Debt, whether national or domestic (household) threatens our future and our children's future and it feels like I have been banging this drum for ever, asking where such cheap money came from and attributing its harmful inflationary and social effects especially on property prices and the welfare and development of community.
Now we have nations and households heavily indebted and interest rate increases could be tantamount to shaking the tree; we know many households will fall but it is inevitable and however serious the problem it will not bury us. After the sub-prime fraud, banks were bailed out with sums that exceeded the value of all of the dodgy mortgages; taxpayers paid for all of these homes. And yet the money went into a black hole and bank vaults remain empty. And the mortgagees are still in debt to the mortgagors; their debts were not expunged.
So we can deal with negative equity if we have to.
We must bite the bullet, control our fears and take the initiative from domineering banks and financial institutions. Banks know politicians are too weak and will fear the consequences of what they have been told will be a financial armageddon.
I say, we must do it, the sooner the better.
Interest rates will give confidence in a currency and of course make imports cheaper. A strong currency will also attract overseas investment and savings. Salaries will be worth more and prices and inflation should fall.
Singapore could benefit far more than the majority of countries from interest rate increases.
Whatever the circumstances, there always be those who benefit. For so long it has most certainly not been the savers or the general public who have, in real terms, gotten poorer daily; and what is most worrying is the gap between rich and poor is in excess of anything we have previously known and is increasing.
Banks, like many corporations, have been hijacked by b o a r d s of directors who now dictate to shareholders. They write their own outrageous contracts and bonuses whether the company makes profits or losses. A recent study said the ratio of directors to employees salaries will soon reach 270:1.
Governments should protect our savings by whatever means are appropriate.
Nations are "owned" by all citizens. Citizens dictate the rules, its their playing field or market place and when a tiny minority manipulate to defraud the majority, their license to operate should be revoked.
And when our market place is flooded with cheap toxic cr@p from outside our borders, causing deep structural unemployment, we should close our borders to imports in excess of agreed quotas which do not threaten domestic employment. This is life, its not a game.
MNC's who are playing away may lose, it was their choice to migrate.
