I heard that Bank Negara will raise interest rates next month. Anyone knows of this?

This post has been edited by AdamG1981: Jun 14 2008, 11:32 PM

AdamG1981,

<<However, inflation and high oil prices dampen consumer spending significantly.>>

A) Prove your point with some data. American use their house equity loan as ATM to withdraw money. Without either interest cut (reduce monthly payment) or house price price appreciation, there are NO ADDITIONAL money to spend.

Inflation and high OIL PRICE only affect marginally when American is saving negative 1% anyhow. Aka, they are spending ALL their income to begin with. They have NO savings.

USA is different from any other country in the world.

B) The other SIGNIFICANT impact on spending is UNEMPLOYMENT rate.

C) Inflation and OIL PRICE is NOT even in the top 5 factors. Inflation is GREAT when you are debtor. Aka, you get to pay back with less valuable money.

D) OIL PRICE only matter when your food costs is TIED to the cost of the food to begin with.. For USA, most of the food costs is tied to the labor aka processing costs as opposed to the price of grains/ rice/ corn/ beef to begin with.

Dreamer

Then what data do you have to support your theory? From my understanding you are saying an inflation is not as big or even bigger problem than the housing woes and that inflation and oil price doesn't affect consumer confidence and spending. IF you can explain to me, in economical terms, that would be great.

"Inflation is GREAT when you are debtor" Then do you think more lenders would want to lend money if there's runaway inflation?



This post has been edited by AdamG1981: Jun 14 2008, 11:40 PM

AdamG1981,

1) I would have to remember where I read it. Basically, for developed country, most of the food costs is tied to labor as opposed to actual material and transportation cost. This is different from developing and under-developed country.

<<"Inflation is GREAT when you are debtor" Then do you think more lenders would want to lend money if there's runaway inflation?>>

2) People are still buying US Treasury Bond even though technically it is in negative REAL interest rate now. This ONLY work in USA and but not any other country in the world.

3) There are TRILLION worth of money from Middle EAST, China, Japan, Taiwan, and South Korea. There NO OTHER PLACE beside USA that is BIG ENOUGH to absorb this amount of money.

Dreamer

Today the G 8 nations have said they wanted a strong dollar and also said commodity Prices Replace Credit Squeeze as Major Risk to worldwide economic growth.

http://www.bloomberg.com/apps/news?pid=206...Gxrs&refer=home

Technically, countries such as China purchases huge amount of T-bills because USA is a country that has never DEFAULTED before. However, China has also recently hinted that it might diversify its holdings. The main reason why Americans got cheap financings in the first place was because of China's huge purchase of T-Bills. Again, this might change in the future. (Monday- Treasury auction)

Here's my take:
Inflation is a bigger threat because it affects everybody and its costlier to us in the long run.
Consumer spent more for necessity items such as food and gas. As a result of more money coming out from the consumers pocket, the consumer sentiment sours because now he /she thinks that everything's expensive when actually it is not!

Automatically when your fuel and food budget represents a big chunk of your paycheck, then you will not want to spend.

If you take a look at corn and cocoa futures, both prices have hit MULTIYEAR high, and this has worried the Fed. IF basic food items are COSTLIER, the standard of living decreases overall, this might lead to strike, riots, etc as seen as many places Malaysia, Indonesia, Philipines, Vietnam, etc.

I rest my case.

AdamG1981,

<<Today the G 8 nations have said they wanted a strong dollar and also said commodity Prices Replace Credit Squeeze as Major Risk to worldwide economic growth. >>

What makes you think that USA listen to anyone??

<<Technically, countries such as China purchases huge amount of T-bills because USA is a country that has never DEFAULTED before. However, China has also recently hinted that it might diversify its holdings. The main reason why Americans got cheap financings in the first place was because of China's huge purchase of T-Bills. Again, this might change in the future. (Monday- Treasury auction)>>

Let's say you are right. Then, where could China put their money?? There are NO OTHER COUNTRY / ECONOMY large enough to absorb that amount of money. EU has even worse problem. Japan? China's itself is overly invested.

<<Here's my take:
Inflation is a bigger threat because it affects everybody and its costlier to us in the long run.
Consumer spent more for necessity items such as food and gas. As a result of more money coming out from the consumers pocket, the consumer sentiment sours because now he /she thinks that everything's expensive when actually it is not!>>

Let me REPEAT one more time. Which country that you are talking about?? You statement works for other countries but it is LESS RELEVANT for USA. FOOD and GAS is ONLY a small portion of average American monthly expenses. It is around 10% to 20% in total.

<<Automatically when your fuel and food budget represents a big chunk of your paycheck, then you will not want to spend.>>

Which is NOT the case in USA even with the recent oil price increase.

Dreamer

If Food and Gas only small portion of monthly expenses, why are the american is still keeping mumming on the increase in oil prices and increase in purchase in hybrid cars such as Prius?

China has multiple investments she can make; such as drilling oil at offshore Cuba, finding more resource. IF you have notice lately, China has been aggressively signing agreements with countries that have black gold so that its future is not threatened.


OK, base on what fact do you know that FOOD and GAS do not affect the US citizens much? How do you know is 10% to 20%? Have you been to the US, driving to work and paying market price for fuel? I can assure you there are many concerned citizens about higher prices of food and gas.

Read below
http://www.cnbc.com/id/25169813/for/cnbc

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Added on June 15, 2008, 11:04 pmADB Urges Asia to Take Anti-Inflation Measures Or Risk Growth

http://www.bloomberg.com/apps/news?pid=206...syvc&refer=news

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Added on June 16, 2008, 12:42 amBank Negara's biggest hint of an interest rate hike

Malaysia May Raise Rates on `Generalized' Price Gains (Update1)

By Shamim Adam

June 15 (Bloomberg) -- Malaysia's central bank may use interest rates to tame inflation if there is a ``generalized'' increase in prices, Governor ZetiAkhtar Aziz said today.

The country faces the risk of slower economic expansion and the bank will decide at its next monetary policy meeting in July whether there's a need to change its official growth forecast for this year, she told reporters at the World Economic Forum on East Asia in Kuala Lumpur.

``We'll assess very carefully what the impact of rising costs has on the general prices and if it results in generalized price increase, then interest rates may be the instrument that'll be used,'' Zeti said. ``At the same time, we'll look at what the growth outlook is and right now, there is also the risk that we may have slower growth.''

Central banks around the region have raised interest rates to quell price pressures amid record food and oil costs. Indonesia and the Philippines both raised rates on June 5, while Vietnam and India increased borrowing costs in the past week.

Bank Negara Malaysia kept its overnight policy rate at 3.5 percent for a 17th straight meeting on May 26 and isn't scheduled to review its interest-rate policy until July 25. The central bank in March forecast economic expansion of 5 percent to 6 percent this year, after growth of 6.3 percent in 2007.

Malaysia may miss the upper end of this year's economic growth forecast, Prime Minister Abdullah Ahmad Badawi told reporters today in Putrajaya, outside Kuala Lumpur.

Growth of 5.5 percent is ``achievable,'' rather than 6 percent, the top end of this year's forecast range, he said.

Bloomberg
http://www.bloomberg.com/apps/news?pid=206...c&refer=economy

This post has been edited by AdamG1981: Jun 16 2008, 12:45 AM

keith_hjinhoh,

American like to whine too.

AdamG1981,

Do you know that you are talking to someone that had lived in USA for 20+ years. And, I kept my expenses in Quicken for at least 10+ years.
And, I have family in 30+ countries. I have first hand information.

<<China has multiple investments she can make; such as drilling oil at offshore Cuba, finding more resource. IF you have notice lately, China has been aggressively signing agreements with countries that have black gold so that its future is not threatened. >>

http://www.chinability.com/Reserves.htm

Do you have ANY IDEA on the size of money that we are talking about?? China's foreign reserver grow about USD $40 billions per month. China's economy itself can only absorb about USD $100 billions worth of investment.

We are talking about trillion worth of dollars

Dreamer

You cannot compare your friends and families "spendings" to project the overall sufferings of American citizens as your experiences do not count as scientific information. By the way, I am surprised that you have to mention your background to challenge my thoughts. There's no need to boast that you have family & friends in 30+ countries as it doesn't boost your credibility any further.

Do you know that obtaining new resources (natural gas, oil) is also expensive? China has a lot of options than just investing in T-Bills; not to mention it needs all that reserve to prepare itself for a soft landing.

congrats to KNM holder. the counter is now FLYING high..

cky80 sold at 6.60 few days ago

anyway, GENTING & RESORTS, up up up

Citigrp-C1....150CW+22.50 expiry 26/5/09..how to calculate?

Is mean 150CW shares with top up Rm22,500 cash can convert to 1 Citigroup shares in NYSE?

CITI has a lot of debts.. cannot trust this Jewish co.

just wonder is Aeon good? they are coming 1 for 1bonus. can someone help me to explain more on this
ex date 20th june

MAYBULK dropped 10 cents today, 3.66 now

Hi Pana,
I'm back!
Time to sapu????

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Added on June 16, 2008, 11:28 amI might wait till 3.50......*kedekut*

This post has been edited by kinwawa: Jun 16 2008, 11:28 AM

yo kinwawa, welcome back, fun trip ya?

maybulk financial good?

also awiting 3.5
Baltic Dry 9646.00 -496.00 -4.89% 06/13
Baltic Capesize 13960.00 -1218.00 -8.03% 06/13
Baltic Panamax 8942.00 -383.00 -4.11% 06/13


This post has been edited by ante5k: Jun 16 2008, 12:09 PM