Greetings my dear listerners! Its been a long time since we had communicated. Today I am sharing a story which I have heard along the way which is amusingly quite relevant.
Ladies and genteleman !!!!!!!!!!
Ladies and genteleman !!!!!!!!!!
` If you have difficulty in understanding the current world financial situation, the following should help... It has been simplified, simply the Indian way.....
Once upon a time in a village in India , a man announced to the villagers that he would buy monkeys for $10. The villagers seeing there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts.The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.
In the absence of the man, the assistant told the villagers: "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50."
The villagers squeezed together their savings and bought all the monkeys. Then they never saw the man or his assistant again, only monkeys everywhere!
Welcome to WALL STREET !!!`
Undeniably,what has started off as a financial crisis has become an economic meltdown.While the West is contemplating different ways to recover from this unprecedented setback, one important issue that has been neglected is what an economist will term it as the potentially dangerous DEFLATION.
And what is DEFLATION my dear listerners?
And this is what I learned:-` DEFLATION happens when peole are reluctant to spend for fear that they may face a bleak future without cash in hand.In short they are hoarding cash.`
I was told if people are spending less, the economy will have less money in circulation and that will effectively mean the companies are unable to sell their goods because people are not buying them.When companies cannot sell their goods, it mean employees have to be laid off to cut losses.When companies lay off their employees, it means all those who are jobless will have less or almost nothing to spend.
For your information my dear listerners near and far, our Finance Minister had recently pumped another RM 7 billion into budget.This I believe would put more cash into the market to help to deter further economic meltdown.
Then there is this plan to cut employees`s EPF contribution from 11% to 8% next year to put more money into the consumers hands. Many factions disagree with this plan of action because this microscopic amount is too insignifcant in channelling more cash into the market. But to the lower income group, this is a handy help-out to boost their spending power.
Recently there was this move by many major hypermarkets to reduce the prices of many basic items to boost consumer spending in this time of financial crisis. Hope such price reductions will not just remain as lip service only or a means for these traders to enjoy free media publicity and sales promotion. Consumers be smart when purchasing these items if you were to optimise your spending power.
All in all, the government is trying to put more money into the market to contain the economic meltdown and to assist recovery. But more importantly the masses must be encouraged to SPEND BUT WITHIN THEIR LIMITS despite all the negative scenario all around; and the companies to hold back retrenchment by cutting cost and unnecessary expenditure.
If to contain inflation,the government and banks can increase interest rates, but FOR OTHERS WHO HAVE THE EXTRA CASH, do not adopt the wait -and-see attitude, hoping the prices will drop further despite the already falling prices of goods and fuel, properties and air travel among others. Making investments will contribute to the recovery of the nation`s economy-BUT THAT IS ONLY WHEN YOU HAVE THE EXTRA MONEY TO SPARE.Remember you need to spend thriftly to weather through this negative economic storm first
All claps for such a wise move-savings
But do not forget, savings if re-invested
can be more lucrative.
This is especially so when Bank Negara
has recently lowered interest rates for fixed deposit so as encourage masses
to spend more or to save-invest in other forms that can spin the economic engine.
Yeah! we can collectively deter further deterioration of the economy-TOGETHER WE ARE A FORCE -we can either cash- in or cash -out at this time of economic meltdown. SPEND WITHIN YOUR LIMITS but do not hoard cash !!! If you are facing personal financial meltdown, seek AKPK-Agensi Kaunseling Pengurusan Kredit, for help.
Sincerely at this time of the day, no one can tell which is the best way to handle your household economy but be wary because all the households` economy when sum together will affect the road to nation`s economic recovery or downturn ie. paint our 1st quarter of 2009 -will it be sunshine or ugly and scary as speculated ???
Once upon a time in a village in India , a man announced to the villagers that he would buy monkeys for $10. The villagers seeing there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts.The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.
In the absence of the man, the assistant told the villagers: "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50."
The villagers squeezed together their savings and bought all the monkeys. Then they never saw the man or his assistant again, only monkeys everywhere!
Welcome to WALL STREET !!!`
Undeniably,what has started off as a financial crisis has become an economic meltdown.While the West is contemplating different ways to recover from this unprecedented setback, one important issue that has been neglected is what an economist will term it as the potentially dangerous DEFLATION.
And what is DEFLATION my dear listerners?
And this is what I learned:-` DEFLATION happens when peole are reluctant to spend for fear that they may face a bleak future without cash in hand.In short they are hoarding cash.`
I was told if people are spending less, the economy will have less money in circulation and that will effectively mean the companies are unable to sell their goods because people are not buying them.When companies cannot sell their goods, it mean employees have to be laid off to cut losses.When companies lay off their employees, it means all those who are jobless will have less or almost nothing to spend.
For your information my dear listerners near and far, our Finance Minister had recently pumped another RM 7 billion into budget.This I believe would put more cash into the market to help to deter further economic meltdown.
Then there is this plan to cut employees`s EPF contribution from 11% to 8% next year to put more money into the consumers hands. Many factions disagree with this plan of action because this microscopic amount is too insignifcant in channelling more cash into the market. But to the lower income group, this is a handy help-out to boost their spending power.
Recently there was this move by many major hypermarkets to reduce the prices of many basic items to boost consumer spending in this time of financial crisis. Hope such price reductions will not just remain as lip service only or a means for these traders to enjoy free media publicity and sales promotion. Consumers be smart when purchasing these items if you were to optimise your spending power.
All in all, the government is trying to put more money into the market to contain the economic meltdown and to assist recovery. But more importantly the masses must be encouraged to SPEND BUT WITHIN THEIR LIMITS despite all the negative scenario all around; and the companies to hold back retrenchment by cutting cost and unnecessary expenditure.
If to contain inflation,the government and banks can increase interest rates, but FOR OTHERS WHO HAVE THE EXTRA CASH, do not adopt the wait -and-see attitude, hoping the prices will drop further despite the already falling prices of goods and fuel, properties and air travel among others. Making investments will contribute to the recovery of the nation`s economy-BUT THAT IS ONLY WHEN YOU HAVE THE EXTRA MONEY TO SPARE.Remember you need to spend thriftly to weather through this negative economic storm first
All claps for such a wise move-savingsBut do not forget, savings if re-invested
can be more lucrative.
This is especially so when Bank Negara
has recently lowered interest rates for fixed deposit so as encourage masses
to spend more or to save-invest in other forms that can spin the economic engine.
Yeah! we can collectively deter further deterioration of the economy-TOGETHER WE ARE A FORCE -we can either cash- in or cash -out at this time of economic meltdown. SPEND WITHIN YOUR LIMITS but do not hoard cash !!! If you are facing personal financial meltdown, seek AKPK-Agensi Kaunseling Pengurusan Kredit, for help.
Sincerely at this time of the day, no one can tell which is the best way to handle your household economy but be wary because all the households` economy when sum together will affect the road to nation`s economic recovery or downturn ie. paint our 1st quarter of 2009 -will it be sunshine or ugly and scary as speculated ???
1 comment:
do you know lower BLR is bad news for some esp.the senior citizens/pencioners who depend on fixed deposits as their source of income.
The government should come up with formula to help the senior citizens and welfare organisations who are affected by the current low rates in fixed deposits esp. at this bad time where medical expenses and food prices are ever increasing.
perhaps senior citizens and welfare organisation should have special FD account type with diffrent kind of priviledges.
a concerned senior citizen
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