Some good reading =)

Ok peeps. I am lazy to forward this on facebook, but I'm sharing this on my blog. My cousin forwarded it to me and I think it's a very interesting read (I've posted this after reading Fareez's blog so this is for you. Lol). Anyone who has articles / thoughts / opinions, please feel free to discuss them. I am no economist, but it'll be great to know these things (especially given the current turmoil we're in). And, to realize that money isn't everything. Cheers!

Leader of the Pack - Hasman on Wednesday

During the high level conference in Bank Negara two weeks ago, Morgan Stanley‘s chief economist Stephen Roach pointed out that Asia will probably will not de-couple from the US and Europe during this current crisis although we have a huge pile of reserve in the balance sheet. The main reason for this would be : “Asian countries tend to be followers, not leaders, so any recovery will depend on the recovery of the developed nations”.

As at 30 Nov 2008, the total US Treasuries have amounted to slightly over USD 3 trillion in circulation. Out of this USD 3 trillion, China and Japan, which is the largest and second largest subscriber of the US Treasuries, have a total combined holding of USD1.2 trillion (approximately 40%). To put things into perspective, this bloody country is borrowing money from the rest of the world especially Asia. We are financing their lifestyle (like Wall Street executives). We look up to them (like the Hollywood celebrities). We are not doing anything when they have murdered our brothers & sisters (like in Iraq). When they screw up, we have to bail them out (like Temasek, GIC & Abu Dhabi bought into Merrill, Citibank). When we purchase their Treasuries they use our hard earn money to maintain their high maintenance lifestyle (AIG top executives are still using taxpayers’ money for their fox hunting games). Who needs this kind of leadership? Without our money, the Americans will be poorer than the people in the slums of Asia. It is time for us to turn our backs; we live by our own rules and chart our own destiny. We should be the leader! How does one become a leader? One, we need to be innovative. When the Jewish children come back from school their mothers will not ask them how’s school today or what they have learned in school. Their mothers will ask them how many questions did they asked the teacher instead. By asking questions they will think outside of the box and be innovative. So, today when your children come back from school, ask them how many questions did they ask their teacher.

Gold Finger

Recently, I attended a talk on commodities market and outlook. The presenter showed a table on the amount of gold reserve in the world. When I studied the table, I saw US has the largest percentage amount of tonnage in gold against its reserves, which amounted to 76%. Only then I realized, “crap, this country has the highest gold percentage reserve, whereby the world is using its fake paper money for trading”. Next, I saw countries which had high foreign reserves like China, Japan & Russia. They have only less than 2% of gold tonnage against their reserves. It finally dawned to me that the whole thing is a total screw up. The world is using worthless US Dollars to trade and invest in US Treasuries as US is holding the largest amount of gold against its reserves. Let’s say if the US Dollar goes “kaput” then the global monetary system will revert to gold standard. In any way, US will still be benefiting. Nonetheless, I believe the emerging countries like China & Russia will eventually add more gold to its reserve and there seems to be a positive future for gold price. So, start buying gold.

USA
Tonne: 8,133.5
Reserve 76%

Germany
Tonne: 3,412.6
Reserve 64%

France
Tonne: 2,508.8
Reserve 59%

Italy
Tonne: 2,451.8
Reserve 62%

Switzerland
Tonne: 1,040.1
Reserve 24%

Japan
Tonne: 765.2
Reserve 2%

Netherlands
Tonne: 621.4
Reserve 58%

China
Tonne: 600.0
Reserve 1%

Russia
Tonne: 495.9
Reserve 2%

Taiwan
Tonne: 422.4
Reserve 4%

Portugal
Tonne: 382.5
Reserve 86%

India
Tonne: 357.7
Reserve 3%

(Source: IMF)

The Cube

When I graduated from college and went into the work force, I was very idealistic in achieving my goal. One of them is monetary goal. When you are trained as a capitalist in college, you work your life through as a capitalist. When I had just started working, I created a spreadsheet on compounded returns, savings inflow, expense outflow and additional bonus injection to achieve RM 1 million when I reach 40 years old. So, I charted my life out towards becoming a millionaire by 40. However, after a super stressful outing in Singapore for 5 years and burned out, I found myself wondering if this is what I really want in life? Will becoming a millionaire make me happy? Sacrificing my time with my family so I can have a million in a bank account worth it? There are so many unanswered questions.

I have many non-Muslim friends who went on pilgrimage journeys to their respective holy places like India, Tibet and Vatican. For Muslims, it is a well known fact that the pilgrimage journey is one of the pillars of Islam. A Muslim is required to go on pilgrimage to Mecca once in their life time if he or she has the means to go. Taking this notion from Ridhwan Bakar, a young author, “when you go on a pilgrimage to Mecca you will become a millionaire”. In Islam, when you pray alone, Allah will grant you 1 good deed (pahala). If you pray in jama’ah, meaning praying with other people, with an Imam leading the prayers, Allah will give you 27 good deeds. When you pray in Masjid Nabawi in Madinah, Allah will give 1000 good deeds per prayer. So, if you spend 8 days in Madinah and prayer 5 times a day in jama’ah, you will get 1,080,000 good deeds (1000 x 27 x 8x5). So, during pilgrimage usually pilgrims will spend about 8 days in Madinah before proceed to Mecca. By spending 8 days in Madinah, Allah will grant the pilgrim a millionaire status in good deeds, insyallah. Therefore, the millionaire status has become subjective to me now. It is not only monetary form; it comes in other shapes as well.