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Old 08-01-2013, 05:54 PM   #16
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Did I say something wrong? Perhaps you should check inflation figures for the past few decades. Yes it may be between 4-5% now, but if u think that it's gonna remain like this for the next few decades without any monetary/fiscal policy intervention, then you might be mis-informed. Maybe you'd like to research more before laughing.
If you truly believe that statistics are not massaged, I have a jug of unicorn tears to recommend to you.
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Old 10-01-2013, 09:22 PM   #17
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Please lah, the CPI stats is produced by the very ppl who cause inflation. You must be damn naive to believe the inflation figures.

Its a open secret that CPI is many times lower than real inflation. You want real inflation figures, go MAS website, see M1 money supply since 2000. In last 12 years, SGD has lost 75% of value.
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Old 10-01-2013, 10:20 PM   #18
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Please lah, the CPI stats is produced by the very ppl who cause inflation. You must be damn naive to believe the inflation figures.

Its a open secret that CPI is many times lower than real inflation. You want real inflation figures, go MAS website, see M1 money supply since 2000. In last 12 years, SGD has lost 75% of value.
We're barely into it, but I believe we have a contender for dumbest comment of the year.

1. CPI figures are fake, but M1 figures supplied by MAS are 100% accurate and reliable.
2. Somehow you can find out about inflation by looking at M1, never mind the size of the economy, the actual prices of goods and services or anything.
3. ..and you can connect it to SGD too. The following is also from the 100% accurate and reliable MAS website:

7 Jan 2000
EUR 1 = SGD 1.7154
GBP 1 = SGD 2.7405
USD 1 = SGD 1.6635

10 Jan 2013
EUR 1 = SGD 1.6010
GBP 1 = SGD 1.9648
USD 1 = SGD 1.2268

My calculator must be broken, I cannot get 75% SGD depreciation.
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Old 10-01-2013, 11:42 PM   #19
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This thread is turning epic!
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Old 10-01-2013, 11:52 PM   #20
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So, who's right, wrong?
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Old 11-01-2013, 11:59 AM   #21
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We're barely into it, but I believe we have a contender for dumbest comment of the year.

1. CPI figures are fake, but M1 figures supplied by MAS are 100% accurate and reliable.
2. Somehow you can find out about inflation by looking at M1, never mind the size of the economy, the actual prices of goods and services or anything.
3. ..and you can connect it to SGD too. The following is also from the 100% accurate and reliable MAS website:

7 Jan 2000
EUR 1 = SGD 1.7154
GBP 1 = SGD 2.7405
USD 1 = SGD 1.6635

10 Jan 2013
EUR 1 = SGD 1.6010
GBP 1 = SGD 1.9648
USD 1 = SGD 1.2268

My calculator must be broken, I cannot get 75% SGD depreciation.
1) Yes you have a point. Its possible that MAS is underreporting M1 figures, so inflation could be much higher.

2) Fiat currencies have 0 intrinsic value, ie you cannot use SGD for eating/manufacturing/etc... Their only use is as a medium of exchange and store of value, their market value is thus solely derived from the available supply.
More supply = less value = inflation.
Inflation is ALWAYS an expansion of money supply. My definition of inflation is based on austrian economics. Rising CPI is the effect of rising money supply relative to economy.

Ask yourself this simple qsn, if we have growth in the economy, how the hell can prices rise? The whole point of growth and advancement is to reduce cost, increase efficiency and improve standard of living. The entire net benefit of growth is negated by your central bank printing money and inflating away any benefit of growth from your hard work. The biggest tax anyone will pay in their lives is not your income tax, its inflation.

3) Lol, you are comparing one depreciating currency to other depreciating currencies. SGD depreciated less than USD so it appears to have appreciated against USD.
If you use something more constant like gold/silver, you can see how much real inflation is.

XE.com - XAU/SGD Chart

Trend looks pretty similar to the M1 figures, no?
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Old 11-01-2013, 12:38 PM   #22
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Smile Gold price (UOB) in SGD

Please lah, the CPI stats is produced by the very ppl who cause inflation. You must be damn naive to believe the inflation figures.

Its a open secret that CPI is many times lower than real inflation. You want real inflation figures, go MAS website, see M1 money supply since 2000. In last 12 years, SGD has lost 75% of value.
Oki, for the record, these are today's gold prices in SGD
We return in 1 yr or so and see how much gold costs then, whatever gains made would be profit, losses = tuition fees... fair?

Gold and Silver Prices
Source: UOB Precious Metals
United Overseas Bank Limited . Far Eastern Bank Limited
Rates as at 11 January 2013
Description Currency Unit Bank Sells* Bank Buys
CAST BARS SGD 1 KILOBAR 66082.00 65842.00
GOLD CERTIFICATE SGD 1 KILOCERT 66082.00 65882.00
GOLD SAVINGS A/C SGD 1 GM 66.08 65.88
GOLD BULLION COINS SGD
KILOCOIN (GNC) 66511.00 66206.00
SGD 1 OZ 2138.00 2068.00
SILVER PASSBOOK ACCOUNT SGD 1 OZ 37.98 37.33
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Last edited by cherry6; 11-01-2013 at 02:22 PM..
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Old 11-01-2013, 01:16 PM   #23
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Smile Singapore, Money printing, 1989-2011.

Please lah, the CPI stats is produced by the very ppl who cause inflation. You must be damn naive to believe the inflation figures.

Its a open secret that CPI is many times lower than real inflation. You want real inflation figures, go MAS website, see M1 money supply since 2000. In last 12 years, SGD has lost 75% of value.
BTW, what is 'DBU'?
[pict source: https://secure.mas.gov.sg/msb-xml/Re...=I&tableID=I.1 ]

Money Supply Compilation and Revisions
In the compilation of monetary statistics, the two broad approaches adopted by various countries are:
- the institutions-based approach where only monetary liabilities of selected deposit-taking institutions make up the money supply
- the monetary characteristics of instruments approach where instruments that exhibit money-like characteristics are included in the money supply. The institutions that issue the instruments are not the defining characteristics of the money supply in this case.

Singapore's monetary aggregates are compiled on an institutions basis. This is also the practice adopted by the U.K. and Germany. Under this approach, M1 and M2 in Singapore comprise only liabilities of the banking system, which includes the Board of Commissioners of Currency, Singapore (BCCS) and commercial banks. In M3, the net deposits of finance companies and, prior to Nov 98, that of POSBank are added. Hence, the definitions of these monetary aggregates in Singapore are as follows:
M1 = Currency in Active Circulation + Private Sector Demand Deposits with Banks
M2 = M1 + Quasi-money
M3 = M2 + Net Deposits with Non-bank Financial Institutions (NBFIs)

Following its merger with DBS, POSBank became part of the banking system. Hence, its deposits are treated like those of other banks and are included in the money supply as part of M1 and quasi-money.
As a result, POSBank's current account deposits are now included in M1 as demand deposits while its savings and other deposits become components of quasi-money and, thus, part of M2. In M3, Net Deposits with NBFIs now comprise only finance companies' deposits less their own placements of deposits with banks to avoid double-counting.
Another revision to the money supply statistics is the treatment of the net deposits of POSBank in M3. Prior to Nov 98, POSBank, like other statutory boards, placed part of its cash with MAS as term deposits. These deposits had been netted off from its gross deposits when compiling M3.
Following its acquisition by DBS in Nov 98, POSBank's term deposits with MAS are now included as part of money supply in line with the institution-based approach described above. In order to avoid a break in the data series and facilitate the analysis of monetary trends, we have revised the historical data back to October 1982 when POSBank first placed such deposits with
MAS.

Source: http://www.mas.gov.sg/en/Statistics/...y_Compilat.pdf
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Last edited by cherry6; 11-01-2013 at 01:41 PM..
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Old 11-01-2013, 01:45 PM   #24
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Oki, for the record, these are today's gold prices in SGD
We return in 1 yr or so and see how much gold costs then, whatever gains made would be profit, losses = tuition fees... fair?

Gold and Silver Prices
Source: UOB Precious Metals
United Overseas Bank Limited . Far Eastern Bank Limited
Rates as at 11 January 2013
Description Currency Unit Bank Sells* Bank Buys
CAST BARS SGD 1 KILOBAR 66082.00 65842.00
GOLD CERTIFICATE SGD 1 KILOCERT 66082.00 65882.00
GOLD SAVINGS A/C SGD 1 GM 66.08 65.88
GOLD BULLION COINS SGD
KILOCOIN (GNC) 66511.00 66206.00
SGD 1 OZ 2138.00 2068.00
SILVER PASSBOOK ACCOUNT SGD 1 OZ 37.98 37.33
Please do not take this as investment advice to invest in gold. Im just stating that gold reflects true inflation. If you think inflation will continue at the same rate as in the past 12 years, gold will be a good form of protecting your purchasing power. I see gold as a vehicle to save, not investment. Someone who bought gold in 2000 did not make 400% return to me, he merely preserved his wealth.

I cannot predict what MAS will do this year or tomorrow.
Maybe it will do the "right thing" and stop printing and inflation maybe go to 0%, or maybe it will jump down the cliff with Abe and friends.

But the M1 and gold price are clear that in the past 12 years, SGD has had a net inflation of 400%. Also note that there are years where MAS kept the money supply relatively constant. Your actual experienced price rise in food may be around 200%-300% due to mitigation by increased food production/efficiency. Property OTOH may have increased more than money supply due to government policy of allowing large influx of foreign labour and restrained housing supply.
I use gold/silver as a barometer because its supply is relatively fixed in the world, unlike housing where more can always be built or food which is consumable and can be affected by weather, increased production.

I don't know what DBU is either

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Old 11-01-2013, 02:16 PM   #25
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Smile Why CPI might fail to capture the true rate of Inflation in Singapore.

Why CPI might fail to capture the true rate of Inflation in Singapore.
Discussion thread: '30K Investment'
I cannot predict what MAS will do this year or tomorrow.
Maybe it will do the "right thing" and stop printing and inflation maybe go to 0%, or maybe it will jump down the cliff with Abe and friends.
But the M1 and gold price are clear that in the past 12 years, SGD has had a net inflation of 400%. Also note that there are years where MAS kept the money supply relatively constant. Your actual experienced price rise in food may be around 200%-300% due to mitigation by increased food production/efficiency. Property OTOH may have increased more than money supply due to government policy of allowing large influx of foreign labour and restrained housing supply.
I use gold/silver as a barometer because its supply is relatively fixed in the world, unlike housing where more can always be built or food which is consumable and can be affected by weather, increased production.
I don't know what DBU is either [bold font added]
Hi Gamer, tks for reply,
Just to be more technically correct, the M1 inflation rate U stated as 400% (over 12 years) should be corrected to approx say 12.2% on a per annum basis.
The reason why CPI did not capture an inflation rate of 12.2% [used compound interest rate calculator]I believe is because the increase M1 (or M2/3) need not affect the CPI: e.g. it can inflate gold and property prices either locally or abroad: thus the Singapore CPI might not register it depending on the definitions used in ascertaining the CPI (e.g. gold prices might not be represented and the property price used within the CPI might be shifted fr Orchard to somewhere in Sembawang for instance(extreme case))- one should perhaps look at the gini coefficient for the increase inequality although even that is an inadequate marker since it only reflects salary, not property ownership.
Other reasons for the CPI to not hit 12.2% would be because the economy really grew (larger population)- larger money supply is permissible if the population is growing- i.e. exports increase.

Theoretically, in so far that the government expects the average man to tolerate a lower and lower standard of living (e.g. do not include luxury goods, HDB property/ private transportation, HP/ tablets, plasma TVs, short holidays/ leisure activities etc from the CPI, the headline rate of inflation will theoretically never increase).

So yes, compared to gold prices, the supply of SGD has markedly increased and this has been under represented where the SG CPI numbers are concerned.

Also, as scientific progress advances, basic necessities (which make up much of the CPI) might remain readily available (quality isn't defined in the CPI I believe)- yet even though CPI might remain unchanged, the wealth divide might worsen- this has destabilizing effects upon society and can ultimately explode as civil war, revolution.

Guess at the end of the day, parameters like the increase in Money supply, CPI, gini coefficient, personal savings rates (retirement years earned), employment rates, climate change (CO2 levels etc), literacy rates, healthy life years, life expectancy, leisure time etc etc all have to be balanced and taken into consideration when making decisions- and that is why I believe that politicians who are immoral and hanky panky are really not fit for government (at least not at such high pay).

I just googled, DBU= domestic Banking unit according to http://www.bis.org/publ/bppdf/bispap15l.pdf

Just my 2c,
C6.
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Old 11-01-2013, 07:52 PM   #26
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2) Fiat currencies have 0 intrinsic value, ie you cannot use SGD for eating/manufacturing/etc... Their only use is as a medium of exchange and store of value, their market value is thus solely derived from the available supply.

...If you use something more constant like gold/silver, you can see how much real inflation is.
Does your employer pay you your salary in gold?

Do your investments pay you back in gold?

Do you pay for your food, water and electricity in gold?

Did you buy your house and car with gold?

Did you pay for that overseas holiday you took with gold?

If you believe your fiat money is worthless, please send it over to me. Thank you.

Here's a recent comment by Paul Krugman about the gold standard mentality that many people still have even though the gold standard was a failure and is long gone. As always it is amazing how delusional gold cultists like yourself can be. You can honestly believe all the wealth around you is somehow an illusion because you can buy less of a piece of yellow metal today than before.

For many people on the right, value is something handed down from on high It should be measured in terms of eternal standards, mainly gold; I have, for example, often seen people claiming that stocks are actually down, not up, over the past couple of generations because the Dow hasnít kept up with the gold price, never mind what it buys in terms of the goods and services people actually consume.

And given that the laws of value are basically divine, not human, any human meddling in the process is not just foolish but immoral. Printing money that isnít tied to gold is a kind of theft, not to mention blasphemy.

For people like me, on the other hand, the economy is a social system, created by and for people. Money is a social contrivance and convenience that makes this social system work better ó and should be adjusted, both in quantity and in characteristics, whenever there is compelling evidence that this would lead to better outcomes. It often makes sense to put constraints on our actions, e.g. by pegging to another currency or granting the central bank a high degree of independence, but these are things done for operational convenience or to improve policy credibility, not moral commitments ó and they are always up for reconsideration when circumstances change.

Now, the money morality types try to have it both ways; they want us to believe that monetary blasphemy will produce disastrous results in practical terms too. But events have proved them wrong.
Barbarous Relics - NYTimes.com
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Old 11-01-2013, 08:36 PM   #27
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You are not very smart are you?
Or maybe english is not your first language.
Its ok.

I was referring to using gold as a measure of inflation not as a currency.
Please go ahead and save all your wealth in appreciating Singapore Dollars. They are "appreciating" and therefore you will be better off in the future.

Paul Krugman is the most famous idiot in the world. Seems that Birds of a feather flock together. The rest of my explanation or economics is beyond you.
And no, i do not think money needs to be tied to gold, but it should remain a store of value which SGD is pefectly not.

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Old 11-01-2013, 09:47 PM   #28
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You are not very smart are you?
Or maybe english is not your first language.
Its ok.

I was referring to using gold as a measure of inflation not as a currency.
Please go ahead and save all your wealth in appreciating Singapore Dollars. They are "appreciating" and therefore you will be better off in the future.

Paul Krugman is the most famous idiot in the world. Seems that Birds of a feather flock together. The rest of my explanation or economics is beyond you.
And no, i do not think money needs to be tied to gold, but it should remain a store of value which SGD is pefectly not.
thx for the insights
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Old 11-01-2013, 10:43 PM   #29
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Why CPI might fail to capture the true rate of Inflation in Singapore.
The reason why CPI did not capture an inflation rate of 12.2% [used compound interest rate calculator]I believe is because the increase M1 (or M2/3) need not affect the CPI: e.g. it can inflate gold and property prices either locally or abroad: thus the Singapore CPI might not register it depending on the definitions used in ascertaining the CPI (e.g. gold prices might not be represented and the property price used within the CPI might be shifted fr Orchard to somewhere in Sembawang for instance(extreme case))-
Yes, that is true. CPI is a horrible gauge for cost of living. All governments are known to massage CPI figures, worse being US.(Should not be too hard to find info on how they reduce reported CPI.)

Regarding where money flows, i agree fully and so does Marc Faber. The following video is very informative IMO.
https://www.youtube.com/watch?v=65SH35IMzlI

one should perhaps look at the gini coefficient for the increase inequality although even that is an inadequate marker since it only reflects salary, not property ownership.
I hold the view that monetary expansion transfers wealth from the poor and middle class to the wealthy. First to the banks which create the vast majority of money in the system and charge interest on it and then to the wealthy who can obtain loans from the banks at favorable terms to buy up assets.

Also, as scientific progress advances, basic necessities (which make up much of the CPI) might remain readily available (quality isn't defined in the CPI I believe)- yet even though CPI might remain unchanged, the wealth divide might worsen- this has destabilizing effects upon society and can ultimately explode as civil war, revolution.
I believe such an outcome is inevitable in US, leading to hyperinflation within this decade, possibly even within next 3 years.
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Old 12-01-2013, 01:10 PM   #30
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So, who's right, wrong?
Good question. Sorry for the wall of text below, but it takes some explanation.

Since the global financial crisis and great recession, and the Federal Reserve's emergency measures and QE massively expanded the money supply and its balance sheet, some people have predicted massive inflation, even hyperinflation. On the other side, people like Paul Krugman thought that we were in a liquidity trap and so zero interest rates and a bigger money supply would not cause inflation.

4 years and counting, it is clear from US inflation numbers, bond yields and so on that Krugman was right and the inflation-is-coming! people were wrong. The people who were betting on hyperinflation lost money on their bets. Singapore's inflation is higher but not by that much and shows no sign of exploding. Confronted with this reality, a rational person would amass the facts, re-examine his theories and see where he went wrong. But people aren't always rational and they certainly don't like to admit they were wrong.

One easy response of someone in denial is, "the government must be faking the inflation numbers." It's a conspiracy! Never mind that in a capitalist economy, most prices are out in the open for anyone to see. You could in theory and in practice collect your own price data, and people like the MIT Billion Prices Project have. The BPP's data coincides remarkably with the government's on annual, monthly and even daily inflation.

But here I see a cleverer way of denying that there is any problem with your philosophy. Inflation is growth in prices, whether it is broad like consumer prices and producer prices, sectors like food, housing and health care, or at the micro level like Fuji apple, NUS tuition, "2-veg-1-meat-mixed-rice-in-the-neighbourhood-coffeeshop" inflation. For example, everyone knows there is housing inflation in Singapore because prices and rents are rising, and there is private transport inflation mainly because COE prices are exploding.

Instead, our friend redefines inflation to mean "growth in money supply", not prices. Then of course, tautologically, the growth in money supply means there is "inflation", according to his private definition of inflation. This is a way for him to "explain" that there is massive inflation when no one in the real world buying most real goods and services sees it.

Since he did not respond, I don't know if GamerSg eats or drinks or pays his bills with fiat money, but he certainly uses the Internet. If his Internet service bill has not risen in years, for example, and here he is assuring us inflation is really 25% or 40% or some large figure, I think that this is either a deeply delusional person off his medication, or he is just dishonest with himself and others. His only response to this is to hurl insults. I think Paul Krugman can take the hit to his reputation.
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