Thread: The Global Rat Race

  1. #21
    Join Date
    Oct 2008

    Re: The Global Rat Race

    In the Rat Race series, we have taken the approach that there is very little transparency in the presentation of information by the Government. In order to assess the future scenarios for the country, we look outside where there is more information available, in order to make an educated guess on what is likely to happen to us. One of the best mirrors for this purpose is the US, where there is a lively independent group of people who trawls through the information and come out with analysis that helps us to have a broad overview quickly. Bill Bonner of the Daily Reckoning is one of those people.

    Using the information from the US, what can we expect for Malaysia:
    1. Housing prices will drop. The foreigners who have been pumping money into the high end houses in KL will pull back to their home country to plug the holes there.

    2. Our economy will go into recession. People will cut down on spending and start saving. Those who are maxed out on credit are in big trouble. They will begin to appreciate the saying:

    Banks have a habit of removing your umbrella just when you need it.

    The sharp fuel price hike has damaged our economy fatally. The reduction in fuel prices is coming in too little too late because the shock to the businessmen's confidence has been too much. We can expect up to a 30% rise in unemployment under the worst case scenario. The transport industry is down 50%. They don't know what hit them.

    3. If the DOW crashes to 4000, we can expect the KLSE to follow along, maybe down to 600 or so.

    4. If the US goes into sovereign default and institutes capital control, the financial system could crash. The RM will go down with it. The only safe haven is gold and silver.

    5. The oil producing countries and China will probably come out all right.

    6. Malaysia: We can thank our lucky stars that we have PR in Selangor. Even though they are not the brightest in the world, at least, they listen to advice and take corrective steps. Their strength during the coming crisis is their ability to get the people to co-operate and pull together.

    Right at this moment, meetings are being conducted by concerned people with PR leaders on how to save the economy and help the people survive the coming crisis.

    At the Federal Level and in the BN states, UMNO is still in denial. So, probably the best thing is to follow Najib's advice -

    change your life-style.

    Read on..

    The Daily Reckoning’s View on Outlook in the US.
    Paris, France, Friday, October 31, 2008
    *** Consumers are guarding their wallets...look for unemployment to keep going up...
    *** Globalization doing the moonwalk...what conditions await the next president...
    *** The Bank of Bernanke will do what it promised to do...questions from dear readers
    “U.S. consumers cut back sharply,” says the front page of today’s International Herald Tribune .
    “Decline is biggest since ’80; data show a shrinking GDP.”

    Well...what did they expect?

    We are in an especially cheerful mood here at the Paris headquarters of The Daily Reckoning . Why? Because everything is happening as it should. God is in his Heaven. The Queen is on her throne. And the Big Boom is turning into a Big Bust.

    As predicted in this space, many times, consumer spending is falling hard. But what else could it do?
    Let’s look back over our shoulder to see how we got to this place.

    The feds goosed up the slumping economy in 2002 with history-making inputs of new cash and extra-easy credit. What followed was an once-in-a-lifetime bubble in housing...which lifted up the entire world economy. Americans bought things they couldn’t really afford with money they didn’t really have. And the whole world rejoiced.

    But when housing prices got so far out of whack that the average person couldn’t dream of buying the average house, something had to give.

    Housing began to fall...taking the mortgage-backed speculative finance business down with it.
    At first, few people took it serious; so it took a long time for homeowners to react. But they had to cut spending sooner or later.

    In an economy that is nearly 80% based on consumer spending, less spending is bound to cause a recession.

    And when businesses take in less revenue, their stock prices are sure to fall.
    All that has happened, just like it should.

    But what should happen next?

    First, we should begin to see some shocking unemployment numbers. It takes time to prune payrolls, but we should be seeing the deadwood on the ground very soon. And then some green wood. Good, young employees will be cut along with the baby boomers.

    A new hotel opening in Las Vegas put out a call for employees. It got 67,000 applicants for 500 jobs. And American Express said yesterday that it will cut 7,000 employees.

    Unemployment is officially at about 6% now. It will pass 10%...and keep going up.

    Then, we will begin to see a big increase in bankruptcies, defaults, and foreclosure. Even after layoffs and cutbacks, businesses will be unable to pay their bills. Laid-off workers will find it tough to find new jobs; they will declare bankruptcy too. Corporate bonds will become worthless. Billions in automobile and credit card debt – along with mortgage debt – will become uncollectible.

    What else will happen?

    Globalization will walk backwards. This time, there will be no need for Misters Smoot and Hawley. Mr. Market will do their work for them. Global trade will collapse as the consumers of first and last resort – Americans – stop spending.

    We’ve already seen this happening in the capital equipment area. Volvo got orders for 41,970 of its big trucks in the 3rd quarter of 2007. In the 3rd quarter of 2008, meanwhile, Volvo got a total of 155 orders.
    As Mark Gilbert reports at Bloomberg , if no one buys trucks, you don’t have to ship trucks. Shipping rates are collapsing too. Now it barely costs 10% as much to ship a truck as it did at the beginning of the year.
    It’s a “descent into Hell,” says Michael Bloomberg himself, describing what waits for the next U.S. president.

    *** So, you see, dear reader, what MUST happen DOES happen. Sometime it takes longer than you expect. And often it doesn’t happen exactly the way you expect. But it is a relief to know that gravity still works...what goes up still comes down. ‘Regression to the mean’ is another old law still in force; when things become extraordinary, you can bet they will go back to normal sooner or later.
    But what does this mean for stocks? And what about gold? The dollar?

    Hey, you’re asking a lot from a free publication. But what the heck...we’ll make some guesses and remind the reader that he is likely to get no more than he paid for:

    Stocks typically regress to the mean, along with everything else. The ‘mean,’ depending on how you measure it, would put the Dow between 6,000 and 9,000. But Mr. Market is can be a devilish fellow. He usually causes stock prices to regress beyond the mean, before he lets go of them. This could take the Dow down to 5,000...perhaps to 3,000...before it finally reaches a bottom.

    And before we make guesses about gold and the dollar, we will tell you another thing that MUST happen.
    Fish gotta swim. Birds gotta fly. And the feds gotta try to pump more liquidity into the system. All over the world, government officials are taking command of the situation. Well, they are taking command of banks...of trillions of dollars worth of bailout funds...interest rates...and financial rules.

    Yesterday, for example, Japan announced that it would spend 5 trillion yen, about $273 billion, in a “stimulus” package. Also, the Bank of Japan told the world that it, too, was cutting rates. This news came as a surprise to us. We didn’t think Japan had any rates left to cut. But the BOJ nevertheless announced that it would shave the short stump of its main rate down to 0.3% and that henceforth it would make commercial loans at 0.5%.

    By contrast, the U.S. Fed still has 100 basis points to work with. And the U.S. Congress is said to be planning another stimulus package of its own – surely wrapped in bright Christmas paper. The price tag might be another $400 billion, according to our sources.

    Not only are the feds trying to bail out the U.S. economy, they’re also lending $120 billion to a group of foreign countries in order to help them swap their currencies for dollars. At least, that’s what it says in the paper...the actual transaction is a mystery to us.

    The Russians are bailing out their own rich people. At least they’ve got some real money to work with – a fund of $200 billion. And the IMF has pledged to lend $100 billion to wherever it is needed.

    You can also count on more rate cuts...trillion-dollar trials...giveaways...and grandstanding. There will no doubt also be a “jubilee” movement – demanding forgiveness of debt.

    The big questions are when and how will these things affect the feds’ ability to borrow? We don’t know the answer...but we have watched Treasury yields rising ominously over the last few days. That could be a sign that the worst is over for the economy. Or, it could be a sign that lenders are worried about US public finances.

    If the world economy continues to weaken...and turns into the FWD (First World Depression), as we think it will...none of these measures will do any good. Finally, the U.S. government will run out of credit, out of money, out of time, and out of luck.

    Then, the Bank of Ben Bernanke will do what it has promised to do: it will print money. And when that happens...or even when investors begin to suspect that it might happen...the dollar will collapse and gold will rise.

    *** “Here’s my question,” begins a Dear Reader. “If in any business deal someone loses or spends money and then someone makes money on the other end of the deal, my question is where did all of the money go? Who is holding on to it? Why? I don’t understand the concept of a global recession. Please help. Thanks.”

    *** Another reader answers the question:
    “I feel terrible. I feel like this thing has taken 10 years off my life. I took your advice. I think. I put half my assets in cash and gold. went down, but not catastrophically, so I’m okay there. But the other half, I put into stocks. Not US stocks. I bought India and Japan and some other foreign markets that I believe you had mentioned. Maybe over the very long run, those stocks will prove to be good buys. I don’t know. But I’m down about 50% in those investments...meaning, I’ve lost 25% of my wealth.

    “Where did it go? It just disappeared. Nobody made any money on the other side of the trade. Because I didn’t sell. I held on, thinking that the bottom was in each time they went down. But they just continued to sink. I still have them. And now I’m afraid they could go down another 50%...but I’m so far down already I don’t care.

    “I’m a big boy...I don’t mind the loss of money so much. But I can’t stop thinking that this money I made over the course of a 40-year career in business. It didn’t come from speculation. It’s not easy-come, easy-go money, in other words. Instead, it’s a quarter of the wealth I’ve accumulated over 4 decades of work. So, it’s as if an entire decade of my life had been lost.”
    Bill Bonner


  2. #22
    Join Date
    Oct 2008

    Re: The Global Rat Race

    It is always good to remember that the Ruling Classes throughout the world share information and learn from each other. What works in one country in robbing the people will be monitored and copied by other governments. So, it is beneficial to understand what Argentina is doing right now to her people.

    Here are a few common tricks:
    Raiding the pension funds - remember RM 5 billion from the EPF used in bailing out the stock market?
    Wives of political leaders using charities to rob the people - remember Balkis?

    Read on...

    Disappearing on the Pampas 011108

    The Daily Reckoning PRESENTS: The average cab driver in Buenos Aires knows more about financial crises than Trichet, Brown and Paulson put together. His training comes neither from Keynes nor Smith. And what the typical Argentine has learned, the English and the Americans are about to discover for themselves. Bill Bonner explains...

    Last week, at the annual convention of the nation’s mortgage bankers in San Francisco, protestors used bullhorns to heckle attendees; they demanded a moratorium on foreclosures.

    Meanwhile, south of the Rio Plata, a mob formed in Buenos Aires too. Their gripe was that the government of Christina Fernandez de Kirschner was grabbing their pension money. ‘No way,’ replied the queen of the pampas. We are just going to “rescue” it from the wicked capitalists. Like a Doberman rescuing a hot dog, the Argentina government will swallow $26 billion worth of private pension funds. The federales say they are taking the money into protective custody. It will just “disappear,” say protesters.

    The signal on the flag here unfurling is that, compared to the Argentines, the American mob is a bunch of naïve chiselers. At least the gauchos can tell the difference between self-delusion and grand larceny. But the average cab driver in Buenos Aires knows more about financial crises than Trichet, Brown and Paulson put together. His training comes neither from Keynes nor Smith. The great Anglo-Saxon economists may have laid out their theories of political economy. But they left some important holes. Argentina’s presidents have filled in the blanks. And what the typical Argentine has learned, the English and the Americans are about to discover for themselves.

    Leaving Argentina, our cab driver tried a familiar flimflam. Hearing a foreign accent, he said: “My meter is broken...but the fare to the airport is always a flat 200 pesos.” On the pampas, no self-respecting taxi driver gives a sucker an even break. But then, rarely do markets or governments, either.

    “What is the message that the government is giving to the people today?” asks Argentine economist, Roberto Cachanosky. “That it is ready to take their revenues and their savings with no limit...and also, that they will continue to give out information and make announcements that, to say it gently, have no connection to reality.”

    “The only secure retirement is one backed by the state,” said a member of the Peronist party, proving Cachanosky’s point. As the country approached bankruptcy in 2001, its leaders followed the traditions of all Peronists, Democrats, Republicans, and National Socialists; when they get themselves in a jamb. First, they lie. Then they steal.

    Argentina has a parallel system of state-owned and privately-owned pension accounts. Its state system pension payments were cut by 14% in 2001, and then cut an addition 66% when the peso was devalued the following year. Now, the Kirschner government is nationalizing the private accounts. Set up in 1993, these funds must invest 60% of their money in Argentine bonds. Naturally, bonds backed by the Argentine government are not necessarily the strongest credits in the world. Argentine peso bonds – like pensions – are adjusted for inflation. But the government lies, with a measure of inflation that is less than half the real 30% rate. As to the dollar bonds, it steals. In 2001, it defaulted on $95 billion worth of loans made by overseas lenders. It didn’t settle up until 4 years later – stiffing the foreigners for 70%. And now the government is in trouble again; it must make a big payment to overseas lenders in 2009. Its main exports – soybeans, gas and oil – are down about 50% this ye

    Things have a way of disappearing in Argentina. After WWII, hundreds, maybe thousands, of Nazis arrived in Buenos Aires from Europe, never to be seen again. Whether people are wanted by the law, or not wanted by the lawmakers, they have a way of vanishing. In the 1970s, when the generals running Argentina wanted to get rid of their opponents, they called on the old Nazis to help ‘disappear’ thousands of them.

    Money disappears too. More than a half century ago, Evita Peron posed as an angel. She set up charitable organizations to help the poor and handed out Christmas presents, personally. After the holidays, she went back to her tricks – making the money disappear from the charitable funds and re-appear in her Swiss bank account. And then, after her spirit gave the world the slip, Evita’s own corpse disappeared. People wondered what had happened to the husk of her, until it was retrieved by Juan Peron 16 years later.

    Senora Fernandez is a practiced magician too. Her recent acts of larceny have included disappearing Aerolineas Argentina from its Spanish owners...and then disappearing the profits of the nation’s farmers, first by preventing them from selling on the open market and then by imposing a confiscatory tax (later withdrawn) on exports.

    “Nationalizing private pensions is theft,” said Juan Domingo Peron himself. The Peronists say they are only acting in the public interest – like the U.S. Treasury and the Bank of England. We would never have done this had there not been a world while financial crisis, they explain.

    “The question that many people ask themselves,” continues Robert Cachanosky is: ‘what rate of interest do you need to compensate for the risk of keeping assets within the reach of a government desperate for more funds?”

    Answering Cachanosky’s question, today, you can buy 8.28% Argentine bonds at 22 cents on the dollar – giving you a yield of 31%. By comparison, a US 10-year Treasury note, at less than 4% yield, looks like a broken taxi meter to us.
    Enjoy your weekend,

    Bill Bonner
    The Daily Reckoning

  3. #23
    Join Date
    Oct 2008

    Re: The Global Rat Race

    Quote Originally Posted by pywong
    The Rat Race Part V – Ch. 3: A Rat’s Look At Malayan History:

    Compare the history related above with that below:

    Rewriting History?
    By MOHSIN ABDULLAH/ MySinchew 2008-11-02 00:00

    The PM wants history to be taught in our primary schools. Some folks in the
    education fraternity are saying let's not rush things. They have their
    reasons. The PM has his.

    But to me the most important question is what do we teach our kids? History
    of our nation of course. But we have heard for so long that our history is
    presented according to the British "perspective". Simply because many of our
    history books were written by British historians- the colonial masters. If
    this is true, are we to use the same books to teach our kids?

    When I was in school years ago(and I really mean many years ago) I read
    history books "proclaiming" CPM leader Chin Peng a bandit. So too were
    Rashid Mydin, Abdullah CD, Shamsiah Fakir But there are many who see them as
    freedom fighters. They were fighting the British for Malayan independence.
    They are telling their side of their story in books easily available in any
    book store. As the books are not banned by the government,can the content or
    part of it be "incorporated" into our history text books?

    "In short will our history books be rewritten?
    Is there a need to rewrite our history?"

    And what about the May 13 tragedy? We have read the "official version" of
    what happened and why. Now we're getting the "unofficial version". Will it
    make into our history school text books?

    Then there was the big UMNO fight of 1987, of which the aftermath could be
    "felt" right to this day.

    And the present day political landscape can be traced to the 1998 sacking of
    Anwar Ibrahim and the reformasi movement.

    There are many more of course. Like it or not it's all part of our history.
    Will it be taught in schools?

    In short will our history books be rewritten? Is there a need to rewrite our

    But first thing first. For starters, an independent body of historians must
    be commissioned to verify the truth, the half truth and the not the truth.
    We must then be brave enough to face the result, the reality. We must learn
    from our history.

    Which brings me to a book written by former politician Fan Yew Teng which I
    bought a long time ago.

    The book was entitled The UMNO Drama. In a nutshell,it documented the many
    power struggles in the party.

    I hope Mr. Fan would not mind me reproducing some paragraphs of his book

    "The serious electoral setback of the Alliance coalition government under
    the leadership of Tunku Abdul Rahman and the subsequent May 13 riots and
    paramilitary rule under the so called National Operations Council left the
    ruling Alliance in political if not organisational shambles. Deep seated
    differences in UMNO,dormant under a deceptive Calm,erupted into fierce and
    open antagonisms. The Alliance had lost it's two thirds majority in
    Parliament,although it still had a comfortable majority".

    "A formidable challenge was mounted against the Tunku by a combination of
    Malay intellectuals, Malay university students and some UMNO personalities
    who included Dr. Mahathir, Musa Hitam, Syed Jaafar Albar."

    "On 17 June 1969, Dr.Mahathir wrote a letter to Tunku Abdul Rahman, making
    scathing attacks on the Prime Minister and UMNO President. Apart from
    accusing the Tunku for being too soft on the Chinese,it also suggested that
    the Tunku should step down as Prime Minister and UMNO President."

    "Mahathir also referred to patronage as a significant factor in UMNO's intra
    party politics. He accused UMNO leaders of having succumbed to the disease
    of dispensing patronage and believing that they no longer needed to heed the
    opinions of their supporters, they disregarded them at every turn".

    "He ( Mahathir) also claimed that the government was apparently oblivious
    top what went on around it".

    Sound familiar? Save for the main characters, the May 13 tragedy and some
    other events, the paragraphs above could very well be used to describe
    current situation in this beloved country of ours.

    There are lessons to be learned today from yesterday for a better tomorrow.
    Afterall, history they say, repeats itself.

    (He is an Editor in Chief for News and Current Affairs of Ntv7 and 8TV)

  4. #24
    Join Date
    Oct 2008

    LIBOR: What happens if people lose confidence in it?

    This issue has been bubbling for the past 6 months and is one more symptom of systemic failure in the financial architecture. Many business transactions are based on the LIBOR and if it cannot be trusted any longer, it will create a lot of problems on how to charge interest rates.

    London Interbank Offered Rate (LIBOR)

    Interest rate at which the London banks are willing to offer funds in the inter-bank market. LIBOR is the average of rates which five major London banks are willing to lend $10 million for a period of three or six months, and is the benchmark rate for setting interest rates for adjustable-rate loans and financial instruments.

    Bankers Cast Doubt On Key Rate Amid Crisis

    LONDON -- One of the most important barometers of the world's financial health could be sending false signals.

    In a development that has implications for borrowers everywhere, from Russian oil producers to homeowners in Detroit, bankers and traders are expressing concerns that the London inter-bank offered rate, known as Libor, is becoming unreliable.

    Libor plays a crucial role in the global financial system. Calculated every morning in London from information supplied by banks all over the world, it's a measure of the average interest rate at which banks make short-term loans to one another. Libor provides a key indicator of ...

    by Jeffrey Cane Apr 16 2008
    Questions grow about a major rate.

    One of the arcane financial acronyms that has gained much prominence over the course of the credit crisis is Libor—the London interbank offered rate. It is the average interest rate when banks make short-term loans to one another.

    It is one of the most important credit benchmarks, used by banks and financial institutions around the world.

    Carrick Mollenkamp of the Wall Street Journal reports that there are growing suspicions that some banks may be underreporting the rates they are paying for short-term loans, undermining the accuracy of the Libor.

  5. #25
    Join Date
    Oct 2008

    Re: The Global Rat Race

    Once in a very rare while, we get the privilege of seeing how the Rat Race System works. This is one of those rare occasions.

    The Rat Race needs the co-operation of the Rats. Constant mass propaganda have dulled the Rats' sense until they lose sight of the fundamentals of exploitation. The current global economic problem has a lot to do with consumer confidence and their reluctance to spend money. When spending stops, the economy stops. The next step to generate expenditure is war.

    If govts resort to printing money to generate consumer spending, the value of the currency will drop. That is why the smart Rat will hide in gold to minimise the impact of Central Bank monetary inflation.

    Governments reflate and gold will rise!
    14th November 2008

    A long and deep recession, possibly a depression is being forecast across a broad front. But the real picture is different. Governments and central banks are not only committed to doing all in their power to resurrect growth and give their different economies ‘traction’ but have begun the vigorous implementation of reflation. They will do “whatever it takes” to get growth and confidence re-established globally. In essence, the crisis appeared quickly and devastatingly out of greedy lending by banks loaning to uncreditworthy individuals on a broad front. It has to be rectified just as quickly because banks control the lifeblood of liquidity in the economy and they will place their financial health well before that of the broad economy and their customers. They have been saved by central banks to date, but it is resumption of growth and confidence, not healthy banks, that must be achieved first. In the major economic blocs of the world actions are underway, to differing degrees, to force the banks to lend or be bypassed, so that the damage they can inflict on growth, through congealed debt and their instruments, is neutralized. The banks have made it opaquely clear, that they will not lend in such a way as to rectify the underlying crises of a dropping housing market and its ‘ripple’ effects on consumer spending. Governments do see banks as an obstacle to the resuscitation of growth and confidence, so their powerful influence over the state of the economy has to be reduced considerably before this can be done. And it has to be done before any semblance of recovery can be achieved again. The longer the process takes the more difficult and lengthy the solution will be.

    Just take a look at the world’s three main economic bloc’s efforts at stimulating growth again:-

    China said it would spend an estimated $586 billion over the next two years, roughly 7% of its gross domestic product each year, to construct new railways, subways and airports and to rebuild communities devastated by the May 2008 earthquake in the southwest. Their reasoning is as follows, “Over the past two months, the global financial crisis has been intensifying daily,” the State Council said. “In expanding investment, we must be fast and heavy-handed.” But in China, much of the capital for infrastructure improvements comes not from central and local governments, but from state banks and state-owned companies that are told to expand more rapidly. China maintains far more control over investment trends than the U.S. does, so they can unleash investments to counter a sharp downturn. The Chinese government said the stimulus would cover 10 areas, including low-income housing, electricity, water, rural infrastructure and projects aimed at environmental protection and technological innovation, all of which could incite consumer spending and bolster the economy. The State Council said the new spending would begin immediately, with $18 billion scheduled for the last quarter of this year. In addition, China has already announced a drastic increase of the minimum purchasing price for wheat from next year, by as much as 15.3%. There is also going to be a substantial increase of the purchasing prices for rice, said the National Development and Reform Commission. In the meantime, they also announced plans to stabilize prices for fertilizers and other agricultural means of production, to ensure that the grain price increase will not be eaten away by input making the price increases real income gains for farmers. This will shore up domestic demand and head off any social unrest in the rapidly growing economy. The government there sees its task to harness all sides of the economy to produce growth while they pull their 1.4 billion people out of poverty. Their recent history confirms their ability to succeed!

    In Europe, with a more Socialist environment than the U.S.A., [meaning greater central government control over the economy], we believe that after bailing out so many European banks, a very heavy pressure will be put on banks to vigorously lend down to street level again. President Sarkozy’s threat to seize banks that don’t lend gives meat to this forecast. In Britain, nationalization lies ahead of suffering banks and the end of senior executive careers, if they don’t lend freely. Despite the lack of the same effective management [ignoring politics and commerce and other capitalist principles] of the economy in Europe as in China, governments will act in the same way as the Chinese are, eventually, to make growth and confidence happen again. They are committed to this, at last. So 2009 will be the year of reflation in the face of deflation.

    In the U.S.A., such synthesis of national institutions in fighting deflation is unlikely as the cooperation of banking, commerce, etc to focus on the underlying economic crisis would barge into so many valued principles fought for, over time. However, we have no doubt that the intransigence of such principles in the face of a decaying economy will produce overwhelming pressures on the system to revitalize the consumer and restore his spending. The government has now seen the banks follow the “profit and prudence” principles after their bailouts and their holding back on lending to safeguard themselves, first. Secretary Paulson has now faced off with them and redirected efforts to make government provided financial relief go direct to the consumer. But he is only at the beginning of this process, which must be across the entire spectrum of consumers, not simply a portion of clients of the largest mortgage providers, Fannie Mae and Freddie Mac. Indeed, the slow nature of this solution as it wends its way through political and financial obstacles, could produce a near revolutionary climate, until sufficient action is taken to re-finance the economy from consumer upwards. After all, day-by-day, solid U.S. citizens are being impoverished by the financial sector problems, not their own. As slow as the pace of support becomes, the more degenerative impact it will have on uncertainty and confidence. We have no doubt that 2009 will be remembered as the year of reflation in the face of deflation. Already, house-owning households are likely to receive direct financial aid, if their mortgages are more than 38% of income. If this is applied to all U.S. households in this position we fully expect to see hope lead to confidence, then spending, then growth. These and the suggested support of the consumer on car finance and credit cards will re-kindle spending and the economy. Such moves must convince the U.S. consumer and stop him thinking like a victim. [In the Depression of the early thirties the U.S. used, as part of its battery of tactics, paying people to dig holes and fill them in again, just to get money flowing from ground level up]. This can be implemented in the next few months and impact on the broad economy by the end of the first half of 2009, if applied properly, as government implies it wants to. If it is, then the first 100 days of President Obama will indeed be a honeymoon.

    The importance of growth

    Mr. Ben Bernanke and the governments of the U.S., the Eurozone and China have recognized in no uncertain way that confidence must be regained before growth gains traction and becomes self-sustaining. It appears that they have got the message now and will do whatever it takes to ensure the credit crisis is replaced by confidence in credit. That the banks should suffer for their indiscreet past behavior is just, for a lender should carry the same risk as a borrower.

    Inflation and gold and silver prices.

    Reflation is vigorously being implemented across the globe, but inevitably it will come with inflation. It is impossible to say just how much money needs to be printed to counter deflation, but for sure it will be more than needed and will keep flowing until the financial sun is shining again. 2009 will probably not see inflation rise to dangerous levels, because of its absorption by deflation. But as the money fills deflationary holes, it will spread far and wide and eat into the value of debt, so bringing relief to troubled debtors in addition to direct governmental support. This will be found to be politically acceptable and will delay, if not remove, the pernicious impact of bad debt that we are seeing now. Growth and confidence are considerably more important problems than inflation. Banks have been given debt relief already and so will the consumer, because that is the only solution to the credit crunch. It will be accompanied by the cheapening of money, leading to far higher gold and silver prices than we are even contemplating now. As this is slowly realized by an ever-widening audience across the globe, gold will re-enter the mainstream of investments as an anchor to monetary values if only at individual levels. Thereafter institutions and perhaps central banks, will appreciate it fully?

    Governments have to act very fast to stop the confidence-eating impact of deflation from becoming a way of life, just as borrowing was, over the last thirty years. Consequently expect global stimulation to be put in place before the end of the first quarter of 2009. In that time we fully expect forced selling of all assets to slow to a trickle. Thereafter a positive tone will benefit gold and silver in the long-term, as well as short-term.

    Let’s be clear though, there is no historic precedent to what we are about to see.

    We expect gold to thrive in an atmosphere of hope, against a threatening backdrop, with the gold price realistically discounting the diminishing buying power of paper currencies.

    Gold Forecaster regularly covers all fundamental and Technical aspects of the gold price in the weekly newsletter. To subscribe, please visit

  6. #26
    Join Date
    Oct 2008

    Re: The Global Rat Race

    If we study the marginisation of the Dayaks and Penans in Sarawak, the Kadazans in Sabah and the Orang Asli in P. Malaysia, the pattern is very similar. Those people who live off the land are out of the clutches of the Ruling Class as they don't follow the Rat Race System. Therefore, the efforts of the Ruling Class are focused on getting them out of the land. The most effective way is to destroy their forests on which their livelihood depends on. That is what has been going on for the past 40 years and will continue until UMNO and PBB are kicked out.

    Strong Dayak winds in Sarawak sending shivers up Taib's ….!!!

    Posted by Vineeth Menon
    Monday, 17 November 2008 16:51
    Ngemah state representative, Gabriel Adit along with former PRS Balleh division publicity chief Beginda Minda and 12,000 Sarawakians have applied to join Datuk Seri Anwar Ibrahim's Parti Keadilan Rakyat or PKR.

    Their application forms were submitted to the PKR de facto leader Anwar Ibrahim at a huge dinner gathering in Sibu which saw more than 4,000 people in attendance. During his speech at the function, Adit, a four term assemblyperson, told the crowd that the main reason for joining PKR was due to the "political castration" of the Dayak under the BN state government.

    "Enough is enough of BN. Now change is coming to Sarawak." he said, adding that there are many BN members waiting to join PKR.

    The Dayak community of Sarawak are disgruntled with the BN government's management (maybe mismanagement is more of a right word) of native customary rights land.
    This land rights issue has been going on for quite some time now. Groans and moans from the Dayaks of being short changed or forced out from their land by the government is an everyday norm here in Sarawak. Some more intelligent once will make it known publicly and some not so fortunate ones doesn't even know that they've been had till it's too late to do anything about it.
    Now with PKR and people like Adit fighting for them, we do hope that the Dayaks will finally get what they deserve being one of the true natives of this land of the Hornbills.

    Former PRS Balleh division publicity chief Beginda Minda joining up with PKR will add even more strength and dimension to the party here in Sarawak. This feistly fella resembles the spicy pepper that Sarawak is famous for. He was forced to leave the state BN component party following his bold call for the Chief Minister and his 2 deputies to step down.

    Over the years under the same Chief Minister and BN administration, we Sarawakians are not spared from the marginalisation, poverty, oppression and discriminations as faced by our counterparts in other states. It is a plague that is killing Malaysia slowly and must be rid of as soon as possible. Failure to adhere to these dictator ministers then consequences such as lost of job, tenders and projects, you will have to bear. Now with the 12,000 new PKR members with a promise of more to come the government will not think that they can always have their way and get away with things like they have grown use to over the past 20 years or so.

    News of such turn out in support of PKR must have ruined Chief Minister and long time UMNO suck up, Taib Mahmud's weekend. Honestly, don't think majority of Sarawakians will pity Taib at all. This white haired demon and his family has been sucking Sarawak and its people dry all these years and it is time for him to go.

    "Good riddance Pehin, sorry but we won't miss you....."

    It is time for the people of Sarawak to unite and fight for our rights as Sarawakians. It is time to fight to ensure that the 'Burung Kenyalang' will forever fly free from the racist and oppressive UMNO and BN.

    Ngelaban Sarawak, NGELABAN!!!

    By - Chai Pasak

  7. #27
    Join Date
    Oct 2008

    Re: The Global Rat Race

    A simple way to think of the Global Rat Race is as a casino. In this case, the Casino Bankers could be heading for a crash and drag everyone along with it.

    Read on in the attachment...
    Attached Files Attached Files

  8. #28
    Join Date
    Oct 2008

  9. #29
    Join Date
    Oct 2008

    Re: The Global Rat Race

    Good piece by Helen Ang. Fundamentally, from the Rat Race perspective, it is class exploitation hidden behind the mask of racial discrimination and Ketuanan UMNO.

    Honey, I shrunk the Indians
    Written by Helen Ang
    Friday, 21 November 2008 13:31

    By Helen Ang

    Two weeks ago on Nov 4, the New Straits Times carried the headline ‘Zaid lucky to be born a Malay, says Syed Hamid’.

    Former law minister Zaid Ibrahim had said in his LawAsia 2008 conference speech on Oct 31: "The obsession with the Ketuanan Melayu doctrine has in fact destroyed something precious in us.

    "It makes us lose our sense of balance and fairness."

    The statement unsurprisingly caused Umno warlords to go berserk.

    On Tuesday, Malaysiakini had the article titled: ‘Ramasamy unfazed by police report’.

    Umno Youth wants to sic its attack dogs on Penang second Deputy Chief Minister P Ramasamy for revealing glaring under-representation of non-Malays in government service.

    Anyone who walks into the state administrative building of Komtar can see for himself the truth of Ramasamy’s words that even in Penang where the population is half Chinese, the civil service is overwhelmingly Malays.

    In my Malaysiakini column article ‘Huff, puff, blow the temple down’ (Nov 20, 2006), I had abstracted from the Seberang Perai Municipal Council website its list of office holders as below:

    Datuk Mohd Aris Ariffin (MPSP municipal president), Fauziah Ariffin (Aris's special asst), Zainol Abidin Md Noh (municipal sec), Siti Aishah Kassim (SUP's special asst), Noraziah Abdul Aziz (director, admin & HR), Mohd Ibrahim Mohd Nor (asst director, HR), Norhayati Sulaiman (asst director, R & D), Latifah Razali (asst director, acquisition & supply), Siti Haslinda Hasan (asst director, training & quality), Maskiah Abdullah (counter officer), Asma Othman (auditor), Lee Moong Nah (director, IT), Hassan Hashim (info systems officer), Abdul Fikri Ridzauudin Abdullah (info systems officer), Mansor Hashim (legal director), Rosnada Abu Hassan (asst director, legal), Munir Affan (asst director, enforcement & security), Mohd Hairay Mohd Yusof (finance director), Shahrulnizad Abdul Razak (finance asst director), Ummi Kalthum Shuib (finance asst director), Dr Romli Awang (health & urban services director), Fadzilah Hasan (director, licensing), Mohd Faidzal Hassan (asst director, licensing), Kamaruddin Che Lah (engineering director), Khirul Annuar Shamsudin (asst engineering director), Baderul Amin Abd Hamid (asst engineering director), Rosnani Mahmud (asst engineering director), Mohd Syukri Said (asst engineering director), Mohd Sobri Che Hassan (asst engineering director), Muhamad Kamaruddin (asst engineering director), Md Pilus Md Noor (building director), Abdul Rahman Harun (asst building director), Ahmad Fuad Hashim (town planning director), Norliza Abdullah (asst town planning director), Mohd Ridzal Abdul (asst town planning director), Kamariah Ramli (asst town planning director), Azian Ahmad (asst town planning director), Dahalan Fazil (asst town planning director), Rozali Mohamud (valuation director), Mat Nasir Hassan (asst valuation director), Ahmad Syahrir Jaafar (asst valuation director), Wan Junaidy Yahaya (community director).

    What do the names above tell you? Yet there are those who complain that the fate of Malays in Penang is like disenfranchised Palestinians languishing in their homeland.

    Umno claims Malays are dispossessed.

    The truth is Umno tortures statistics. Numbers are ‘turned over’ to confess a story protecting the party’s interest. When the statistics show another side, Umno bullies.

    It threatens, it appeals to the police and uses media, it compels the numbers to retreat from public view, for example when then Deputy Finance Minister Dr Awang Adek Hussin told Parliament in November 2006 that bumiputera shares equity ownership in Bursa M’sia was 36.6 percent but the figure was retracted six days later.

    Threat to national security?

    Late last year before the authorities detained the Hindraf five under ISA, it spun statistics to portray the Indian community as successful and therefore, ingrates to be thus whining.

    Not too long ago, prior to the Home Ministry banning Hindraf, they did the same again, and our mainstream media were complicit in aiding and abetting the government to demonise the movement.

    In my October article ‘The Hundraf of Umno’s making’, for the Centre for Policy Initiatives (CPI), I pointed out the areas where Home Minister Syed Hamid Albar deliberately skewed his reading of the figures to dismiss how on the whole, Indians are indeed a marginalised community.

    And yes, I did use the term ‘Hundraf’ for Human Rights Action Force as the Malaysian government would – if it could – prefer that the Hindraf spirit ceases to exist.

    After reading my ‘Hundraf’ article, a People’s Parliament participant Jayanath Appudurai passed me a copy of his monograph Malaysian Indians: Looking Forward, co-written in 2008 with G.A. David Dass which analyses more data.

    My own belief is that official statistics available in the public domain is incomplete. While the surveys and studies are adequate, their findings are not released transparently.

    As corroborated by the figures Ramasamy cited, the top tier of civil servants in any government department comprises a cabal belonging to one particular race solely.

    Jayanath tells me he spent about half a year on research, piecing together peripheral statistics to complete the picture by looking from side angles. It is a sad portrait our authorities-in-denial refuse to paint in full.

    Name-calling Chinese and Indians ‘pendatang’ conveys the impression that the minorities have only just stepped off a slow boat from China and India.

    The Tamil labour migration in fact began in 1786 with the establishment of the crown colony of Penang. They were brought in to work the plantations and build the infrastructure. At Independence in 1957, Indians were 11.3 percent of the population. In 2005, they were 7.5 percent. By 2020, it is forecast they will constitute less than 6.5 percent.

    In 1957, about 70 percent of the Indian labour force was in the plantation and mining sectors.

    In 1970, 46.5 percent were in agriculture. In 2000, only 11.1 percent remained in agriculture while 62 percent were in the manufacturing and services sectors.

    A Canada-published research by N.J. Colletta called the plantation Indian labour force ‘Malaysia’s forgotten people’. When the estates were fragmented, its workers were forced to relocate to urban dwellings, such as the squatter area of Kampung Medan.

    There is a perception that the majority of Malaysian Indians are mired in a proletarian urban under-class," writes Jayanath.

    "Undeniably there has been a fundamental shift of the Malaysian Indians labour from primarily tapping rubber in the estates to soldering chips in the factories, sweeping drains, cleaning toilets, supervising car parks and driving lorries in urban areas," he observes.

    I’ve a personal anecdote from my schooldays to relate. A prefect – an Indian boy from my cohort – could not get a place in local public university and went on to supervise his dad’s car park. My ex-schoolmate could well have been one of the statistics.

    Coming out of the woodwork

    Zaid is lucky to be born a Malay, said Syed Hamid. I say Malaysia has done Indians a great disservice by begrudging its acknowledgment that they have worked hard and contributed much to building this country.

    Malaysia is compounding this disservice by not uplifting its poor Indian citizens according to need; this due to affirmative action programmes being race-biased.

    At present, we’re in the 9th Malaysia Plan phase 2006-2010. The NEP started in 1970 resulting from May 13, 1969.

    The New Economic Policy morphed into the National Development Policy (NDP) which is associated with the Second Outline Perspective Plan or OPP (1991–2000). NDP got new clothes as NVP or National Vision Policy coinciding with the Third Outline Perspective Plan (2001–2010) or the Emperor’s ‘Vision 2020’.

    The general trend during the 8MP period was that the rich got richer and the poor poorer.

    Malaysia fares among the region’s worst along the Gini coefficient indicator with great inequality in income between the top and bottom earners.

    9MP makes no specific mention on addressing Indian poverty, which was calculated at 3.5 percent in 1999.

    By 2004, the number of impoverished Indian households had increased to 13,300, up 600 from five years prior. Jayanath concluded that by the government’s own definition of poverty, Indians have become progressively poorer.

    Annual growth rate of Indians is lagging behind Bumiputera and Chinese. Before NEP, Indians as a whole – there are so many Indian doctors and lawyers, says Syed Hamid – were earning a little more than the national mean, but after four decades of NEP and in the noughties, the gap closed and Indians earned less.

    OPP stats say the income disparity ratio between total Malaysian and Indians was 1:1.15 in 1970, and 1:1.06 in 2004.

    Since we’re toggling with numbers, please note our government was insisting that Bumiputera equity had remained fossilised at the magic-sakti percentage of 18.9. The purported under-achieving bumiputera share of the economic pie seems to have shrunk with the passing years .... if Umno is to be believed.

    It is only now with Pakatan Rakyat in power in five states that the hitherto obscured data is slowly beginning to come out into the open.

    And it took a deputy chief minister from the federal Opposition, no less, and he a former professor who had done research first-hand to shine some light into the dark corners.

    Official data has long been hidden because it not agreeable to Umno for us to know.

    (Source: Malaysiakini)

  10. #30
    Join Date
    Oct 2008

    Re: The Global Rat Race

    More attempts to control the Rats. How I wish these "Agents of God" can learn to be a bit more subtle.

    Fatwa council bans yoga for Muslims

    KUALA LUMPUR, Nov 22 — The country’s top Islamic body today ruled against Muslims practising yoga, saying it has elements of other religions that could corrupt Muslims.

    The National Fatwa Council's non-binding edict said yoga involves not just physical exercise but also includes Hindu spiritual elements, chanting and worship.

    "It is inappropriate. It can destroy the faith of a Muslim," council chairman Abdul Shukor Husin told reporters.

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