I read with interest the article in the New York Times dated 2nd February 2009 by Rolfe Winkler entitled
"Bad Bank is a Very Bad Idea". (Just click the highlighted link to read his article.)
Why do we need to care what happens on this issue? Because, whatever happens to the American Economy, will definitely affect our future; not only our future, but our Children's Future too. We have no choice.
THE IMPOSSIBILITY OF THE SITUATIONIn my opinion, Winkler's article explains the impossibility of the situation and the wisdom of President Roosevelt not to bail out the banks during the 1929 Great Depression. It should be noted that current conventional economic thinking is that this was a wrong decision back then.
Nevertheless, we now have a better idea as at today, as to why it is IMPOSSIBLE to do so, which is what both the Bush and Obama Administration have not come to a conclusion yet.
THE ASSUMPTION THAT WE ARE SMARTER TODAY THAN YESTERDAYWith time, we are supposed to become smarter because we can learn from history. However, if we become trapped in our "wisdom" of what we have learned, and try to do impossible things, because of the bias that has formed from our learning, then, this is what happens.
Of course, I am assuming that this is not because of bad politics, which I know nothing about. However, I do know that this is bad business judgment for the American Government and its taxpayers.
WHY DIDN'T THE JAPANESE FORM A "BAD BANK"? WERE THEY STUPID?It would seem from Winkler's article, that the problem of bankrupt banks is insolvale, and it is a matter of time that not only the US Government, but Governments all over the world, will come to that conclusion. This could also be the reason why the Japanese Government did not solve their bad banks problem.
It was because, and still is, not possible to solve it. As is, the Japanese Government is highly indebted from resolving the Japanese Banking Problems one after another, and yet, the problem has never been effectively resolved. If the US or any government persist in attempting this futile exercise, they would only place themselves in a similar situation, or possibly worse.
Right now, the CNBC Commentators / Interviewees are still saying that the US Government is more proactive, and SMARTER than the Japanese, in that it will form a Bad Bank to take over all the toxic assets of the US Banks.
WHAT HAPPENS AFTER THE US GOVERNMENT SWALLOWS THE TOXIC ASSETS AND BECOMES VERY SICK?Time will tell that this is a Market Untruth. The people who are pro "Bad Bank" believe and argue that "
If the US Government takes over all the toxic assets of the US Banks, the banks will be healthy tomorrow, and the economy will then recover."
However, the Untruth is that
THE US ECONOMY CANNOT BE HEALTHY WHEN THE US GOVERNMENT IS EXTREMELY SICK FROM SWALLOWING EVERYONE'S POISON.
The assumption that the US Government is so strong that it can withstand digesting ALL TOXIC ASSETS is unrealistic.
THE INEVITABILITY OF A US$ DEVALUATION CRISISWhat will be the consequence of such an action? There will eventually be a US Dollar Currency Devaluation Crisis. The question is not whether it will happen, but when.
When will this US$ Devaluation Crisis happen?Kotlikoff & Burns, explained how Currency Devaluation Crisis happens using a
Sand Metaphor, in their book entitled, "The Coming Generational Storm, published in year 2004.
If you drop a grain of sand, one at a time, initially, it will just pile up, and form a mound. Eventually however, a single grain dropped, i.e. the last grain, will be such that it will topple the whole mound, because the nature of gravity is such that the mound can only take so much. The problem is, we never know when this will happen, although we do know that for sure it will happen.
The US Government keeps piling debt after debt on the US Taxpayers. How much more can the US Taxpayers take? It will take a book to explain all the problems they are facing, and it will be too boring to read.
However, let me just say that I believe that there is NO WAY OUT for the US Government to settle the existing Government Debt of US$12 trillion officially declared, and another US$45 trillion in undeclared debts from Non Generational Accounting of the Social Security, Medicare and Medicaid Funding Deficits.
Worst, instead of finding ways to reduce the problem of the Government Debts and the Social Security & Medicare Funding Deficits, President Obama is planning on expanding the Medicare Benefits Coverage further, and with this Government Policy move, it signifies his intention not to take any action to resolve the bigger, longer term Government Debt issue.
In Conclusion, the US Government's Finances is one of a Mountain of Debt, where the mound will grow, US$ 1 billion at a time, one grain of sand at a time, leading to the inevitable conclusion that the last grain will trigger an economic holocaust of epic proportions that no man can imagine.
This statement is not sensationalism but the truth. There is no turning back. The US Government can no longer solve the Funding Deficits and Government Debt Problem. The question is the timing, i.e. WHEN the situation will deteriorate into a Financial and Economic Armageddon?
BUT MANY HAVE MADE SUCH DOOMSDAY PROPHECIES AND LIVED TO BE RIDICULEDIt is true that many have made such Doomsday Prophecies and lived to be ridiculed, for such a scenario has not materialized thus far. So why would I stick my neck out and say the same "foolish" thing so that you can ridicule me?
It is because I believe that this is the Reality today, and the fact that I share this opinion, gives us time to do more homework i.e. prepare and strategize our approach to investing in assets, be it a house or stocks, or structured products.
More importantly, it highlights the Risk of Conservatism, i.e. of merely holding on to one's cash, whether under the mattress or in the bank.
YOU CAN LOSE ALL YOUR MONEY, ESPECIALLY IF YOU DO NOTHINGYou can lose all of your money, even if you do nothing; especially if you do nothing, in a Hyper Inflation Environment.I have also qualified my Economic Holocaust Prophecy statement with the "Last Grain of Sand" Explanation, which no one can know in advance. We are in a musical chair game right now. If you can foretell the right moment in time, when the last grain of sand, that last US$1 billion that will break the camel's back, and cause a run on the US$, and take action to take advantage of the foresight, you will be a very, very rich man.
However, the point I want to make is that
"Just because it hasn't happened, doesn't mean it will not happen. And by the time it happens, it will be too late to do anything."LESSONS FROM THE ASIAN CURRENCY & ECONOMIC CRISISThe question is, "Can you do something about it today?" That, my friend, depends on each individual circumstances, and I will not carry on the discussion of the solutions in this present blog article.
The message of this blog article is clear.
The Bank Toxic Assets Problems are too massive even for the US Government or any Government to digest. If the US Government persists in doing so, then we have to really watch out for an Economic Disaster in the form of a US$ Devaluation Crisis worse than that of the 1997 Asian Currency Crisis. A number of affected Asian countries relied on Export Trade with US to eventually grow themselves out of the hole. On the other hand, America will have no leg to stand on, if a US$ Devaluation Crisis happens.
When Asia had a Currency Crisis, most Asian countries' currencies were devalued in the process, against the US$. Thus, when the US$ experiences a Devaluation Crisis, what does it mean to the world?
WHAT WILL HAPPEN WHEN THERE IS A US$ DEVALUATION CRISIS?There are two schools of thought here. The first, argues that the concept of TINA, i.e. THERE IS NO ALTERNATIVE to the US$, and thus, there cannot be a devaluation of the US$ at a crisis level.
For many months, I was confused on this issue. Asian Currencies devalued against the US$. However, when the US is in trouble, Asian countries will also be in trouble. In fact, the whole world will be in trouble. As the saying goes, "When the US sneezes, everyone catches a cold". Such is the economic influence of the US, and I believe this assumption to be true.
However, I have come to the conclusion that currencies are nothing but a medium for the exchange of goods. That was "Eureka" but to most economists that is basic theory. It is not the theory that is profound but the implications of this idea that is interesting.
Is it possible that when the US$ experiences a Devaluation Crisis, the whole world currencies will also experience a similar Currency Devaluation Crisis, not against a particular currency, but the price of goods?
In other words, a US$ Devaluation Crisis will lead to a World Hyper Inflation Environment, where Prices of Goods skyrocket because the currency is a worthless medium, not that acceptable to the public then.
A US$ DEVALUATION CRISIS MAY LEAD TO WORLD HYPER INFLATION & STAGFLATIONAll of the world's currencies are just PROMISES to pay, and as each currency devalues, it will be Hyper Inflation that takes over, in the form of higher and higher prices of goods, as people starts buying goods to hedge against the fast eroding value of their currency.v This will happen, despite the fact that other currencies are also devaluing.
Oil Prices will skyrocket, and so will Grains like Soya Beans, Wheat and Palm Oil. The rising Commodity Prices will put inflationary pressure on all kinds of goods to go up in price, and it will not matter what currency you hold, because every currency in the world, will lose its value against the hard assets and solid goods.
We should not forget that Hyper Inflation can occur in a recessionary environment, due to currency devaluation crisis, and thus, there is no economic boom when this situation looms its ugly head.
During this time, your salary will not go up much, because everyone's looking for a job in the World's Greatest Economic Depression. Even rental income will not go up much, in relation to the Hyper Inflation Rate, because of affordability issues.
Think about it. In the last Asian Currency Crisis, cost of imported goods skyrocketed but did rental go up? Did salary go up? No. But Inflation rose because twice as much of the same currency was needed to buy the same imported good valued at US$1. Asians were saved by a strong US Economy then, but this time, NO ONE in the world will save the world.
Economic Holocaust and Financial Armageddon of the Greatest Historical Proportion!!!
These words are not meant to scare us, but it is a scenario that has to be considered. The Probability of such an Event happening is getting higher with each passing day, especially if the US Government persists in such blatant disregard for Hyper Inflationary Pressures.
The US Government is the last bastion to maintaining some form of stability in not only the financial markets but the whole World Economy. If the World believes the US Government Finances to be very sick, then even God cannot help those who NEVER helped themselves.
THE LESS RISKY ALTERNATIVE - LET NATURE TAKE ITS COURSEI hope that the US Government will wake up and face reality. There is a much bigger issue at stake, i.e. the future of all Americans and the World. Let them not try to take on what cannot be done, and fail with disastrous consequences. Instead, let them be thankful for what they have today, and start a step by step, solid plan to rebuild and nurse an economy in tatters, back to health.
There is no shortcut to nature taking its course. No amount of medicine can get a patient (banks with toxic assets) in ICU (Intensive Care Unit), up and running, and running the Olympic Marathon in a month, or even in six months. Nature doesn't work that way, and those who try, will put everyone's future in jeopardy.
Unfortunately, unless we are part of the President Obama team of advisors, there is not much we can do, other than to do what we can for ourselves. California is on the verge of bankruptcy, and now, there is talk even on CNBC, that New York state may also be in trouble very soon. Thus, today, the key states in America are in fanger of defaulting on its debt obligations. How much deeper will the US Government dig its hole before it wakes up? Or before the Non US Investors wake up?
THE KEY MILESTONE EVENT LEADING TO A US$ DEVALUATION CRISISHow do we know whether what I say will happen? Here is the clue. This is the Key Milestone Event that must happen before the Currency Devaluation Crisis will happen. However, the happening of this event does not necessarily mean that there definitely will be a Devaluation Crisis, but it increases the Probability of the Crisis happening, exponentially.
The US Government will have to fund all its massive Proposed BGovernment Budget Deficits for the year 2009, estimated today to total US$3 trillion, sometime this year.
What does this mean? It means that "talk is cheap!" You still need to find the money, even if you are the US Government, and money don't grow on trees. The US Government, having nothing but US$12 trillion of debts in its pockets right now, will have to print money, and this printing of money will have to be subscribed by investors in the form of Treasury Bills.
The German Government is already running out of options to fund any Government Budget Deficits. The recent German issuance of Government Bonds had low subscriptions, and to attempt to issue another and fail, would have disastrous consequences. We are looking for a similar event for the US Treasury Bills.
Will Foreign Investors wake up and stop subscribing for US Treasury Bill,s especially at this artificial and ridiculously low interest rate level? Or will they continue to support the US Government? That is the key. As long as the investors keep supporting the US Government, then, there will not be a US$ Devaluation Crisis.
On the other hand, should the US overnment push their luck too far, "A Treasury Bill Too Far", not unlike the historical war movie, "A Bridge To0 Far", if you will, then the whole Financial World will realize that the US Government has run our of options.
What will investors should such a nervous time of risk arise? That is the final question that may push the US Government Finances over the brink.
DOES THE US GOVERNMENT HAVE A PLAN TO MANAGE OR MITIGATE THE HYPER INFLATION SCENARIO?This argument is not new, although it is a minority view. Thus, two pertinent question would be, "Does the US Government know and understand this US$ Devaluation Crisis Risk?" and "If so, what is the US Government intending to do about it?"
Most of the commentators who criticize the US Government that its actions will eventually cause a US$ Devaluation Crisis and Hyper Inflation behave as if the US Government is too ignorant to understand what is happening. In my opinion, nothing could be further from the truth.
If you think about how Americans think, they have always insisted on planning ahead, and they always insist on having a solition to all their problems way in advance, rather than wait for things to happen, and then muddle through. At least for the smart American Corporation leaders, this is how they work - "Always have a plan, and always insist on a solution to a problem, no matter how difficult the problem."
With all the smart people in the US Government, I can't believe that it doesn't have a plan to manage the Risk of a Potential Economic Holocaust.
Thus, we have to assume that the US Government has already seriously considered the Hypothesis and implications of a US$ Devaluation Crisis and a subsequent Hyper Inflation, and have come to the conclusion that it should not only ignore such a risk, but actually, print money like crazy, in a direct and blatant disregard of the consequences of such a Hypothesis.
Either the US Government is extremely smart, or extremely bold but stupid, or ...........
Maybe, just maybe, the US Government KNOWS and has admitted to itself, but not the world, that the balooning of the US Government Debt, i.e. the adding of a few grains of sand to an already high mound, is inevitable, and therefore, the US$ Devaluation Crisis is INEVITABLE.
THE CONCLUSION - THE US$ DEVALUATION CRISIS IS INEVITABLE - A QUESTION OF WHEN, NOT IF IT WILL HAPPENMy current thought process has led me to infer that the above statement is possibly why the US Government doesn't seem to care enough as to how much debt it is adding on to the American taxpayers. It knows that it will eventually have to default on the Government Debt, not in the form of a Declaration of Non Payment, but through excessive printing of money. This is how all Governments with excessive Government Debts have done it in history, since the days of the Roman Empire.
THE SOLUTION - A NEW AMERICAN CURRENCY PEGGED TO GOLD TO COPE WITH HYPER INFLATION & STAGFLATION?This leads to another important Hypothetical scenario to consider.
"If the US President insists that I come up with an idea / scenario / Strategic Plan to resolve the impending and inevitable US$ Devaluation Crisis, and in the process, place the US Government in a much stronger, more dominant position as the Greatest Economic Power with minimal debt, how would I do it? How can it be done?"The answer to this question will take a book, possibly two. However, the short answer to it would be that there would be a need to issue a new American Currency that is possibly pegged to Gold on an immediate basis, and partially to Oil, possibly in 20 years' time.
IF HYPER INFLATION IS TO HAPPEN, HOW WILL IT HAPPEN?As mentioned, if the US Treasury Bills are lowly subscribed, this phenomenon would highlight the lack of confidence of Foreign Investors in both the US Currency and its Ability to Fulfil its Debt Obligations without excessive printing of money. The undermining of Foreign Investor Confidence could be the final trigger in starting an avalanche of withdrawal from holding US$.
When the US$ Devaluation Crisis starts, the Federal Reserve will be obliged to raise interest rate to compensate for the risk that foreign investors are taking in holding on to a fast devaluing currency.
If the US Federal Reserve Rate rises from the current 0.25% p.a. today, to 15% p.a. tomorrow, and the US$ Devaluation Crisis is still not brought to control, then the scenario of a new US Currency is likely to happen.
In the case of Malaysia, the Interest Rate on the Ringgit (RM) rose to 22% p.a. in Singapore forex market, and yet, the RM fell to RM5.20 to the US$ during the Asian Currency Crisis, from a stable exchange rate at RM 2.50 / US$1. The then Prime Minister, Dr. Mahathir went on to install Capital Controls and pegged the Ringgit at RM 3.80 to the US$.
Obviously, unlike the Malaysian RM, the US$ cannot be put on capital controls as it is the world's most widely held currency, not to mention the contradictions of the American Philosophy of Capitalism and Free Trade.
So, in this case, the only solution would be to substitute the old currency, i.e. the US$ for a new currency, say the American Dollar (A$) and ensure that there is value in this new currency, by pegging it to something of acceptable perceived value, acceptable to the whole World, i.e. Gold.
OIL AS A PERCEIVED VALUE ACCEPTABLE TO THE WORLD - NOT TODAY, BUT POSSIBLY IN TWO DECADES' TIMEOil has the necessary perceived value because everyone needs oil, and it is a depletable and more importantly, depleting resource. The problem with Oil is that it is not an asset that can be simply and easily stored, without deterioration in quality, or loss in quantity through evaporation. It also needs special security against fire and leakages.
Thus, the simplest solution would still be to go back to the Gold Standard. However, it is certainly not inconceivable that, in 20 years' time, when Oil Supply becomes even more scarce, most of the forward looking countries would have build underground caves / storage compartments to keep a SPR (Strategic Petroleum Reserves), for the emergency situations when a drastic oil shortage may cripple a country. With prices rising exponentially, to US$200, US$400, or even US$1,000 due to the inelasticity of demand, the cost of securing leakages, evaporation and quality management would be minimal, in relation to the cost of a national emergency due to Chronic Oil Supply Shortages. At least, this is the world, I see, in 2 decades' time.
Why such a drastic scenario? Because of the Mathematical Concept of Exponential Growth.
Imagine moss growing in a piece of bread at double its existing size, every day. If assuming it only covered 0.8% of the area of the piece of bread on Day 1, how many days would it take to cover the whole piece of bread?
Just a simple double up from 0.8% to 1.6%, 3.1%, 6.25%, 12.5%, 25%, 50%, 100%, i.e. 8 days.
It would take 8 days to cover the whole piece of bread. However, notice that it took only one day, to grow from 50% area, to 100%. This is the issue with Oil Supply Constraint. A small problem accelerates into a very, very, big problem within not only a short period in time, but worse, it hits you whilst you thought you have time to solve it.
So, this is my Vision of the World Oil Problem, in 20 years' time. Anyway, I digress, but it is intellectually interesting today, to consider the possibility of Oil Products as a Future Currency, within our lifetime.
UNDERSTANDING THE NEW AMERICAN CURRENCY BACKED BY GOLDLet's return to consider the implications of a new American Dollar (A$) backed by a Gold Standard. I will use some simplistic calculations just to understand the possibilities. The scenario is one where the US Government may issue the new Currency, A$ backed by 8,133.5 metric tonnes or 287.086 million troy ounces of Gold at Fort Knox.
This is assuming that the Gold is still there because there have been some arguments that no one has seen this Gold at Fort Knox in its totality for more than 20 years. There have been claims that Inspectors who check the Gold are shown parts of it on different days, and so, there is no way for the Inspectors to verify completeness under such conditions.
BUT, let's assume that the Gold is still at Fort Knox, and assume, just for argument sake, that the new A$ is arbitrarily pegged to Gold at say, US$100 per ounce. This would equal to A$28.708 billion backed by 8,133.5 metric tonnes of Gold.
The exact total US$ in circulation is unknown today, but, let's just give it another arbitrary figure, but hopefully one that will reasonably reflect the situation.
The value of this exercise is not in the accuracy or reliability of the calculations for there are just too many permutations to even come remotely accurate to the real situation if and when it arises. Thus, the value of this exercise lies in given us a rough mental picture of the situation that may happen, i.e. one that will reflect the backbone of the New World Order.
There is probably US$14 trillion in total for the US Government to replace right now; US$12 trillion being the existing Government Debt, and US$ 2 trillion being currency in circulation in the banking system and possibly some miscellaneous stuff, that you and I probably don't understand anyway.
The point is ..... the US Government will have A$28.7 billion, backed by Gold, to pay for US$14 trillion (US$14,000 billion) of previous currency. This will translate to an exchange rate of A$1 = US$487.80, or a rough ball park figure of US$500 for every single new American Dollar.
The world will start over with this new currency, and previously, if you had been a millionaire with US$1 million in the bank, the New World would be that you only had A$2,000 after the conversion.
HOW WOULD HYPER INFLATION & STAGFLATION AFFECT US? THE 1920S GERMAN HYPER INFLATION MODELThis by itself, means nothing. What is important is the real purchasing power of One NEW American Dollar, i.e. what can you buy with the money. The answer, No one knows.
The problem is, a new currency will never be issued unless Economic Disaster of Epic Proportions in the form of Hyper Inflation has struck, and this is usually related to a Currency Crisis. The Currency Devaluation Crisis triggers Hyper Inflation because people are worried about th value of the US$, and doesn't want to hold it any longer than they have to, and this will include Americans themselves, in such a crisis. Economists who are familiar with Econometrics calculations will have all kinds of impressive formulas and models using calculus, etc., to calculate all kinds of things that can possibly happen.
Howeve, for us layman, let's just understand the concept of the Velocity of Money. The faster money changes hands and converts into goods and then these goods convert into money, has a major effect on the creation and propagation of Inflationary Pressures.
As an example, in the 1920s, the Germans had their salary paid twice a day, in truckloads of currency notes called Papier Marks. In fact, there were occasions where workers were even paid three times a day. The denomination of the currency ranged from a million Papier Marks to a trillion Papier Marks, for a single currency note.
Imagine holding 1 trillion dollars in your hands in exchange for a loaf of bread ..... I can't imagine it.
I am not very sure, but I believe that 10 or 20 Papier Marks would have bought you a loaf of bread in 1920.
In any case, the workers who receive the Papier Marks would rush to the stores and buy everything and anything they could lay their hands on, after queuing for a long time to enter the store.
Why? Because, bu the end of the day, their money would be useless, and can no longer buy the same amount of goods they could have bought if they had the patience and tenacity to que for an hour, to spend their money, there and then.
To get an idea of what I am talking about, we need some statistical figures. According to the Wikipedia, as at the 1st half of 1921, you could exchange 62 Papier Marks (PM) for one US$, i.e. US$1 = PM 62.
The Hyper Inflation started around mid 1921, and by October 1923, at the height of the Hyper Inflation, a new Interim German Currrency had to be issued. It was called the RentenMark (RM).
The new exchange rate was RM 1 = PM 1 Billion.
Yes, you got that right. One new RentenMark was equivalent to 1,000 million Papier Mark. If you had been a Billionaire in January 1921, you would be worth ONE RentenMark in October 1923.
Again, by itself, this means nothing, until you start converting into US$.
US$1 = RM 4.2 or PM 4.2 Billion. This means that if you had been a Billionaire in January 1921, and you just kept your money safely in the bank, you would be worth 23.8 US Cents as at October 1923. How will you survive?
Eventually, the RentenMark was converted into the Reichsmark in August 1924 at equal value, and so, the Hyper Inflation stopped at the Rentenmark.
The Hyper Inflation lasted slightly more than 2 years, but it was enough to convert the Bill Gates of that time into a poor man. Assuming he had PM 42 billion in 1921, his new worth would be only US$10, i.e. TEN US Dollars in 1923.
Now substitute US$ for Papier Marks and A$ for RentenMarks. No matter what the final exchange rate will be, you can expect your current US$1 million in the bank to be worthless, or possibly, not more than A$2,000 bythe time the New World Order is stable.
Is such a highly Hypothesized Scenario Possible?
US has experienced two such events in its economic history. First, was during the Continental War for Independence, which gave rise to the phrase, "Not worth a Continental". The Continental Dollar was then the currency issued by the US Government to be, at that point called the Continental Congress. It led to the US Government correlating the future US$ with Gold and Silver, so that there is some value attached to the pieces of paper being printed.
In the Civil War, between 1861 and 1865, the Confederate States of America Dollar suffered a similar fate, and it was also worthless nearing the end of the war.
President Nixon took the US$ off the Gold standard in the 1970s, which led to the US Government simply printing money when they had to, then and today.
Will the US Dollar suffer a similar fate by the time the Iraq War Situation ends?
THE SCARY PART IS NOT THE HISTORY OF HYPER INFLATION BUT THE INEVITABILITY OF HYPER INFLATION CAUSED BY A US$ DEVALUATION CRISISThe scary part is not the history of Hyper Inflation. The really scary part is that I have come to the conclusion that Hyper Inflation of the US$ is INEVITABLE. We don't know when the last grain of sand will topple the whole mound of sand, but it is a question of WHEN, and not an IF, it will happen.
All I can say is that there is a strong Probability that it will happen in our lifetime, for those of us, with at least 30 years to live. Why 30 years? Because, by then, the full effect of the Baby Boomers' Phenomenon would have been felt.
WE BREAK HERE FOR AN UNSOLICITED STARBUCKS COFFEE COMMERCIAL .....Ok, now that I have scared all of you to death, let me do a commercial. For those of you who want special consultancy on how to manage the impending, inevitable Economic Holocaust of Epic Proportions, a few cups of Starbucks Coffee is the price. I charge like Robin Hood. Those with more money have to pay more while those with little money need not pay, since the Rich already paid enough.
Of course, a cup of Coffee of the Day at Starbucks Coffee might cost you US$1 million by the time the Hyper Inflation Crisis is on the way, so better pay for it early. Right now, the going rate is only S$3.50, whilst the second cuppa is only S$1.50. Call now, to make your advance bookings! Hahaha! Enjoy!
Although we can joke about this issue, we need to start thinking, and more importantly, set up the proper infrastructure to handle such a world catastrophe when it happens. Remember, by the time it happens, a telephone call to arrange for coffee with me might cost you US$1 million then. Hahahaha.
Moral of the story? Drink a lot of Starbucks Coffee now because you won't be able to afford one in your old age. I also think it is better to die from coffee overdose than to live to see your hard earned US$ 1 million, shrink to the value of a loaf of bread, after you have spent your entire lifetime, earning it, counting it, and preserving it under your mattress. Hahahaha. I hope you enjoyed reading this article. I did enjoy writing it.
HOPE FOR THE BEST, PREPARE FOR THE WORST!It is not a question of viewing the "Glass as half empty or half full", i.e. being pessimistic or optimistic. It is about being realistic and pragmatic / practical about what we are facing. I leave you with some final words of wisdom -
"HOPE for the Best, PREPARE for the worst."
and
"LUCK favors the BOLD and the PREPARED!"
Lastly, I wish to remind you of the Liability Exclusion Clause stated at the top of this blog.
Best wishes,
Ooi
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