danmooncake,

Raising tax aka GST will cause the following too.

<< running risk of stagnating the economic growth and goes into recession that's because the heavy debt of many household (also businesses)>>

In summary, there is no way out for Malaysia.

Dreamer

Hansel,

Come on.. With RM8 to 10 millions, you are the last person that need to worry. Unless, you just like to worry.

Dreamer

Ramjade,

It is VERY SIMPLE.

Do you TRUST the government??

ASB is different from any other ASx. It is "XYZ only". So, it is SAFE to invest in ASB. As for other ASX, why bother??

Dreamer

cybermaster98,

1) You should keep your investment in ASB. THE GOVERNMENT will do whatever necessary to defend ASB.

2) USD will appreciate to 4.005 but RM may not drop 8% every year so it is not worthwhile to take money out of ASB.

Dreamer

Ramjade,

<<No I don't trust. But what choice do common people like me have? >>

You choose to be IGNORANT. Hence, you have NO CHOICE.

"Average people are not rich. Rich people are not average."

If you CHOOSE to behave and think like a common people, you will not be rich.

<<They are too scared to move the money overseas.>>

While others are too scared to leave money in Malaysia.

<<Even if we move the money overseas. With the current economy, you are damn lucky that pnb is paying dividend of 6.6%>>

Given that you KNOW NOTHING, how could you tell that PNB's dividend of 6.6% is a good deal??

Your life and your choice.

You could choose to WHINE that you KNOW NOTHING and you have NO CHOICE.

Or,

You could LEARN to INVEST.

Dreamer

Folks,

This is Malaysia.

It is VERY SIMPLE.

Do you trust THE GOVERNMENT?? If not, how could you trust anything control by THE GOVERNMENT??

Now, some people are selling ASNB. So, what can they say about ASNB??

Dreamer

richstars8818,

How would you know that it will not drop even further??

Dreamer

richstars8818,

1) So, if your instinct tell you that it is going down more than 4, why do you sell at 4??

2) What makes you think that it can stop dropping??

Dreamer

richstars8818,

Why do you think it is safe to keep your money at RM instead of USD??

Dreamer

richstars8818,

If you do not trust Malaysia and you plan to migrate to Australia, why would you keep your savings in RM?? How does exchanging USD back to RM makes any sense??

<<Anyway, let's stop asking why and why>>

Why not?? You are not thinking logically. Your thinking process does not make any sense even to yourself.

Dreamer

MGM,

If that happened, Malaysia's foreign reserve will be gone in a week. And, this time unlike 97/98, there will be no extra Oil Money to bail out Malaysia. Who knows, Maybe someone is counting on more donation from Middle East.

Dreamer

This post has been edited by dreamer101: Aug 10 2015, 11:14 PM

Folks,

It is not exactly correct that BNM can print unlimited RM. 30% of THE GOVERNMENT's debt is held by FOREIGNER. If BNM, print more RM, RM will devalue. BNM has to raise interest rate or FOREIGNER will not buy more GOVERNMENT's debt and /or sell existing GOVERNMENT's debt. If THE GOVERNMENT imposed capital control, FOREIGNER will not buy additional GOVERNMENT's debt.

THE GOVERNMENT's deficit spending had reached a point where it need financing from FOREIGNER. It can no longer be financed solely by cash flow from EPF contribution.

Enjoy the show!!!

"Don't worry, be happy!!"

"Not too bad!!"

There will be enough DUMMIES investing in ASx to cover this holes because of the high dividend rate.

Dreamer

cherroy,

The KEY QUESTION is whether Petronas earn ENOUGH[U] Oil Money to cover the hole?? The answer is obviously NO. THE GOVERNMENT's debt is increasing at 40 to 50 billions per year every year for the last few years. This includes 2012 when Oil Price was at record high.

If in a NORMAL TIME, Petronas does not have enough Oil Money to cover the hole. It is OBVIOUS that Petronas does not have EXTRA Oil Money to bail Malaysia out in a CRISIS.

Dreamer

This post has been edited by dreamer101: Aug 16 2015, 12:23 AM

AVFAN,

It is VERY SIMPLE.

THE GOVERNMENT is supported by

"Don't worry, be happy!!"

and

"Not too bad!!"

People.

There will be enough DUMMIES that will buy ASx. So, THE GOVERNMENT will have extra rounds of ASx to finance this. Then, THE GOVERNMENT will sell some of the GLCs via "IPOs".

As long as THE GOVERNMENT has the support of civil servants and FELDA settlers, it can stay in power. So, beyond the biggest GLCs like TNB, Maybank, and Telekom, it can sell a few to hang on for a while...

Dreamer

This post has been edited by dreamer101: Aug 16 2015, 01:28 AM

icemanfx,

1) If that is true, record oil price in 2012 would had help THE GOVERNMENT to reduce budget deficit, it did not.

2) That drop in RM will have to be big enough to offset drop in Oil Price in order to matter.

Dreamer

This post has been edited by dreamer101: Aug 16 2015, 07:56 AM

Showtime747,

Then, please answer my question. If BNM print unlimited RM, FOREIGNER no longer buys Malaysia Government's bond, how is THE GOVERNMENT going to finance the budget deficit??

Please note that 2 millions to 2.5 millions of THE MAJORITY are on THE GOVERNMENT's pay roll. THE GOVERNMENT has to increase their pay / income to beat inflation in order to stay in power.

Dreamer

P.S.: "Don't worry, be happy!!". There will be enough DUMMIES out there to buy ASx to supply the money.

This post has been edited by dreamer101: Aug 16 2015, 08:23 AM

Ancient-XinG-,

Very good question...

You trust THE GOVERNMENT. I don't. So, I moved my money and investment out of Malaysia.

Now, why do you BELIEVE that you can only invest in Malaysia and no where else?? Why do you put all your eggs in one basket?? I don't.. My investment are spread all over the world. I do not need to trust and rely on any country to do well.

It is VERY SIMPLE.

All your money is tied up with THE GOVERNMENT, GLC, and GLIC. And, it is controlled by THE GOVERNMENT. Is it WISE to put all your eggs in one basket??

Dreamer

This post has been edited by dreamer101: Aug 16 2015, 10:24 AM

icemanfx,

1) "Don't worry, be happy!!"

There will be more ASx and more DUMMIES to buy ASx to cover this hole.

2) For those that buy ASx regularly over the past few years, do you ask yourself why you can get ASx easily lately?? There are more rounds of ASx and they are more easily available. Why??

Dreamer

This post has been edited by dreamer101: Aug 16 2015, 10:25 PM

http://samcheekong.blogspot.com/
<< With 40% of our debt is short term in nature, thus it can be said that there are about RM 300 billion in short term debt that are vulnerable to reverse flow. The question is, say if only 50% (RM 150 billion) of the short term funds decided to rush for the exit can Bank Negara counter this move? What chance are we able to defend the Ringgit with just USD 96.7 billion left in the Foreign Exchange Reserves? Please do not forget that from the table above, our Short Term Debt/ FX Reserve stands at 80% which is the second highest after Turkey. Turkey is the biggest Emerging Market economy to succumb to the current financial crisis. >>

<< The third point to note from the table above is that foreign holding of Malaysian bonds stands at 44%. This is the third largest after Hungary and Mexico. Malaysia also has one of the largest LCY (Local Currency) bonds in Asia after Japan and Korea. It is close to 100% to GDP or about RM 1 trillion. Below is the breakdown.>>

<< Who are on the losing side when they invest in local currency bonds especially when the Ringgit is depreciating? Well foreign bond holders will be on the losing side. This is because when they exit the bond market they will be getting less USD when they convert their Ringgit to the USD. To ensure the bondholders do not exit at the same time, interest rates will have to rise as a form of compensation. The price of bonds is inversely related to the yield. When happens when foreign investors start selling? The price of bond will go down and the yield will go up. The nightmare every country has is a ‘bond run’. This happens when every bond holder starts rushing for the exit and this will cause a selloff in the bond market which in turn caused interest rates to rise substantially.>>

<< Wrapping Up

In wrapping up, from above we know that Malaysia is now one of the most vulnerable countries subjected to capital outflows. This is mainly due to our large exposure to short term debts. With Short Term Debt/ FX Reserve at 80% and Short Term Debt/ Total Debt at 40% and dwindling foreign reserves. In short, we are running on wafer thin safety margin. With Turkey, Russia and Brazil already admitted to defeat in the Currency war, Malaysia’s effort to prop up the Ringgit by selling the Dollar will end up a loser game. Brazil has since gone to the next level of protectionism by enlisting embargo and tariffs. If our political crisis is not solved within a shortest period of time, our economy, exchange rate and stock market will risk a rapid decline soon.

In tradespeak, this amounts to terminal velocity.>>

Folks,

Some highlight from this blog.

Dreamer

cherroy,

http://samcheekong.blogspot.com/

<< Our Foreign Exchange Reserves peaked at $155 billion in August 2011 but has since been declining rapidly. In July 2015, our Foreign Reserves declined to $96.7 billion, a drop of $58 billion from the peak. We have been recording Balance of Payment surplus for the past many years and by right the excess Dollars should be added into the Foreign Exchange Reserves. Yet we are seeing dwindling reserves and one explanation is some of the reserves are being used for open market operations to support the Ringgit. This can be further supported by the expansion of Bank Negara’s Balance Sheet as shown below. >>

1) BNM did intervene regularly since 2011.

2) You are correct in general but it may not apply to Malaysia since 50+% of KLSE is owned by GLC and GLIC. So, a large portion of corporate debt is linked to THE GOVERNMENT.

3) Which prove the point that there may be no way to stop the flow back to USD.

Dreamer

This post has been edited by dreamer101: Aug 17 2015, 10:38 AM