One magical aspect of the laws of supply and demand (with reference to singapore especially) is: in regard to price, the laws of gravity hardly works. Once the price goes up, even when the supply problem is solved, other factors come into play. Predictable factors such as increased labor costs, increased materials cost, increased demand (such a convenient reason isn't it? Anything has to be brought about by an increase in demand, including the hoo har over increased demand for university places, so publicized in our local news lately), increased A, increased B, increased C blah blah blah. So the price remains at that level, paving a trend for more upward revisions. The increase in GST is the perfect reason to up price for all other industries. Result? Inflation.
On the other hand, inflation to any economist is not something that is undesirable. We are taught that inflation is normal. In fact, it's good. It shows that the economy is booming. People spend when they feel rich. In turn, demand goes up. And through some intricate mechanism of the asset market, labor market, capital market etc, which I am not going to explain due to its technicalities, prices go up. And tadah, the government believes they had made you and I happy and rich, and they elevate themselves a step closer to nirvana short of being labelled saints, rewarding themselves with offerings from taxpayers.
What is not taught in textbooks: When measuring the economy, say in terms of GNP or GDP, even if only an individual profits a pot of gold, but if it far exceeds any drop in production by other commoners, it is still recorded as an increase in production on the overall. This situation is nothing special. It is just the offspring of typical capitalism, which exists in any industrialized or capitalized country such as the motherland of capitalism, the United States of America, Japan, England, and now, Singapore as well. This phenomena is most often referred to as effects of globalization nowadays. I rather call it The Global Engulfment of Capitalism. So you have the economy booming but only enjoyed by the top strata of the society. The Gini coefficient goes up, and because the government is part of the zenith level of society, they blame it on globalization.
A paradox isn't it? On one hand, the government encourages globalization. "Globalization is good! The entire world is your oyster! We will become more prosperous." Then because globalization creates a larger gap between the Rich and the Poor, they say, "Oh, we have no choice. Globalization is to be blamed. But do not worry, we will help you." So people at the bottom part of society waits for help. So they wait. And they wait. And wait. And wait.....And help finally comes in subsidies that could barely support their basic daily needs in ever inflating ever expensive Singapore. The last I saw on Straits Times is something like S$250 a month? Or lesser? I could not remember.
"Oh, our resources are limited. We have to save for the rainy day when M'sia or Indonesia decided to enter war with us and at least we have the cash to buy US military help" The same reason used for the past 42 years since independence. US$130bn in Temasek, another US$150bn in GIC, another US$130bn in CPF, US$140bn of foreign reserve, plus some unclassified money lying elsewhere, a conservative estimate would be US$600bn of wealth. In case some of you do not know the magnitude of this money, it is written as US$600,000,000,000.00. Dividing it by 4m population (take note that 1.5m are PRs cum foreign talents or whatever stereotypical terms you wanna name it), that amounts to an average of US$150,000.00 or S$225,000 per capita! That is equivalent to a 3/4 rm HDB flat for every single one of us! Oh, by the way, when you purchase a HDB flat, it essentially still belongs to our dear government.
And that is still a conservative number. Who knows? Maybe the government has hundreds of mini accounts spread out over the world and a secret vault containing tonnes and tonnes of goldbars/money hidden in the Singapore equivalent of the AirForce 1, parked 1000m under the Istana, ready to soar into another country with all the elites when war broke out?
So at the end of the day, when is 'enough' enough? 10 years down the road, even when the total reserves reaches 5trillion, the same reasoning is, more likely than not, appear again. This question will continue to linger. When is 'enough' enough? Look at the pay scale of our elites. Being elites, having looked at complex mathematical formulas and educated at renowned universities to the likes of Harvard, Stanford, Oxford, Cambridge, I doubt 6-7 zeros can hardly be considered a large number. Maybe they are aiming at this thing called
On the other hand, inflation to any economist is not something that is undesirable. We are taught that inflation is normal. In fact, it's good. It shows that the economy is booming. People spend when they feel rich. In turn, demand goes up. And through some intricate mechanism of the asset market, labor market, capital market etc, which I am not going to explain due to its technicalities, prices go up. And tadah, the government believes they had made you and I happy and rich, and they elevate themselves a step closer to nirvana short of being labelled saints, rewarding themselves with offerings from taxpayers.
What is not taught in textbooks: When measuring the economy, say in terms of GNP or GDP, even if only an individual profits a pot of gold, but if it far exceeds any drop in production by other commoners, it is still recorded as an increase in production on the overall. This situation is nothing special. It is just the offspring of typical capitalism, which exists in any industrialized or capitalized country such as the motherland of capitalism, the United States of America, Japan, England, and now, Singapore as well. This phenomena is most often referred to as effects of globalization nowadays. I rather call it The Global Engulfment of Capitalism. So you have the economy booming but only enjoyed by the top strata of the society. The Gini coefficient goes up, and because the government is part of the zenith level of society, they blame it on globalization.
A paradox isn't it? On one hand, the government encourages globalization. "Globalization is good! The entire world is your oyster! We will become more prosperous." Then because globalization creates a larger gap between the Rich and the Poor, they say, "Oh, we have no choice. Globalization is to be blamed. But do not worry, we will help you." So people at the bottom part of society waits for help. So they wait. And they wait. And wait. And wait.....And help finally comes in subsidies that could barely support their basic daily needs in ever inflating ever expensive Singapore. The last I saw on Straits Times is something like S$250 a month? Or lesser? I could not remember.
"Oh, our resources are limited. We have to save for the rainy day when M'sia or Indonesia decided to enter war with us and at least we have the cash to buy US military help" The same reason used for the past 42 years since independence. US$130bn in Temasek, another US$150bn in GIC, another US$130bn in CPF, US$140bn of foreign reserve, plus some unclassified money lying elsewhere, a conservative estimate would be US$600bn of wealth. In case some of you do not know the magnitude of this money, it is written as US$600,000,000,000.00. Dividing it by 4m population (take note that 1.5m are PRs cum foreign talents or whatever stereotypical terms you wanna name it), that amounts to an average of US$150,000.00 or S$225,000 per capita! That is equivalent to a 3/4 rm HDB flat for every single one of us! Oh, by the way, when you purchase a HDB flat, it essentially still belongs to our dear government.
And that is still a conservative number. Who knows? Maybe the government has hundreds of mini accounts spread out over the world and a secret vault containing tonnes and tonnes of goldbars/money hidden in the Singapore equivalent of the AirForce 1, parked 1000m under the Istana, ready to soar into another country with all the elites when war broke out?
So at the end of the day, when is 'enough' enough? 10 years down the road, even when the total reserves reaches 5trillion, the same reasoning is, more likely than not, appear again. This question will continue to linger. When is 'enough' enough? Look at the pay scale of our elites. Being elites, having looked at complex mathematical formulas and educated at renowned universities to the likes of Harvard, Stanford, Oxford, Cambridge, I doubt 6-7 zeros can hardly be considered a large number. Maybe they are aiming at this thing called
∞
I wonder who invented it...this guy's a genius and an elite of the elites!
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