I have this strange feeling, although this is at odds with what we are know.
We were being told by the media that how strong the Singapore economy were and how strong the Singapore currency (SGD) were, and how strong the stock market (STI) were. However, when I went back and check the SGD exchange rate with other currencies including EUR, GBP, CHF, THB, IDR, CAD, AUD, NZD, JPY and USD, the SGD in the past 10 years only strengthen against the USD, JPY and IDR. In fact, if we were to discard the period of weakness from 1997-1998 for the IDR, SGD has in fact gone nowhere against the IDR!
So if our economy is doing that well, why our currency is weakening against others? This is really at odds with my understanding. The reason is, therefore, our economy is not as good as it is. True that the STI is making new high. But that is so only because it measured in SGD term. If we measure it in term of say EUR, the gain is only just maybe 3%, and measured against gold, it in fact decreased! What happen? To put it simply, our purchasing power is eroded, and if you happen to be the less well off or less educated and did not put your money into equity or property market, you will loss out.
I ponder what is installed for us going forward. I looked at the CHF against SGD and to me, it is clearly bottoming out. It means that the SGD will weaken against the CHF going forward. In fact, I foresee SGD weakening going forward. And because of the weakening of the SGD, the STI may scale new high, but that is nothing to shout about because it merely reflects the weakness of the SGD. The central bank can simply print money to jack the stock market higher, but if you measured it against hard currencies like gold, you will find that the stock market measured in term of gold will fall dramatically.
What is the implication? This implies that the gap between the have and have not will widen.
I am not very optimistic about the future of Singapore. Despite what the government paint about a picture perfect scenario, I think their policies are just benefiting the rich.
With the Indonesia government reviving their plan to build a nuclear plant near a volcano, and natural disaster will have a huge impact. According to Australia National University (ANU), its study suggested that if there is a nuclear plant accident, the leak of the radiation can cover as wide as from Southern Thailand to Northern Australia, effectively wiping out whole of Singapore. So why isn’t our government doing anything about it? Or is it that they think that nothing can be done? If that is the case, I am not surprise that we will see our minister starts to migrate in the next decade (and maybe this explain why they wanted the pay hike).