Is big inflation coming? I think this may be a jest and is an unquestioned trouble for many others people because of their narrowed horizontal on economy forecast and background. Many peoples have said to me before "It not should be a main concern in this special moment" and "no others matter rather than pumping money into market to recover our nation's economy from consecutive downturn". I personally feel that the next challenge we need to deal with is not merely an inflation, but is Stagflation.
The bulls and bears are now are the most critical point that they have had in years for the global markets and economy. What we are experiencing today or going to face is the most devastating economic scenario, namely, rising prices in a deflationary environment isn't in a typical sense.
I personally feel that the governments on this planet especially with Obama regime, printing more artificial money than ever, they have been creating a more larger monster for the world to deal with and the side effects are already showing up. What are they doing today to reviving economy's vigor from deflationary mires is matching with what stated in Keynesian ideology by inject and speed up the cash flow into financial market, even making an unproductive investment in an unproductive sectors.
The worst is over but the world is still in a deep recession and we aren't probably even in the middle of the recovery path. Based on past experience, it's need to take 24 months to back our economy onto the correct path. Therefore, my own belief is that the global economy has largely stabilised if compared with 1997/1998 Asean Financial Crisis and it will recover end of this year.
Unfortunately, i also remain convinced that it will just for temporary moment, afterward it will fall agains - W-shaped recovering model appearance, and not V-shaped recovery. Every government on the planet is trying to stretch things out in the hope the time will resolve the problems. A V-shaped recovery is simply a myth promoted by the shills working for brokerage firms especially in property sectors.
One important things i would like to stress here is in this under global mess under over printing artificial money, the global stock market are more overvalued than before. The liquidity wave that central bank unleashed since the financial crisis happened is floating our whole economy's structure. The argument that we are hearing from some of the best mind in financial market is that we will see a new secular bull market in Malaysia regardless of what is going to happen in US market. That's really a bold call! Please... when you are talking to economics, don't quote stock market as a primary indicator to gauge the actual strength of our nation economy. Remember, the overheating in our capital market should be seen as an another concedely problems - over excess money in capital market will lead to asset bubbled, commodities price are rising. In particular, fuel prices have been rising mostly because of leveraged positive feedback speculative assets bubbles. All these will move our economy into inflationary pressure later.
Many people strongly believe that economy are onto the recovery path by looking on many manufacturing mills restart their daily operation. It is just temporary and due to inventory goods has finished. I don't think that this phenomena is caused by excess demand in market. It can proved by consecutive high unemployment rate and consumer's willingness to purchase are still in dim outlook although the figure has shown there are increasing in confidence our economy recovery from end of this year. It's because through the bigger financial meltdown after postwar in this case, much more consumers started realize the importance of saving.
Indeed, risk to growth is still high. I believe that growth in dosmestic demand continuelly expected to suffer an unpronounced slowdown, to dip into the negative slowdown trajectory. Private expenditure is expected to perform badly. Exports will face an intensified contraction from the sluggish American economy outlook. Once our labor market conditions remain weak, American economy continuely in dim outlook (our export will be contracted) and the side effect of excessive money flow in market ferment later, it is the right time for all reckless policymaker to confront with a more devasting scnerio - Stagflation, and it is inevitable.
The bulls and bears are now are the most critical point that they have had in years for the global markets and economy. What we are experiencing today or going to face is the most devastating economic scenario, namely, rising prices in a deflationary environment isn't in a typical sense.
I personally feel that the governments on this planet especially with Obama regime, printing more artificial money than ever, they have been creating a more larger monster for the world to deal with and the side effects are already showing up. What are they doing today to reviving economy's vigor from deflationary mires is matching with what stated in Keynesian ideology by inject and speed up the cash flow into financial market, even making an unproductive investment in an unproductive sectors.
The worst is over but the world is still in a deep recession and we aren't probably even in the middle of the recovery path. Based on past experience, it's need to take 24 months to back our economy onto the correct path. Therefore, my own belief is that the global economy has largely stabilised if compared with 1997/1998 Asean Financial Crisis and it will recover end of this year.
Unfortunately, i also remain convinced that it will just for temporary moment, afterward it will fall agains - W-shaped recovering model appearance, and not V-shaped recovery. Every government on the planet is trying to stretch things out in the hope the time will resolve the problems. A V-shaped recovery is simply a myth promoted by the shills working for brokerage firms especially in property sectors.
One important things i would like to stress here is in this under global mess under over printing artificial money, the global stock market are more overvalued than before. The liquidity wave that central bank unleashed since the financial crisis happened is floating our whole economy's structure. The argument that we are hearing from some of the best mind in financial market is that we will see a new secular bull market in Malaysia regardless of what is going to happen in US market. That's really a bold call! Please... when you are talking to economics, don't quote stock market as a primary indicator to gauge the actual strength of our nation economy. Remember, the overheating in our capital market should be seen as an another concedely problems - over excess money in capital market will lead to asset bubbled, commodities price are rising. In particular, fuel prices have been rising mostly because of leveraged positive feedback speculative assets bubbles. All these will move our economy into inflationary pressure later.
Many people strongly believe that economy are onto the recovery path by looking on many manufacturing mills restart their daily operation. It is just temporary and due to inventory goods has finished. I don't think that this phenomena is caused by excess demand in market. It can proved by consecutive high unemployment rate and consumer's willingness to purchase are still in dim outlook although the figure has shown there are increasing in confidence our economy recovery from end of this year. It's because through the bigger financial meltdown after postwar in this case, much more consumers started realize the importance of saving.
Indeed, risk to growth is still high. I believe that growth in dosmestic demand continuelly expected to suffer an unpronounced slowdown, to dip into the negative slowdown trajectory. Private expenditure is expected to perform badly. Exports will face an intensified contraction from the sluggish American economy outlook. Once our labor market conditions remain weak, American economy continuely in dim outlook (our export will be contracted) and the side effect of excessive money flow in market ferment later, it is the right time for all reckless policymaker to confront with a more devasting scnerio - Stagflation, and it is inevitable.
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