Reply to Tommy Koh's: "What Singaporeans can learn from Europe"

My friend asked me to have a read of Tommy Koh's recent Straits Times article. It brings up some interesting points, and it can be read here:

http://sghardtruth.com/2012/05/19/what-singapore-can-learn-from-europe-by-tommy-koh/

I agree with much that he says is 'improvable' with Singapore, however I disagree with his solutions.

Firstly, I think he is a little misleading mentioning how we shouldn’t chastise Europe for their financial worries (Greece, Italy, Ireland, Spain, Portugal & france etc etc) and then goes on to compare Singapore with the Nordic countries? Just to point out: Finland is the only one using the euro. Norway is not in the EU. Sweden and Denmark are in the EU but still use the krone. They do not have a sovereign debt crisis. Actually Denmark just had an oversubscribed bond auction lately, pointing to the fact that they are actually on the opposite side of the ship from the PIIGS mentioned above (where no one wants to buy their bonds, hence the soaring bond rates). So yes we should criticise Europe (PIIGS) for their debt binge, and no, no one is actually talking bad about the Scandinavians (not yet anyway).

Back on point, everyone agrees that equality is great. That high wages for all is great. Free education and healthcare is great. That the ability to have a lot of kids and afford for them to have childcare is great. What Tommy doesn’t mention is that these things cannot and will not be made possible just by the government or its people wishing for it to come to pass. Nothing is free. Everything has to be paid for with taxes, or by deficit spending (PIIGS/US/Weimar Republic/Zimbabwe anyone?) 

My thoughts on his solutions:

1.       Limit the number of cheap foreign workers in Singapore

a.       Prices of everything starts to increase. Bus fares go up since we need to pay more for drivers. Houses go up since we need to pay more for construction labourers. Food prices go up (bye bye $3 chicken rice) since we need to pay for cooks. Yada yada yada. You get the drift

b.      Sweden and the rest of the Nordic areas would KILL to have cheap labour like we do. Why is it a bad thing that we get something cheaply? Nordic countries tap into cheap energy (wind, oil, coal) to fuel their economy, we tap into cheap labour. There are people willing to work and there are people willing to pay for that work. Why should the government come into the situation to stop what would make 2 parties happy?

c.       He talks about us not having enough childcare services. Then asks us to decrease foreign labour. Who then will agree to be our maids for $500/month (not entirely sure on the price)?

2.       Set a minimum wage

a.       Minimum wages always affect the economy adversely. Worst of all, they affect the people that they are trying to protect. When you increase the minimum wage, cost of setting up business goes up, the flow on effect is everything else goes up. Businesses don’t get set up (imagine setting up a hostel, and needing to pay $25/hour for a person to clean tables and man the reception), so unemployment goes up, with the people that would be earning minimum wage being the ones now not having the jobs (because the businesses dont get set up). Even if these jobs are somehow kept, their high wages mean everything else has to go up in price, so they end up losing that increase in salary since they have to pay more for goods.

3.       Better education

a.       I think our children suffer from the mentality of their parents more than from the education system. People in Europe want their kids to chase their dreams, and enjoy school, and to get a pass from exams. Singaporean parents want their kids to chase condos and cars, and to get straight A’s. Who is the pressure really coming from? 

Lastly, he stated: THE citizens of the world aspire to live in fair societies. One important aspect of fairness is the equitable distribution of income and wealth. This is the moral force behind the economic doctrine of inclusive growth.

I would ask everyone to be careful of what he means ‘equitable distribution’. Does that mean taking from the poor to give to the rich? From the productive to the unproductive? Would this constitute stealing? Should stealing be considered a moral force? Please do not get me wrong. I believe that as a member of the human race, we ultimate aim should be to strive towards helping the poor, towards serving the needy. However,this should be done through free will, and not through government mandate.

I think that the role of government is to protect their citizens through a fair and just judicial system, and by protecting us from outside threats (armed forces). Besides that, the government should allow us to chase our dreams, and to keep what we earn based on our skills in the market place. Give the market place what they want, and you will be rewarded richly. Don’t offer the market place something useful, then you don’t get rewarded. It is no surprise that Singapore has been able to attract the best talent globally by following this mantra. If you can do something that everyone can do, you are not offering anything ‘rare’. If you want to get rich, go better yourself and make yourself unique and valuable. Simple, though unfortunately not easy.

Lastly, he fails to mention that those countries have a wealth of natural resources which fuels(Norwegian oil, Danish wind) and supports their welfare state. He also fails to mention that the Nordic people are very generous (free education for foreigners, huge aid donations etc) and content people, being happy with the basics in life, and striving to share and give to the needy. Singaporeans on a whole (there will always be exceptions) are not happy with taking the bus (most Scandinavians are more than happy to rely on trams and trains), with earning as much as the next guy etc etc. So instead of blaming our government/ the system, maybe we should look inwards at ourselves. We cant have our cake (wanting to have all the riches of the world) and eat it too (not work for it, and ask that we be given it based on ‘equality’). 

Singapore is a country built on meritocracy principles, and I am proud at how it is like that. I personally do not think the system has much to learn from the European model. I believe ours is actually superior.  There are however plenty more we can learn from the Scandinavians when it comes to being content, and generous, and hard efficient workers. We need to change from the inside out (if we want to be like them), and not vice versa. 

Ranting Andy on India's falling Rupee and Gold

In India, the Rupee is down to yet another ALL-TIME LOW, memorializing the results of perhaps the WORLD'S WORST FINANCIAL MANAGEMENT - quite the distinction in today's environment of abject incompetence...

  

  

I mean, centuries of Indian culture have ingrained the concept of REAL MONEY into its citizens' DNA, which is why it has been the world's largest gold consumer for as long as data has been recorded.  However, despite having one of the world's most vibrant economies - albeit, a statement doesn't mean what it used to - its moronic government has printed the Rupee into oblivion, going to great lengths to discourage citizens from taking steps to not only PROTECT their wealth, but GROW India's stature.

In one of the most pathetic speeches EVER - from a high ranking official that has not yet mastered the English language - here is India's "Finance Minister" begging citizens to avoid the "dead asset" - GOLD - which has appreciated against the Rupee eightfold over the past decade!

India's Finance Minister Wants The World's Largest Gold Investors To Invest In Anything But Gold  http://www.businessinsider.com/india-finance-minister-investing-gold-2012-6

Desiderata - by max ehrmann

Go placidly amid the noise and haste, and remember what peace there may be in silence.

As far as possible, without surrender, be on good terms with all persons. Speak your truth quietly and clearly; and listen to others, even to the dull and the ignorant, they too have their story. Avoid loud and aggressive persons, they are vexations to the spirit.

If you compare yourself with others, you may become vain and bitter; for always there will be greater and lesser persons than yourself. Enjoy your achievements as well as your plans. Keep interested in your own career, however humble; it is a real possession in the changing fortunes of time.

Exercise caution in your business affairs, for the world is full of trickery. But let this not blind you to what virtue there is; many persons strive for high ideals, and everywhere life is full of heroism. Be yourself. Especially, do not feign affection. Neither be cynical about love, for in the face of all aridity and disenchantment it is perennial as the grass.

Take kindly to the counsel of the years, gracefully surrendering the things of youth. Nurture strength of spirit to shield you in sudden misfortune. But do not distress yourself with imaginings. Many fears are born of fatigue and loneliness.

Beyond a wholesome discipline, be gentle with yourself. You are a child of the universe, no less than the trees and the stars; you have a right to be here. And whether or not it is clear to you, no doubt the universe is unfolding as it should.

Therefore be at peace with God, whatever you conceive Him to be, and whatever your labors and aspirations, in the noisy confusion of life, keep peace in your soul.

With all its sham, drudgery and broken dreams, it is still a beautiful world.

Be cheerful. Strive to be happy.

Quotes of interest

Anyone who has asked me about QE - whether it be QE2 or the likelihood of QE3 - my stock answer is I never noticed QE1 stop.  Two and a half years ago, my expectation was the US money supply would be required to grow almost vertically.  Today, that view seems exactly right.

-Rob Kirby

Unless the Fed is actively engaging in monetization at every given moment, the impact from easing diminishes progressively, ultimately approaching zero and subsequently becoming negative.

-Zero Hedge

The whole point of the European bailout fund (ESM/EFSF) is to BUY BONDS.  Basically Merkel just confirmed that the whole point of the ESM, which by the way still does not exist, and whose sole purpose is to buy bonds... is to buy bonds. You can't make this up.

-Zero Hedge

Ironic, isn't it, that the United States, the home of the indispensable people, stands before us as the likely candidate whose government will be responsible for the collapse of the West.

-Paul Craig Roberts

In my opinion, today's Fed inaction guarantees a systemic Western world financial crisis this year that will make Société Générale's ($1,900-$8,500 gold forecast) 100 percent correct.

-Jim Sinclair

To savvy investors, gold looks good when everything else looks bad.

-David Schectman

From Andy's Rant today

What is a dollar worth? An oz is always an oz. :)

Back to gold, here's a chart of the CPI-adjusted gold price - depicting gold nearly 40% below its ALL-TIME high...

  

  

However, if the TRUE CPI was utilized - care of John Williams of Shadow Stats - the "adjusted" gold price would be closer to 75% below its 1980 highs, as is the case with the current Dow.  Of course, if the "apples-to-apples" Dow was utilized - including stocks deleted due to bankruptcy or nationalization (Eastman Kodak, General Motors, Citibank, and AIG) - the Dow's "adjusted decline" would be closer to 85%...

  

  

In conclusion, you can see why the Fed is TERRIFIED of announcing a "new QE" initiative (which is probably why they'll couch it in "Fedspeak")...

Read the whole rant @ : http://campaign.r20.constantcontact.com/render?llr=n7vdaxbab&v=001cijNGvIyoo6by9-wrtuISpHN5b6phw09eOsAAKujnMruAv5mqA8EGlGQ1yZ-PHcNwWd7jWtkoIeHc0RDxOXDV-6ySBcBGHvFSi3P30nlLgIjuwTKyDJtKw%3D%3D

Real reason on Iran: "we need to blame people that don't look like us"

Very interesting listen. Pulls the curtains behind inflation and the need to keep things going till the election. 
Talks about:

• Monetary Easing
• Global Inflation
• Chinese Economy, and the need to curb inflation
• Politics behind Iran
• Australian Boom Times (47% of economy is made up of exporting Coal and Iron Ore to China and Japan)

Erik Townsend: Expect a US Price Shock as Black Swans Come Home to Roost

American investor (and longtime CM.com member) Erik Townsend has spent the past several years living internationally, with an eye to which countries may be good alternatives if economic crisis and/or Peak Oil start to materially impact life in the US.

His main observation as an expat? Through its misguided policies, the US has been exporting inflation to the rest of the world, raising prices all over the globe (as an example, Erik cites a $57 chicken pot pie from the menu at a 'working class' restaurant in Australia).

This inflation is affecting the rest of the world harshly, but is not yet being felt in the US due to our ability to export it as the issuer of the world's reserve currency. Our immunity will not last forever though, and when it ends, a massive upwards spike in prices is going to hit.

http://www.peakprosperity.com/blog/erik-townsend-expect-us-price-shock-black-swans-come-home-roost/72026

A few homemade charts

The Greatest Bull Market, A Gold Standard & Silver Shortages

from Silver For The People by brotherjon

kingworldnews.com / by Eric King / June 18, 2012

Today acclaimed money manager Stephen Leeb, told KWN, “the world is rapidly heading toward what you would call a ‘de facto’ gold standard,” and that we will see “shortages of silver over the next 5 to 10 years, massive shortages.”  Leeb, who is Chairman & Chief Investment Officer of Leeb Capital Management, also told King World News that investors are now “looking toward what I believe is going to be the greatest bull market of our lifetime — the one in junior miners.”  But first, here is what Leeb had to say about the situation in Europe:  “For a few hours after the Greek results were announced, investors were breathing a sigh of relief.  Initially we saw a big uptick in stocks, commodities, but gold was trading lower.  Then investors realized the elections didn’t mean a whole lot.”

Stephen Leeb continues:

“At that point you saw gold recover some, while stocks gave up the overnight enthusiasm they enjoyed in the futures markets.  At the end of the day, Europe is a mess, and it is still up to the Europeans to decide what to do to get out of this situation.

The strongest evidence of the continued chaos in Europe is a chart of the Spanish bond yields.  Spanish bond yields are now approaching 8%.  That’s a crazy number….
Read more here

"Today takes the cake for market madness..."

by Jim Sinclair, JS Mineset:

 My Dear Extended Family,

Of all the madness I have seen in markets over the last 50 years, today takes the cake.

My take on it is:

Mrs. Merkel can already taste the joy of being President of Euroland. Hollande is getting ready to set the stage for his growth solution to the euro mess. The entire western world economy is falling off a cliff. The West wants to bomb Syria into the dark ages but might meet Russia head on there.

Gold continues to overcome the bears.

The shorts of the euro are emboldened, but not necessarily as right as they think they are. Dollar strength has no fundamental backing, but benefits from the mirror image of the euro.

I recommend that you shut your ears to the multitude of experts, especially those on Financial TV that claim to have never been wrong.

Read More @ JSMineset.com

J.S. Kim on Physical Precious Metals' Importance

"I describe two important topics that the public-at-large still fails to grasp. One, I describe how the criminal banking cartel can counter-intuitively and periodically temporarily crush gold and silver prices in fraudulent paper markets even as global physical demand rises and physical supplies shrink and the importance of this sham to the banking cartel in seducing the retail investor to always make improper decisions about physical gold and physical silver (ie. not buying it). Two, I describe why retail investors should not fear this situation, how retail investors can use accumulation of physical gold and physical silver as an effective tool in fighting and defeating the criminal banking cartel and why purchasing physical gold and physical silver may be the only form of protection against the inevitable brutal collapse of our fraudulent monetary and banking system that is coming..."


Read whole article @ http://www.theundergroundinvestor.com/2012/06/a-blueprint-to-kill-jp-morgans-alleged-massive-manipulative-position-in-the-silver-futures-market/