
<br />
In a world where ignorance casts its cloud upon the whole humanity, the chase for accuracy is as good as the reference of the judge of the accuracy.<br />
<br />
As an afterthought, accuracy can be accuracy of the truth and of the falsehood. Accuracy does not necessarily equate with truth. A perfect fake painting is an accurate reproduction of the real painting; the only issue is the claim to authenticity.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-5014075006969917149.post-24428626378769447112018-03-08T11:55:00.001+08:002018-03-08T11:55:22.921+08:00Brexit - RevisitWhat is happening with Brexit?<br />
<br />
Brexit started from the simple idea that there was a need for Britain to control immigration because of the heavy influx and the pressure it was putting on social services. When Britain appealed to the EU to allow it to do so, the EU rejected the idea of a controlled border.<br />
<br />
The decision was then to put to the general public through a referendum as it whether Britain should leave the EU (if it so desperately wants to control immigration) or stay. The resumption was that most people would choose to stay and therefore decide once and for all that Britain then would have to accept the uncontrolled immigration with all its costs and the implications on subsequent fiscal decisions such as taxes.<br />
<br />
The referendum decided on Brexit which the EU subsequently vehemently opposed by imposing all kinds of restrictions and costs on on the idea that you cannot leave this place alive. Britain must die if it wants to leave the EU.<br />
<br />
The EU consists of a bunch of bureaucrats who are not at all directly related to the various constituents of the EU except the home country from which they come from. But the political forces of the EU come from Germany and France, apart from Britain. It looks a bit like a another war where Britain is now defending itself against Germany and France.<br />
<br />
The money costs may be a burden for the immediate future but not in the long run. The restrictions especially on trade may have some legitimacy if the common market is the focal point. The common market is important only if its very existence is the underlying force for the economic survival of the EU. In the sense that by the free movement of goods within the EU, EU can develop happily without the rest of the world. It seems strange that while there is a loophole whereby the movement of people from outside the EU can be free once they have gained a foothold in some obscure part of the EU, this cannot be applied to goods. There is a prejudice for the free movement of people from all over the world, but not of goods. It does seem therefore that the EU is really a political entity which is using trade sanctions to punish those who disobey the EU political masters.<br />
<br />
Britain's decision to leave the EU is a political decision. It is a war and war has its consequences. Britain has been involved in two major wars in Europe and it has recovered since. So this is not the first time that Britain is facing a situation such as this.<br />
<br />
Businesses of course are worried because they are the target of the EU response to Brexit. This applies especially to those who are in the EU because of the EU common market advantage. After Brexit, a new profile of the British economy will emerge which will be shaped according to the new reality of being outside the EU.<br />
<br />
But the EU is not the world. The EU bureaucrats have not taken into their calculations that Brexit will only be detrimental to Britain and not the EU. If that is the case, they should let Britain go and concentrate on the joyful development of the EU in future. But the EU will also suffer without Britain because Britain is a major economy in Europe. Within the EU, Britain acts as the financial centre and some manufacturing for Europe while neglecting its agriculture. Outside the EU, Britain may lose some of its financial services; but not all but it will also be able to recover some of its traditional industries.<br />
<br />
The future growth engines of the world will be China and Russia. There is much of European and British that the Chinese would wish to consume. Even if India were to become a substantial economic power outside itself, it will also be a major consumer of European goods and services including British. Economic growth of European countries depend on their relationships with countries outside Europe. Europe is a major tourist destination which can be sold by entertaining the tourists.<br />
<br />
The EU is merely flexing its political muscles in the negotiation. Whatever the final outcome, it is good for Britain to be out of the EU and be as free as before to be its captivating self.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-5014075006969917149.post-78921796415820484772017-06-27T23:30:00.002+08:002017-06-27T23:30:44.571+08:00Party & StateMy dearest children,<br />
<br />
I started off my life by asking the question of what is the best. For if I wanted to do good in the world, if I wanted to do the best for the people, then I have to put them before myself. This is when I started to find a way of how to turn a swamp into a modern and vibrant city.<br />
<br />
Of course, our place was not just a swamp like a lump of mud but a lump of mud that is strategically located in the middle of the most important trade route of the world. This is when it is opened to receive that trade as a means for our people to earn a living by working hard to provide a service.<br />
<br />
The economic story is well-known. But the politics is a bit more complicated.<br />
<br />
I had decided that I should be the philosopher-king as propounded by Plato. If wisdom should befallen the political leader, the society shall benefit from that wisdom. It has been shown that democracy, while the idea is good for being all encompassing and inclusive, is a dilution of perfection and the end result is always mediocrity but of the type that the common people find acceptable. But if we were to pursue economic prosperity through economic efficiency, we must have perfection that is characterized by meritocracy. That perfection and meritocracy must be seen to culminate in at least one place and that one place must be the political leader who is both wise and selfless.<br />
<br />
When my eldest son decided to be a politician and ultimately the political leader, I had no choice but to open up the route for him. If he could do the job, why not? But of course, there were criticisms which I did not hear which would suggest that there might be others who were better than him and who, as a result of my son being earmarked for the top post, might have sensibly withdrawn volunteering their talents to the state. How much is this opportunity cost worth no one will ever know. The real cost must lies in the future of this state.<br />
<br />
The problem of having a son succeeding his father in politics is that the son is under pressure to do better than his father, and this better must be seen as a much harder line instead of a veering away from the old path and taking the country onto a more enlightened path as it was then on a much firmer footing. If the son were to presume to take a similar premise as the father had taken, then the whole future is staked upon a single platform which may or may not be as relevant now as it had been in the past. The likelihood of making an error in future projection is very real, the further time moves away from the origin. But this is now for the government to decide.<br />
<br />
In my case, for my own legacy, I had already made it very clear - that I did not wish to be glorify in any grandiose scale, for to do so will distract the attention of the people from what they have to do for themselves in the future if they have to keep looking backward into the past. It was for this reason that I had decided that any physical monument that had come to represent me should be removed so as to prevent any idol worshiping.<br />
<br />
However, I was aware that there could be considerations by the party that its history should be preserved as part of the national history. That is very well and good when you imagine that the party is the best representation of the interest of the people and the nation in the future as it had in the past. But it may not be so. New parties may rise up and take over our party as the people demand their new aspirations to be met and which may be best served by new representations which they may create in the future. The party may not even be as important in the future as it had been in the past, unless the ideology of the party evolves with the times.<br />
<br />
I know now that the quarrel among my children is a quarrel between the party and the citizens. I would say, son, let the citizens win.<br />
<br />
Your loving father, etc.Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-5014075006969917149.post-42419859996406367122017-06-15T13:27:00.001+08:002017-06-15T13:27:21.011+08:00End of CivilisationClever economists cook up fantastic ideas about accelerating economic growth through competition. Adam Smith conjectured that public interest can be served by the pursuit of personal interest. Now we know Adam Smith had got it wrong.<br />
<br />
Competition is now extended to the global level. First, we have nations conquering other nations to ensure their own prosperity. Second, we have companies conquering the world to ensure their own corporate profitability. Third, we have politicians hand in glove with global companies conquering their own nations in pursuit of their own personal gains. Clever politicians are now global companies in their own right.<br />
<br />
The second layer of competition is people competing with companies. Marx said people should rise in arms to take over companies, because in the end there are no profits and all gains go to labour because there will be more capital than people. Now we know Marx had got it wrong.<br />
<br />
While there is indeed much more capital than needed thanks to decades of money printing, it seems that human beings have been much more productive. This is a perfect situation for capitalists as they now can pay zero wages for people to work, as they take back the wages through inflation. Thanks to the help of politicians who now control economic policies as they raise taxes in order to pay for the services of firms. There is a great pretense in paying wages. The new phenomenon is the working poor; those who work can still be poverty stricken. In the past, the poor can pick from the land; now they have to pick rubbish from the streets.<br />
<br />
There is the great sickening concept of the aging population is no good because they cannot feed themselves. This is utter rubbish. The fact is that the population has not been properly paid and what they have been paid is not sufficient to live on over their entire life. What happens to the profits that they have helped to make? Companies get richer and they have no where to invest. So they start buying countries from politicians. Corporatisation of the world? Big Brother is coming.<br />
<br />
The aging population is good. It reduces the population in the world and conserves scarce resources so that they are sustainable in the long run. That you need a faster rate of population growth and lower wages in the future to take care of the old folks is a pathetic idea. Some financial consultants have got their calculations all wrong.<br />
<br />
And now, people competing with people. There is no more gentlemanly fights or womanly fights. No more boxing; it is now kick boxing and mixed martial arts. There are no more rules. You can do anything to bring your opponents down. You have the right to be abusive and disruptive.<br />
<br />
The clever people is no more a person who knows many things and be honourable and polite. The clever people is now a person who does not have to know a lot, but that the little that he knows is good enough for him or her to abuse others and remove any threat perceived. There is no more at improving knowledge; there is everything to do with acts of destruction.<br />
<br />
So now we have politicians calling people whom they do not like all kinds of ugly names. The ones who are abusive and foul mouthed win. Those who can lie and cheat win. People who can be abusive of fellow citizens are national heroes. Those who can insult their customers in a language their customers cannot understand is a great sign of disrespect; they are a product of the political environment in which they are brought up.<br />
<br />
Is this the end of civilisation where people have forgotten to be civil? Has the respect for each other gone? Are we in the middle of a war of one group of people against another group where is only goal is to destroy the other? Is there no hope for people to live in peace and harmony and work hard to raise their families? Is it our way of life to steal from others and destroy them so that we can live off the fruits of their hard work? Are we in the midst of a fight to death for scarce resources as we encourage faster population growth in order to fight an aging world? Is the human race going to choke in death in their own toxin as we have seen in some countries? Is the world messing up its own back garden?Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-5014075006969917149.post-56421107669328188622017-04-17T10:46:00.002+08:002017-04-17T10:46:25.545+08:00Inflationary ForcesI think we have to be clear how we think of inflationary forces in this country.<br />
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We know that GST would cause a one-off increase in the price level with the introduction of the 6% on 1 April 2015.<br />
<br />
We know that the piling up of sin taxes on alcoholic drinks and cigarettes would also only cause a one-off price increase - each time the sin taxes are raised.<br />
<br />
We know that even the drastic depreciation of the ringgit of 20% against the US dollar would also be a one-off effect on the price level.<br />
<br />
The academic argument on inflation is that a one-off increase in the price level is not considered inflation because inflation is the continuous increase in the price level from one period of time to the next.<br />
<br />
On this score, the GST is free of guilt because the 6% is only one-off from the base of zero GST. At all subsequent times, the GST remains at 6% and hence the price for the same product will remain unchanged at the heightened level. Unless of course the GST is raised above 6%, then another round of one-off price increase occurs.<br />
<br />
In the case of the sin taxes, these have in the past few years been heavily victimised because the policy makers want to raise tax revenue in the guise of self-righteousness.<br />
<br />
The sharp depreciation of the ringgit of course is again another one-off ever since the depreciation started at about the same time as the imposition of the GST. There was gradual depreciation on a sustained basis until it hit the current level which the general public feels that the situation is completely out of control. This was when the coffee shops started raising prices by 20% to 30%. We can consider this also as another one-off impact.<br />
<br />
In terms of analytical rigour, if we were to separate out each of these factors, the conclusion is that none of these by them is a major cause of inflation.<br />
<br />
But the obvious answer is that there is the cumulative effect of all these little impacts. A single mosquito bite doesn't quite bother, but a hundred bites would anyone insane.<br />
<br />
All these analytic rigour is good for the student who is trying to understand the basic mechanics of inflation. Mind you, the ability to distinguish between a one-off price increase as not inflation and the sustained increase in prices is an important one to learn in class.<br />
<br />
After having understood the lesson, in the real world, the challenge is how to think about policies which will affect the price stability of the nation. This after all is the mandate of the central bank, a responsibility entrusted to it by the government. The world has invented the central bank in order to control the minister of finance from spending recklessly for political/populist reasons. The central bank's main tool is tight control of the money supply.<br />
<br />
In this country, the central bank has no control over the money supply. We do not have foreign exchange control because we embrace free trade and the free flow of capital. Quantitative easing by the US Fed encouraged money to flow into the stock market here raising stock prices which subsequently fell upon profit taking. The currency rose and fell as a result of the collective inflow and outflow. We lose foreign reserves through our stock market.<br />
<br />
The last time the central bank tried to sterilise the domestic money supply from the capital flows resulted in incompetent forex dealers at the central bank losing the pants for the nation.<br />
<br />
The increased capital inflows and the increased monetary base encouraged banks to lend out money to the general public to punt shares, speculate on real estate and generally going on a spending spree with their numerous credit cards. The bank executives got big bonuses for creating debt recklessly.<br />
<br />
Chief among the borrowers is the government who has learned the joy of spending to solve all political and economic problems, including an incompetent civil service which does nothing but line their pockets with giving out concessions, perks and pensions at the top of their respective scale. Nothing productive came out in the economy except huge public sector debt, raised through bonds which need to be redeemed eventually. Which they did and caused the sharp currency depreciation as foreign bondholders sold out and leave.<br />
<br />
They left because the central bank was afraid of the impact of selling forward on the currency and foreign bondholders were left with nowhere to hedge their currency risks on their miserly discount rate on the bonds.<br />
<br />
The attempt to control the public sector debt and the political need to spend on mega projects compelled the government "to make very difficult decision" by imposing the GST on the economy. This is a major single act of the transfer of funds from the people to the government which at once make the government rich and the people poor. There is no doubt about this - inflationary or not.<br />
<br />
When the ordinary people talk about "inflation" they are really talking about the fall in their standard of living - times are bad, taxes go up, prices go up, margin level down, business poor, hard to earn a living.<br />
<br />
The imposition of the GST seems to be a vindictive act to kill off the informal sector which has been the lifeline for many of the poorer sections of society which has been ostracised because they are not of true blue blood of the soil. The GST will force this group further underground, no doubt with the godsend from cyberspace.<br />
<br />
The sin taxes and all the other taxes which the government now seems to be trigger happy in imposing will slowly but surely and persistently ensure an underlying bubbling of the inflationary forces in this nation.<br />
<br />
The one obvious thing - to the eyes of a trained practicing economist - is this: when is the major adjustment going to take place in real estate. Real estate prices have gone off beyond the reach of the ordinary people. Either wages have to go up or prices have to come down - in order for the market to equilibrate. For the moment, the market is waiting for the equilibrating forces to come from overseas thanks to the cheapened currency.<br />
<br />
The thing about inflation (or rather, a one-off major increase in prices) and depreciation of the curreny is that they really do decrease the standard of living of the ordinary people by increasing the costs of living and the only way that they can cope is to reduce their consumption. We are now very discerning in the things we spend money on - and only on the essentials which may also be verging on the inferior quality.<br />
<br />
I am looking at you - the banks with your huge debt portfolio all skewed towards real estate and personal finance. You cannot lend much more because your customers have lost their credit-worthiness. Now you are only dealing with big tycoons - does that mean money laundering?<br />
<br />
Looking ahead, the world is now entering an upcycle on interest rates - meaning that there is only one way for the interest rate to go - which up.<br />
<br />
This is a big nervous decision for the US Fed because they have been so used to solving problems by printing money (QE) for the last three decades that for them to end that trend will just reverse everything that happened. That's why Yellen is walking on a tightrope. To fight inflation, interest rates must go up.<br />
<br />
The good times are over. Youngsters who have had a good life putting stocks and flipping real estate may have to learn to do real jobs. The other fantasy world is cyberspace which is real in itself being of the digital economy age but probably only a handful will succeed. The rest will just have to put their noses to the grind, work at a job and wishing and hoping that properties will become affordable so that they can start their new families and get on with life.<br />
<br />
Yes, economic theories and models are great. They help us to think clearly. But policy is an entirely different ball game altogether - a combination of every model that you can hold in your head at any one time.Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-5014075006969917149.post-29037238495061002962017-03-30T11:48:00.002+08:002017-03-30T11:48:59.347+08:00Brexit - Leaving EUThe United Kingdom triggers off its break from the European Union on the 29th March 2017, with two years to negotiate by 2019.<br />
<br />
The original intention for the UK to break off is to be able to control its own borders. Rapid immigration has put pressure on its public sector especially in housing, healthcare and welfare services. It is inevitable that with common borders, workers from poor countries flow to rich countries in search of jobs and a better life.<br />
<br />
The UK is forced to take this extreme measure of breaking off between the EU does not allow member states to limit the number of immigrants, a direction that was pursued by David Cameron. The EU said, "No, you take the whole package and cannot pick and choose." This forced the referendum and the population voted to get out.<br />
<br />
Those in the cities mostly voted to stay in while those outside the cities mostly voted to leave. Scotland and Northern Ireland voted remain, while England and Wales voted leave. As democracy is in the end reduced to a simple major rule, the leave wins which then leads to the triggering of Article 50 of the Lisbon treaty yesterday.<br />
<br />
The beauty of the EU is that it provides a common market for the goods and services of the EU member states. It may be envisaged that a mixture of rich and poor countries can provide all the necessary ingredients of a balanced and self-contained economy. As it turns out, capital does not easily flow to poor countries, but the people of poor countries easily flow to rich countries.<br />
<br />
But why should the Europeans be so angry with the UK for trying to leave the EU, by being very difficult in the negotiation? After all, there is freedom and democracy in Europe and countries should be able to freely join or leave the club.<br />
<br />
Maybe the EU is not a club, but like a religious grouping where once you joined you cannot leave with threats of tribulations.<br />
<br />
The EU is a political grouping that is disguised as an economic club. While the immediate benefits are economic in nature, the ultimate purpose is to create a political entity that is a federation of member state that answers to a big brother in Brussels. The EU is an attempt by Europe to regain its former glory as a unified empire, in an apparent counter-force to Russia and China, and probably the US. Many say that EU has resulted in decades of peace in Europe.<br />
<br />
If the EU were to break, then individual nation states may see themselves as vulnerable to attacks by their bigger neighbours, the biggest one being Russia. The EU can be seen as a continued ideological fight for democracy against the totalitarian state of Russia. In attempting to do, unfortunately, Brussels may have to act in a totalitarian manner with respect to their individual states.<br />
<br />
Each European state may therefore have to choose to suffer in the hands of either friendly dictators or fearful enemies.<br />
<br />
In trying to punishing the UK for leaving the EU, Brussels may be shooting its own foot. By destroying the UK economy, the EU may be destroying a potential ally in times of war should Russia decides to act. Putin is watching. Strategically, the EU should help and ensure that the UK be sound and strong so that they can collaborate politically if need be in future.<br />
<br />
After WWI, Europe punished Germany by insisting on war reparations causing hardships to people and which led to the rise of Hitler and WWII. After WWII, the US supported Germany and Japan, the losers in the war, as economic giants so that they can be strong allies in times of war or to deter another war.<br />
<br />
These are lessons that Germany should learn, when dealing with the UK.Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-5014075006969917149.post-45790807712699298472017-03-29T14:53:00.002+08:002017-03-29T14:53:26.709+08:00Values for Modern SocietyThe question here is what are the moral values that we should adopt in order to live successfully and happily in the modern money society that we have today.<br />
<br />
The modern society we have today is a drastic change - as a result of the scientific revolution where human beings have learned to conquer nature and gone beyond the confines of the natural environment (well, not quite) into an artificial world of the matrix which involves human activities that move money - from the very slow and mundane world of agriculture and natural self-sufficiency which managed to keep everybody in a community from starving but also from being too rich.<br />
<br />
From the traditional agrarian society of the past, where economic fortunes laid in a delicate balance as mother nature (or some would call god) constantly threatened to upset things once in a while with either too much rain or no rain or violent wind, we learn that it is good to be humble and not too be proud because we do not know what tomorrow may bring and therefore we better not be too cocksure about ourselves and our abilities. Whatever skills we may have are nothing when considered in the context of the larger cosmos, the billions of stars in the skies and the huge expanse of the earth and everything that the sea, air and earth can hold.<br />
<br />
Because of the vagaries of the world, humbleness is indeed the best insurance because when your luck is down, you need the help of your neighbours, and vice versa. If you were to boast and you happen to be in trouble, then you are on your own because nobody is going to help you because you put yourself above everybody else when you were lucky and now everybody want to see how you can get out of the quagmire you are in and if not to see you eat dirt.<br />
<br />
And you don't blow your own trumpet because other people do not like the sound of the noise you are making about yourself because they could be jealous as a result of their own inadequacy or that they may be more superior to you and could come out in the open and challenge you in order to teach you a lesson on humbleness. It is okay for others to blow the trumpet for you and then you should be proud of your greatness. This is because in a small unstable society, a small fart will stink the whole place and it is better you do not let off that you are the culprit. Secrecy is key to survival, and all the skeletons in the cupboard better be properly hidden.<br />
<br />
In modern society where Adam Smith declared long ago that the best thing to squeeze the best out of the best in society is competition. By which means, give everybody a chance to show off and be the best. The world wants to know who is the best - the fastest runner, the strongest weightlifter, the richest person, the richest company, the best technology firm, the best car maker.<br />
<br />
The modern world is not a world of humbleness; it is a world of self-declaration (I'm the greatest, and you've better be) and self-advertisement (I'm not the best, but I can get it and you can't). The modern world is a world where everybody is the unique (hence the body tattoo) and the best in whatever little niche they have decision to hole themselves in. This is because in a competitive environment, you have to find the odd little space that is empty and you try to fill it in and capture a place in the busy market.<br />
<br />
The modern world is no more dependent on the natural environment (though ultimately it must still do); it is dependent on how much money you have. As Joan Collins recently mentioned, to have the f--- you money, so that you do not have to kowtow to anyone anymore. With money and wealth in the mind, everybody is out to kill the competition and be the only one left standing (ask Bill Gates). The big ones crush the small ones and the world is run by the global monopolies who now have the power to twist the arms of sovereign governments - and threaten to move their investments out if they do not endorse a slavery policy and pay no tax and leave the ordinary citizens in every country they invest in unemployed and poor below subsistence. Human beings become inputs to the large industrial complex that controls the world economy, aided by the global money printing machine that is the US Federal Reserve which has happily been churning out paper banknotes in the billions over the last three decades.<br />
<br />
So for the ordinary person in his little abode of whatever kind he and his family have managed to find themselves (read she as well, especially the single mother), how is he going to behave. If he is humble and doesn't blow his trumpet and waiting for his bosses or other people to recognise his talents and achievements, he will end up as a semi-unknown person pushing the keyboard in a little corner while his bosses take credit for all his work and allow themselves to be admired by other thieves of credit (that being their only major credit).<br />
<br />
The bosses and managers (usually with soft skills in manipulation and lying) short change the skilled workers (with their hard skills obtained after many years of book study and brain cracking), because the skilled workers are humble and the bosses are braggarts. So the sons and daughters of farmers and fishermen, well trained in manners by their parents, languish in their little stations in life, desperately trying to pay back the mortgage on their house and car and putting food on the table everyday.<br />
<br />
Worse still in a society of discrimination, where sections of society are either put in favour or being ignored, the values that are now being germinated are completely strange.<br />
<br />
Among the well-to-do in favour, they are privileged and therefore everything deserved go to them.<br />
<br />
Among the not-so-well-to-do in favour, they are being caught in twilight zone as they cannot cry that they are in trouble nor can they say that they are not good enough.<br />
<br />
Among the well-to-do being ignored, they are really not being ignored but courted because they know how to make things happen and everybody love them.<br />
<br />
Among the no-so-well-to-do being ignored, they are at the bottom rung of the social ladder, their parents literally sacrificed their own lives to provide a basic platform for their children to take a first step up.<br />
<br />
Those who can't resign themselves to fate, abandon the formal society and enter into the world where no laws apply. Because the world has ignored them, they in turn ignore the world. They create a world of their own. They become rebels and rise in opposition to the government, the source of the injustice done to them. In this world, it doesn't pay to be humble, but be obedient to their code of brotherhood to fight together for survival, and probably at all cost to defend their right to live in this world.<br />
<br />
In the meantime, the brighter world of the government officials who are employed not for their competence and who spend all their life in employment training to be fit for the jobs they were initially hired for and retired upon their graduation from education. They go on the escalation of promotion and privilege so that everyone has a chance to get the top scale upon which they can retire in luxury, never ever having to lift a finger to help their fellow citizens who are desperately in need of guidance of the rules of the societal game.<br />
<br />
The civil service becomes bloated because those who are sent to school during employment have a replacement to do their jobs. Those sitting in position but are incompetent hire external consultants to do the job for them.<br />
<br />
So what is the moral values that one must adopt in order to live successfully and happily in this modern world of ours? Certainly not the traditional values of self-restrained and self-righteousness. I suggest some here - kill or be killed, lie in order to avoid trouble, fake when you are can't do it properly, steal when no one is looking, steal openly when there is a policy endorsing it. Not forgetting, blow your own trumpet or rather blow with the trumpet you have stolen. Advertise your talents as there is always a demand by the incompetents who have access to funding.<br />
<br />
The world has changed.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-5014075006969917149.post-49654315096661294552017-03-28T16:08:00.002+08:002017-03-29T14:53:46.888+08:00Bitcoin & Theory of MoneyI was asked by a friend to write about bitcoin.<br />
<br />
Not that I have been following bitcoin closely. I haven't.<br />
<br />
But from what I have gathered from some headlines, it goes something like this:<br />
<br />
Bitcoin is a computer algorithm, supposedly complex and is on its own after its creation and nobody can control it nor modify it. Its supply is created by some random successes in operations which is supposed to mimic the randomness of the success of mining. In other words, its supply is sporadic.<br />
<br />
The key to getting this bitcoin scheme going is to create a demand for it. It has its own ecosystem whereby people with a hoard of bitcoin can exchange it with others. There is no point exchange it with another bitcoin unless of course you want to go into debt by borrowing. You want to try to exchange the bitcoin with other non-bitcoin items, so that from there, it is supposed to behave like money.<br />
<br />
The other way to hip the demand for bitcoin is to create an exotic story out of it, like the Mona Lisa, in order to get people to desire bitcoin for its own sake. Or, to stimulate demand by creating a speculative fervour for it about its rising value in the future. All these things could be stimulated out of an environment of complete nothing better to do and boredom. One must just as well try to cultivate the black tulip.<br />
<br />
In the bitcoin ecosystem, of course, by definition, the rule is to use bitcoin as a unit of account and a medium of exchange. Anything can be used to fulfill these two functions.<br />
<br />
We can think of isolated places now or in the place where all kinds of stuff are used as a unit of account or medium of exchange - but in small doses. It could be favours (of a lady or man), graces in heaven, cows, shells, stones, metals, dusts. The most famous was salt which was used to pay Roman soldiers as "salarium" which becomes in English "salary".<br />
<br />
The test of money as we now know it as money is the size of the ecosystem in which the item functions as money. If we think of the ringgit or any other national currencies, each ecosystem may not be very large. But if we think in terms of paper money or electronics money, it covers the entire earthly universe, almost literally - except for those few isolated places that still trade in wives or some other unfortunate creatures.<br />
<br />
So a unit of account or medium of exchange is not sufficient a quality to be considered as money.<br />
<br />
The store of value is also a necessary function but not sufficient. In Malaysia today, the ringgit is not considered a good store of value. People who are clever enough are proud that they are fully in debt and in possession of bricks and mortar called houses and condominium units. Better still, gold.<br />
<br />
But however lousy the ringgit may be as a store of value, it is still the only means of final settlement.<br />
<br />
No matter how rich you may be, but if you do not have the cash, you cannot buy anything. This is here that the banks do a roaring business, exploiting the difficulty of ensuring sufficient liquidity by people at very inconvenient times - only of course when you have collateral assets in real estate. Banks know from hundreds of years of operations that real estate is the only way to hold value because people cannot help but procreate and they all want to live in city centres.<br />
<br />
What I am getting at is that the current economic theory despite the Keynesian revolution is still stuck in medieval times in the barter economy where unsold goods can be considered as savings and hence investment. Keynes got stuck at the savings equals investment and could get out; he insisted that there is hard truth no matter what. He was still stuck in the barter economy.<br />
<br />
In the monetary economy - ie, a money-using economy, like we all are in the world today - no money, no talk. We all have debts and we must have the cash to pay the debts - you can ask the unfotunate wives of gamblers who borrowed from loan sharks as lenders of last resort. They just want their cash back.<br />
<br />
So if you set up a company to produce apples, you have to have capital in cash to hire workers and machines. You have to pay the workers cash first before they would work. There are no apples to give them in the first place. But after you have produced the apples at the end of a production period or harvest, you want cash back for your apples. You are not happy if you sell all the apples to your workers and they give you back all the wages you pay them. You have your initial capital in cash back and have no more apples. If you keep back some of the apples for profit, and sold some apples to your workers, you do not have cash. Your profit must be in the form of cash.<br />
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The only way of is to sell your apples to your foreign friends for foreign curreny or your political friends who print money or your rich friends who have savings from their parents.<br />
<br />
That why, all merchants clamour for exports rather than feed their workers. That's why governments print money. Or people spent their inheritance or borrow to the hilt. This is the way our modern monetary world works.<br />
<br />
So, I don't think bitcoin is any bit a coin, not just yet.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-5014075006969917149.post-63913931743544835452017-03-26T22:42:00.002+08:002017-03-26T22:42:21.161+08:00SupremacyThere is this constant search for supremacy in the world among human beings who are trying very hard to deny their mortality.<br />
<br />
We human beings are nothing but tiny fry whose lifetime in this world when measured against the cosmic world is shorter than the blink of the eye.<br />
<br />
But many of us are taken to illusion of grandeur, blowing ourselves out larger than we actually are. Many of us are shouting and trying to make ourselves heard in the noisy market place.<br />
<br />
The reality is that most of us are anonymous, living our lives in quiet desperation.<br />
<br />
We look at the media and see the glamour. We look at ourselves and see how mundane we are.<br />
<br />
So what can we do to get attention?<br />
<br />
We look for the most trendy things that are happening and we try to associate ourselves with them. We try to be a part in a bigger whole. Many of us subscribe to entities that champion our ideals. For the most ambitious individuals, they try to make themselves prominent and take charge of the whole.<br />
<br />
In the world of competitive, the strongest wins. We see this in all the sports - the more civilised versions of war. In the arena of war, we see this in the display of weapons and technology being devoted to the destruction of fellow human beings. We are heading ourselves towards total self-annihilation. Of course, we should not be so surprised - after all, the whole should reflect the individual parts which always ends in death.<br />
<br />
In the world of economic competition, the tendency is towards monopoly - the total destruction of the opponents so that only the strongest survive. It is not surprising that the world is composed of a handful of global giants who are controlling the entire world economy. Economic life has not been as boring before as it is today.<br />
<br />
In the globalised world, we see the exact few giants in the shopping malls in our neighbourhood as we see them in the big cities of the world. We just see the same thing duplicating itself all around.<br />
<br />
The diversity of the economic world has disappeared. There are no more little shops run by the old little couple who are champions of their little neighbourhood, with a unique that cannot be duplicated elsewhere.<br />
<br />
And different parts of the world have their own unique little quirks that one cannot find anywhere else. This is no more.<br />
<br />
The world we live in today is a world of great cultural diversity as the migration of people reach a larger scale as air travel is now a commodity and the immigration policy of any major growing economy is being dictated by big global businesses looking for cheap labour.<br />
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The greater diversity of culture in many urban centres are fostering great loneliness among people. As they try to find their own identity, in a foreign place, they resort to their own ethnic food and their own culture. If their culture is defined stronger by place, and if they are in the wrong place, their culture is then replaced with either a philosophy or a religion.<br />
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Among the masses, religion takes a strong hold on the individual because religion is the result of one's own conviction, by definition. Religion transcends the harshness of geography and enters the imagination of goodness and everything that is opposite of harshness.<br />
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From sheer desperation, desperate are called and religion becomes the rallying call for the disillusioned.<br />
<br />
This is the world as we now see it.<br />
<br />
In economic theory, the great wisdom is that monopoly is something that has to be fought because the world belongs to everyone. Everybody should have an opportunity to participate in the great activity of human survival and feeding one's own family.<br />
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This is why economic wisdom called for an authority usually the government to break up monopoly and ensure that others have a chance to enter the fray of economic activities.<br />
<br />
In reality, the world we have today is a world where monopolistic structures are being put up to try to dominate a situation. While this is certainly going on in the economic arena, the same is certainly also going in the religious realm.<br />
<br />
The great wisdom of some religions is the retreat of the religious from secular life. The great dread today is the attempt by some to bring religion forth to the foreground as the dominant force in life. To kill secular life by imposing a religious life.<br />
<br />
But the great shame is that for most people like us who have been living an obviously secular life, because we never try to impose our life beliefs on others, we trying very hard to do that to ourselves, we may now have to contend with the madness of others as to how we should live life everyday.<br />
<br />
Such courage to try to impose one's religious values onto others cannot be the act of one person, but the result of people at the core of modern government who secretly condone such creeping of religious views into secular government.<br />
<br />
Treachery is all over the place.<br />
<br />
As economic theory says, the best approach to the greatest welfare for everybody is the freedom to choose and competition. In a world of diversity, there should be freedom to choose and competition in diversity.<br />
<br />
This may have to mean that there may be nothing that can be sacrosanct which cannot be debated in a formal manner. There must be the right of others to try to understand that which is so special about a particular position in religion, especially if it affects your neighbours.<br />
<br />
There is now a debate in this part of the world that because a religion is the official religion, the religion edicts overrides the secular civil code of the constitution of a democratic society.<br />
<br />
The word "official" is a simple word but not many understands. These words have a reference. In the diverse world of many religion, whenever there need to be mention about what is the religion to be referred to for this country, the answer is that which is the official religion.<br />
<br />
The world has suffered a lot unduly unfortunately over the other statement the one supreme entity to you or me. In the world of many gods, I am the one for you - as you and one has to declare to our respective spouses. Unfortunately, human beings have fought over the oneness.<br />
<br />
Supremacy is selfish and cowardly.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5014075006969917149.post-20120072456471820772017-02-13T14:54:00.002+08:002017-02-13T14:58:14.103+08:00What It Means To Be Malay<!--[if gte mso 9]><xml>
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The definition of Malay as a race in the constitution and hence the national economic policy has been and still is the fundamental source of racial discrimination. In fact, in the way it is practiced, it is now a religious discrimination. We all know this is politics at its worst in this country. It may be about time that this explicit discrimination is removed from our national psyche.<br />
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It therefore gave me great joy to read this letter to the editor in the New Straits Times last week. For once, I feel that at last the NEP has produced enlightenment which can really be a light of hope for this nation of ours. I therefore copied that the letter below for you to read for yourself.</div>
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What It Means To Be Malay</div>
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by Dr. Sabariah Mohamed Salleh </div>
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Universiti Kebangsaan Malaysia, </div>
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Bangi, Selangor</div>
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10 February 2017 </div>
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Read More :
<a href="http://www.nst.com.my/news/2017/02/211075/what-it-means-be-malay">http://www.nst.com.my/news/2017/02/211075/what-it-means-be-malay</a></div>
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"According to Article 160 of the Constitution, a Malay is
defined as someone who professes to be a Muslim, habitually speaks Malay and adheres
to Malay customs. Therefore, I am constitutionally defined as a Malay. </div>
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However,
this does not erase the fact that my paternal grandfather, Pateh Akhir, was of
Bugis descent and my maternal grandfather, Abu Bakar, was of Thai descent. </div>
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To
me, culture and cultural identity are interesting topics. When discussing
cultural identity, people often look at a person’s history, ancestry and
clothing as identifying markers. </div>
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I remember sitting in my visual culture
seminar, when I was doing my PhD in Vienna, Austria, when my lecturer,
Professor Filitz, asked me: “What makes you a Malay?” </div>
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Confidently, I said I
spoke Bahasa Malaysia, wore baju kurung and celebrated Eid. </div>
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He said: “Does this
mean, by sitting here in my class, wearing a pair of jeans and Adidas sneakers,
and speaking in English, you are not a Malay?” </div>
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I was stumped. Growing up, I had
always assumed that cultural denominators, like clothes and language, were
elements that made us culturally distinct. </div>
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To me, the basis of culture is made
up of differences because we are assigned in a system that categorises us in
groups, as exemplified by the racial categorisation that we adhere to when
filling in forms and answering demographic questions. </div>
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According to Filitz, this
made me an essentialist. He said I had a utopian idea of what a Malay should be
like, and that I had failed to realise that culture was constantly evolving. </div>
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How was I sure that the concept of Malayness that I practised and believed in
was the original Malay culture practised centuries ago?</div>
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“How can you put
culture in a box?” Filitz said. </div>
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That made me question myself. When getting
dressed for work, I prefer suits than baju kurung. </div>
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I express myself better in
English. I am not well versed with the names of Malay kuih. Does that make me
less Malay? </div>
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Scholar Anthony Giddens said globalisation played a big role in how
cultures were practised. He said new technologies and developments had
encouraged people to venture out of their comfort zones to travel or immigrate. </div>
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This increase in mobility makes it possible for cultural activities to be
practised anywhere and for people to know cultures from around the world. </div>
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Interestingly, nowadays, people do not have to travel to experience other
cultures. </div>
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The Internet and advanced technology have enabled people to offer
recommendations for French cuisine in Paris, despite not being there. </div>
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One can
learn how to speak Korean from YouTube videos or experience Bhutan through an
Instagram account. </div>
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This virtual movement provides choices as to how people
could construct their cultural identity. </div>
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These options enable people to pick
any style or personality they want and mix and match it to construct their
identity. </div>
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So, would it be possible for people to claim that they are purebred
Malays, Chinese and Indians? </div>
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I believe that cultural identity is immeasurable.
For instance, no particular sect of Malay — Javanese, Bugis and Boyan— is more
superior than the other. </div>
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My limited knowledge of Malay syair or penchant for
hot mocha and dim sum should not be a reflection of my level of Malayness. </div>
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Stuart Hall aptly said cultural identity was fluid and constantly changing. </div>
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Thus, as an individual, I can choose to adapt, change or omit any cultural
element to construct my own cultural identity." </div>
Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-5014075006969917149.post-45273718698480902042017-01-21T22:59:00.001+08:002017-01-21T22:59:26.730+08:00PrejudicesIt seems incredible that there are people who think that only they have the moral high ground and that their prejudices are OK and your differences with them are not OK.<br />
<br />
One would have thought that only in this little minded country of ours that we have people like our previous topmost leader who had his prejudice into affirmative policies which neglects others. He now fears those from China as he previously also feared those from China. But this time he says that the old Chinese here should also fear the new Chinese, like he is now. It is a fact that once you have phobias, you will always have the phobias, no matter how you may wish to disguise them - unless you have a sudden dose of wisdom and enlightenment and wake up the reality of yourself.<br />
<br />
What really dismayed me were the bad manners of the Obamas and the Clintons who think that only they are the decent people who have decent views - and those who differ from them in their public statements are indecent. I simply just cannot phantom why they could not give Trump and his wife the due courtesy as anyone would give to the President of the US and his wife - unless of course they have decided to disrespect the President of the US themselves. Even John Lennon who subsequently returned his OBE to the queen at least had the decency to behave properly in front of her.<br />
<br />
Now we have pressure groups out in numbers to protest against Trump and the US Presidency. This is incredible. Where have the respect for the law gone to? I can see parallels of the situation in our country and I think it is not healthy. I rather bear the nonsense rather than to have chaos and violence done in the name of justice - for it depends on what justice and whose justice.<br />
<br />
You are losing the game and you have decided to those the chess board. It was alright when you were winning.<br />
<br />
There are many of us in this country who have bear our burden of so many injustices which we have learned to take it as part of the game. It is a rough game. It is an unfair game. But life is real, and we should protect life and bear the rest.Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-5014075006969917149.post-70964346570514581742017-01-19T11:24:00.000+08:002017-01-19T11:24:21.170+08:00What Is Better Than GST?There is recently this very public question of "What is better than GST?", and I think it needs an answer.<br />
<br />
1. No GST.<br />
<br />
The best alternative to the GST is no GST. There is no god-given right for the government of the day of any country to impose a tax on everything in life.<br />
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The GST is argued to be good because it reaped RM40 billion for the government. It is good for the government but no good for the general public.<br />
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A RM40 billion withdrawal directly from the pockets of the ordinary people as they go about their daily lives is a punishment for them, especially those with fixed incomes. It leads directly to a reduction of their real incomes.<br />
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The counterargument could be that the government is pumping back some money to the low income groups to "compensate" them for the GST. Yes, very nice conceptually but unlikely to be correctly practised - some who deserve may not get it and some who do not deserve get it.<br />
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2. Reduce Government Spending.<br />
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Since the purpose of introducing the GST is to fund the government deficit, it is logic that the alternative is to reduce government spending.<br />
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The government is spending too much money. The government should cut down on its lavish lifestyle. Projects should be better scrutinised for their economic viability, and cost cut by not over-specification. The most showy events in public today are government events.<br />
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3. No personal income tax.<br />
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If there should be GST which is indirect tax, there should be no personal income tax which is direct tax. To impose GST on top of the personal income tax is for the government to tax on taxed income of persons - the government is trying to discourage consumption on top of discouraging effort.<br />
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We know income tax has been reduced with the introduction of GST, but the argument here is that income tax should be abolished altogether at least personal income tax.<br />
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Cope out. <br />
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It is a cope-out argument that the introduction of the GST is justifiable because so many other countries are applying the GST or its equivalent. I think for once we should learn to argue from first principles and need rather than using a precedent from elsewhere. When is this country going to be original?<br />
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Implementation.<br />
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There are so many issues about the implementation of the GST. The whole thing boils down to that the burden of the implementation falls on the businesses. If they do not understand the system, they get punished. The incompetence of the implementors of the GST does not matter, for it is costless for them.<br />
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Inflation.<br />
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The current bout of inflation has been enormous, about 20-30%. The biggest cause has been the currency depreciation as a result of expectations of higher US interest rates and the outflow of the ringgit to other currencies. The ringgit outflow could be related to repatriation of stock market proceeds and profits, the redemption of ringgit bonds, foreign workers remuneration as well as better investment opportunities abroad. The lack of opportunities in the country is a serious concern. The 6% GST is a small issue, relative to these colossal impacts of the ringgit weakness. Nonetheless, the GST does not help in the situation and could the trigger that makes everybody decides that there is no more respective for the stability of retail prices. We have created inflationary expectations and we are passing the cost of higher prices to other people, with precedence from the government.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5014075006969917149.post-38989127477512058422017-01-10T15:41:00.000+08:002017-01-10T15:43:13.988+08:00Stocism: The Art Of Living In AdversityThere seems to be a perennial interest in the philosophy of stocism, that revered stone-faced approach to living.<br />
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Stoic: person who can endure pain and hardship without showing their feelings. (Oxford Dictionary.)<br />
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The primary goal of stocism is how to be happy or rather how to live a happy life. So, we are not talking about just moments but the whole stretch of one's life, although everything would be based on the moment, and hence, a series of moments.<br />
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To live a happy live is to live a life that one wishes - not in the sense of frivolity - but in the sense of living in accordance with one's inner being. Be a good durian if you know you are a durian, and not trying to be a rambutan.<br />
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In other words, stocism is about being one's true self. It is by being true to oneself that one can truly be happy with oneself.<br />
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This is because this is the reality.<br />
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The reality is out there, and not inside you, and therefore it is not part of you. Whatever the reality is, it has nothing to do with you. This is the reality.<br />
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The only way reality has an impact on you is when you react to it, the reality. By reacting, you allow reality to hit you.<br />
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Which means that in order to ensure that the reality has no impact on you is for you not to react to it. By not reacting to reality, you do not allow reality to hit you.<br />
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Here you are, alone in this world. There it is the reality, existing by itself, existing before you were born and will exist after you are gone from here.<br />
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Pain is external to you. There may be pain in a part of your body, but yo do not have to own that pain. You can make pain an alien to your being. You do not have to react to the pain. <br />
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Now, what do you do in this apparent stalemate?<br />
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The only thing to do in this real life is to live according to your own true self.<br />
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Know yourself.<br />
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Live your life, your own way.<br />
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Do what you have to do; do not do what you don't need to do.<br />
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Do as per your true self. Live your life with integrity to your true self.<br />
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To live life with integrity to your true self, you have to keep life simple. You can only know a few key elements of your own true self, and you have to keep your faith with those few points of yours.<br />
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Be honest - don't lie, don't cheat, don't misrepresent, don't mislead, don't say what you do not know.<br />
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Have courage - endure though not suffer, don't be afraid.<br />
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Be rational - use your head, re-examine carefully all those impressions of things in your mind and make sure that they are true, calm your senses down by keeping still in order to know yourself, behave on the basis of what you know.<br />
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Stocism is therefore about living a virtuous life according to yourself, your own nature, being true to yourself, without depriving others from doing the same.<br />
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Living In The Present<br />
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When the real world today seems all in shambles, the world is in shambles, but not you.<br />
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You are intact. You know who you are. You are being honest to yourself.<br />
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If you are in debt, then pay off the debt by selling the assets you have accumulated. If that is not sufficient, get yourself declared bankrupt. Do what you have to do. Don't try to avoid the consequences of your own past actions. Don't blame others for your present troubles. You did not credit others when you were doing well before; you owed everything to yourself. Your financial world may collapse, but you are still alive. Only you will decide for yourself that you should be unhappy. You do not have to get others' approval to be happy.<br />
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The same applies to your fame, your reputation - bestowed upon you by others for no reasons of yours that you can fathom and for no good purpose that you can use it for. You are like everyone else: human, alive, aging, waiting.<br />
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In such adversity, it is a real joy to be alive, because that is the only thing that now defines you - and possibly the only most important thing.<br />
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Every step you take is entirely yours and yours alone. You decide. You do. You live.<br />
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Be happy. Be alive.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-5014075006969917149.post-57324786609320594142016-12-20T01:43:00.002+08:002016-12-20T01:54:49.526+08:00KillingA man shot dead the Russian Ambassador to Turkey today in Ankara.<br />
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There have been many killings around the world everyday, in big cities and small towns, among friends and among families, between people who do not see eye to eye with each other and do not want to, between people who have a misunderstanding because they have different upbringing and experiences.<br />
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But this particular killing is the result of anger over political actions in Syria by local and foreign forces which has resulted in the ruins of towns and homes, and the death of many people with those alive fleeing for their lives.<br />
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Will this one killing of an official avenge for all those killings of many ordinary people, and the matter ends? Will it stop further killings? Or will a proud nation demonstrate to the world its superiority and take matters to a level that prompts other equally proud nations to a show of force?<br />
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We can only tremble at the prospects.Unknownnoreply@blogger.com3