Let's Talk About ... Inflation!
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I think all of us are facing concerns about rising costs whilst disposable income remains the same and the buying power of the dollar is driven downwards.
Therefore, why not give vent and discuss about the issue? There are things about inflation I do not understand well, and perhaps, can learn from those of you who are well-versed in Economics. I know in Club 30, there are peeps like Bear, Fatum, elindra, Gedanken, etc etc who are knowledgeable and will be able to provide insight.
Anything and everything with regards to inflation, let's discuss it here. Hopefully, we'll all become wiser on the topic at the end of the day.
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I'll start the ball rolling with a letter printed in the forum section of The Herald Sun in Melbourne on Mon, 25 Feb 2008. It touched on a number of points that apply to Singapore too :
Get Serious About Savings
"If the Govt is serious about cutting inflation, it will stop giving away so much money and make people responsible for their own lives.
"There are a number of stregies which could be employed toward this end.
"The first-homeowner grant should be a sliding scale conditional on the amount prospective buyers save towards a deposit. This would cut spending and encourage saving.
"The baby bonus should be paid over a number of years as kindergarten and school fees to prevent it being wasted on holidays or the pokies.
"Interest-free periods offered by retailers should be outlawed, so we return to the days of not spending money until we actually have it.
"While it doesn't apply to everyone, many young people have never taken responsibility for their financial welfare because there is always easy money being offered.
"It is time ot learn a little restraint, and the benefits will be evident in the future. "
Barbara Spencer, Berwick
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A businessman once told me: "It is better to lose money in property than lose money to inflation."
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i look at Zimbabwe and i'm thankful for the 7% inflation... instead of the 100,000% inflation (and i think that's a monthly number)
sure it affects me.. but i can still afford occasional small luxuries for myself and loved ones, i'm content..
i guess i'm just a simple guy at heart?
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we don't just face inflation in Singapore ... we are also facing deflation .....
wage deflation that is ....
I find it especially disturbing when the ministers themselves start telling the people to make do with less, to switch to frozen meat etc ....
the point isn't really about rising food costs ... the point is about why the middle lower classes are facing such a squeeze that they have to start making do with less on their existing wages .... because they know the lower middle classes are already up against the wall, and something has to give ? .... because all the fat's already been cut out, and you'd now have to start on the meat ? ....
my father's ITE graduates are now looking at wages barely nudging past the thousand dollar mark .... and I have no idea what the poly people are getting nowadays when my indonesian friend got a job here on a 2k salary with a good BSc .....
a thousand dollars .... a few years ago ITE grads were getting 1.3-1.5 ..... what has happened ? ... that wages are not even keeping up with inflation, but sliding backwards ? ....
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Originally posted by Fatum:
we don't just face inflation in Singapore ... we are also facing deflation .....
wage deflation that is ....
I find it especially disturbing when the ministers themselves start telling the people to make do with less, to switch to frozen meat etc ....
the point isn't really about rising food costs ... the point is about why the middle lower classes are facing such a squeeze that they have to start making do with less on their existing wages .... because they know the lower middle classes are already up against the wall, and something has to give ? .... because all the fat's already been cut out, and you'd now have to start on the meat ? ....
my father's ITE graduates are now looking at wages barely nudging past the thousand dollar mark .... and I have no idea what the poly people are getting nowadays when my indonesian friend got a job here on a 2k salary with a good BSc .....
a thousand dollars .... a few years ago ITE grads were getting 1.3-1.5 ..... what has happened ? ... that wages are not even keeping up with inflation, but sliding backwards ? ....
Dunno... but maybe, that's what happens when wages are determined by free market forces? I think in Singapore, there isn't any guaranteed minimum wage for any one profession? I do remember sifting through SNEF's (Singapore National Employers Federation) guidelines back when I worked in Human Resources and I recall seeing Min, Max, and Mean wages for various professions in various industries, but there was never a guaranteed minimum wage declaration.
My understanding of economics is rudimentary, but I do have a question - if the Govt starts to impose minimum wages on the major professions and industries, won't that, in turn, exert an inflationary pressure on businesses? Already, businesses face inflation in the cost of raw materials, essential services, taxes, etc. To also face sudden rising costs in wages as well might be the straw that breaks the camel's back.
In such circumstances, is it better to be employed for less, or not to be employed at all? Given, the good times are over and we are now in bad times. Back in the '80's, when we were hit with recession, the worry on everyone's minds was whether or not they'll be able to keep their jobs. Now, in the US, although they are not officially admitting it, a huge percentile of Americans surveyed by CNN believe that they are now in recession. I believe there are people who are losing their jobs, or facing reduced salaries over there, as a direct result of having their working hours cut, or benefits taken away.
Times like this, is not the time to question why there's so little, but rather, to just bite the bullet, get on with making ends meet, and know that bad times won't be forever.
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it is chim...haha...
i only know that, my pocket money nvr increase but food prices keep increasing. ( i haven talk abt luxuries yet hor)
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Originally posted by hiphop2009:
it is chim...haha...
i only know that, my pocket money nvr increase but food prices keep increasing. ( i haven talk abt luxuries yet hor)
In a nutshell, that's a good summary of what inflation means to everyone. 
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Originally posted by Rhonda:
Dunno... but maybe, that's what happens when wages are determined by free market forces? I think in Singapore, there isn't any guaranteed minimum wage for any one profession? I do remember sifting through SNEF's (Singapore National Employers Federation) guidelines back when I worked in Human Resources and I recall seeing Min, Max, and Mean wages for various professions in various industries, but there was never a guaranteed minimum wage declaration.
My understanding of economics is rudimentary, but I do have a question - if the Govt starts to impose minimum wages on the major professions and industries, won't that, in turn, exert an inflationary pressure on businesses? Already, businesses face inflation in the cost of raw materials, essential services, taxes, etc. To also face sudden rising costs in wages as well might be the straw that breaks the camel's back.
In such circumstances, is it better to be employed for less, or not to be employed at all? Given, the good times are over and we are now in bad times. Back in the '80's, when we were hit with recession, the worry on everyone's minds was whether or not they'll be able to keep their jobs. Now, in the US, although they are not officially admitting it, a huge percentile of Americans surveyed by CNN believe that they are now in recession. I believe there are people who are losing their jobs, or facing reduced salaries over there, as a direct result of having their working hours cut, or benefits taken away.
Times like this, is not the time to question why there's so little, but rather, to just bite the bullet, get on with making ends meet, and know that bad times won't be forever.
you know ... if we speak purely in terms of economics alone, then yes, there's no contest ... every single marco econs prof would tell you the same thing .... but, as one of my former profs said, economics cannot exist political and social considerations ....
we are a country ... we cannot be run as a business ... costs to businesses is but one side of the story ... yes, Singapore is a tiny island state, which will forever be swayed by outside economic forces ... but if there is unbridled competition, when we face overwhelming outside competition without flood gates at all, then I'm sad to say, we cannot compete ....
The average Singaporean worker may be able to compete in terms of productivity with the average foreigner, but he cannot accept third world wages and live and love and raise his family and retire in first world singapore ... that's the crux of the problem ....
we talked about the example of the 55 years old toilet cleaner aunty yesterday, who would hire the Singaporean aunty when he can employ a younger, more energectic bangla or PRC at a lower wage, who can work longer hours, who doesn't have to be an home by 5 to cook dinner for her family ... or the 38 years old retrenched technician with a wife and two school going kids ? .... when he can get a young strapping burmese engineer with a degree at the same wage ? ...... and who doesn't have to go for an annual two weeks "holiday" in the SAF besides ? ....
we have to acknowledge that Singaporeans are being asked to fight with one hands tied on an uneven field ....
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Originally posted by Fatum:
you know ... if we speak purely in terms of economics alone, then yes, there's no contest ... every single marco econs prof would tell you the same thing .... but, as one of my former profs said, economics cannot exist political and social considerations ....
we are a country ... we cannot be run as a business ... costs to businesses is but one side of the story ... yes, Singapore is a tiny island state, which will forever be swayed by outside economic forces ... but if there is unbridled competition, when we face overwhelming outside competition without flood gates at all, then I'm sad to say, we cannot compete ....
The average Singaporean worker may be able to compete in terms of productivity with the average foreigner, but he cannot accept third world wages and live and love and raise his family and retire in first world singapore ... that's the crux of the problem ....
we talked about the example of the 55 years old toilet cleaner aunty yesterday, who would hire the Singaporean aunty when he can employ a younger, more energectic bangla or PRC at a lower wage, who can work longer hours, who doesn't have to be an home by 5 to cook dinner for her family ... or the 38 years old retrenched technician with a wife and two school going kids ? .... when he can get a young strapping burmese engineer with a degree at the same wage ? ...... and who doesn't have to go for an annual two weeks "holiday" in the SAF besides ? ....
we have to acknowledge that Singaporeans are being asked to fight with one hands tied on an uneven field ....
You don't listen to what others are trying to say, do you? Last night, in Night Owls, when we were discussing FT's, I've already pointed out that it is not their presence alone that drives down wages. Again, I reiterate here, it is up to the Govt to enforce minimum wage rules, and if the Govt chooses to leave wages to free market forces, then what you see in Singapore is a direct result of that policy. Repeating the same points over and over again is rather unnecessary - I heard you the first time round, and I have already provided you with an alternative way of viewing this whole matter. We will not be able to come up with any viable solutions, simply because we aren't in politics, all we can talk about are theories, ideals, wishes, etc. It always helps to view something from all available angles.
This thread is not a discussion on FT's in any case. And it is not just Singapore that's facing tough times right now.
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Originally posted by Rhonda:
You don't listen to what others are trying to say, do you? Last night, in Night Owls, when we were discussing FT's, I've already pointed out that it is not their presence alone that drives down wages. Again, I reiterate here, it is up to the Govt to enforce minimum wage rules, and if the Govt chooses to leave wages to free market forces, then what you see in Singapore is a direct result of that policy. Repeating the same points over and over again is rather unnecessary - I heard you the first time round, and I have already provided you with an alternative way of viewing this whole matter. We will not be able to come up with any viable solutions, simply because we aren't in politics, all we can talk about are theories, ideals, wishes, etc. It always helps to view something from all available angles.
This thread is not a discussion on FT's in any case. And it is not just Singapore that's facing tough times right now.
i'm sorry ... I was in SC mode ...
but I still think it's the influx of foreign "talent"s that's driving down wages ... there is simply no incentive to hire singaporeans anymore ...
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Originally posted by Rhonda:
Dunno... but maybe, that's what happens when wages are determined by free market forces? I think in Singapore, there isn't any guaranteed minimum wage for any one profession? I do remember sifting through SNEF's (Singapore National Employers Federation) guidelines back when I worked in Human Resources and I recall seeing Min, Max, and Mean wages for various professions in various industries, but there was never a guaranteed minimum wage declaration.
My understanding of economics is rudimentary, but I do have a question - if the Govt starts to impose minimum wages on the major professions and industries, won't that, in turn, exert an inflationary pressure on businesses? Already, businesses face inflation in the cost of raw materials, essential services, taxes, etc. To also face sudden rising costs in wages as well might be the straw that breaks the camel's back.
In such circumstances, is it better to be employed for less, or not to be employed at all? Given, the good times are over and we are now in bad times. Back in the '80's, when we were hit with recession, the worry on everyone's minds was whether or not they'll be able to keep their jobs. Now, in the US, although they are not officially admitting it, a huge percentile of Americans surveyed by CNN believe that they are now in recession. I believe there are people who are losing their jobs, or facing reduced salaries over there, as a direct result of having their working hours cut, or benefits taken away.
Times like this, is not the time to question why there's so little, but rather, to just bite the bullet, get on with making ends meet, and know that bad times won't be forever.
Hi Rhonda,
Yes your correct, minimum wage does indeed increase the inflationary pressures faced by firms and ultimately the consumer.
The intuition is simple: Consider a situation when you operate a firm that employs low-wage labour but because of the implementaion of minimum-wage laws, you are faced with a higer wage expense. You therefore can either a) demand less labour (increase the unemployment rate) or b) transfer the higher wage expenses to consumers in the form of higher prices (adding to existing price inflation).
I guess its always better to be employed for less then not to be employed for more, given the lesser of 2 evils. And as you pointed out yourself, bad time or recession alike, they don't last forever.
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As usual with inflation,
The rich gets richer
The middle gets squeezed
and the Poor drops down another rung deeper into the pits of hell
Anyway I think the whole problem is the lower income group income is getting depressed. If I'm not wrong, the middle income group income is still moving along side with inflation. Maybe not on par but at least it is going up.
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External Factor
a) Rising demand for oil and minerals from China and India
b) Consolidation of major industries such as steel, mining and oil
c) Forming of cartels and natural monopolies which control supply and jacking up prices.
d) Too much liquidity in the market, which cause property and stock prices around the world to sky rocket.
e) Creation of biofuel, which causes shortage of food supply
f) War in Iraq and on going middle east conflict
g) The world is overly reliant on oil
h) Rising cost of China as they are now exporting inflation, instead of deflation.
i) Rising world trade activities which cause an increase in shipping cost.
Internal Factor
a) Rising residential property prices due to IRs
b) GST hike
c) Rising commerical and retail rental
d) Transportation cost hike
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I am really happy at the direction this thread is heading. Controlled civility whilst expressing valid ideas from all perspectives. Kudos to y'all... so far!
Fatum, I'd like to highlight something elindra said. The poor are the ones suffering even more than ever. I feel the Singapore govt should extend a helping hand to the poor - those too uneducated to retrain effectively, and those who are stuck in ruts and can only obtain jobs that will never pay more than decently - these are the people who deserve to be offered more financial assistance.
However, I draw the line at sympathising with fresh grads. You seem to think that they deserve to be paid more and have a better lifestyle in "First World Singapore" (and btw, the terms 1st, 2nd and 3rd worlds have long been abolished as being politically incorrect decades ago and has since been replaced with developed, developing and ... what's the worst? ... Undeveloped? Underdeveloped?
). Here, in "First World Melbourne", I see fresh grads in Nursing, struggling all the time. Traditionally, grads are offered lower salaries simply because they do not yet have any substantial experience to be of any great contribution to the employer. On top of that, the employer has to rope in resources to train them, as well as to bolster any losses and etc resulting from mistakes made by an amateur. In good times, employers fight for the best grads, offering more remuneration to employ the cream of the crop. But when the tide turns, as it often does, grads will suddenly find themselves in a disadvantaged position when it comes to bargaining power and starting salaries.
It's the "I'm entitled to a better life" mentality that I abhor. No one is 'entitled' to a better life. You work for it. Even here, in Melbourne, I see grads struggling financially everyday. They get much lower salaries until after they have clocked in a year's worth of solid working experience, then they suddenly get a gratifying increase to acknowledge their experience. It is sort of like a probation of sorts, and also a rite that acknowledges that you are no longer a rookie, you can actually make contributions to your employer right now. Nothing wrong with starting humble, and that should be the case. Start small.
These grads get paid so little, and on top of that, they have to pay off a huge education debt. I know of grads who, after paying off their education loan, the car loan, and the regular living expenses, have barely enough to eat well. And yet, do they go around shouting that they live in first world Melbourne, they deserve a better life? No. We sit around at the table and talk about how tough life is, but then, they roll up their sleeves, and ask for extra shifts so they can earn a bit more that month. Some of them work agency shifts on their days off so they can make ends meet and / or pay that extra surprise bill that crept up on them. No one has it easy. And yet, instead of asking for the govt to give them more, these people just accept it as a fact of life, and work harder.
Why should young Singaporeans have it any differently? All around the world, it's a rite of passage almost, that you start small, start tough, and as you move on, your lifestyle gets substantially better.
Look all around the world, Singaporeans aren't doing any worse than any other developed country. And for that, we have to be thankful. I've met migrants who come from countries where they are still dealing with basic hygiene, basic bread-and-butter, basic safety and welfare issues. Singaporeans, in comparison, have had it easy, have had lots of abundant, fruitful years. Be thankful for those good years, but if times turn bad, it affects everybody. Of course, the upper eons won't have it as rough, but that is something that is seen the world over. The rich are always cushy... otherwise, why would anyone work hard at all if life "up there" isn't cushy and nice?
It will bother me if the more experienced and skilled people in the workforce in Singapore aren't getting better remuneration. But that doesn't seem to be the case. As long as you continually upgrade yourself and invest in your own self-development, as long as you work hard and prove yourself to be a valuable asset to your employer, you will be kept employed.
Once again, I want to repeat the point made by elindra last night - that some FT's work harder than the locals. Why? They have a hunger. A hunger to build a better life for themselves by working hard. Their circumstances back home are often worse than what we enjoy here, and they are fired up by the sheer determination to 'make it good'. Whilst we are busy screaming bloody murder for our lives getting tougher, these guys are rolling up their sleeves, grinning and bearing it, and working away diligently.
If I were an employer, I will hire the FT - they work hard, don't complain, and are committed to making it good. Basically, if you want to compete with the FT's, beat them at their own game. Otherwise, face the reality that only the fittest survive.
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Reuters - 1 hour 6 minutes ago
Citigroup cuts Asia growth forecast, ups inflation
SINGAPORE, March 26 - Citigroup has cut its forecasts for Asia's 2008 economic growth to 7.6 percent from 8.2 percent due to the U.S. slowdown, while lifting its inflation outlook because of rising food and energy costs in the region.
"Recent rapid deterioration in economic and financial conditions in the United States have dimmed the outlook for emerging Asia," said Citigroup's chief Asia economist Yiping Huang in a research report published on Wednesday.
The bank had cut its growth forecast for China to 9.8 percent in 2008 from previous 10.5 percent and trimmed India's growth outlook to 7.7 percent from 8.3 percent, it said.
Asia's economies, excluding Japan, grew 8.8 percent last year, the bank said.
Citigroup had halved its forecast for U.S. growth to 0.8 percent in 2008, despite rapidly falling interest rates, it said.
Meanwhile, the bank raised its inflation forecast for Asia-Pacific to 5.1 percent from 4.6 percent, led by price rises in China, Singapore, Taiwan and Vietnam.
Asian economies have remained solid because the U.S. economy was initially hit by the housing sector, which had little impact on Asia's exports, but the picture had started changing now that U.S. consumers have started suffering, Huang added.
Asia's exporters would feel the pinch from weaker global demand in the second quarter, probably in May or June, he said.
"Rising inflation has been the main policy concern in most Asian economies, and recent high inflation data probably contributed to official tolerance for currency appreciation in China, Taiwan, Singapore and Vietnam," the bank's report said.
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Originally posted by the Bear:
i look at Zimbabwe and i'm thankful for the 7% inflation... instead of the 100,000% inflation (and i think that's a monthly number)
sure it affects me.. but i can still afford occasional small luxuries for myself and loved ones, i'm content..
i guess i'm just a simple guy at heart?
Before you embark on your comparison, there must be some similarities between Zimbabwe and Singapore. Don't you agree?
Since Inflation is an economic problem, don't you think you should use economic quantifiers to perform your comparisons.
A good economic quantifier would be GDP per capita.
Zimbabwe's GDP per capita is $500 (2007 est.) http://en.wikipedia.org/wiki/Economy_of_Zimbabwe
Singapore's GDP per capita is $31,400 (2006 est.) http://en.wikipedia.org/wiki/Economy_of_Singapore
To compare you need some form of basis, else very soon I will see you making comparisons between yourself and a simbian or canine.
Ignorance is indeed bliss.
傻人有傻�
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Originally posted by maurizio13:
Before you embark on your comparison, there must be some similarities between Zimbabwe and Singapore. Don't you agree?
Since Inflation is an economic problem, don't you think you should use economic quantifiers to perform your comparisons.
A good economic quantifier would be GDP per capita.
Zimbabwe's GDP per capita is $500 (2007 est.) http://en.wikipedia.org/wiki/Economy_of_Zimbabwe
Singapore's GDP per capita is $31,400 (2006 est.) http://en.wikipedia.org/wiki/Economy_of_Singapore
To compare you need some form of basis, else very soon I will see you making comparisons between yourself and a simbian or canine.
Ignorance is indeed bliss.
傻人有傻�
Whilst I welcome different perspectives on this topic, I would have to ask you to please refrain from getting personal and abusive. We want to hear different opinions and get facts, not start some silly, petty verbal war.
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Originally posted by TCH05:
External Factor
a) Rising demand for oil and minerals from China and India
b) Consolidation of major industries such as steel, mining and oil
c) Forming of cartels and natural monopolies which control supply and jacking up prices.
d) Too much liquidity in the market, which cause property and stock prices around the world to sky rocket.
e) Creation of biofuel, which causes shortage of food supply
f) War in Iraq and on going middle east conflict
g) The world is overly reliant on oil
h) Rising cost of China as they are now exporting inflation, instead of deflation.
i) Rising world trade activities which cause an increase in shipping cost.
Internal Factor
a) Rising residential property prices due to IRs
b) GST hike
c) Rising commerical and retail rental
d) Transportation cost hike
But I don't think Biofuel will affect as much, although it is an interesting viewpoint.
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Originally posted by maurizio13:
Before you embark on your comparison, there must be some similarities between Zimbabwe and Singapore. Don't you agree?
Since Inflation is an economic problem, don't you think you should use economic quantifiers to perform your comparisons.
A good economic quantifier would be GDP per capita.
Zimbabwe's GDP per capita is $500 (2007 est.) http://en.wikipedia.org/wiki/Economy_of_Zimbabwe
Singapore's GDP per capita is $31,400 (2006 est.) http://en.wikipedia.org/wiki/Economy_of_Singapore
To compare you need some form of basis, else very soon I will see you making comparisons between yourself and a simbian or canine.
Ignorance is indeed bliss.
傻人有傻�
i know.. i am happy that i'm here.. and i'm not there..
perhaps you can be happy but choose to look at everything in pure and utter accuracy so much so that life passes you by?
your choice
geniuses are usually dumber than a brick..
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This will be the starting and the worse is yet to come, be prepare and save up. Future outlook is very bad, and for sure price will travel upwards only.
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Originally posted by eagle:
But I don't think Biofuel will affect as much, although it is an interesting viewpoint.
The demand for biofuel is dependent on the price of crude oil, the higher the latter, the more attractive is the former.I am not sure who gave you the idea that demand for biofuel such as ethanol and bio-diesel will not have a big impact on inflation because they are the main cause for the rise in flour, cooking oil, sugar, condensed milk etc.
Suppose if you have a corn plantation and you have 2 customers A and B. A operate a flour mills while B operate a ethanol refinery. If there is surge in demand for ethanol wont B will buy more corn from you?
If you have limited supply, what will you do?
Say NO to more profit?
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Originally posted by Rhonda:
You don't listen to what others are trying to say, do you? Last night, in Night Owls, when we were discussing FT's, I've already pointed out that it is not their presence alone that drives down wages. Again, I reiterate here, it is up to the Govt to enforce minimum wage rules, and if the Govt chooses to leave wages to free market forces, then what you see in Singapore is a direct result of that policy. Repeating the same points over and over again is rather unnecessary - I heard you the first time round, and I have already provided you with an alternative way of viewing this whole matter. We will not be able to come up with any viable solutions, simply because we aren't in politics, all we can talk about are theories, ideals, wishes, etc. It always helps to view something from all available angles.
This thread is not a discussion on FT's in any case. And it is not just Singapore that's facing tough times right now.
The wage differentials between other developed countries are less compared to Singapore.Singapore's Gini Coefficient is more akin to USA's.
If other countries managed to lived with it, why is Singapore any different?
Sole reason is the government's policy on foreign immigrants, they import more foreign workers to suppress the growth of the lower wage earners.
Let's look at the inflation figures for other comparable countries.
Taiwan's CPI 3.89%
http://eng.stat.gov.tw/point.asp?index=2
New Zealand's CPI 3.2%
UK CPI 2.5%
http://www.statistics.gov.uk/cci/nugget.asp?id=19
Germany's CPI 2.8%
France's CPI 2.8%
http://www.insee.fr/en/indicateur/indic_conj/indconj_frame.asp?ind_id=29
Ireland's CPI 4.77%
http://www.cso.ie/statistics/cpi2008.htm
Japan's CPI 0.7%
http://www.stat.go.jp/english/index.htm
Malaysia's CPI Feb 2008 ( year on year) was 2.5%.
http://www.statistics.gov.my/english/frameset_cpi.php?file=cpifeb08
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Originally posted by TCH05:
The demand for biofuel is dependent on the price of crude oil, the higher the latter, the more attractive is the former.I am not sure who gave you the idea that demand for biofuel such as ethanol and bio-diesel will not have a big impact on inflation because they are the main cause for the rise in flour, cooking oil, sugar, condensed milk etc.
Suppose if you have a corn plantation and you have 2 customers A and B. A operate a flour mills while B operate a ethanol refinery. If there is surge in demand for ethanol wont B will buy more corn from you?
If you have limited supply, what will you do?
Say NO to more profit?
You have only stated one side of the picture. It is an internationally ongoing debate, and not something that you can conclude in just one post.
http://en.wikipedia.org/wiki/Biofuel
Rising food prices — the "food vs. fuel" debate
This topic is internationally controversial, with good-and-valid arguments on both sides of the onging debate. Prices on a number of food types used for biofuel have doubled in the last couple years. There are those that say biofuel is not the main cause. Some say the problem is a result of government actions to support biofuels. Others say it is just due to oil price increases. The impact of food price increases is greatest on poorer countries. Some have called for a freeze on biofuels. Some have called for more funding of second generation biofuels which should not compete with food production so much.
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Originally posted by TCH05:
External Factor
a) Rising demand for oil and minerals from China and India
b) Consolidation of major industries such as steel, mining and oil
c) Forming of cartels and natural monopolies which control supply and jacking up prices.
d) Too much liquidity in the market, which cause property and stock prices around the world to sky rocket.
e) Creation of biofuel, which causes shortage of food supply
f) War in Iraq and on going middle east conflict
g) The world is overly reliant on oil
h) Rising cost of China as they are now exporting inflation, instead of deflation.
i) Rising world trade activities which cause an increase in shipping cost.
Internal Factor
a) Rising residential property prices due to IRs
b) GST hike
c) Rising commerical and retail rental
d) Transportation cost hike
The external factors affect other equivalent economies as well, it's doesn't solely affect only Singapore.
Taking into account the external factors, our inflation rate is far higher than other comparable countries.
Then we have to look at the internal factors.
Who has a direct hand in managing the internal factors?
Rising housing prices due to increase immigrants, GST increases, rising rentals, rising electricity rates, rising medical cost and rising transportation cost.