Tough Times Ahead

You're asking, why am I getting even more boring and socio-political in my posts? Because I am pissed, because I am trying to outline the stark facts, and to let as many people know as to how mismanaged our economy and country is, and no, my arguments do not run on the lines of racial and emotional fallacy.

I'll start out by reiterating my point that the coalition government WILL hold an election by the end of November this year. Why? Because of tough times ahead, and if you are one who uses your brains, you'll know that the 'feel good factor' is the ultimate tool that favours the current government.

Picture this, the Australian government under the stewardship of PM John Howard is betting on this 'feel good factor' that the Australian economy is booming. (which was not because of his policies like lowering the minimum-wage/stripping away workers' rights but because of their commodities and China.) New Zealand put a new PM in office just because the All-Blacks got kicked out of the RWC. Gordon Brown called off an early-election and screwed up the foundation he laid in the previous 3 months, having to start up again from scratch.

The below is a severe-case (but not worst-case) scenario.

So, what's in it for Malaysia? With oil prices reaching a record last week, gold and platinum recording all-time highs (which is the traditional sign of safe haven), we can expect the real inflation rate to jump next year, even though we are an oil-exporter country. Although the official government statistics for 2007's inflation rate is at ~2.2%, we can well expect it to be at a staggering 4%.

With so many items under price control, it's only logical to assume it to be higher without the price ceiling right? So if inflation is at 4%, the money that we are storing in our banks is effectively shrinking. Banks only provide an FD rate of 3-3.6% at the moment. So, put it this way, disposable income is at most going to grow at a snail's pace, or remain stagnant. So, if oil prices rise, electricity tariffs will rise, pump petrol price will definitely rise. The increase in transportation costs will definitely raise the prices of essentials such as flour, bread and rice. Small traders will pass on 100% of the increased costs to the end-consumer. In the end, the prices of food will rise, along with the cost of living, particularly in the city.

However, with prices of commodities and agricultural products at a high currently, the effect wouldn't be very much felt in the rural areas. (With the exception of prices of fertilisers that have gone up) It's the city folks that will feel the pinch.

So back to macroeconomic indicators, if national growth remains at 5.5-6% (which if compared to our neighbours is considered a laggard), effective growth will only be at 1.5-2%, so if inflation jumps up by 1%, we'll only be experiencing a growth of 1% at most. By all means this means that we have to spend more out of our pockets while disposable income will most probably remain stagnant.

Remember also that we have Christmas holidays as well as CNY next year, which the latter will definitely shoot prices up. And if the government prefers to keep the people happy, they'll have to do it at an expense of the country's coffers, by shooting people up into space (although this is something to be proud of), launching new submarines, new satellites, and absorbing petrol price increases.

So, keeping this in mind, I dare say that the government has a strong chance of calling an early election.

People have remained ignorant, on how much power has shifted to the executive when power should have remained with the people. How much have the citizens been robbed of, how much money has been transferred to the executives, how everyone is being treated as a fool. Of course, then again, it's probably a futile effort to spread awareness. Everyone's either thinking of running, or not even caring. "Why bother to vote for opposition? They'll not win anyway", "Aiya Singapore better lah", "I wanna leave this f***ing country" Nazri has told opposition parties not to count on the EC (Elections Commission) because "who says it's independent?". The practice of the EC has always been wide open for scrutiny, which brings us to the Mass Rally on Nov 10th.

So all in all, enjoy your time now while you still can. =)