THE RAT RACE PARTS I TO III

[pywong]

Happy 2009.

Time to wrap up the Rat Race.

How to read these articles?
1. These articles are very long. They are not written for entertainment.
2. Run through the first run quickly to get an overview. Ignore the links to other sites.
3. Print the articles and file it. You will find it easier to read on a hardcopy.
4. When you have more time and in the right frame of mind, read the hard copy and follow the links on your computer. You will find it easier to follow the ideas.

Here's a promise. If you are below 35 and you read these articles carefully, it will save you some time in your journey of life. Maybe you could even get some ideas on how to get out of the Rat Race! :)

Back in Sept 2007, as I was watching the movie Engineering an Empire: Egypt, I was idly thinking of the Rat Race and it struck me: The slaves hauling the huge stone blocks up the ramps to build the pyramids were exactly like the rats in the Rat Race! That was it!

For the past few years, I had been puzzling over what made the Rat Race tick. My interest was mainly centred on how I could help my children to beat the system, as I knew intuitively that it was a system and that there were people manipulating it behind the scenes.

Hence these series – The Rat Race.

There are a few objectives in writing these articles:

What is the Rat Race?
http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/th_cashflow3.jpg (http://s416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/?action=view&current=cashflow3.jpg)

What is the history behind it?
How does it operate?
Who are behind it?
How was it executed?
How do we defend ourselves from being exploited by the Rat Race?
And lastly,
How to get out of the Rat Race.

In presenting these articles, we will first examine the Rat Race System on a global basis, after which we will focus on the special case of Malaysia.

Since 18 Feb 2008, just before Mar 08 elections, we have been publishing the Rat Race. Over the next few days, we will republish them to help readers refresh their memories.

In these series, the life of a worker or employee in the political-economic system of a nation is described. To help our readers, we have proposed the mental model of a Rat Race System that operates on a circular track. At the same time, we describe the mental model of a Pyramid to depict the powers that are behind the Rat Race System. When the two models are combined, we will get a Cone.

We will show that human beings are exploited as Rats and manipulated through their emotions.

Fundamentally, life is a cycle. And cycles are a function of our emotions.

Read on ….

[pywong]

THE RAT RACE PART I: WE ARE DOING WELL!

(Note: This was first published in Malaysia-today (http://mt.m2day.org/2008/content/view/3044/1/) on 18 Feb 2008:
and in usj.com.my (http://www.usj.com.my/bulletin/upload/showthread.php?t=22431) on 10-04-2008

The headlines at the Sun on Monday, 18 Feb 2008 screamed: “Believe me, we’re doing well!” It went on to quote Prime Minister Abdullah Badawi: “Kerajaan cakap, orang tak percaya, lain orang cakap, orang percaya, (What the government says, the public does not believe but what others say, they believe). Please believe us. We are your government and we do not lie,” said Abdullah.

These statements give rise to a few questions:
1. Is Badawi suffering from such a credibility gap that he has to resort to such desperate pleas? I leave readers to consider his denial about the dissolution of parliament on 12 Feb 2008 and the very next day, dissolved parliament. If that was not lying, I don’t know what is lying.

2. He said: Believe me, we’re doing well! Here we have to stand back and ask ourselves –
Doing well against what?

Let me elaborate.

In 1970, my mum was working as a maid, earning a monthly salary of RM 50. That was the year the NEP started. My sister had to stop schooling early because my mum could not afford her school expenses. I was farmed out to be taken care of by relatives. My dad had died more than 10 years earlier. We were living way below the poverty line. Yet, with her salary, she could buy 0.5 oz of gold, which cost USD 35/oz.

I managed to secure a state scholarship to do engineering at the University of Malaya. With my starting salary of RM 750 as a graduate engineer with the government in 1973, I could buy 5.9 oz of gold (official gold price USD 42.22 per oz, although the free-market price was much higher, varying from USD 58 to USD 97. See here. (http://www.nma.org/pdf/gold/his_gold_price.pdf)

Today, a fresh graduate will earn RM 1785 per month in government service. That salary will buy 0.6 oz of gold (USD 905 per oz. See here. (http://www.kitco.com) In other words, after 35 years of the NEP, from 1973 to 2008, a graduate’s earning power has dropped by almost 90%! She is almost at the poverty level of a maid in 1970! We are talking about graduates. Don’t even think about the poor farmers in the field or the estate workers. They are in such a deep hole, that we don’t even know where to find them.

My question is: How can we be doing well with such numbers? Just do some simple comparisons. In 1970, a bowl of mee cost RM 0.70, a car RM 7,000, a double-storey terrace house in SS 2, Petaling Jaya cost less than RM 39,000. Mind you, that was a 26 feet wide house (8m), not the pigeon holes we call terrace houses nowadays. Today, the corresponding prices are between 5 to 10 times higher. But our salaries have not matched inflation. Honey, they have shrunk our ringgit!

Over the years, many readers at Malaysia-today have wrung their hands over the overt racism and discrimination of UMNO. I would like to suggest that our problems are not with UMNO per se but rather with the system of the Rat Race. I will elaborate on this in Part II – The System. Stay tuned.

[pywong]

THE RAT RACE PART II – THE SYSTEM

(This was first published in Malaysia-today (http://mt.m2day.org/2008/content/view/3105/84/) on 20 Feb 2008:
and usj.com.my (http://www.usj.com.my/bulletin/upload/showthread.php?t=22444)) on 11 Apr 2008:

What is the Rat Race?

Before I started in 1973 as a fresh engineer, all I wanted was to work and be independent. I was tired of depending on others for my survival and I thought that a job was my passport to wealth. Being young and foolish, I dreamed that by 28, I would drive a Mercedes and be a millionaire. All I had to do was to work hard….. Ah, the exuberance of youth.

Twenty eight came. I found that I was married, had my first child, was driving a 2nd-hand Toyota Corolla, put in a deposit for a house and …. zero in my bank account. So much for my fantasies. I found that I was really and truly stuck in the Rat Race.

Hmmm, wrong plan. Time to change direction.

So, after a few years of planning and saving, I jumped out of employment into the frying pan of running my own business. That was the beginning of much pain, sacrifice, stress and worse of all, fear. I even ventured overseas to try my luck. Eventually, after 20 years of sweat, blood and tears, I managed to save enough, on paper, to retire. By the 1998 Asian Financial Crisis, I was out of the Rat Race, except for one small problem. All my money was stuck with my client/developer who went bust. Not only that, my company owed the bank millions of ringgit.

There I was, on paper financially independent but in reality more broke than the day I started work. The next 3 years was a period of extreme worry and stress, staring at bankruptcy and realizing that I was too old to start afresh. Finally, the developer’s owner bought out the debt at a few cents to the dollar. It was a huge loss financially but being able pay off the bank was a huge relief.

No more! I was getting out!

Now I was free to pursue my other interests. But I still did not “get" the Rat Race. I had this vague idea of people running round and round in circles trying to make ends meet. I could not relate to it as I felt that I was not in that category since I was the boss of my own company. It was when I read Robert Kiyosaki’s best-selling book Rich Dad Poor Dad (http://www.richdad.com/Store/ProductDetail.aspx?id=2) and played his Cashflow 101 Board Game

http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/th_cashflow1.jpg (http://s416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/?action=view&current=cashflow1.jpg)

that it hit me - We are all caught in the Rat Race!

The Oxford Pocket Dictionary describes

The rat race

http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/th_cashflow3.jpg (http://s416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/?action=view&current=cashflow3.jpg)

as a way of life in which people are caught up in a fiercely competitive struggle for wealth or power.

Another description is: an exhausting routine that leaves no time for relaxation.

A much better way of understanding the concept is to play the Cashflow Game itself. Basically, the game is a modified form of Monopoly with additional features like share investing, understanding our Income Statement, players taking up various professions and the teaching of financial literacy. The key to the game is that a 30-year working life is compressed into 3 hours and this gives participants a chance to understand the outcome of different choices of professions, financial habits and decisions. The elements which made up this game are:

1. Work
2. Debt through the purchase of houses, cars, traveling, children upkeep, entertainment, etc.
3. Spending on unnecessary stuff – Doodads.
4. Investment through real estate or the stock market.

Essentially, it is a simplified version of the American way of life, which in many respects, is reflected here in Malaysia.

This is what the Rat Race appears on the surface.

But this did not make sense to me. From young, we were told “Go to school, study hard, get good grades and go out to get a good job. Then you will be set for life.” Our teachers taught us that. Our elders taught that. How could it be wrong?

Although I was out of the Rat Race, in many respects, I was still in the Rat Race. So, for the next few years, I started searching. Was there more to this than just a simple Rat Race? In the 70’s I had watched a movie Soylent Green (http://www.imdb.com/title/tt0070723/plotsummary). The plot had stuck in my mind for more than 30 years. In 2000, I saw The Matrix (http://www.imdb.com/title/tt0133093/), which pictured the global domination of the human race by a super-computer but with a more malignant twist. It suggested a global conspiracy underlying our problems with the Rat Race and seemed to make sense. Could this be really happening to us? It was too horrifying to imagine.

In September 2007, when I saw Engineering An Empire: Egypt (http://www.history.com/marquee.do?content_type=Marquee_Generic&content_type_id=51242&display_order=1&marquee_id=51188), the missing pieces of the puzzle fell into place. The Rat Race that we were running in was a sub-set of a global Rat Race and the answers to our dilemma laid outside. I then directed my search to the US, the dominant economic and military power and where information was more readily available. This led to a study of the global financial system and the people behind it. Now, things became clearer.

The Rat Race is a vehicle for exploitation of our global resources including humanity. In the eyes of the exploiters, human beings are a resource. In the old days, such people were called slaves. Nowadays, we have a more polite term – workers and employees (and sometimes, associates).

Those of us who vilify UMNO for our problems tend to forget that UMNO alone could not have implemented the Rat Race on their own. They needed collaborators and witting/unwitting participants. It is easy to wallow in our misery and blame others, but much harder to take a good look at ourselves and to ask: Did we collaborate in being victims?
(Update 06/02/09: The overthrow of the Pakatan Rakyat State Govt in Perak has shown very clearly who are the Collaborators)

Still, many people are not aware of the insidiousness of the Rat Race because it acts on a very fundamental level of our mind - our emotions of fear and greed, our ignorance and genetic urges. And the beauty of it is that it had been run successfully for thousands of years.

In the next segment, we will examine The Rat Race Part III – How does the system work?

[pywong]

THE RAT RACE PART IIIA - HOW THE SYSTEM WORKS?

(This was published in Malaysia-today (http://www.malaysia-today.net/2008/content/view/3211/36/) on 22 Fed 2008
and usj.com.my (http://www.usj.com.my/bulletin/upload/showthread.php?t=22474) on 13 Apr 2008)

In Part I (We Are Doing Well ) we explained why we are not doing well and in Part II (The System) we suggested that our problems are created by a system. From here on, it is going to be heavy-going. We are going to probe into “The Who, Why, How, and What”. It is going to be controversial and emotionally difficult for some to accept, simply because many sacred cows will be challenged, maybe we have to unlearn many things that we have learnt so far in life. So, we will proceed gently. The best suggestion we can make is: Hold your judgement until the end of this series. Then decide if it makes sense to you. If so, take it on board and use the knowledge wisely. Otherwise, move on.

First, a bit of digression…. The Internet has been a boon and a bane. A boon in the sense that we now have access to a huge source of information, a bane in that we are drowning in information.

INFORMATION OVERLOAD!

We have Malaysia-today, Malaysiakini and all those blogs screaming at us, ….. UMNO is corrupt! They are thieves and robbing us blind! Then we have the mainstream media, the religious establishment, our political leaders intoning solemnly, …. UMNO is heaven’s gift to Malaysia, if not to mankind. Malaysia and Malaysians should be thankful to them for treating us like Rats.

Next we have some religious leaders breathing fire and brimstone, declaring …. A vote for party A is a vote for Satan. On top of that, there is a financial tsunami building up around the world, with their alphabetic soup of derivatives (http://en.wikipedia.org/wiki/Derivative_(finance)) (CDO, CDO Squared, CDO Cube, CDS, SIV) and the danger of the USD crashing. (By the way, if you have been putting your nose too close to the grinding stone to notice, watch the gold price closely) We are pulled hither and thither. How do we make sense of all these stuff? How do we protect ourselves?

KEEPING THINGS SIMPLE!

We need a simple model to make sense of the world, an anchor to benchmark against or better still, a picture of the whole scheme of things. Otherwise we will be like flotsam in the sea, drifting wherever the tides will us. Charlie Munger, Warren Buffett’s partner, made frequent references to this dilemma in his speeches. In fact, he wrote Poor Charlie’s Almanack (http://www.poorcharliesalmanack.com/index.html), on how to go about it. We commend it to you.

As described in Wikipedia, Charlie introduced the concept of Elementary Worldly Wisdom as it relates to business and finance. Munger's worldly wisdom consists of a set of mental models framed as a latticework to help solve critical business problems. According to Munger, only 80 or 90 important models will carry about 90% of the freight in making you a worldly-wise person. That’s all we need…. 80 to 90 models to make sense of the whole world!

MENTAL MODELS

A mental model, Mental Models and Usability (http://www.lauradove.info/reports/mental%20models.htm) or Wikipedia Mental model (http://en.wikipedia.org/wiki/Mental_model) is an internal scale-model representation of an external reality. It is built on-the-fly, from knowledge of prior experience, schema segments, perception, and problem-solving strategies. A mental model contains minimal information. It is unstable and subject to change. It is used to make decisions in novel circumstances. A mental model must be “runnable” and able to provide feedback on the results. Humans must be able to evaluate the results of action or the consequences of a change of state. They must be able to mentally rehearse their intended actions.

In laymen's language, think of the picture of a jig-zaw puzzle. A picture of that puzzle in your mind is the equivalent of a mental model.

(If you can just take on board the idea of mental models and apply it, you will have made a great difference to your life.)

WHAT’S THE POINT?

The key point about a mental model is that it is fluid, to allow us to modify it as new information arises. We need it to deal with a Rat Race model which is an evolving system that has survived for thousands of years. It is practically a living organism, maybe a Memeplex (http://en.wikipedia.org/wiki/Meme) as described by Richard Dawkins in his book, The Selfish Gene (http://en.wikipedia.org/wiki/The_Selfish_Gene).

Are you still with us? Good! Let’s get on with the nitty-gritty stuff.

For simplicity, let us consider a country. In future articles, we will expand it to include the whole world. For now, a country will do.

THE WHO: MENTAL MODEL NO. 1 – THE PYRAMID

Who is running the Rat Race? For now, let us call them the Exploiter. They sit at the top of a pyramid. We, the Rats, form the base of the pyramid. In between, there are multiple layers that transition from Rats to Exploiters and Collaborators. Now, that wasn’t so bad, was it?

THE WHY OF THE EXPLOITERS: GREED

As we have alluded to in Part II (The System), the Exploiters are doing it for greed and their objective is to control the resources, including the Rats, of the country. This is an important principle to remember: Understand the objectives and the actions will be clear. If you know the ultimate destination of a car, you don’t need to worry which route the driver is taking. Just focus on the end point. Then, all the smoke and the mirrors cannot confuse you. As a corollary, the reverse of what the Exploiters say, is usually the truth. That will help us to make sense of Badawi’s claim in Part I (We Are Doing Well). As an exercise, apply this principle to what Mahathir has been telling us for the past 26 years. It can make for some interesting revelations.

THE HOW OF THE RAT: IGNORANCE, APATHY & SLOTH

How did we end up in this mess? Ignorance, pure and simple! Ignorance about how our mind works, apathy and sloth in applying our minds productively and in resistance to change. Our mind at its most basic level reacts to sensations, sensations of craving and aversion. However, it is too subtle for us to detect, for most of us anyway, without some form of mental training. We won’t go into that as it is too esoteric for the purpose of these articles. (Those who are interested to explore further, can go here: Mind Mastery (http://www.dhamma.org/). Warning: Your goals in life may change after that. So tread with caution.. At a grosser level, the reactions manifest itself as a liking for pleasant sensations and a dislike for unpleasant sensations. For example, we like it when people praise us. We dislike it when people criticize, condemn or threaten us. So we do things that encourage people to praise us and we avoid things that result in us being threatened, criticized or condemned… nothing wrong with that, except when others use this trait to exploit and manipulate us.

Conformity: Humans, like sheep, tend to follow the crowd. Experiments have shown that you only need to control 5% in a group and get them to follow your instructions. The rest will follow, especially, if they don’t know what they are doing. I remembered as a kid, walking across a grass field to school. The most direct way was a straight line but someone started walking in a meandering direction. The others followed. After a while, a meandering path was formed on the grass, even though there were no obstructions along the straight line. And ever since, for years on, the school-children would follow the meandering path. No one knew why. They just followed

Conditioning: Again, like animals, humans are easy to condition. Keep feeding them lie after lie. After a while, they will accept it as the truth.

Start Early: Next, start them young. If we want to teach a dog, we start at the puppy stage. As they say, you can’t teach an old dog, new tricks. If a child is taught from young that a piece of paper is valuable, he/she will accept it as valuable. Sometimes, such values are transmitted unconsciously.

Illusion of paper money: There was an incident in the early 90’s when the ATMs were starting to take over the functions of the bank tellers. Our fifth child, Mei, had developed an early fascination for buying “stuff”. Her mom tried to fob her off, telling her she had no money. Her innocent response: “Get the card from papa, put it in the ATM machine and money will come out.” Mei is 21 now and her fascination has mutated into an obsession with shopping. Ah, the joys of parenthood.

Did your parents teach you that paper money is real money?

Education: Then we have education or more correctly, the lack of it. The education system is geared towards producing Rats – workers or cogs for the system. A sad example: The Tamils in Malaysia were encouraged to live in estates and study Tamil in the estate schools. They were trained to be estate workers. But when the business model changed, the estates were converted to housing or industrial areas, the Tamils suddenly found themselves uprooted and lost. For more, read here Plea of the dispossessed (http://www.aliran.com/index.php?option=com_content&view=article&id=430:hindraf-rally-a-plea-of-the-dispossessed&catid=53:200710&Itemid=10).

Obedience: We are taught to be obedient to the system, not to challenge it. The Exploiter will keep enough sticks in place to make sure we comply.

Financial Illiteracy: The school system does not teach us how the financial system really works. We are not taught how to manage ourselves financially. We are encouraged to get into debt. That sets us up as suckers for the banks and financial institutions to exploit – more on that later.

Distract them: The news and entertainment media are set up to distract the Rats, to keep them from thinking too deeply. In the olden days, the Romans had the lions and the coliseum. Today, we have the football stadium and Malaysia-bolehism.

Keep them busy: Give the Rats so much work that they have no time to think. Think Singapore.

Inflation: We are taught that inflation is caused by the price of goods rising. Day after day, this point is drummed into us. Then we are told that prices of essential goods are controlled or even subsidized, to protect us. Did anyone ever bothered to tell you that rising prices is a symptom of inflation, not its cause? Inflation is mainly caused by too much money chasing too few goods! The excessive supply of money is due to the Central Bank printing too much money! (The other factor, of course, is demand exceeding supply.) To keep the Rats from getting too excited about rising inflation, the Consumer Price Index (CPI) is under-stated. Don’t feel bad. All the governments in the world do it. So we are not alone.

The best place to get a better handle on this is to study the US economy.

Here is an example on how under-reporting was carried out in the US:
Actual monthly average prices vs the Government reported prices.
http://i416.photobucket.com/albums/pp242/tindakmalaysia/rat%20race%20part%20IIIA/RatRacePartIIICrudeoilpricesActualv.jpg

Well, this table says it all, the government don't report the real numbers but LOWER ! They do that in order to keep inflation rates low, it's as simple as that !
The Malaysian CPI has always been reported as between 2 to 4%. Ask your mum who buys the groceries. She should be able to give you a more realistic figure. We estimate that real inflation is more of the order of 7 to 10%. Prices double every 7 to 10 years. Here’s a tip: World wheat prices has gone up by 200% over the past year. Imagine what keeping money in the bank earning interest of 2 to 3% per annum does to your money. Or buying insurance and hoping for that little nest egg at the end of 20 to 30 years. Or your EPF.

Now, why would they want to do that? We have to remember that our wages are “tied” to inflation. If inflation goes up significantly, the Rats will start agitating for higher wages. The pensioners and the poor are the hardest hit.

Assigning Labels: Assign labels to the Rats. Call them anything … Black Rats, Brown Rats, Yellow Rats, Green Rats, holy Rats, unholy Rats. Just categorize them up and treat them differently. It is a sure-fire way of keeping the Rats distracted and squabbling among each other. It never fails.

Divide & Rule: Here’s a secret: The Exploiter treats the Rats as both a resource and as a potential enemy that can turn against them. The best way to prevent that is to keep the Rats busy fighting each other. The greatest fear of the Exploiter is that the Rats wake up and unite.

Greed: Play on the greed of one group of Rat and co-opt them to become collaborators to disadvantage the others.

Envy: Tell one group of Rat that another group is doing better than them and that this group has to be suppressed.

Fear: If the above doesn’t work, the Exploiters have another tool – the infliction of fear, the threat of violence and harm on the Rats. Play on their sense of vulnerability.

Ego: Feed on the Rats’ egos. Tell them that they are superior, God’s gift to earth. Sometimes, Exploiters get carried away, playing on the Rats’ fears and simultaneously feeding their ego. And yet the Rats lap it up.

Sloth & Resistance to change: Even when the Rats see disaster staring them in the face and they know that a change in mindset is necessary, due to their mental lethargy, they refuse to change. Their rationale is “Better to stick with the devil we know than the devil we don’t know”. Another excuse is “The other group has no experience. How can we trust them?” It does not occur to them to ask “What is the best way to find out?” Slothful Rats go through life always getting the wrong results because they don’t ask the right questions. Their defense will be to adopt the attitude of a victim – life is not fair to them, they have not been given a chance.

War: If all else fails, the Exploiter will resort to desperate measures, a new distraction – an external one. Go to war with another country. Send the ring-leaders (trouble-makers) to the war-front, destroy the old Rat Race, so that a new Rat Race can be started after the war. During this period, a massive transfer of wealth from the Rats to the Exploiters will take place (provided the Exploiters win the war. The losers join the Rats.). (More of this in a future article on The Pyramid.)

We are sure if you were to sit down and list it out, there is much more but to keep this article within manageable limits, we will stop here.

So the Exploiters exploit the mental weaknesses of the Rats to enslave them. Make no mistake about it. It is a form of slavery!

To sum up:
1. The Exploiters are doing this out of greed.
2. The Rats are mentally weak and ignorant
3. The Exploiter takes advantage of the Rats’ ignorance to exploit them.
4. Develop your wisdom through Mental Models.

We shall take a break here and continue with Part IIIB – The Circle, later. There we will discuss how the Exploiters implement the system of the Rat Race. We promise you. It will be fun..

[pywong]

Segment 1 of 2: The Exploiter's Strategies

THE RAT RACE PART IIIB: MENTAL MODEL NO. 2 – THE CIRCLE
See Malaysia-today (http://www.malaysia-today.net/2008/content/view/3355/1/) 25 Feb 2008, or
usj.com.my (http://www.usj.com.my/bulletin/upload/showthread.php?t=22580) 20 Apr 08

For those who wish to explore more, we recommend George Orwell’s classics Animal Farm (http://www.george-orwell.org/Animal_Farm/index.html) and 1984 (http://www.george-orwell.org/1984/index.html) or to watch the movies Soylent Green (http://www.imdb.com/title/tt0070723/plotsummary) or The Matrix (http://www.imdb.com/title/tt0133093/).

In 1984 (http://www.george-orwell.org/1984/index.html) the ruling party’s slogans were:

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH

The reverse of the truth was exactly what we saw in Part I (We Are Doing Well).

The Pyramid:
Let us consider the Pyramid a bit more. The Rat’s mental model is a base of Rats with an apex of Exploiters. The Exploiter’s mental model is quite different. They see themselves as the owner of all the resource in a country including all the Rats. These Rats are regarded as both an asset and a potential enemy. In their calculus, the Rat has to be subjugated through a constant programme of psychological warfare. They have to be kept divided among each other to prevent them from grouping and threatening the Exploiter’s hold on power. Any rebellion has to be ruthlessly put down but with as little bloodshed as possible. After all, if you are the owner of a flock of diary cows and you are milking them, you don’t want to shoot them at the first sign of trouble. You want to keep them in good shape as long as there is milk to be extracted. The Rat Race system has to meet these objectives.

Remember this concept:
To the Exploiter, the Rat is both an asset and a potential enemy that has to be constantly monitored and subjected to brainwashing.

The Exploiter’s Strategies
1. The Boiling Frog Strategy (http://en.wikipedia.org/wiki/Boiling_frog)

The Exploiter will keep on squeezing, in small increments, the Rat to extract more and more output from it. If the Rat protests, the pressure will be let up temporarily. Then the Exploiter will go into placating-mode to calm the Rats down. When the Rat is not paying attention, the pressure resumes. The long-term objective never changes - maximum output from the Rat that will still keep the Rat alive. You don’t want to kill The goose that lays the Golden Eggs (http://en.wikipedia.org/wiki/The_Goose_that_Laid_the_Golden_Eggs)

2. Draw the Rat into the Dollar Economy
Get the Rat to work for money issued by the Exploiter. To the Exploiter, money is free, only paper and ink is needed. The money is backed by taxes, part of which is collected from levies on the Rat.

3. Train it to run in the Rat Race
Train the Rat from young to run in the Rat Race for money. Effectively, the Rat is working for free.

4. Debt trap
Induce the Rat to get into debt through the purchase of house, car, spending, credit cards, easy loans, etc

5. Tax
Impose income tax on the Rat. Levy taxes on all goods consumed and on property owned by the Rat. Every step of the way, through the salami technique, steal the Rat’s money. Tax them on social security, health insurance, accident, anything that could be gotten away with.

6. Inflation:
Reduce the value of the money progressively through induced-inflation. This is achieved by printing money in excess of the economic growth. Eg. If growth is 4%, increase the money supply by 15% say. Excess money will result in too much money chasing too few goods leading to price increase. A very good example is property speculation. House prices rise. The early birds feel good. The Exploiter feels good. After all, he controls the land bank. The poor Rat panics and jumps in to buy before the prices shoot to the moon. Now, he is caught in the cycle of debt and the Rat Race. It works all the time. Inflation means that the Rat is paid less and less, ditto for the pensioners.

7. Baby Rats
Encourage the Rat to produce baby Rats to increase the labour pool. The Rat even looks after and pay for the upkeep of the babies. Talk about having your cake and eat it.

8. Laws
Impose laws to keep the Rats in line. Prevent them from building large social groups, networks and unions.

9. Secret Service
Constantly monitor the Rats to pre-empt any move towards rebellion. Isolate any potential rebel leaders by detaining them and turning them over (brainwashing). The Secret Service’s job is to keep stirring the pot. Introduce new ideas to keep the Rats agitated and at each other’s throats constantly, but not enough to cause an outbreak of violence. Wounded Rats are not good for business.

10. Control of information
Control all the news media. Use TV, radio and newspapers for mass propaganda and brainwashing of the Rats.

11. Thought Control
The only ideas allowed are those that promote the Exploiters’ hold on power. Any idea or thought contrary to that or challenge the Exploiters’ version of the truth shall be suppressed. Eg: Promote the idea that only the Exploiter can run a nation. Create the belief that the Exploiter will always remain in power. (Read this article by Dr Azmi Sharom Don't Be Afraid Of Open Debate (http://mt.m2day.org/2008/content/view/3256/1/). Once such mental habits are formed, it is very difficult to break out of it, especially for those with weak minds. Keep the Rats apathetic. Keep them distracted. Football and Malaysian Idol (http://en.wikipedia.org/wiki/Malaysian_Idol) are perennial favourites. Do not encourage innovative thoughts.

Promote a common religion, claim that it holds the Ultimate Truth. Do not allow any deviation or other versions of that religion to co-exist. Make use of collaborators to proselytize the Exploiters’ version of the Truth. Continuously suppress other religions. Create the specter of danger posed by other religions to the mainstream religion. This is a useful divide-and-rule tactic.

12. Other Mind-control Techniques
Make use of all the mind-control discussed in Part IIIA.

Doesn’t this sound like The Matrix (http://www.imdb.com/title/tt0133093/)? By now, most readers are ready to give up and say: This is just too difficult. It is easier to remain a Rat For those who are not prepared to accept their fate, let’s move on.

Next: Segment 2 - The Circle

[pywong]

Segment 2 of 2 - The Circle

Mental Model No. 2: The Circle

First start with a simple model. Use the Cashflow Game as a guide. We recommend playing a few rounds of the game. In learning how to create mental models, we need to discard a life-time of mental conditioning and mental habits. It requires change but change is never comfortable…. easier to follow the rut, even though the rut leads us to ruin.

Look at the following images of the Cashflow Board.
Cashflow 1: Overview showing the Fast Track and the Slow Track (smaller double blue circles).
http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/cashflow1.jpg

Cashflow 2 & 3: Top and side view of the Rat Race.
http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/cashflow3.jpg

We see many Rats rushing around two blue circles either carrying a hand-phone or a briefcase. There is an inner ring with many stations – Pay check, Opportunity (Big deal/small deal), The Market, Charity, Doodads (expenditure on unnecessary stuff), Downsizing and Baby. At the core is King Rat, the Banker. He controls all the money, the land, the properties, the Opportunities, the Market, the Pay Checks. The little Rats receive their Pay Checks from King Rat, buys and sells everything through King Rat….. It’s too complicated to explain everything here. Just go and play the game and things will become clearer. We just want to use this board to illustrate some of the ideas in our mental model.

The Rat moves on the basis of a dice throw. The maximum no. of steps is 6. So, there is an element of luck involved. For every revolution that the Rat makes, he receives 3 Pay Checks. That means, a complete revolution represents 3 months of work. For the typical Rat, 120 to 160 revolutions will represent a life-time of working before they can retire. Some never stop running. They either don’t know how to stop or they cannot afford to stop!

Here’s a thought: In Part I WE ARE DOING WELL! (http://tindakmalaysia.com/tm_forums2008/index.php/topic,601.msg2336.html#msg2336), we spoke about thinking of our salaries in terms of gold. That provides us with a stable bench mark. Here’s another way of looking at money. Think of buying stuff in terms of months of salary.

Eg. In 1970, a school teacher with a salary of RM 500 could pay off a terrace house in SS 2, Petaling Jaya (Part I WE ARE DOING WELL! (http://tindakmalaysia.com/tm_forums2008/index.php/topic,601.msg2336.html#msg2336)) with 78 months of salary. Today, that teacher with a corresponding salary of RM 1200, say, will need 500 months of working to pay for the same house! 500 months is 42 years! (King Rat has a strong interest to inflate property prices. After all, he controls the largest land bank – public land, which by the way is held in trust on behalf of the Rats. We can expand that idea to include timber, minerals, water, oil, etc.). King Rat will point to the salaries and claim: Look, the teacher has increased her salary by 240% in 38 years. She is doing well.

In other words, instead of thinking of our wealth in dollars and cents, think in terms of months or days of working. And King Rat wants to own your time. Doesn’t that sound like slavery?

King Rat’s strategy is to make the Rats run continuously, then to extract money from them through taxes or to reduce the value of their Pay Check through inflation..

He encourages the Rats to buy property on which he can levy property tax and house assessment. Once the poor Rat gets a mortgage to buy the property, he is caught in another trap - the debt-trap.. On top of the debt is compound interest which can result in the debt doubling or tripling. And this is the biggest trap of all and can take a lifetime to get out off, if it ever gets done. Is it a wonder that teachers like Jesus Christ and Prophet Muhammad PBUH condemned usury and money lenders?

The central idea is to get the Rats involved in the dollar economy.

(There is another aspect of the Cashflow Game – The Income Statement. This is intended to teach financial literacy, to help the Rat to think of money in terms of cash flow. A better way would be to think as a corporation instead of an individual. We will need to prepare annual reports to assess our financial progress. That will require another mental model, which we won’t go into here, … maybe at the end of this series when we discuss how to get out of the Rat Race.)

Here is a slight twist to the Cashflow model. The race track (blue ring) is rotating anti-clockwise. That means the Rat has to run more steps to reach the stations than before. The rotation of the ring accelerates with time. That is the effect of inflation. And inflation is how the King Rat gets the Rat do more for less.

(Imagine, if a government were to chop the civil servants salaries by 5% every year, there will be a revolt. But if a government was to reduce the value of the currency by 5% a year and under-report the Consumer Price Index (CPI), the employees would not notice. The Boiling Frog Strategy (http://en.wikipedia.org/wiki/Boiling_frog). On top of that, the government would save money in their pension bill.)

Cash economy
For the system to work, the Rats must be plugged into the paper money economy and they must trust it. What happens when the money breaks down or people lose trust? We get the 1923 Weimar republic Germany (http://hubpages.com/hub/Hyperinflation_in_Post_World_War_I_Germany), or
Hyperinflation (http://en.wikipedia.org/wiki/Hyperinflation).

Next change: USA 2009 USD crash and along with it, the RM. (Watch this closely. This is coming and could be the reason for an early election in Malaysia (8th Mar 2008). It is always best to get such inconveniences out of the way first before all hell breaks out. There is already speculation that the USD will be debased to zero and replaced with a new note - the Amero (http://en.wikipedia.org/wiki/North_American_currency_union) and Amero pictures (http://images.google.com.my/images?q=amero&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&ei=YgKNSYvfD9K6kAWwsuCuDA&sa=X&oi=image_result_group&resnum=4&ct=title).)

This, dear readers, is a simplified mental model of the Rat Race – The Circle. Admittedly, it is not perfect. But it does not have to be. Use it as a template and consider your personal situation. See whether it fits?

To summarise:
1. There is a constant psychological war waged by the Exploiter over our minds using the Boiling Frog Strategy
2. The Exploiter sits on top of a power structure called the Pyramid
3. They use the Rat Race System, which we depicted using a Circle as a mental model, to entrap the Rats and extract work out of them.

In the next article, we will be going back in history to explain The Rat Race Part IV – The Pyramid (http://tindakmalaysia.com/tm_forums2008/index.php/topic,626.new.html#new)[b].

[pywong]

THE RAT RACE PART IIIA - HOW THE SYSTEM WORKS?

Fear: If the above doesn’t work, the Exploiters have another tool – the infliction of fear, the threat of violence and harm on the Rats. Play on their sense of vulnerability.

Sim Kwang Yang says it eloquently here:

Hornbill Unleashed
June 11, 2009
ISA and the panopticon: the anatomy of fear

By Sim Kwang Yang

I was a little taken aback when a close and respected friend complimented me on my courage in my writing.

I was surprised, because much as I searched within myself, I felt no courage in me when taking on the most contentious issues and the most powerful politicians of the land. Then I realise why I don’t feel brave at all. I don’t have to be brave because I feel no fear, as long as I am careful and fair.

That does not mean I am such a fearless hero. I too have my phobias. Being broke is my greatest fear that has pursued me in my entire life. My other fear is dying slowly a long, debilitating, and painful death, while being broke!

Then I realise we are all moulded by our fears, and we do not know much about our fears. So I checked up some quick resources on the Internet. One site – about.com:phobia — has this to say:

“Fear is a powerful and primitive human emotion. It alerts us to the presence of danger and was critical in keeping our ancestors alive. Fear can actually be divided into two stages, biochemical and emotional. The biochemical response is universal, while the emotional response is highly individualized.” More… (http://hornbillunleashed.wordpress.com/2009/06/11/1803/)

[pywong]

Segment 1 of 2: The Exploiter's Strategies

THE RAT RACE PART IIIB: MENTAL MODEL NO. 2 – THE CIRCLE
See Malaysia-today (http://www.malaysia-today.net/2008/content/view/3355/1/) 25 Feb 2008, or
usj.com.my (http://www.usj.com.my/bulletin/upload/showthread.php?t=22580) 20 Apr 08

For those who wish to explore more, we recommend George Orwell’s classics Animal Farm (http://www.george-orwell.org/Animal_Farm/index.html) and 1984 (http://www.george-orwell.org/1984/index.html) or to watch the movies Soylent Green (http://www.imdb.com/title/tt0070723/plotsummary) or The Matrix (http://www.imdb.com/title/tt0133093/).

In 1984 (http://www.george-orwell.org/1984/index.html) the ruling party’s slogans were:

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH

The reverse of the truth was exactly what we saw in Part I (We Are Doing Well).

Some good examples of double-speak:

The BN’s doublespeak in Manik Urai
7 Jul 09 : 8.00PM

By Zedeck Siew
zedecksiew@thenutgraph.com

IN George Orwell's seminal work of dystopian fiction, Nineteen Eighty-Four, the totalitarian Ingsoc government employs, among its slogans, the phrase "Freedom is Slavery". Orwell, who wrote at length about how "language can corrupt thought", is credited with popularising the concept of "doublespeak": language deliberately constructed to distort its actual meaning.

The Barisan Nasional (BN) campaign in Manik Urai, if its ceramah in Laloh on the evening of 6 July 2009 is any indication, appears ready to embrace such distortion. The Nut Graph.... (http://www.thenutgraph.com/the-bns-doublespeak-in-manik-urai)

[pywong]

THE RAT RACE PART IIIA - HOW THE SYSTEM WORKS?

(This was published in Malaysia-today (http://www.malaysia-today.net/2008/content/view/3211/36/) on 22 Fed 2008
and usj.com.my (http://www.usj.com.my/bulletin/upload/showthread.php?t=22474) on 13 Apr 2008)

THE WHY OF THE EXPLOITERS: GREED

As we have alluded to in Part II (The System), the Exploiters are doing it for greed and their objective is to control the resources, including the Rats, of the country. This is an important principle to remember: Understand the objectives and the actions will be clear. .. Then, all the smoke and the mirrors cannot confuse you. As a corollary, the reverse of what the Exploiters say, is usually the truth. That will help us to make sense of Badawi’s claim in Part I (We Are Doing Well). As an exercise, apply this principle to what Mahathir has been telling us for the past 26 years. It can make for some interesting revelations.

THE HOW OF THE RAT: IGNORANCE, APATHY & SLOTH

How did we end up in this mess?
Divide & Rule: Here’s a secret: The Exploiter treats the Rats as both a resource and as a potential enemy that can turn against them. The best way to prevent that is to keep the Rats busy fighting each other. The greatest fear of the Exploiter is that the Rats wake up and unite.

Greed: Play on the greed of one group of Rat and co-opt them to become collaborators to disadvantage the others.

Envy: Tell one group of Rat that another group is doing better than them and that this group has to be suppressed.

Fear: If the above doesn’t work, the Exploiters have another tool – the infliction of fear, the threat of violence and harm on the Rats. Play on their sense of vulnerability.

The above was written more than a year back. It's still relevant today. We are now seeing the System operating in real time. Mahathir's protege, Najib is performing to script.

Where is all this racism going?
Neil Khor, Aug 11, 09

Creating a group fear

Most Malaysians have nothing against one another. Individually human beings can be quite rational. But talk to them when they are in a group and a different voice is heard. By suggesting that the Malays are about to lose political power, anxiety is stimulated.

The next step is to publish a few stories through anonymous blogs. Repeat it often enough and rumours begin to "sound" real. This is because we have been programmed to believe in repeated slogans, especially after 30 years of being bombarded by daily doses of intense advertisements.

The current economic crisis also helps as most people are feeling insecure about their jobs. Put all these different and often unrelated issues together and "group fear" is created.

Legitimacy to "group fear" is added when senior politicians denounce anyone who disagrees as "traitors to the race". At the same time, ministers exhort the people to respect the constitution as though those opposed to them do not and are therefore unpatriotic.

Then say that you will strike at them with the full might of the state and exercise executive powers of arrest and harassment. Finally, blame these "traitors" for "destablising" the country by arguing that if they did not exist, we would not have to do what we are doing in the first place.

Umno and those in-charge of "psychological-warfare" understands how this strategy works because it is as old as the hills. They are adopting it because it always works. Malaysiakini. Subscription required. (http://malaysiakini.com/news/110307)

[pywong]

Segment 2 of 2 - The Circle

Mental Model No. 2: The Circle

First start with a simple model. Use the Cashflow Game as a guide. We recommend playing a few rounds of the game. In learning how to create mental models, we need to discard a life-time of mental conditioning and mental habits. It requires change but change is never comfortable…. easier to follow the rut, even though the rut leads us to ruin.

Look at the following images of the Cashflow Board.
Cashflow 1: Overview showing the Fast Track and the Slow Track (smaller double blue circles).
http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/cashflow1.jpg

Cashflow 2 & 3: Top and side view of the Rat Race.
http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/cashflow3.jpg

There are a few key elements of the Rat Race used by the Ruling Class to control the Rats.

1. Power to print paper money and force every one to use it - by Law.
2. Ownership of public land and creating revenue through land sales.
3. Taxation on personal income, corporate income and real estate.

Read here how China is exploiting the desire of human beings to own property:
http://web.stratfor.com/images/writers/ChinaFilesRealEstate-1.pdf

It is applicable throughout the world. The reason the US is in deep financial trouble now is that the manipulation of the real estate bubble has failed due to collapse of the property bubble. It occurred in Japan in the 90's and will happen in China.... soon.

[pywong]

THE RAT RACE PART IIIA - HOW THE SYSTEM WORKS?
Financial Illiteracy: The school system does not teach us how the financial system really works. We are not taught how to manage ourselves financially. We are encouraged to get into debt. That sets us up as suckers for the banks and financial institutions to exploit.

It's always easy to blame others and not take responsibility for our actions. Stupidity is not an excuse in this Dog eat dog world. If we want to survive, we just have to learn to be smarter. Sounds harsh but we all have to learn the hard way.

Facebook: Elvie Ho
How can they afford to service their loan of 200K if they earn less than 3K?Scheme launched for young adults to get 100% financing for new home
thestar.com.my
KUALA LUMPUR: Young working adults can now buy themselves a new home without having to pay a sen in down payment.

TheStar (http://thestar.com.my/news/story.asp?file=%2F2011%2F3%2F9%2Fnation%2F8218336&sec=nation)

Elvie Ho: Jenn,if a person earn 2,800 per month,his take home pay minus EPF is only 2,492.His monthly repayment loan will be more than half his salary.I dont see how he can survive unless he eat maggie mee everyday!


Woong-sin Hiu tis could b an observation tat could b relevant. Umno n their bn machai property developers r sitting on a mountain of unsold properties, so they made up tis same trick tat d west had just being thro, easy loans,flexible terms, low interest, sell sell sell, even to those tat d west term, "Buy-to-Let" landlords(thus increasing d pool of punters) customers, domestically d housing mkt, other then Klang valley n penang island,will b facing a challenging time n it's not going to bottom out any time soon. if those punters tat had secured their house on a 100% mortgage n d property price falls, u r buggered, u r stuck in a negative equity trap n many were bankrupt on tat when they can't service d interest rate, n don't 4get, in a volatile economy, interest rate could spike up suddenly, then we r fucked. n those clever crooks from umno n bn had oledi pocketed your monies..


Elvie Ho Woong,I agreed with you,gov should built more apartments costing less than 100K and sell to those earning below 3K.How could the rakyat earning less than 3K afford loan of more than 100K?


Woong-sin Hiu politically it can b a smart move to ensnare voters to b stakeholders which eventually could create a more manageable nation. but tis lot don't c it tat way, any person with some common sense can c d sum don't add up with their propose loan scheme, if they cut back @ their kickbacks n their inflated land banks by 50 % they still makes thier millions..tis lot of political cum businessmen n rafidah r so blatantly greedy in their haste n just milk it like they is no tomolo.


Wong Piang Yow The loan is a trap. 1970, a graduate buy a double-storey terrace house in SS 2, Petaling Jaya for 51 months salary. Today, same house take 28 years! We need to change the govt, push new govt to reduce the construction cost to half so fresh grad can buy in 14 years.

Step 1: This is possible by cutting red tape, corruption and stopping unnecessary surrendering of land for nonsensical infrastructure and facilities. Privatised monopolies like telecoms, TNB, Water and sewerage are blackmailing the developers by demanding more land than necessary. They also demand supply of spare parts for the plant and machinery in the sub-stations for up to 5 years. They have to be stopped. The Govt oversight bodies are not doing their job to protect the consumers. Many of the senior govt servants serving there can retire with a golden parachute to join the very companies they were supposed to supervise.

Step 2: Govt provide pre-approved standard building plans that developers can use immediately. They only need foundation design. Town layouts should be designed under a master plan so developers and investors can have confidence to invest. This will cut down on holding cost.

Step 3: Release more state land for housing so land prices can come down.

Step 4: Hold developers to account by implementing the build-then-sell system to protect house-buyers. The law is in place but BN don't want to enforce it. Today many innocent buyers are cheated by unscrupulous developers who abscond with their money leaving the projects abandoned. The govt don't bother to go after them and the laws does not protect the house-buyers.

Step 5: Increase productivity so salaries can go up. This is more long-term and ties in with improvement in our education system. We need English to be taught so our graduates have a higher market value to the international investors. Malaysia can be a good outsourcing centre because we know Malay, English, Chinese and Tamil to serve China and India plus the Western countries.=

You want cheaper housing, change the Government first. Current govt is only interested to suck our blood.


Wong Piang Yow House prices: I just came back from Perth. A fresh engineering grad makes AUD 60K a year. He can buy a bungalow single storey house with 4 - 5 years of salary, I am told. If our graduate takes 28 years just to buy a d/s terrace house, something is wrong!


Wong Piang Yow This excellent article by Sakmongkol explains better what I have been trying to say but from the angle of using EPF money (your money!) to finance housing schemes for the rich. http://www.tindakmalaysia.com/showthread.php/2396-Sakmongkol-Watch-your-EPF?p=8208#post8208

[pywong]

In this interview lies the answer on how the modern Rat Race is maintained - the principle of forcing Rats to work for paper money printed by the Central Banks....


6/7 Antal E. Fekete - WHAT YOU ALWAYS WANTED TO KNOW ABOUT GOLD - But were afraid to ask

The following is a transcript of an interview requested by a gold-friendly hedge fund.


Q.: Professor Fekete, you are known as a staunch advocate of a return to the gold standard. But mainstream economists are saying a gold standard is not practicable and they are fighting the idea with everything they have. How do you answer their criticism?

A.: To say that the gold standard is not practicable is the same to say that honesty is not practicable, and Constitutions are made to be blithely ignored when convenient. The American Constitution, for example, mandates a metallic monetary standard for the United States in the clearest possible language. Opponents of the gold standard have never been able to muster up the moral fortitude to amend the Constitution so as to formalize the abolishing of the gold standard. Yet in 1933 president Roosevelt confiscated the gold of the citizens, gave them irredeemable paper in exchange, and proceeded to write up the value of gold in terms of the paper by 75 per cent. Might makes right: if you cannot do it fairly and legally, then you can use the strong arm of the government to do it through chicanery, backed by the constabulary and the jail cell.

More recently, in our own century, Switzerland changed her Constitution in which the gold standard was also enshrined, through a referendum. Citizens were given a week-end to debate and decide the merits or demerits of the proposed constitutional changes. The indecent haste with which they were railroaded through the constitutional process betrayed the bad conscience of the authors.

One of the key principles supporting a gold standard is that jurisprudence cannot tolerate a double standard of justice. The government, its departments and agencies ought to be subject to the same contract law as are citizens. There are no valid grounds to allow the Treasury and the Central Bank to issue obligations which they have neither the means nor the intention to honor — while everybody else doing it will be dealt with according to the Criminal Code. To say that the gold standard is not practicable is the same as saying that the government should be exempted from the provisions of the Criminal Code in its dealings with its subjects.

Q.: What would be the basic steps involved in reintroducing a gold standard? How to proceed?

A.: Three indispensable steps are involved.

First, the government should open the Mint to gold. This means that everybody who wants to convert his gold of the right quantity and quality into gold coins of the realm should be able to do so at the Mint, free of seigniorage charges, and with no limit imposed on the amount. In other words, they would get gold back, ounce for ounce, in coined form, and the cost of minting would be absorbed by the government, the same way as it absorbs the cost of maintaining highways in good repair. Conversely, owners of the gold coins of the realm must have the right to hoard, melt down, or export them as they see fit. them as they see fit. This is designed to vest the right to regulate the money supply in the people, rather than in unelected bureaucrats.

Second, “legal tender protection” of paper money must for once and all be declared unconstitutional. This is designed to remove coercion whereby labor can be forced to accept irredeemable currency for services rendered.

Such coercion was first legalized in France and Germany in the year 1909, just five years before the outbreak of World War I. These countries wanted to make sure that civil servants and military personnel could be paid in chits, thus putting the entire labor force at the disposal of the government — regardless of the state of budget and collection of taxes — in case of war. The motivation behind the second provision is that governments should not be able to wage undeclared and unpopular wars, as could kings of old, but must raise taxes. World War I would have come to an early end but for the legal tender laws. As soon as treasuries had run out of gold, the belligerents would have been forced to make peace, unless the electorate agreed to pay for the continuing bloodshed and destruction of property. And the world would have been the better for it.

Third, the principle known as the “Real Bills Doctrine” of Adam Smith should be observed. Bills of exchange drawn on fast-moving merchandise in most urgent demand by the consumers, which mature into gold coins within 91 days (the length of the seasons of the year), must be allowed to enter into spontaneous monetary circulation. This would guarantee the flexibility of the monetary system not through government coercion, but through the voluntary cooperation of producers and consumers in satisfying human wants.

It can be seen that the market for real bills is the clearing house of the gold standard. In 1918, at the end of World War I, the victorious allies decided not to allow the world to go back to multilateral international trade. To be sure, they wanted to go back on the gold standard, witness Great Britain’s decision to make the pound sterling once more convertible into gold at the pre-war exchange rate in 1925, but with only bilateral trade allowed. This meant nothing less than the castration of the gold standard: once its clearing house was amputated, it could not perform.

The allied powers did this out of spite and vengeance: they wanted to cripple Germany over and above the provisions of the Versailles peace treaty. Forcing bilateral trade upon Germany was equivalent to peacetime blockade whereby the allied powers could monitor and control Germany’s imports and exports. The measure backfired. The Great Depression and the 1931-1936 collapse of the international gold standard was due to the forcible elimination of the multilateral financing of world trade with real bills.

The gold standard did not collapse because of its “contractionist nature” — as alleged by Keynes. It collapsed because of its clearing system, the bill market was blocked. Falling prices in 1930 were not the cause of the Great Depression: they were the effect. The cause was falling interest rates. Incidentally, falling interest rates were in turn caused by the illegal introduction of “open market operations” by the Federal Reserve of the United States in 1921, whereby the central bank pays bribe money, in the form of risk-free profits, to bond speculators for bidding bond prices sky-high.

Q.: To what extent should money be “covered” by gold?

A.: The Real Bills Doctrine provides the answer to that question. There are on average 75 business days in a quarter. Therefore on each business day, on average, one-seventy-fifth, that is, 11/3 percent of the outstanding real bills mature into gold. Sufficient gold must be available at all times to pay the bills at maturity; more if the discount rate is rising, less if it is falling. In normal times the commercial banks should have that much gold flowing to them in the ordinary course of business, with which they can pay the maturing bills. If times are abnormal, banks go to the bill market and sell at a discount a sufficient amount of bills from portfolio to raise the gold. This should be no problem: a maturing real bill is the best earning asset a commercial bank can have. At any given time there are commercial banks somewhere in the world overflowing with gold. They scramble to acquire earning assets. The value of real bills increases every single day through maturity. They represent “self-liquidating credit”. Sale of the underlying merchandise to the ultimate consumer provides the wherewithal for their liquidation.

Q.: What happens if a country has no gold in its coffers?

A.: Such a country will experience a rise in the discount rate. The appearance of a positive spread between the discount rates prevailing in two countries improves the terms of trade in favor of the one with the higher rate. It can offer lower cash prices on its exports, while paying lower prices (91 days net) for its imports. This means that the country gets the gold for its exports 91 days before its bills payable in gold for its imports fall due. In addition, the higher discount rate will induce an inflow of short term capital that will help finance both exports and imports. We have to remember that imports are not financed by exports, not by gold. Gold is there to tie the country over through temporary imbalances.

Should this help not be sufficient to meet the shortage of gold, then consumers, if they want to eat, to keep themselves clad, shod and, in winter, warm, will have to dig into their pockets and come up with the gold coin to pay the bills for their imports upon maturity.

The point is that a shortage of gold need not cause privation: thanks to the discount-rate mechanism it is a self-correcting condition.

Q.: You have announced that in August you will start a school, and call it the New Austrian School of Economics, in Budapest, Hungary. Why new? Why Austrian? Why in Hungary?

A.: The Austrian School of Economics was started by Car Menger (1840-1921) of Austria-Hungary who deserves the epitaph, along with Isaac Newton, humanis generis decus (pride of the human race). The first members of the school, like Merger himself, were all great monetary scientists who abhorred the idea of irredeemable currency. Keynes introduced the notion that the gold standard is a “barbarous relic” and should be discarded. Through bribe and blackmail academia was enlisted to rally to the new doctrine, while the Austrian School withered.

When the intellectual bankruptcy of Keynesianism — which turned things upside down in castigating the virtue of thrift and lionizing the vice of prodigality — has become obvious, the Austrian School has gone through a renaissance, especially in the United States, calling for sanity and return to the gold standard. However, the “American Austrians” are vehemently against the Real Bills Doctrine of Adam Smith for doctrinaire reasons, as it contradicts their holy of holies, the Quantity Theory of Money. They do not understand that real bill circulation is spontaneous and its suppression is nothing less than unwarranted interfering in the operation of the free market. They do not see the difference between the discount rate (yield on real bills) and the rate of interest (yield in the gold bond).

This prompted me to start my school in Hungary where I live. It would be a disaster if the American Austrians succeeded in making their “100 percent gold standard” a reality. It would not survive the first Christmas shopping season. Markets would seize up, and the gold standard would be given a bad name for the second time.

Austria and Hungary used to be a dual monarchy during the days of Carl Menger, sharing not only the monarch, but also their scientific and cultural heritage.

Q.: Why a gold standard? Why not pick a basket of precious metals, or of some other marketable commodities to serve as the standard unit of value?

A.: American money doctors arein the habit of ridiculing gold in comparing it to frozen pork bellies that, horribile dictu, have been trading in the same pit since gold was expelled from the Monetary Paradise. This reflects a mindset suggesting that gold, at best, is just one of several marketable commodities, and a basket of wider selection could provide a better monetary reserve than gold.

This position is false. Gold is no frozen pork bellies — wishful thinking of the American money doctors notwithstanding. The reason is that the marginal utility of the former declines more slowly than that of the latter. In fact, the marginal utility of gold declines more slowly than that of any commodity (or a basket of any commodities) known to man. That’s what makes gold what it is: the monetary metal par excellence. That’s what makes gold the only monetary asset that has no counterpart as a liability in the balance sheet of someone else.

Incidentally, there are only two monetary metals: gold and silver. Other precious metals such as platinum and palladium are not monetary metals. What sets monetary metals apart from other precious metals is their stocks-to-flows ratio. They are a high multiple for the monetary metals, but a small fraction for other precious metals.

* * *

Q.: Critics say that historically, under the gold standard, the world economy languished, trade was sluggish, technological and therapeutic innovation was unexciting, in a word: the gold standard has never worked well. How do you answer that?

A.: This allegation is just the opposite of the truth. The heyday of the gold standard was during the 100 years’ period between 1815 (the end of the Napoleonic wars) and 1914 (the start of World War I). This was the age of transcontinental railways, intercontinental shipping, when all the key inventions were made that ushered in the age of electricity, of the internal combustion engine, of aviation, of wireless telecommunication, of the X-ray, etc. Financing these discoveries and their applications in transportation, telecommunication, and therapeutics would have not been possible without the gold standard and the accumulation of capital that it facilitated.

Q.: Introducing a gold standard hardly seems possible today, in view of the gigantic injections of new currency into the economy world-wide. How could the gold standard handle that?

A.: It wouldn’t. The new gold standard would let the regime of irredeemable currency run itself aground and boil in its own juices of excess fiat money. When it can no longer handle the task of delivering food and other necessities to the people, when it can no longer provide employment to the majority of the population, the gold standard will spring back to life spontaneously. People have to eat, and they also have other necessities. They must have work to be able to earn a living. It will dawn on the world, maybe unexpectedly for the majority, that gold has a place underneath the Sun. Gold is that hard core of capital that can be destroyed neither by inflation nor by deflation, that will survive any consolidation of balance sheets. Gold is at the heart of the healing process of the world economy that makes survival possible.

Q.: Is a gold standard the ultima ratio to cure the human weakness, the belief that you can multiply wealth by printing money without limits? Is it not true that no central bank could ever stand up to do-gooder politicians?

A.: Friedrich Hayek, the Nobel-laureate Austrian economist thought so. He said that there would be no need for a gold standard but for the propensity of governments to spend beyond their means.

I don’t believe that. I see gold everywhere, independently of the government’s spending propensities. Even without a gold standard, gold has a role to play in forming prices, wages, rents, the rate of interest. It helps to find the balance between short- and long-term satisfaction; it determines the marginal productivity of capital and labor. It is like air, we don’t see it yet it’s there and, without it, there is no life.

You need a yardstick to measure value. Gold is the raw material of which that yardstick is made.

Q.: In the past states also went bankrupt, some repeatedly, e.g., ancient Athens, Rome, or France in the 17th and 18th centuries. This shows not only that such occurrences are possible under a gold standard, but also that the powers-that-be could always circumvent limitations put on coining money and restrictions on banking whenever the idea of scarcity of gold takes hold. What makes you think that a future gold standard may be more successful, and could endure for a long period of time?

A.: There is no hard-and-fast limit on the amount of self-liquidating credit that can be safely built on the unit weight of gold. Improvements in clearing techniques, such as those in telecommunication, freight-forwarding and warehousing will increase the amount of credit outstanding while there is no corresponding increase in gold bearing that credit. It is this property that makes gold the ultimate extinguisher of debt. It is simply not true that restrictions put on the economy by the gold standard are “contractionist”, and that the “powers-that-be” are justified in breaking those fetters.

Gold is not scarce: in terms of its stocks-to-flows ratio gold is the most abundant substance on earth. But for the gold standard to endure man has to have confidence in the promises of government to pay gold. If this confidence is impaired, gold tends to go into hiding and then the system may break down. The answer to the problem is that the government must keep faith with its subjects without fail.

* * *

Q.: What is your opinion of the governments’ handling the great financial crisis, the Greek crisis, the crisis of the Euro, and the other currency crises brewing? How long can they contain the “debt-firestorms”? Will they be able to extinguish it with a shower of new debts?

A.: The governments of the industrialized countries bear full responsibility for bringing the world to the brink of this crisis — the greatest financial and economic crisis ever. They should have resigned in admission of their guilt, and let new governments armed with a better economic theory take over and work out the remedy. Instead, they doggedly cling to power. Their analyses of the causes of the malady are faulty; the remedial measures they have recommended are the old nostrums, incredibly inept, nay, counter-productive.

Take the example of the runaway growth of the debt tower. The great financial crisis, the Greek crisis, and all the currency crises still at the brewing stage, are part of the same problem, namely, the debt problem. It goes back to the year 1971. On August 15 of that fateful year the U.S. government defaulted on its international gold obligations. By now the debt tower threatens with toppling, and burying the world economy under the debris.

The reason for the exponential growth of debt in the world is that the international monetary system has been lacking an ultimate extinguisher since 1971. Total debt in the world can only grow, never contract. We should do well to remember that, since time immemorial, gold has successfully acted as the ultimate extinguisher of debt — until it was forcibly removed from the international monetary system in 1971. Paying debt in gold extinguished the debt, period. Since 1971 governments have pretended that paying debt in U.S. dollars extinguished it, too. But in fact it did not. Debt was merely transferred from the debtor to the U.S. government and kept accumulating. Transferring debt is not the same as extinguishing it. Debt accumulation has a natural limit. This limit has now been reached.

Your description of the debt-tower as a firestorm is apt. Governments of the leading industrialized countries will not be able to contain the firestorm they have started. They are just pouring oil on the fire.

Q.: How will the current situation unfold? Do you think resolution will come in the form of hyper-inflation or deflation?

A.: One has to be careful with these terms. Both inflation and deflation mean destruction of wealth through destroying the value of obligations; the former through depreciation, the latter through default. It is also possible to have a mixture of both simultaneously.

But if you insist on my answering your question, chalk me up in the deflation column. Signs of deflation are all around us. Rivers of new money are unable to turn receding prices and interest rates around. Confidence in promises to pay is evaporating. Banks do not trust one another with overnight money. Paper gold is being pushed down the throat of those wanting physical gold. Worse still, vanishing confidence has reached the stage of contagion. Paper wealth is disintegrating before our very eyes. The domino-effect is spreading: the collapse of one firm brings down two other. Most frightening is the shrinking of employment. It is leading to a break-down in law-and-order. Governments are completely unprepared and think that it is just a matter of printing more money, for which they are superbly equipped, to prevent further contraction.

Q.: Your answer to my next question would certainly interest our readers very much. Are you invested in gold, silver, and other precious metals? Would you still buy them at these elevated prices?

A.: I take exception to your use of the word “investing”. To my way of thinking holding monetary metals is not investing but more like taking out an insurance policy. I don’t think the other precious metals (or stones, for that matter) make good investment. As far as the monetary metals, gold and silver, are concerned, you would be well-advised to buy some more every month routinely, regardless of the price. You should look at your holdings as you look at your fire insurance policy. If you never need to collect, well, so much the better.

At the optimum, you would track the value of your assets not at their dollar price but at their gold equivalent. In other words, you would carry your balance sheet, both on the asset and the liability side, not in dollar or euro units, but in gold units (ounces or grams). It takes self-discipline to do that, but this is the only way to avoid the pitfall of always looking at your own face in a curved mirror. The torsion of the image may easily translate into torsion of the mind.

Q.: I come to my final question, if I may. What do you think the gold price will be in terms of U.S. dollars or euros in 3 to 5 years’ time?

A.: I am sorry, but I am not a practitioner of clairvoyance. I think I would compromise my reputation as a scientist if I ventured to answer this question. Besides, I don’t think I am very much interested in knowing. Guesses at the future price of gold are dime a dozen.

A more appropriate — and interesting — question may be whether the dollar and the euro will still be around in 3 to 5 years. I am not sure about the euro, but I think the dollar will definitely be around 3 years from now. 5 years — maybe not, but I wouldn’t be surprised if the staying power of the dollar extended beyond 5 years.

It is dangerous to underestimate the strength of the poison you have to live and work with.

Interviewer: Thank you for your time to talk to us.

Professor Fekete: Thank you for the opportunity to express my views.

May 6, 2010.



Antal E. Fekete



DISCLAIMER AND CONFLICTS
THE PUBLICATION OF THIS LETTER IS FOR YOUR INFORMATION AND AMUSEMENT ONLY. THE AUTHOR IS NOT SOLICITING ANY ACTION BASED UPON IT, NOR IS HE SUGGESTING THAT IT REPRESENTS, UNDER ANY CIRCUMSTANCES, A RECOMMENDATION TO BUY OR SELL ANY SECURITY. THE CONTENT OF THIS LETTER IS DERIVED FROM INFORMATION AND SOURCES BELIEVED TO BE RELIABLE, BUT THE AUTHOR MAKES NO REPRESENTATION THAT IT IS COMPLETE OR ERROR-FREE, AND IT SHOULD NOT BE RELIED UPON AS SUCH. IT IS TO BE TAKEN AS THE AUTHORS OPINION AS SHAPED BY HIS EXPERIENCE, RATHER THAN A STATEMENT OF FACTS. THE AUTHOR MAY HAVE INVESTMENT POSITIONS, LONG OR SHORT, IN ANY SECURITIES MENTIONED, WHICH MAY BE CHANGED AT ANY TIME FOR ANY REASON.

Copyright © 2002-2008 by Antal E. Fekete - All rights reserved

24hgold. (http://www.24hgold.com/english/contributor.aspx?rss=true&article=2935171606G10020&redirect=false&contributor=Antal+E.+Fekete)

[pywong]

In posts 4 & 5, we wrote about how the Ruling Class wage propaganda warfare on the masses as well as use the Rat Race System to exploit them.


]THE RAT RACE PART IIIA - HOW THE SYSTEM WORKS?
GREED, IGNORANCE, APATHY & SLOTH, Conformity, Conditioning, Start Early, Illusion of paper money, Education, Obedience, Financial Illiteracy, Distract them, Keep them busy, Inflation, Assigning Labels, Divide & Rule, Envy, Fear, Ego, Sloth & Resistance to change, War

Hishamuddin Rais has an interesting term to describe what UMNO has done to the Malays - bonzification of the Malay mind. He also calls upon the Chinese to sympathize with the Malays and help them break out of the trap. I can relate to that.

Hisham Rais: Umno has shrunk the Malay mind

Joseph Sipalan
Sep 7, 10

Renegade artist Hishamuddin Rais declared that the Malay mind has been "bonsified" (shrunk and distorted, like a bonsai plant) by Umno's political agenda in order to perpetuate the culture of fear against non-Malays.

The former ISA detainee said that it is typical of Umno to play on racial fears to convince the public that they are the best option for Malays to remain at the forefront of social and economic development in Malaysia.

"This process that 'bonsifies', nullifies and stupefies (Malays) goes back to the British time. (Malays) are led by lazy leaders and lazy thinkers," Hishamuddin (middle in photo) said at the 'Malays are muted too!' forum at the KL and Selangor Chinese Assembly Hall last night.

The controversial activist noted that Malays have been indoctrinated to fear new ideas and 'ghosts' of Chinese supremacy, to the point that the Malay public believe that the 'ghosts' are real threats to their existence.

Taking the example of bomoh or witchdoctors, Hishamuddin claimed that Umno employs the same tactics to convince the Malays that they are constantly battling against hantu (ghosts).

"In Malaysia it is very simple. The hantu for the Malays are the Chinese. The Malays are made to believe that there are all sorts of hantu, to encourage the public to be thankful for Umno (to save them).

"It's just like (the tactics of) the bomoh in the kampung, where kampung folk will be told that there are all sorts of hantu to deal with... Umno uses the same modus operandi," he said.

Playing up fears

Hishamuddin claimed that just like the colonial British in Malaya, Umno realises that a liberated Malay mind is a threat to their existence, hence the ruling party's efforts to stop the liberalisation of the Malay mindset.

He alleged that Umno would never agree to free the Malay mind as it is all about maintaining the ruling party's power and control over Malaysia's wealth.

Hishamuddin noted that such fear of losing power has only taken hold fairly recently, evident especially in the ruling government's efforts to perpetuate the fear of a recurrence of the May 13, 1969 racial riots.

"They put the fear in Malays that the Chinese wanted to take over the country. I thought that (notion) was mad, because this is the most mismanaged country, with corruption in the police and the judiciary.

"Because the country is so mismanaged, do you really think the Chinese want to take over the country?" he quipped.

Speaking to an audience of around 160 people, Hishamuddin stressed that the ruling government is simply working on the premise of "manufactured consent"', where it employs public institutions such as the Malayan Sultanate to force people to agree with whatever opinions or policies it makes.

He said that it has perpetuated the culture of 'lazy thinkers' among Malays, where the best minds end up being unwilling or unable to contribute to the community's advancement.

Licence just to laugh

Hishamuddin stressed that it is unfortunate that the best Malay minds have been left out of the nation's education system, to make way for 'half-educated' Malays who are bent on maintaining the status quo.

"Malays have become very lazy thinkers. To the non-Malays, I ask that you have sympathy as the Malays are faced with a situation where their reading material is very limited and (the government) allows less and less people (to form their own opinions)," he said.

Taking the example of the recent banning of comics by cartoonist Zulkiflee Anwar Ulhaque, better known as Zunar (right), Hishamuddin said it is ridiculous that public expression, particularly by Malay artists, should be censored.

"Just imagine, just to laugh you need to get a licence... and if you want a licence you will have to engage in corruption to pay the Marxists," he said. Malaysiakini. Subscription required. (http://malaysiakini.com/news/142142)

[pywong]

In the 2nd article below, read the garbage and twisted logic Mahathir spews out and the bonzaied brains lap it up. Goes to show how successful UMNO has become in warping human brains. When will the Malays stand up and fight this evil together?

Finally, Mahathir concedes he screwed the merit system

Mon, 06 Sep 2010 14:02

Former Prime Minister Mahathir Mohammad in a statement (FMT Sept 4, 2010) finally admitted that he and the Umno government intentionally discriminated against innocent non Bumiputra students by denying their educational rights as enshrined in the Constitution.

He said: "If we use the merit system , half of the university students (Bumiputeras) don't qualify..."

What one can gather from his statement is that the education system over the past 53 years has failed to produce Bumiputera students to meet the set requirement by Umno's own higher educational qualification merits.

Despite the billions spend to improve the educational achievements among Bumiputeras, citizens of this country are now been told by this longest serving Malaysian Prime Minister that Bumiputera students in Malaysia can only survive upon discrimination against their fellow non Bumi students. What a shame!

The former Prime Minister also revealed the truth on why local public universities are constantly dropping in international standard ratings. He admitted that half of the undergraduates did not qualify for entry into universities but were nevertheless granted places merely on race considerations.

I wonder how he justifies such brutal educational injustices. The moment a government tolerates such discrimination, it is actually planning to fail the country and its citizens over the years to come.

By implementing this racist based policies, thousands of fully qualified non Bumiputera students are cruelly denied entry into matriculation courses , local public universities intakes as well the PSD scholarships.

To summarise Mahathir's statement, he as the former prime minister and those in power ruling this country today clearly do not implement meritocracy in local university intakes, half of our university students are actually non qualifiers for higher education.

Fully qualified non Bumiputera students are oppressed and suppressed by the implementation of racially biased educational discrimination. The Umno-led Barisan Nasional government over the past 40 years have conveniently violated article 8 and 12 of Federal Constitution. FreeMalaysiaToday.... (http://www.freemalaysiatoday.com/fmt-english/opinion/letters/10006-finally-mahathir-concedes-he-screwed-the-merit-system)

.................................................. .....................................
*SAYA UCAPKAN SELAMAT MENYAMBUT HARI MERDEKA KE-53 KEPADA SEMUA RAKYAT MALAYSIA KHUSUSNYA KEPADA PEMBACA BLOG INI*

1. I dislike to return to this subject but I need to explain myself.

2. I was prompted to write about the racism in meritocracy because of the reaction to Malay criticisms against the ideas coming out of the Chinese Economic Congress.

3. The leader who made the statement on doing away with quotas etc said that cannot we discuss anything without (the Malays) raising racial issues. He apparently considers his call for meritocracy was not racial.

4. It is racial beause he was advocating taking away the protection afforded by the NEP and quotas from the bumiputras and not from any other race. Obviously he believes that without these protections the bumiputera would lose against the non-bumiputera.

5. As much as giving protection to one race is racial, taking it away from that race so as to benefit another race must also be racial. The suggestion coming as it did from a racially exclusive economic congress must be because it is in the interest of that race. That must be racial even though the demand is for meritocracy.

6. I am not proud of the protection afforded the bumiputera. It implies weakness. I don't think Malays and other bumiputera like to think that they are inferior in any way.

7. But the reality is that in Malaysia the bumiputeras need new skills and a new culture even. These cannot be had by them in a mere 20 years. The original planners of the NEP were too optimistic.

8. I had suggested merit for university entrance in order to shock the bumiputera into getting serious about their education and their own future. However it did not work.

9. In education whereas there is about 60% bumiputera in the Government universities, there are less than 10% in the private universities. And there are more private universities, university colleges and colleges than there are public (Government) universities. Even the 10% bumiputera are there because of scholarships by MARA. Take the scholarships away and there would be practically none.

10. Why is it that the focus is only on what is done by the Government? If the bumiputera in Government universities should be reduced, then the bumiputera in the private universities should be increased. Or else meritocracy would reduce the number of bumiputeras getting university education. Or is it the intention to deny bumiputeras higher education? They are not the best but they are qualified.

11. It is the same with foreign universities. Because they can afford it there are more non-bumiputera than bumiputera in foreign universities. This must increase the disparities in higher education between different races.

12. Lest I be accused of making unfounded assumption, a proper audit should be done by an impartial team.

13. When I was still PM, the Government decided to allow for private colleges and universities to be set up. They can twin with recognised foreign universities and should issue their diplomas and degrees. The reason for allowing private institutions of higher learning is to reduce cost of tertiary education so that the parents who could not afford to send their children abroad can have access to foreign qualification from local private institutions. You can guess who are the beneficiaries of this Government policy.

14. As for contracts even with the 5% advantage given to bumiputera contractors, many of the Government contracts do not go to them because of their lack of capacity. Even if they do get, non-bumiputera contractors get most of the sub-contracts etc.

15. Actually construction by the private sector is bigger than the public sector. In the private sector the bumiputera contractors get next to nothing. I suppose this is because the private contracts are given based on merit. Or maybe it is not. I don't know.

16. Take away the minor protection afforded by the NEP and the bumiputera will lose whatever that they may have. Then racial division will be deepened by wealth division. I don't think this would be good for the country. Remember it was the disparity between rich and poor in Europe which led to the violence of the Communist revolution.

17. I may be labelled a racist but fear of the label will not stop me from working for what I think is the good of the country. Nothing will be gained by dividing the people of Malaysia into poor bumiputera and rich non-bumiputera. The time is not right for disregarding the disparities between the races in the interest of equity and merit.

18. For 46 years this country enjoyed relative stability and consequently good growth. But today the races are more divided than ever. Everyone has become racist, talks about meritocracy notwithstanding. Everyone is thinking about his own race. If I am included it is because I think it is dangerous for the rich to take away what little the poor has. che det (http://chedet.co.cc/chedetblog/2010/08/meritocracy.html)

[pywong]

See post #11 for earlier thread. This is designed to keep you stuck in the Rat Race for life.

Friday, 11 March 2011 07:04
http://cdn.malaysia-chronicle.com/media/k2/items/cache/8fb6c5c2ff73e0b057e6a54f9a079159_S.jpg

Debtors for life just to enrich crony-developers
Written by Malaysia Chronicle

PENANG - The Federal government has been warned that its newly-launched 'My First Home Scheme' would eventually drive young working Malaysians into deeper debts.

Steven Sim, who is Penang DAP Youth's treasurer, said the scheme, which enables young working Malaysians to obtain up to 100 percent financing to buy their first home, was an instance of how short-term solution was used to cover-up "long-term major social problem".

“Recent reports showed that 60% of Malaysian households are earning a monthly income of less than RM3000 while 40% of the households are living with an average monthly income of RM1500.

"Through this latest scheme, instead of addressing the issue of soaring property prices and being responsible as a government to provide affordable housing, the government is encouraging Malaysians to take up more debts,” said Sim in a statement to Harakahdaily.

Sim reminded that spiralling property price had been long neglected by the government, and this he attributed to unplanned urbanization which encouraged mass migration of workers to cities, as well as lack of interest to provide proper housing to the people.

"Government public housing schemes on the other hand are poorly managed, resulting in many of these houses in bad conditions due to years of neglect and abuse of the system by cronies who received public housings only to rent them out to others, mainly foreigners," he said.

Prime Minister Najib Razak, in launching the programme yesterday, said those earning RM3,000 could look forward to buying houses costing from RM100,000 to RM220,000 with full loans offered by 25 financial institutions with a repayment period of up to 30 years.

To qualify, buyers must be employed by the private sector for at least six months.

'Only property developers will gain'

Sim however said the scheme would aggravate the country’s household debt, and pointed out a Bank Negara statement recently revealing that the country’s household debt had risen to a staggering RM577 billion, or 74 percent of the country’s Gross Domestic Products (GDP).

“The Government’s latest programme will drive up debts of the already debt-laden Malaysian families. The Prime Minister’s latest move can only continue to benefit property developers and the banks without solving the problems faced by the average Malaysians,” he stressed.

Rather than allowing the market to dictate on such basic necessity as housings, Sim urged the government to take on a more proactive role in providing affordable and quality housing for the people.

“It should also upgrade existing public housing schemes. In summary, the government should do a total review of the national housing policy to address the problem of housing and not drive Malaysians, especially young people into more debts.”



- Harakahdaily malaysia-chronicle. (http://malaysia-chronicle.com/index.php?option=com_k2&view=item&id=8822:debtors-for-life-just-to-enrich-crony-developers&Itemid=2)

[pywong]

Segment 1 of 2: The Exploiter's Strategies

THE RAT RACE PART IIIB: MENTAL MODEL NO. 2 – THE CIRCLE
See Malaysia-today (http://www.malaysia-today.net/2008/content/view/3355/1/) 25 Feb 2008, or
usj.com.my (http://www.usj.com.my/bulletin/upload/showthread.php?t=22580) 20 Apr 08

For those who wish to explore more, we recommend George Orwell’s classics Animal Farm (http://www.george-orwell.org/Animal_Farm/index.html) and 1984 (http://www.george-orwell.org/1984/index.html) or to watch the movies Soylent Green (http://www.imdb.com/title/tt0070723/plotsummary) or The Matrix (http://www.imdb.com/title/tt0133093/).

In 1984 (http://www.george-orwell.org/1984/index.html) the ruling party’s slogans were:

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH

The reverse of the truth was exactly what we saw in Part I (We Are Doing Well).

In case you don't understand what this clown is talking about, read George Orwell's 1984 above. BTW, he single-handedly launched Reformasi. History will give him due credit for his efforts. All these people are leaders in the UMNO War Machine. And their reward is Ascension to Heaven when they retire.

Question: Can you trust that the EC will be run impartially, seeing that they are infested with ex-civil servants?

Human rights movement like communism, says former IGP (http://www.themalaysianinsider.com/malaysia/article/human-rights-movement-like-communism-says-former-igp/)


By Yow Hong Chieh
October 26, 2011
http://www.themalaysianinsider.com/images/uploads/2011/october2011/26/20111026-rahim-nor-perkasa01.jpg
Tan Sri Abdul Rahim Mohd Nor chatting to Shazryl Eskay Abdullah at the Perkasa general assembly. – Picture by Jack Ooi

KUALA LUMPUR, Oct 26 – The nation’s former top cop has likened the rise of the human rights movement in Malaysia to communism, and said this would lead to the questioning of “accepted truths” like the social contract.“Every century has its wave... and we cannot avoid being hit by this wave.

“Now, it’s the human rights wave... Before that, it was the wave of Marxism, Socialism,” former Inspector-General of Police Tan Sri Abdul Rahim Mohd Noor said today.

He was speaking at the 2nd Perkasa general assembly at Dewan Centrum here today after officiating the event.

Calling the human rights movement a new religion, Rahim warned that civil liberties activists saw the US and UK as their spiritual home and drew parallels to how the Comintern had engineered the global spread of communism from its Moscow base.

“Now we see many things being questioned because of the human rights wave,” he said.

“They question the self-evident [social contract], as though they’re trivialising what was agreed upon.”

He added that many leftist Malay leaders during the post-World War II period had been tricked into thinking the communists had their interests at heart but realised later that they were being used by “wolves in sheep’s clothing”.

Rahim is best remembered for giving former deputy prime minister Datuk Seri Anwar Ibrahim a black eye following the latter’s arrest under sodomy charges in 1998.

Also present at the general assembly today was businessman Datuk Shazryl Eskay Abdullah, who was fined in June together with two others for screening an alleged sex video of Anwar.