BRACING FOR HARDSHIPS DURING CRISIS

Hi Guys,

 

Thanks for dropping by.

 

Moneytalk, as the name implies, is a blog dedicated to money and matters concerning wealth and it’s related issues. The writer’s primary profession is in the Capital Market Services and Practices Diamond Qigong for healthy well-being. As this blog is allocated to me by my Master Sifu, I’ll try to offer my level best opinion from my wisdom to your queries and share them here with all.

 

Please feel free to offer your good opinion too. In fact, all are welcome to provide and share your input if you have a better opinion to any querries raised or have a different approach or opinion which you think fits best. All rational inputs were be unreservably appreciated. Thank you !      

 

Quote : “Giving alms is just like sowing seeds; the seeds will bud when nourished with

               a loving heart.” – Buddha   [“布施如播橦 叮郗善滋滋橦子 才会发芽 ” – ]

 

              

As we bade farewell to 2008 and welcome the new year 2009 albeit with tepidity, it is my fervent hope that the in coming “Earthy Ox” will be a “healthy” and “strong” one so that it can provide us the might and strength to tide through this very difficult period of global economic slow down caused by the US Subprime Crisis.

 

Some of us are now beginning to slowly, while most will surely feel the “pinch” from the effects of  this economic slow down. It may take a longer while for global economies to recover but bracing for the worst is what all of us need to prepare for now.

 

Let us now guess what is going to happen from now on until full recovery of  our country’s economy.

 

Normally it will take a period of time ranging from three (3) to six (6) months for the domino effects to reach our shore but because of the magnitude of the crisis and that it happened far away and the fact that our economy are yet to be “globalized”(Blessing in disguise as Malaysia is not yet a global FTA member as discussion with US on free trades broke down just too many times in the past), looks like it should take about one (1) year for the full effects of the US Subprime Crisis to get to us ! In fact the tell tale signs are there for the more observant economic advisers to all the nation’s top government officers in the likes of the Prime Minister and his Deputy, Finance Ministers and their deputies and to a lesser extent, the Foreign Affairs Ministers and his deputy and the Foreign Trades and Industries Minister and his deputy who have studied the most fundamental of economic theory subject in the basic of Economic 101 to have been able to see the obvious [could this be the reason why our top government officials entrusted by the rakyat to look after the Country’s wealth are so confident that Malaysia will not be handed a hard landing as multi stimulus packages are on place ever ready to be call upon anytime soon ] !

 

 

 

What Does Business Cycle Mean ?

 

The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery. At one time, business cycles were thought to be extremely regular, with predictable durations, but today they are widely believed to be irregular, varying in frequency, magnitude and duration.

 

Business Cycle explained.

Since the World War II, most business cycles have lasted three to five years from peak to peak. The average duration of an expansion is 44.8 months and the average duration of a recession is 11 months. As a comparison, the Great Depression – which saw a decline in economic activity from 1929 to 1933 – lasted 43 months.

 

 

Really, it does not take a genius but a mediocre business student to be able to tell you what it’s all about in a business or an economic cycle ! He may be able to tell you that after all the BOOM, the last or the tailend of it is always in the PROPERTY SECTOR which signifies the beginning of the end of a Country’s good times ! Just look at our closest neighbour Singapore, they are the first country in the Asean Region to be hit hard by the US Subprime Crisis through their quick declaration of  “RECESSION” and they are a “GLOBALIZED COUNTRY” mind you !

 

Ok, let us do an estimate of the likely duration of recession that can affect the economy of our Country. Because it’s a global recession, we will “Average Out” the followings : the “SUM” of the average duration of a recession since World War II and the worst duration of the recession suffered during the Great Depression ; i.e. (11 + 43)/2 = 27 months or 9 quarters in financial term.

 

So we should be prepared to last at least 2 years of hardships from now !

 

Time of hardships are already knocking at our doors, incomes are reducing while costs of living, essential and necessary expenses are mounting by the days, some are retrenched and given long holidays without compensation and/or pay while the slightly luckier ones are taking pay cuts and VSS.

 

Many consumers are complaining that while the price of petrol, diesel and some essential items such as cooking oil, flour just to name a few here are coming down but the greedy food retail outlets especially the stall owners at foodcourts are still charging higher prices for the food that they served. Do you think that we should boycott them ? These greedy traders are taking advantage of the situation and are not helping the cause at all ! I think it is good idea that we should all cook and eat at home and not commit to their coffers !    

 

What should we do next follows !  

 

 

                                      ………….to be continue………….               

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