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24-04-2012, 12:29 AM
(This post was last modified: 24-04-2012, 01:02 AM by honeyclover.)
All this discussion is very interesting & educating.
Do correct me if this is wrong concept,from my rojak understanding.
I think inflation is global thing, one cannot isolate it without linking it to the global economy unless the country is self-sufficient.
Since the financial crisis US been turning on their printing machine nonstop with their stimulus, low interest rate.
More money = USD down = RMB UP.
CHINA LPPL, bo bian have to keep RMB low because their one of the world largest exporters, with huge export = huge inflow for RMB
Thus China have to print more $$ to buy more USD to maintain the pegged RMB else their export die, companies closed down, unemployment high = government die.
[Image: dos4du.jpg]
Using the inconsistent trinity, China in adopting both Fixed Exchange Rate and Sovereign Monetary Policy(can print money), Cannot have free Capital Flow.
Thus China can Limit the effects of money supply and the exchange rates but that brings another sets of problems. They print more money, though limit outside effect with fixed exchange rate but internally they got increasing inflation, large current surpluses ..etc
anyway
back to Singapore, SG in adopting both Free capital flow and Sovereign Monetary Policy(ability to print money) cannot have fixed exchange rate.
Thus unlike China cannot limit the effects of money supply & the exchange rates.
SG cannot don't print $$ to indirectly reduce inflation, so that firms will tried to reduce costs with pegged exchange rate, to become more competitive to compete with international markets. therefore, maintain low inflation, bringing interest rates down and increase trade and investment.
All the printing of money have to go elsewhere, SG is not an exception.
practically like borrowing USD, borrowing EUR, chasing for better returns in elsewhere aka include SG. Even Japan also printing more $$ to reduce their yen exchange rate.
Thus the inflation everywhere in e world.
Maybe tat's y Jim roger said must buy commodities.
So how? buy stocks, index etf, maybe commodities cos inflation bo bian one.
Regarding COE, HDB i think is really abt supply & demand. maybe reduce demand limit to 1 car per 5 family members like e foreign worker dependency ratio? LOL?
HDB ? really can't think of anything, small country/island/city, Hongkong,Shenzhen, Chengdu all exp$$. Maybe SG also subprime, economy contract then cheap cheap.
Do correct me if this is wrong concept,from my rojak understanding.
I think inflation is global thing, one cannot isolate it without linking it to the global economy unless the country is self-sufficient.
Since the financial crisis US been turning on their printing machine nonstop with their stimulus, low interest rate.
More money = USD down = RMB UP.
CHINA LPPL, bo bian have to keep RMB low because their one of the world largest exporters, with huge export = huge inflow for RMB
Thus China have to print more $$ to buy more USD to maintain the pegged RMB else their export die, companies closed down, unemployment high = government die.
[Image: dos4du.jpg]
Using the inconsistent trinity, China in adopting both Fixed Exchange Rate and Sovereign Monetary Policy(can print money), Cannot have free Capital Flow.
Thus China can Limit the effects of money supply and the exchange rates but that brings another sets of problems. They print more money, though limit outside effect with fixed exchange rate but internally they got increasing inflation, large current surpluses ..etc
anyway
back to Singapore, SG in adopting both Free capital flow and Sovereign Monetary Policy(ability to print money) cannot have fixed exchange rate.
Thus unlike China cannot limit the effects of money supply & the exchange rates.
SG cannot don't print $$ to indirectly reduce inflation, so that firms will tried to reduce costs with pegged exchange rate, to become more competitive to compete with international markets. therefore, maintain low inflation, bringing interest rates down and increase trade and investment.
All the printing of money have to go elsewhere, SG is not an exception.
practically like borrowing USD, borrowing EUR, chasing for better returns in elsewhere aka include SG. Even Japan also printing more $$ to reduce their yen exchange rate.
Thus the inflation everywhere in e world.
Maybe tat's y Jim roger said must buy commodities.
So how? buy stocks, index etf, maybe commodities cos inflation bo bian one.
Regarding COE, HDB i think is really abt supply & demand. maybe reduce demand limit to 1 car per 5 family members like e foreign worker dependency ratio? LOL?
HDB ? really can't think of anything, small country/island/city, Hongkong,Shenzhen, Chengdu all exp$$. Maybe SG also subprime, economy contract then cheap cheap.