Why Singapore's Economy Is Heading For An Iceland-Style Meltdown

[BuiKia]

Song boh? Sinkaporean?

In 2007, Iceland was celebrated for attaining the world’s highest standard of living according to the U.N.’s annual Human Development Index report. In less than a decade, the tiny North Atlantic island had transformed from a traditional fishing and tourism-based economic backwater into a finance and banking powerhouse, rocketing the country’s wealth and living standards to enviable new heights. Sadly, Iceland’s economic boom was an illusion based on a reckless credit and asset bubble that led to a terrifying financial crisis when it popped in 2008.

It has been just five years since the Global Financial Crisis, and the world – in brazen defiance of the lessons of 2008 – is already back to blowing massive bubbles and naively praising the countries that are benefiting from these “fool’s gold” economic booms. The Southeast Asian island nation of Singapore is currently inflating one of the most egregious examples of these post-2009 bubbles, and is displaying parallels to Iceland’s bubble that are causing me to believe that its boom will end in a similar (but not necessarily identical) manner.

Like Iceland in its heyday, Singapore’s economic stability and vitality – on the surface at least – has made it the envy of the world at a time when most Western economies are languishing under feeble growth, and high rates of unemployment and poverty. Singapore’s booming finance and real estate-focused economy has earned it the moniker “The Switzerland of Asia”, and finance professionals from all over the world are flocking to work there to take refuge from the hard-hit financial sectors in their home countries. Singapore’s unemployment rate is a mere 1.8 percent even as the country’s red hot construction sector has been attracting overseas workers, and a growing number of wealthy citizens are hiring domestic helpers from neighboring countries like the Philippines and Indonesia. The ranks of Singapore’s wealthy are growing rapidly thanks to the country’s asset bubbles, which is helping to fuel a luxury consumption boom in everything from high-end apartments to exotic supercars.

Even though Singapore is no longer an emerging market nation, I consider its bubble economy to be part of the overall emerging markets bubble that I have been warning about due to its strategic role and location in Southeast Asia, which is also known as ASEAN (Association of Southeast Asian Nations). My recent reports on Malaysia, Thailand, the Philippines, and Indonesia show that the entire region is caught up in a massive bubble, and Singapore is benefiting from this bubble by acting as ASEAN’s financial center.

The emerging markets bubble began to inflate in 2009 after China launched a $586 billion stimulus plan to boost its economy after the Global Financial Crisis threatened the country’s economic growth. China’s stimulus plan aimed to drive economic growth with an ambitious debt-funded infrastructure and residential real estate construction boom that led to the building of countless empty and unused cities and other wasteful projects. The stimulus plan caused Chinese growth to surge, and sparked a global raw materials boom and eventual bubble that provided an economic windfall to commodities exporters such as Australia and emerging market nations at a time when the rest of the global economy was suffering very heavily. International investors soon took notice and piled into emerging market investments to reduce their exposure to investments in deeply indebted and troubled Western economies.

Extremely low interest rates in the West and Japan, combined with the U.S. Federal Reserve’s multi-trillion dollar quantitative easing or QE programs resulted in a $4 trillion torrent of speculative “hot money” that flowed into emerging market investments from 2009 to 2013. An international carry trade arose in which investors borrowed significant sums of capital at rock-bottom interest rates from the U.S. and Japan, and directed the proceeds into high-yielding emerging markets assets with the intention of profiting from the difference in interest rates or the spread.

The sudden surge of demand for EM investments led to a classic “too much money chasing too few goods” scenario, which inflated bubbles in those countries’ assets, especially in bonds, which led to record low borrowing costs for emerging market governments and corporations. These ultra-low interest rates have helped to finance government-driven infrastructure spending booms while inflating an unprecedented wave of dangerous credit and real estate bubbles in emerging nations across the globe.

Hot money inflows, combined with central bank policies that allow currency appreciation to temper inflation, have contributed to an approximate 22 percent increase in the value of the Singapore dollar against the U.S. dollar since the financial crisis.

continue on website...............

http://www.forbes.com/sites/jesseco...y-is-heading-for-an-iceland-style-meltdown/2/

 

[AhMeng]

i hope it will happen soon...

 

[laksaboy]

I will keep posting this.


http://www.tomatobubble.com/id39.html

To feed the insatiable debt monster, and to maintain confidence in his notes, Mortimer must have a perpetually growing GDP (more tomatoes). If not, runaway debt and inflation will cause the economy to implode sooner, rather than later. GDP growth is fueled by "consumer spending"(consumption) and the constant borrowing which enables it. This is why economists, politicians, and other assorted lunatics are so obsessed with constant GDP growth.


The "business cycle" is very simple. When the rate of growth in money supply (debt supply) exceeds the rate of growth in the general economy (GDP), the excess "money" has to go somewhere. It creates an illusion of prosperity. Artificial bubbles will form either in housing, stocks, currency, etc. Eventually the market always corrects for these phony excesses and the bubbles burst. (just like the poker game.)

 

[Lionheart]

i hope it will happen soon...

There are so many stories, fairy tales and catastrophic soothsayings about Singapore.

I think there are hundreds if not thousands of them written to describe the demise and collapse of Singapore. And none of them have been proved correct.

This is another bullshit envious and jealous piece of garbages to discredit Singapore.

Singapore will survive and it will soldier forward with greater prosperity and greater wealth for all its people.

We are a dynamic economy and we are capable of changing with the change of climate and financial landscape.

Majulah Singapura!!!

 

[enterprise2]

I thought we Swiss standard not ice standard!!

 

[AhMeng]

I thought we Swiss standard not ice standard!!

no swiss ice oso can mah..

 

[GOD IS MY DOG]

Laksaboy....................you also visit rense.com and tomatobubble.com ah.................

 

[Lionheart]

no swiss ice oso can mah..

potong red bean also can lah !!!

 

[Rogue Trader]

That is why the 6.9 million is going full steam ahead.. with or without consensus from citizens.

 

[laksaboy]

That is why the 6.9 million is going full steam ahead.. with or without consensus from citizens.

But like a MLM or Ponzi scheme, eventually there'll be a limit reached. You can't keep adding additional downlines and simply hope for the best.

 

[GramStroker]

There are so many stories, fairy tales and catastrophic soothsayings about Singapore.

I think there are hundreds if not thousands of them written to describe the demise and collapse of Singapore. And none of them have been proved correct.

This is another bullshit envious and jealous piece of garbages to discredit Singapore.

Singapore will survive and it will soldier forward with greater prosperity and greater wealth for all its people.

We are a dynamic economy and we are capable of changing with the change of climate and financial landscape.

Majulah Singapura!!!

Haha when the bubble burst, your Lion Fart will stink to high heaven.

 

[Lionheart]

Haha when the bubble burst, your Lion Fart will stink to high heaven.

I have read and hurt about the " property burst" so often I think the only thing that is going to burst is your belly!!!

Those who had missed the boat are now complaining like hell. Those who had bought properities are now enjoying life to the
fullest!!

 

[tonychat]

what happen to the old humane rule of "borrowing if you can pay it back" and "sell when there is a need and want"

these 2 golden rules if not followed, will lead to financial disaster. any business entity which follows these 2 golden humane rules will do very well for themselves safely and in long term.

integrity plays the part in everything and keep you safe and sound and secure. Temptations ( which money brings) are just illusion.

 

[escher]

90% of my money and assets are kept outside Stinkapore.

When that smear of shit on sole of shoe LKY die in the coming weeks, that will be the start of unravelling of PAP Stinkapore

Maybe one ringgit will get 4 stinkapore dollars before it drop to one yen for one stink dollar.
Especially when the world get to realised LKY stole hundreds of billions and only the COEs and HDBs are propping up the fucking stink dollar

 

[Rogue Trader]

But like a MLM or Ponzi scheme, eventually there'll be a limit reached. You can't keep adding additional downlines and simply hope for the best.

I agree.. everything has a limit. Unfortunately in sinkapore, scholars chart our future using spreadsheets and computer models.

 

[johnny333]

There are so many stories, fairy tales and catastrophic soothsayings about Singapore.

I think there are hundreds if not thousands of them written to describe the demise and collapse of Singapore. And none of them have been proved correct.

This is another bullshit envious and jealous piece of garbages to discredit Singapore.

Singapore will survive and it will soldier forward with greater prosperity and greater wealth for all its people.

We are a dynamic economy and we are capable of changing with the change of climate and financial landscape.

Majulah Singapura!!!

Even LKY believes that Spore cannot make it alone. He predicts that Spore will eventually have to re-join Malaysia.
The only question is on what terms.

With the amount of mismanagement & waste that is going on under LHL it will not be on the basis of equal partners.

 

[Satyr]

If a 90 lb weakling suddenly piles on 10lbs of muscle and then repeats this every week until he becomes a 200 lb hulk, this hardly normal.
Obviously he has discovered a wonderful secret or he is ingesting something that will ultimately destroy him.
Why do you think Singapore's leaders keep pressing unpopular messages in ever more frantic tones. They have very few options. The two casinos were the start. At least the casinos were announced beforehand. The untrammeled immigration of all and sundry was done on the quiet until it became a fait accompli. We don't know what else is lurking unless we get our own Snowden.

 

[da dick]

pls leh. iceland threw their corrupted bankers and CEOs into jail, sinkie keep giving our CEOs and minister million dollah bonus? where got same? sinkie is going bankrupt like this. iceland has stronger fundamentals.

 

[AhMeng]

pls leh. iceland threw their corrupted bankers and CEOs into jail, sinkie keep giving our CEOs and minister million dollah bonus? where got same? sinkie is going bankrupt like this. iceland has stronger fundamentals.

Good insight...sinkieland is doomed

 

[syed putra]

very difficult to believe. stinky is the safe haven financial centre in south east asian. In 1997/8 meltdown, all those with cash dumped their money in stinky, the only currency that did not devalue. Besides, S$ it is also backed by brunei.
When Thaksin sold his company to temasek, did he repatriate that money back to thailand or stash the loot in stinky? I think many other big businesses and businessmen do the same.