Real losers and winners
In his interview with CNBC, President Bush said that we were in an "Unusual Period" and this justified bailing out BSC and the Fed's aggressive rates cut, etc., despite high inflation risks. Clearly, ordinary poor guys like me are the ones to lose under such policy. Why? Simple: my hard-earned money is depreciating everyday and such endless devaluation (which started several years ago) is raising prices of all goods and services everyday! If I am a subprime victim who is facing foreclosure, I can't see how these policies are helping me out. Whether BSC continues its operation by getting funding from the Fed is irrelevant to my conditions and I will definitely lose my house, my investments and my money unless I can earn more "real money" to finance or service the subprime mortgage. But how could I earn more money now? Prices are rising everyday, jobs and wages are at risks, stocks are falling, funds are liquidating, and damn, my hard-earned cash, whether in USD or HKD, is devaluing everyday.
The real beneficiaries are the culprits behind the financial and credit crisis of America today, namely, speculators, lenders, hedge funds and the sophisticated financial/securities firms involved in trading, setting up or building up such terrible risky markets.
Leveraging is a deadly flu virus
I hate the word "leveraging" now but before BSC, I think many people believed leverage might be a good way to make you rich overnight. It's time for regulators round the world to control and supervise anything related to "leverage" which now sounds like a dead flu virus to the financial and credit world.
Socialism for the rich is not so easy
The crisis may go on for a long time
One more thing (but not the last): we don't know how long these crises will go on. It's like what we had experienced in Hong Kong during the 97 financial crisis in Asia or the nightmarish period of SARS attacks in 2003. We didn't know how it began and it ended. The Hong Kong economy never really recovered after the burst of the property bubble in 1997 and it was only when our BJ Central Government came to save us after SARS and a series of local mass demonstrations in 2003 that Hong Kong began to show some real signs of improvement. The subprime problems have been flourishing for more than one year and instead of seeing any real sign of improvement, we now have BSC collapsing (all of a sudden) pending the outcome of the Fed funding through JPM. What the Fed has done so far has no help at all and financial giants in Wall Street are facing more and more problems. Well, "Socialism for the Rich" cannot work so easily as you wish as in the case of socialism for the proletariat. Not so easy, my friend.
Here are some more hard-learned lessons after BSC:
You can't trust the system
You can't trust the system and what these giant financial firms are telling you. You know, I am one of those stupid fools that would buy BSC stocks after S&P's report on the recovery of the subprime problems and the release that BSC was still OK despite rumors about of its liquidity problems. Fortunately, I didn't do that at the last minute because I recalled that Warren Buffett did not buy BSC when it was in trouble last year. Thanks for saving me again, our dear Mr. Warren Buffett.
The Fed has no choice but to bail out the culprits
The Fed has no choice but to bail out the failing lenders and speculators. This is an "Unusual Period"! USD value must continue to decline against other currencies, prices of fuel and other commodities are bound to go up to reflect the impact of such devaluation, our hard-earned cash will depreciating everyday, inflation can't be stopped.
Recession can't stop inflation
Recession can't stop inflation. Why? The US has been in financial, credit and housing crises for over a year and inflation has been going up. Oil and gold hit record high and so is the price for food. The fact that I can't have enough money to pay my rents, gas, electricity, food, taxi, etc., does not mean the sellers or suppliers can reduce prices. They don't have the choice to do that when raw materials, grains, oil, are all going up. It's a vicious circle, my dear.
Something we never learn: Real estate bubble must never be repeated
Real estate bubble must never be repeated. I hope it is not futile to say this again. No territory on earth has thrived well by property bubbles. No, not Japan and not even the USA. Our Chinese Central Government understands this very well and that's why, our BJ Central Government is exercising tighter and tighter macroeconomic control over property speculation in Mainland China. Contrary to our Central Government's wisdom, the local Hong Kong government is practising high land price policy so as to revert Hong Kong to a property bubble as in the good old days of British colonial rule before 1997 and I am sure this will again ruin the Hong Kong society. When will human beings learn from history? Never, I think and that's why poverty, war, disease, famine, disaster, etc., suffering will continue until ... Judgment Day.
Something we must but can't do: depeg HKD and USD
We must stop pegging the Hong Kong dollar to USD! Our BJ Central Government again has the wisdom to link Chinese Yuan to a "basket" of currencies and contrary to such policy, the local Hong Kong government still persists to maintain an entirely outdated peg of HKD to USD which was introduced as an emergency measure only in 1983 when the Hong Kong dollar almost collapsed. Even rich oil countries are delinking their currencies to USD, why is Hong Kong so stubborn? May be the answer lies in the hands of the ruling elite in Hong Kong, namely, the big banks and big landlords. They have everything to lose once we de-peg. There will be no more negative interest rate, no more inflationary pressure, no more devaluation, etc., to enable them to artificially top up property prices, profit margins and earn more and more paper money from poor guys like me. Yes, they rely on the US Fed to print paper money to fill their pockets in Hong Kong and this is what the Fed is going to do next week.
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