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Monday, 17 March 2008

Bad things are coming – Global Financial Meltdown 2008

Bad things are coming for Malaysian economic environment and we are probably will be facing the worst economic recession in the modern history of world economics. I’ve been monitoring the development of the United States Financial Crisis development which started with the decision of U.S. Federal Reserve to bail out Bear Stearns (an investment bank) by giving and overextended credits to JPMorgan on the basis not to let out big banks such as Bear Stearns to collapse.

Such an act if done by an Asian country such as Malaysia, Philippines or Thailand will be reprimand by the IMF, but on the U.S. Banks case, the IMF have took a double standard measures by being abstain from any actions towards the U.S.

Reasons why I’m saying that bad things are coming after watching the bail out of Bear Stearns Bank by the U.S. Federal Reserve:-

U.S. Deficits have reach double deficits than Clinton era;

U.S. recessions have been predicted to happens in 2008 and irreversible;

U.S. Dollars had been weakening since 2007 and had made its products very competitive compared to Malaysian products;

We are one of the largest trading partners with the U.S. economic amounting to almost 30 % (last figures that I’ve got);

Malaysian Ringgit had been freed from U.S. Dollar – Ringgit peg (even though within the currency baskets);

U.S. Federal Reserve abandoned its moral grounds not to bail out any bank that collapse within the free market and let the Asian countries such as Philippines, Thailand and Vietnam to pay the price of it;

Asian Financial milieu is contagious such as had been experienced in 1997;

To many postponed projects and bubble economic/ projects in Malaysia; and

The spiralling increase of the world crude oil that are currently being traded in U.S. Dollar and the price are being determined in London and NYMEX (New York)

My advice to you all in facing such latent danger of 2008 Financial crisis:-

Don’t panic to much;

Buy gold or jewellery which does not liquidate fast as on comparative basis with the products that was traded with U.S. Dollars;

Finish up all the postponed projects while the dollar decrease still can be containable;

Do not buy assets that was based on bubble economic (land which situated on the project on the intention mode); and

Those that want to get marry should marry now (no kidding!).

I’ll be happy to discuss further with you all and feel free to mail me if any enquiry should arise from this mail. Thank you.


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Faces of Tun Teddy

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