Saturday, May 24, 2008

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Stagflation : Worst of the Evils Raising its Ugly Head

The more I go through the week's headlines, the more I shudder. We may not be just seeing a recession but a recession accompanied by soaring prices - yes, the most feared evil - Stagflation.

It is a scenario of people with no jobs, no money and no food ... that's scary. It conjures up vivid images of violent protesters hurling stones at police, looting shops, burning down buildings and even outright civil wars.

That'll not happen in Singapore, we comfort ourselves. But we know such political unrest is likely to happen in neighbouring countries, and if it does, can we be completely immuned to the adverse impacts? What would the situation be like then at home?

Most people don't want to think about such scenarios, preferring instead to focus on the rosy master plan, but the way I see, the problem is not going away.

I remember my first Economic lesson vaguely about "Scarcity of goods, and the unlimited wants of people". Oil is a non-renewable resource, so is the land that produces our staple food. But people want more oil and more food, so do we have an answer for that?


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)