Signs of the Inevitable
The current Barisan government of DS Najib Razak has a limited window of opportunity to strike at the opposition by taking that bold step towards the next general elections (GE14) now.
The Barisan has the opportunity to cash in on a deeply divided politically bankrupt opposition devoid of any alternative policies. And with the opposition’s future bound up in the prospect of a Royal Commission of Inquiry (RCI) into the Forex and other scandals, it looks likely that the opposition is staring down the long loaded barrel of a gun. They have no succession planning.
The opposition’s ally in Singapore is scandal plagued with no Lee Kuan Yew there at the helm to rein in the dissidents and troublemakers. The trouble there this time is from and within the Lee family itself. The remaining Lees have much more to deal with domestically than to serve as amahs to the US and its errant DoJ (department of justice) seeking to vilify and damage the reputation of DS Najib Razak and his government.
How Good are the Barisan’s Chances Really?
So does DS Najib and the BN (Barisan Nasional) have a guaranteed free run to Putrajaya again this time if elections were held soon? Well the answer to that is not quite that simple anymore.
What looms large over every government throughout the world today is the very real prospect of another devastating global financial crisis. It is not if but when.
The collapse of financial markets is now long overdue, inevitable and without contingency. And when it comes it will hit with such fury and unexpectedly that the destruction in its path will not bode well for countries like Malaysia.
All of the speculative half truths peddled about government and the Malaysian economy by the opposition will crystalize into overnight realities. The truth won’t matter anymore. The people will be looking for a scapegoat. And the Barisan will be it.
It is just a matter of time before another global financial shock hits the world. The ripple effects of it will be felt as far away as Timbuktu delivering self fulfilling prophesies to opposition groups everywhere. All of the signs and economic data point to a devastating cataclysmic event just waiting for that small flash to push us over the precipice. Could it be Brexit hat will light that spark? or Tony Blair’s sudden conversion to honest Joe confessing his sins and the part he played in the destruction of Irak?
Anwar will without doubt as he is preparing for it, re claim his anti BN credentials as an economic prophet and prophet of doomsday. What his followers will do will make 1998 pale into a school boys picnic.
New Messiahs Old Problems and Self Fulfilling Prophesies
In Malaysia the opposition and many religious groups claim to have already predicted an apocalyptic calamity like the financial market collapse of 2008.
The Evangelical Christians and extremist Muslim groups alike will find new recruits falling form heaven into their arms. They will be the new political ideologies and parties for the next generation.
Government’s ability to control the chaos from the dissatisfaction, the outrage, fall out and confusion from the next crash will be limited to declaration of a state of emergency. Losses will be measured in the hundreds of billions of dollars. Accumulated gains in all sectors will be wiped out in minutes. Savings including Provident Fund savings will evaporate. The prospect of effective government intervention will be zero.
Professor Joseph Groth outlined the characteristics and the behavior of not just markets but also humans in times of such crisis. History has proved his research right time and time again. Religion will always come to the fore and to the emotional rescue of the masses. It will prevail over all temporal ideologies and philosophies, common sense and logic. It’s very human. Its very dangerous and the threat is very real.
Asset prices have only increased and grown (artificially) since 2009 because of inflated values created and maintained by a narrow band of market leaders. Reserve Banks the world over have through QE (Quantitative Easing- meaning they print new bank notes to allow banks to buy government bonds and other financial assets to stimulate the economy). QE hasn’t worked well and was no long term solution to the massive destruction of the global financial system as a result of the Global Financial Crisis of 2008.
Doomsday Gospels or Reality?
The world economy has in fact shrunk since 2009 with a tilt in favour of China. The first 20 years since implementation of its free market policies, China was able to ride the crest of a one sided wave with relative impunity and insularity because of the sheer size of the economic advantage it held over its competitors. It still has no floating currency, large reserves, a controlled economy and a monopoly on manufacturing. It will need a war to distract it when the crisis hits. That war will either be fought over the Spratley islands or the Korean peninsula or along the Sino Indian border (where it can only be short).
China’s economy too has a dark and depressing side to it. China has a large unstable mountain of debt which it will not be able to control when the next crash comes (very soon). It is no longer that insular from the effects of the world economy. And neither is Malaysia. Already the Johore corridor is showing signs of economic stress from an over supply of real estate. China will inevitably withdraw or renege on some of its investment commitments to Malaysia. That in turn will drag the ringgit below any floor economists have created. No amount of central bank (Bank Negara) buying will be able too contain the fall.
Act Now or Perish (forever hold your piece)
If DS Najib Razak does not act now, the swing against his government will be catastrophic. It is tragic that no one has yet put it before him that he should go to the people for another mandate for another 4 years term before he gets wiped out or the country slides into uncontrollable chaos. Both scenarios are very likely.
The self fulfilling prophesies of the opposition of ‘failed state’ ‘one party monopoly’ ‘broken economy’ ‘ Chinese mirage in investment’ will all be handed to an undeserving opposition on a silver platter and without merit.
No one in their right mind, not even the Jewish bankers of Europe and the US believe in the longevity of this bull run since 2008 is anything more than a mirage and a disaster waiting to happen. It is artificial and unsustainable. But like with all lessons of history, we never seem to learn the lessons of history.