http://www.cnbc.com/2015/08/25/new-1mdb-fe...nggitagain.html

Malaysians should STOP chasing US Dollar and Singapore Dollar if they'd really like MYR to strengthen or buy these currencies at a better price.

"When the buying stops, the Dollar drops."

- L3 Economics

Hi macai, you again ?

You have no clue what was his comment previously and make a stupid comment not knowing the head and tail. You got to read back what he wrote on 18/8 to understand the context of the whole conversation

You so butthurt about me making fun of you last time until you appear out of nowhere reply me ?

1MDB have denied the news

Normal lah... Our Gomen will deny anything not in their favor.

this is becoming increasingly probable.

even higher probability if low crude and gas prices slide for few more months which is looking very likely.

hike int rates, hike gst... there'll be a lot of walking dead.


budget 2016 coming in oct, we'll see...

This post has been edited by AVFAN: Aug 26 2015, 11:47 PM

AVFAN,

If BR went up, many people will go bankrupt due to increasing housing loan payment...

Dreamer

that's called between the devil and the deep blue sea.

what happens then, better we leave it to another time in another thread.

Some questions here

a) How much of our national debt is foreigner held? It is said if there is a short term run on our bonds, the national reserves of &96 is unable to cover

b) Next, while foreigners may sell, there are others who maybe attracted to the yields, Bear in mind, the rating agencies have not down graded Msia yet.

c) Why should Bank Negara raise the BR while the country is not doing well?

For a) a quick Google can give you the answer. Malaysia is not the only country in trouble now. We are a small part of a very big global crisis.

b) you cannot analyze malaysia economy without taking into account what is going on in the world. The world now is risk-off.

c) To hopefully limit the MYR drop.

Why bother? Especially when you cant do much due to the 2 above? And also you will kill your domestic economy ?

prophetjul,

THE GOVERNMENT is running a budget deficit of 40 to 50 billions per year. So, THE GOVERNMENT has to borrow money. EPF cannot supply enough money. So, THE GOVERNMENT has to borrow from FOREIGNER. It has NO CHOICE.

Or else, it will have to

A) Cut government's budget

or

B) Stop paying the debt aka default

Dreamer

A) Increase Gomen Income - GST

Cut gomen spending - reduce petrol subsidies

B) Refinance from EPF. EPF can afford that. Just kick the can down the road the future gomen

They are career politicians. They plan to be back again and again. They must look like they are working. Either that or they don't know better.

Exactly. Politicians live for the present. Especially in Misia.

Why bother about something which one cant do much about and worsen it by raising rates? Blame it on world woes and get on with life and dish our more BR1M to the kampung folks. And all will be well. Aferall kampung folks arent bothered whether USD be 2,3, 4 or 5

prophetjul,

A) Okay. That can be done. But, it is still not enough.

GST of 6% ~ 20 to 30 billions. Petrol subsidy is only 20 billions.

B) It is a cash flow problem. There is not enough annual cash in from EPF to finance THE GOVERNMENT's budget. Please note that EPF is only 500 to 600 billions. THE GOVERNMENT's annual budget is 250 to 300 billions per year.

Dreamer

Increasing tax will further depress economic activity and we don't need that.

Best thing to do perhaps is to default on their external debt. Greece has done it many times in the past and they are still around.

Check out what's going on with Puerto Rico and Greece now. Default is their way out. That might also be our solution.

This post has been edited by Binyamin: Aug 27 2015, 09:13 AM

prophetjul,

To stay in power, THE GOVERNMENT need to spend and borrow more. Raise interest rate will make many people bankrupt. But, THE GOVERNMENT will have more money to spend and stay in power.

Dreamer

a) There you go.......30 + 20 = 50bil

b) What you wrote there is wrong. Its as if the gomen has ZERO income. They only need to finance the deficit.

i am actually more concerned with loss of income from

a) Drop in income tax collected. Most Listed companies have seen their profit DROPPED in the last qtr. i hope its only a small pond. But bear in mind petronas who is one of the biggest contributor to the income tax will see massive drop in profit

b) sustainabilty of income from Petronas' dividends

sorry

i dont mean to increase GST. i meant the gomen is already doing that.

Default is a very bad word. Look at how they are treated. As pariahs in the economic world. But then again, Argentina has survived. So.