Crisis Deja Vu

The STI has been going down for the last week? I didn't really keep track of it. The current financial crisis has so much similarity with the Asia Financial Crisis back in 1997. Business vanished over night, people lost their jobs over night. All the good things vanished over night. Bungalows were selling at half price. STI went all the way down to 800+ points. At that time, one of my investment guru friend advised me to buy some if I had some spare cash. Unfortunately at that time I was saving up for my postgrad studies overseas. If I had bought some, I would be laughing to the bank now, even after STI had droped more than 50% from its peak of 3900!

The 1997 crisis was because Asian companies and governments borrowed too much, expanded too fast & furious. The current crisis is because some western countries borrowed too much.

It seems like the old wisdoms are still the best. Always be prudent in your finance, have savings (not necessary in the form of savings account savings though), and a positive cash flow at all times.

The current crisis is bad. It may take us years to recover, but then a word of caution here is that once we recover, we might get into a hyperinflation period, as a consequence of the inflating money policies the US FED is adopting right now. In fact, what do you expect other than inflation if the FED keeps printing money. Wealth is NOT created by printing money but by improvement in productivity and efficiency. Printing money from thin air is NOT counted as wealth creation, rather, it is wealth destruction.

Be prudent, and shop around for good value goods, this crisis may present you with some good opportunities. :D