I read with horror the latest initiative by the government to stimulate the economy to overcome the global financial crisis that has now impacted on Malaysia.

Had the government listened to my warnings since December 2006 and prepared a comprehensive strategy in anticipation of the Global Financial Tsunami impacting on Malaysia, there would be no need for the patch work, ad hoc remedies now unfolding.

In the headlines of the Business Times Monday, it was reported that the government plans to use its assets to tap private sector funds to increase revenue that will support the economy amidst slower growth. The Director General of the Economic Planning Unit, Tan Sri Dr. Sulaiman Mahbob said that the monetisation approach will feature open tenders involving both the private sector and government linked companies to “maximise returns” to the government.

Assets identified thus far to implement the scheme are inter-alia, the Rubber Research Institute mammoth land bank in Sungai Buloh, as well as tracts of land in Jalan Cochrane and Jalan Ampang Hilir in Kuala Lumpur. These are the crown jewels of the government.

Badawi – Off Tangent

Badawi in Beijing still cannot get it right. No doubt that the leaders in Beijing at the ASEM meeting did discuss the global food crisis as a consequence of the total bankruptcy of the US based financial system. However, the main thrust of the ASEM meeting was, and the Washington Summit in November 15, 2008 will be, the decision (already made by the US ruling elites) that the US will go into default and the US dollar will be replaced with another currency. This decision will be imposed either by the Bush regime in its remaining months or by the victor of the Presidential elections in November, 2008 when he assumes office in January, 2009.

Even when in Beijing, the idiotic Badawi still maintained the position that Malaysia somehow will not be affected much by the global financial tsunami because of Malaysia’s strong fundamentals and there will be no recession. Malaysia the mighty will be the lone survivor!

This idiotic and deceitful statement was echoed by the Deputy Prime Minister, who is also now the Finance Minister. If the “heir apparent” does not change his tack and confront reality, he is not fit to succeed and he should be booted out together with Badawi. This is his last chance. This is the final warning – stop the nonsense and tell the truth. Prepare the country for the devastation. The people are mature and resilient enough to face the truth as they had done in the 1997/1998 financial crisis.  Don’t you dare insult our intelligence.  

How utterly idiotic can Malaysia get – two political buffoons dancing to the same tune when even local (now just awakening) newspapers blasted in their pages, the grave and impending disaster?

It is not uncommon for spin doctors to believe in their own fairy tales and lies. This mental state of mind reflects a person’s inability to accept reality and to seek refuge in self-created “reality”.

In my article “Global Red Alert” posted to the website on 4th October 2008, I had warned that the US will be in sovereign default by the first quarter of 2009, if not the second quarter.

However, events have to deteriorate to precipitate such a catastrophe. Events are fast unwinding throughout the developed economies and I am advised that G-7 nations are already taking measures in anticipation of this catastrophe.

The Dow has been trying to maintain a support level at 9,000 but this effort has failed notwithstanding the historic bailout packages announced by the US Treasury, the FED, the ECB and G-7 governments. There was only a short historic rally of 900 points on the Dow immediately after the announcement of the bailout, but thereafter stock markets the world over have been gyrating violently sending shivers down the spine of stock traders.

This is reflected in Malaysia by the psychological break-through of the KLCI falling below the 900 points support level.

In January 2008, in my e-mails to friends all over the world, I forecasted that Dow would go below 11,500 by the 2nd quarter. And the KLCI would go below 900 in the 3rd quarter.

Dow went below 11,500 months ago and just recently Dow even dipped below 8,000 but recovered.

Yesterday, 20th October 2008, the Kuala Lumpur Composite Index (KLCI) in the opening hours dipped below 900 points touching 888 but recovered to close at 906.25. My forecast for KLCI was off by six weeks, but the fact remains that it went below 900 points yesterday.

My analysis is now reproduced in my book, The Shadow Money-lenders and the Global Financial Tsunami.