SKIM PIRAMID

As posted by Dr. Mahathir Mohamad at Che Det on May 29, 2009 7:30 AM

(Ini adalah rencana bersiri mengenai aliran semasa yang membawa kepada krisis kewangan masakini. Rencana asal di dalam bahasa Inggeris telah disiarkan di dalam blog ini pada Mei 7, 2009)

1. Terdapat pula skim Piramid atau Ponzi. Bernard Madoff hanya terbongkar selepas dia kehilangan 50 bilion duit yang telah dilaburkan dengannya.

2. Operasinya cukup mudah. Operator hanya memulangkan sebahagian sahaja wang yang "dilaburkan" dengannya sebagai dividen. Jika dia membayar dividen sebanyak 20 peratus setahun dia akan menghabiskan wang tersebut dalam masa lima tahun.

3. Tetapi apabila semakin ramai pelabur baru melabur dengannya, dianya akan dapat terus bayar dividen hinggakan para pelabur asal telah menerima semula pulangan jumlah yang mereka labur terdahulu. Lagipun pelabur akan terus melabur selagi mereka mendapat pulangan yang tinggi.

4. Secara amnya pelabur akan gembira dengan pulangan yang tinggi yang mereka tidak akan pun merungut. Pihak berkuasa juga tidak akan mendapat tahu tentang operasi skim tersebut. Lagipun jika ianya dibongkar dan diarah berhenti pelabur akan kehilangan semua wang yang mereka labur.

5. Madoff bukanlah satu-satunya yang kendalikan skim ini. Sebenarnya tidak ada kekayaan yang diperolehi kerana duit yang dilabur sebenarnya dipulangkan. Walaubagaimanapun dividen yang kononnya diperolehi akan menyumbang kepada per kapita dan KDNK Negara.

THE EXTREMISTS

As posted by Dr. Mahathir Mohamad at Che Det on May 27, 2009 10:35 PM

1. We are all held to ransom by extremists. We want to be rational and we all want to do what is best for ourselves and our country. We all want the best for our children and their future. But we cannot do all these because if we do we will be accused of being traitors, not supporting our own community or our own religion. We will be demonized etc.etc.

2. So willy-nilly we become the instruments of these extremists and their narrow jingoism, to our own detriment.

3. In Malaysia we are constantly being asked to confront each other on racial issues. Disputes cannot be resolved by rigidity in our stand. But we have to be rigid if we do not want to be vilified.

4. It is a miracle that this multi-racial country has remained stable and peaceful for so long. If the extremists can have their way we would all be at each others' throats. We would be demonstrating in the streets and at the airports. If we do not accede to the wishes of the extremists then we cannot even make a living, there will be no investments and no jobs for the workers.

5. Today we are grappling with the problem of education. We have three streams and woe betide anyone who suggests that we should not have them. We talk of liberal society, of free speech, but if you express some commonsensical views you would be labelled racist.

6. Then there is the controversy over the teaching of science and mathematics in English. We curse the person who had proposed this, calling him a betrayer of his mother tongue, of the national language. Then there are those who want to carry out a nationwide strike if the policy is not changed.

7. I am ready to surrender to the extremists, to pay the ransom demanded. What does it matter if the country goes up in flames, if the extremists win the day? What does it matter if the life of our children and their children is blighted? Anything for a quiet life. I want to be a member of the silent majority and just acquiesce. However the habit of a lifetime just refuse to go.

NUCLEAR POWER

As posted by Dr. Mahathir Mohamad at Che Det on May 24, 2009 12:22 PM

1. With the price of oil going up higher and higher, many in this country are thinking about power generation. At one time the Malaysian Government had decided on a four fuel policy for the generation of electric power. We wanted power plants to use either fuel oil, gas, coal or hydro power. We had excluded the use of nuclear power.

2. Why did we reject nuclear power?

3. I am not a nuclear scientist but I believe I know enough of the dangers of using nuclear (fissionable) material.

4. When Hiroshima and Nagasaki were atom-bombed, the scientists who invented the bombs thought that the destructive effect would be only from the huge explosion due to fissionable material. So did their victims - the Japanese.

5. As a result the Japanese entered the destroyed cities to carry out rescue work and to clean up.

6. It was only later that they realised that the residual radiation would cause a variety of radiation sickness and diseases. The radiation remained harmful for a long period after explosion. Even today there are people who had entered the bombed area in those days who are dying of a variety of diseases, including cancer, contracted through exposure to radiation from the Hiroshima and Nagasaki bombs.

7. I think we all know about the Chernobyl disaster in Russia. Despite thousands of tons of concrete being poured into the site, the power plant is still emitting dangerous radiation.

8. Besides this we should know that radioactive material used as fuel for power generation remain radioactive and dangerous to health after the fuel has been exhausted. The waste cannot be disposed anywhere, not by burial in the ground nor dumping in the sea. It can be reprocessed by certain countries only. This requires the dangerous material to be transported in special lead containers and carried by special ships. Most ports do not allow such ships to be berthed at their facilities. Reprocessing means that the nuclear material again becomes active and harmful to health.

9. The fact is that we do not know enough about radioactive nuclear material. Once it is processed it remains a source of danger forever.

10. We have some experience dealing with radioactive material. In Perak we have a site where we had buried by-products of tin mining (amang) which had been processed to become radioactive and which was used to colour television. We had poured tons of cement on the buried material. More than one square mile of the burial site is barred to humans. The site is still radioactive and dangerous.

11. If we have a nuclear plant, besides not being able to get rid of nuclear waste, we may have accidents which can endanger people living even far away because of the material being carried by water (ground water) and wind.

12. I think the authorities should rethink the idea of nuclear power plants. Scientists do not know enough about dealing with nuclear waste. They do not know enough about nuclear accidents and how to deal with them.

13. Until we do, it is far better if Malaysia avoids using nuclear power for electrical generation.

MAHATHIRISM

As posted by Dr. Mahathir Mohamad at Che Det on May 22, 2009 5:45 PM

1. One way of demonising an opponent, particularly a political opponent, is to give him a derogatory label.

2. At one time Lee Kuan Yew labeled me as a Malay ultra. After that caught on, I could do nothing that would not be labeled as extreme. Even if I make the most innocent statement, it would be considered as extreme, as racist.

3. It took me decades to live it down. When I was appointed Deputy Prime Minister there was consternation among the Chinese. What was going to happen to Malaysia when this Malay ultra took over the Prime Ministership?

4. However, by the time I stepped down I had managed to belie that description. In the 1999 Election it was Chinese votes which helped give me the 2/3 majority in Parliament.

5. Now the doomsday label is Mahathirism. Such was the fear of this thing called Mahathirism that Tan Sri Muhyiddin had to assure the public that Najib's ascendancy to the Premiership would not bring back Mahathirism. The foreign press seem to imply authoritarian Government with Mahathirism.

6. No one has yet described the rule of Dato Seri Abdullah Badawi as Badawism. It must be because he is said to be liberal and free from authoritarianism. But is he?

7. It appears to be simply because the mainstream media, print or electronic, is totally controlled by him through his hatchet man, Kalimullah. And Kali ensures that the media plays up Abdullah's supposed liberalism, his transparency, his tolerance of the press etc. That the media blacks out any news that is not flattering of him is not noticed by readers, especially the foreign press.

8. Until the bloggers came into the picture and their blogs became extremely popular as they reported the truth, the black-out was effective. Now Kali's media reports some of the news and views appearing on the blogs.

9. But still the general public is not aware of the kind of authoritarianism of Abdullah. Ministers and civil servants critical of him have been removed. Many are in cold storage. Tan Sri Sanusi Junid who was President of the International Islamic University was one of those removed. No one has been appointed to his vacant place yet.

10. A whole bunch of journalists working with the UMNO owned paper had to resign, to be replaced by Kali's nominees from Singapore.

11. But Kali has friends amongst the foreign journalists. So we do not hear of Badawism. But privately people have given all kinds of uncomplimentary labels to the 5 years of misrule by the fifth Prime Minister of Malaysia.

12. By now people can draw their own conclusions as to whether Mahathirism in whatever form has returned.

DANA LINDUNG NILAI

As posted by Dr. Mahathir Mohamad at Che Det on May 20, 2009 7:39 AM

(Ini adalah rencana bersiri mengenai aliran semasa yang membawa kepada krisis kewangan masakini. Rencana asal di dalam bahasa Inggeris telah disiarkan di dalam blog ini pada Mei 4, 2009)

1. Perniagaan yang dilakukan oleh dana lindung nilai (hedge funds) adalah lebih kompleks. Tetapi mereka juga boleh meminjam dari bank sehingga 30 kali ganda nilai wang pelabur yang mereka pegang. Dengan itu mereka mampu memberi keuntungan kepada pelabur hasil dari melabur 30 kali ganda dari wang yang dilaburkan. Selepas membayar faedah kepada bank dan komisyen pengurusan, pulangan kepada pelabur dari 30 kali ganda pelaburannya tentulah amat besar - jauh lebih besar jika pelabur sendiri melakukan pelaburan secara terus dengan modalnya sahaja.

2. Adalah dianggarkan 8,000 dana lindung nilai (hedge funds) menguruskan sejumlah 620 ribu billion dollar (620,000,000,000,000 dollar Amerika). Begitulah permainan mereka sehingga pelabur diyakinkan dengan keuntungan besar. Cara mereka melakukan pelaburan kerapkali diselubungi rahsia. Pusat kewangan bebas cukai luar negeri (offshore) kerap digunakan dimana mereka tidak perlu menyerahkan akaun mengenai perniagaan mereka yang meragukan.

3. Negara-negara miskin tidak begitu terlibat didalam perniagaan yang meragukan ini dan petunjuk-petunjuk ekonomi mereka adalah lebih tepat.

4. Krisis masakini terjadi kerana kebenaran yang tidak terhad yang diberikan kepada bank-bank untuk mencipta lebih banyak wang dan memberi pinjaman dan wang ciptaan ini. Walaupun mereka mengambil insurans perlindungan dan sebagainya, namun kerugian begitu besar sehingga tidak dapat ditangani dan disembunyikan walaupun oleh pihak bank dan/atau pemerintah.

5. Sebagai contoh, apabila mereka melabur 30 kali ganda dari wang yang telah dilaburkan kepada mereka, maka bila kerugian berlaku ia akan menjadi 30 kali ganda juga. Mereka masih perlu membayar balik pinjaman yang besar yang telah mereka dapati dari bank. Sudah pasti mereka tidak akan mampu melakukannya. Wang yang dilaburkan kepada mereka tidak akan mencukupi. Mereka akan meruntun turun bank-bank bersama mereka.

6. Walaupun kesannya kurang terhadap negara-negara miskin, namun krisis sebegini masih boleh memiskinkan mereka. Ini disebabkan negara rakan dagang yang dahulu mampu membeli barangan eksport negara miskin sekarang sudah tidak mampu lagi.

7. Amerika Syarikat dan negara-negara kaya yang lain sedang cuba mengembalikan kekayaan mereka dahulu dengan mengeluarkan ribuan juta dollar untuk menyelamatkan (bail-outs) syarikat-syarikat dan bank mereka. Dunia harus sedar ribuan billion dollar ini tidak datang dari cukai dan lain-lain pendapatan yang dikutip oleh Kerajaan. Ianya dicipta.

8. Malangnya, usaha menyelamatkan (bail-outs) dengan wang yang dicipta tidak akan dapat menjayakan usaha menghidupkan bank-bank dan perniagaan-perniagaan yang telah gagal. Ini kerana mereka tidak akan dapat menebus diri mereka menerusi perniagaan yang biasa dan halal kerana pendapatan dari punca ini tentu terlalu kecil. Mereka cuma boleh berjaya jika mereka dapat melakukan perniagaan yang meragukan dan tersembunyi. Tetapi, jika mereka melakukan yang ini, satu lagi krisis yang mungkin lebih teruk dari yang berlaku masakini akan terjadi.

9. Kerana kita telah membenarkan sekumpulan orang yang tamak menyalahgunakan system yang ada, dana lindung atau "hedge fund" telah dicipta oleh mereka yang diberi hak pinjam sehingga 30 kali ganda modal mereka. Apabila pelaburan mereka gagal maka kerugian yang besar yang dialami oleh mereka turut menyumbang kepada krisis kewangan dan ekonomi yang kita hadapi.

PERDAGANGAN MATAWANG

As posted by Dr. Mahathir Mohamad at Che Det on May 15, 2009 8:43 AM

(Ini adalah rencana bersiri mengenai aliran semasa yang membawa kepada krisis kewangan masakini. Rencana asal di dalam bahasa Inggeris telah disiarkan di dalam blog ini pada April 28, 2009)

1. Perdagangan matawang merupakan satu lagi penyumbang palsu kepada kemewahan negara-negara kaya. Perniagaan ini sekali lagi melibatkan wang yang tidak ujud. Bank akan pinjamkan sehingga 30 kali jumlah wang pelabur yang dipegang pedagang. Sekali lagi pinjaman diujudkan oleh wang rekaan bank. Begitu juga dengan wang pelabur jika ianya dipinjam dari bank.

2. Pinjaman yang besar oleh pedagang matawang membolehkan mereka memanipulasikan pasaran; menolak naik atau turun nilai matawang. Apabila nilai matawang bertukar peniaga mengaut untung. Kerana peniaga matawang mengawal beribu billion dollar, keuntungan mereka amatlah besar, dan begitu juga dengan dividen yang dibayar kepada pelabur.

3. Perniagaan matawang dianggarkan 20 kali lebih besar daripada jumlah keseluruhan perdagangan dunia. Pulangan ke atas setiap dolar yang dilaburkan akan lebih tinggi berbanding dividen daripada pengeluaran dan perdagangan barangan dan pemberian perkhidmatan. Dengan itu pelabur dan peniaga akan mendapat perolehan yang lebih tinggi daripada jangkaan sekiranya mereka melabur hanya modal yang ada pada mereka.

4. Individu tidak boleh pinjam 30 kali ganda wang yang mereka miliki untuk dilabur. Tetapi peniaga matawang boleh. Demikian kecenderungan pelabur untuk melabur melalui pedagang matawang.

5. Perniagaan matawang bukanlah untuk melabur dalam perniagaan atau perdagangan. Ianya diperjudikan ke atas kenaikan atau kemerosotan sesuatu matawang. Walau apa sekalipu jadi pada matawang (naik atau turun), penjudi (peniaga) akan untung. Kerana untung adalah daripada pelaburan lebih 30 kali ganda duit pelabur, kedua-dua peniaga dan pelabur akan mengaut untung yang jauh lebih tinggi daripada pelaburan dengan jumlah modal asal.

6. Keuntungan yang diperoleh peniaga dan pelabur ini akan dengan satu cara atau lain dimasukkan di dalam perkiraan KDNK dan pendapatan per kapita negara. Dengan itu angka-angka petunjuk ini menjadi begitu tinggi.

PETUNJUK EKONOMI DAN KEKAYAAN NEGARA

As posted by Dr. Mahathir Mohamad at Che Det on on May 13, 2009 11:39 AM

(Ini adalah rencana pertama di dalam siri mengenai aliran semasa yang membawa kepada krisis kewangan masakini. Rencana asal di dalam bahasa Inggeris telah disiarkan di dalam blog ini pada April 23, 2009)

1. Kita semua percaya bahawa negara-negara masyhur yang maju ekonominya memperoleh kekayaan menerusi pengurusan ekonomi yang pintar dan kemahiran dalam perniagaan. Mereka juga ternampak berjaya mentadbir negara mereka dengan baik.

2. Mereka telah mengadakan pelbagai petunjuk untuk menunjuk tahap kekayaan yang telah mereka capai. Dengan riaknya mereka membandingkan petunjuk-petunjuk ini, terutamanya pendapatan per kapita dan Keluaran Dalam Negeri Kasar (KDNK), dengan negara-negara miskin, untuk menunjuk bagaimana cekapnya mereka dalam menguruskan ekonomi mereka. Yang miskin tetap miskin kerana tidak belajar bagaimana untuk uruskan ekonomi negara mereka. Mereka ini boleh dianggap negara mundur.

3. Dakwaan negara kaya bahawa mereka begitu cekap dalam mentadbir dan mengurus hanyalah separuh benar. Benarlah mereka pengeluar barangan, pembekal perkhidmatan dan berdagang di dalam dan di luar negara. Tetapi kekayaan mereka daripada aktiviti-aktiviti ini tidaklah sebesar sebagaimana yang mereka gembar-gemburkan. Jika per kapita dan KDNK mereka berdasarkan hanya kepada perniagaan yang sebenar ini, mereka tidaklah sekaya seperti yang didakwa. Sudah tentu Amerika Syarikat dan Britain akan hampir bankrap.

4. Apa yang membolehkan mereka berjaya pertahankan petunjuk yang tinggi ialah kecerdikan mereka dalam berjudi dan memanipulasikan kewangan. Inilah yang memberi keuntungan besar kepada mereka dan membolehkan rakyat mereka menikmati tahap kekayaan yang amat tinggi.

5. Sebagai contoh, pasaran saham. Keuntungan kewangan yang diperolehi dalam pasaran saham tidak ada kena-mengena dengan perniagaan sebenar. Selalunya dividen yang dibayar amat kecil, berdasarkan kepada nilai asal saham. Oleh itu jika saham tersebut pada mulanya dinilai satu dolar, dividen sebanyak lima peratus hanyalah lima sen.

6. Tetapi jika terdapat permintaan yang banyak, saham satu dolar akan dinilai lebih tinggi daripada harga asal saham tersebut. Jika "harga pasar" saham ialah lima dolar, dividen lima peratus akan berikan pemegang saham hanya 0.5 % atau setengah sen dividen untuk setiap saham yang dibeli pada harga lima dolar. Ianya tidak akan membuatkan pemegang saham itu kaya.

7. Adalah lebih baik jika wang tersebut diletakkan dalam simpanan tetap dengan kadar faedah empat peratus, dengan itu lima dolar akan memperoleh kadar faedah sebanyak 20 sen.

8. Tetapi jika nilai saham naik, katakan daripada lima dolar ke enam dolar, pulangan ke atas pelaburan lima dolar adalah satu dolar atau 20 peratus. Tetapi nilai sebenar perniagaan tersebut dari segi aset tidak akan digambarkan pada nilai saham (dalam pasar) mahupun modal.

9. Jika perniagaan gagal ianya akan dinilai sebahagian sahaja daripada harga pasaran jika ianya hendak dicairkan (dijual).

10. Walaubagaimanapun aset (modal dan harta) tersebut mungkin bernilai lebih daripada harga pasar yang menjunam. Dalam pada itu pelabur (yang melabur semasa harga saham tinggi) akan kehilangan banyak wang yang dilaburkan (kerana kejatuhan nilai saham dalam pasar).

11. Jika pembeli membeli kesemua saham yang nilainya sudah merosot, ada kemungkinan dianya akan membuat untung dengan menjual asset (harta) perniagaan tersebut. Ini bukanlah satu jenis perniagaan, tetapi memang ada yang beli syarikat untuk meleraikan aset. Selepas itu tidak akan ada lagi perniagaan yang akan menyumbang kepada KDNK.

12. Yang jelas harga saham tiada kaitan dengan perniagaan yang dijalankan. Walaupun perniagaan maju, harga saham yang terlalu tinggi tidak membayangkan nilai sebenar atau keuntungan perniagaan. Harga saham sebenarnya palsu. Saham, yang pada dasarnya kepingan kertas telah menjadi komoditi yang tersendiri (untuk dijual beli).

13. Tetapi pelabur tetap boleh jadi kaya dengan membeli dan menjual saham. Sudah tentu mereka juga boleh kehilangan semua duit yang dilaburkan apabila saham merudum.

14. Harga saham juga boleh dimanipulasi. Menerusi jualan singkat harga boleh dinaikkan atau ditekan turun. Sekali lagi pergerakan harga saham tidak ada kena mengena dengan perniagaan sebenar yang dijalankan.

15. Pasaran saham bertukar menjadi kasino di mana pertaruhan berlaku walaupun ianya tiada kena mengena dengan perniagaan sebenar. Perjudian di negara-negara kaya ini adalah jauh lebih besar daripada nilai syarikat yang disenaraikan di pasaran saham. Tetapi keuntungan luar perniagaan ini tetap dihitung di dalam pendapatan per kapita serta KDNK.

16. Tetapi bukan ini sahaja kekayaan palsu yang menaikkan per kapita dan KDNK negara-negara kaya.

17. Hakikatnya ialah angka petunjuk per kapita dan KDNK tidak mencerminkan kekayaan negara-negara maju daripada perniagaan dan dagangan mereka. Jika ditolak pendapatan daripada jual-beli saham, daripada pinjaman sub-prime (yang lemah) bank-bank, gadaian dan insuran keatas hutang yang tak dapat dibayar, jualan matawang dan kegiatan dana lindung nilai, pendapatan per capita dan KDNK negara-negara maju akan berkurangan sebanyak 40 peratus (angka ini disebut oleh Obama). Ini bermakna per kapita Amerika Syarikat bukan US36,000 Dolar tetapi US21,600 Dolar.

18. Pendapatan per kapita Malaysia lebih tepat kerana kita tidak terlibat (setahu saya) dengan pinjaman sub-prima, dana lindung nilai dan lain-lain. Hari ini per kapita kita ialah US6,000 Dolar oleh kerana nilai tukaran Ringgit ialah 3.80 bagi satu dolar Amerika. Jika tidak kerana penyangak matawang Amerika menurunkan nilai Ringgit dari 2.50 kepada 3.80 bagi satu US dolar pendapatan per kapita kita sepatutnya 9 ribu hingga 10 ribu dolar Amerika.

19. Dari angka per kapita ini, kita tidaklah jauh ketinggalan dari kemajuan dan kekayaan negara-negara maju yang sebenar.

BOSNIA-HERZEGOVINA

As posted by Dr. Mahathir Mohamad at Che Det on May 11, 2009 4:00 PM

1. Kita sudah lama tidak mendengar laporan berkenaan Bosnia-Herzegovina (BiH). Pada satu ketika nasib orang Bosniak, iaitu orang Islam Bosnia, yang mengalami penghapusan etnik oleh orang Serb amat menyayat hati kita.

2. Kita telah beri sedikit bantuan yang amat dihargai oleh orang Bosniak. Mereka anggap orang Malaysia sebagai sahabat karib mereka. Ramai juga yang menuntut di Universiti Islam Antarabangsa dan mereka memegang jawatan penting dalam Kerajaan BiH, termasuk Duta Besar Bosnia ke Malaysia.

3. Orang Bosniak adalah orang bangsa Eropah dan bukan orang keturunan Turki. Di Eropah hanya orang Albania dan Bosniak sahaja yang beragama Islam. Mereka memandang tinggi terhadap Malaysia.

4. Jumaat lepas (Mei 8), Mufti Bosnia, Mustafa Ceric bersama dengan rombongan kecil telah jumpa dengan saya. Antara yang datang ialah seorang pengusaha bernama Faruk Serbegovic, arkitek yang telah bangunkan sebuah Halal Business Park. Beliau ingin mendapat co-developer dan pelabur dalam industry makanan halal untuk Business Park Bosnia.

5. Bosnia Herzegovina mempunyai kedudukan istimewa dalam Kesatuan Eropah (EU). Walaupun belum diterima sebagai ahli EU, barangan keluaran BiH boleh masuk EU tanpa cukai. BiH juga menjadi pusat untuk dagangan dengan Negara-negara bekas Soviet Union, Turki dan Negara-negara Timur Tengah.

6. Saya berpendapat projek Halal Park ini berpotensi untuk pengusaha Malaysia dalam bidang makanan halal melabur di dalamnya.

7. Jika ada sesiapa yang berminat sila berhubung dengan saya supaya dapat saya uruskan.

THE INDICES

As posted by Dr. Mahathir Mohamad at Che Det on May 8, 2009 9:40 AM

(This is the conclusion to the series on the trends that led to the present financial crisis)

1. I have listed and explained a little on five schemes for making money out of non-business. The amounts of money involved in these money make money schemes are huge. The hedge funds alone handle 620 trillion dollars. The trade in currency involves 20 times the value of total world trade.

2. These money make money schemes are huge and the earnings of those who manage and invest in these schemes are equally huge.

3. They are not business because they produce nothing and they supply no services. They also create hardly any employment, nor spin off other productive business.

4. Yet the money they generate is real because they can be used to buy goods and services from the real business world.

5. The earners of this money i.e. the fund managers, the bankers and the investors are truly rich and they live the life of the wealthy.

6. Quite naturally the players, i.e. the fund managers, the investors and the banks and bankers make large sums of money. And their earnings must contribute to the national wealth.

7. Since we have developed indices for the wealth of countries, the Per Capita Income and GDP of the countries where these money make money games are played must be high.

8. But if we deduct the wealth from these schemes from the computation of the Per Capita and GDP, obviously the figures would not be as big as claimed.

9. The bubble has now burst and the true Per Capita and GDP can now be seen. And they must be much lower.

10. So the real Per Capita Income and GDP of the rich countries are really not so high compared to the poor countries whose Per Capita and GDP are based on real business.

11. The people in the rich countries who are furiously trying to regain their statistical wealth should not be in denial. You will never be able to recover to your pre-crisis self no matter how many trillions you spend on bailouts.

12. If you accept this fact than you may be able to end the slide to national bankruptcy.

THE PYRAMID SCHEME

As posted by Dr. Mahathir Mohamad at Che Det on May 7, 2009 5:28 PM

(This is the fifth and final instalment in a series on the trends that led to the present financial crisis)

1. Then there is the pyramid or Ponzi scheme. Bernard Madoff was only exposed after he lost 50 billion dollars of the money invested with him.

2. The operation is simplicity itself. The operator simply gives back a percentage of the money "invested" with him as dividends. If he pays a dividend of 20 per cent he would finish the money in five years.

3. But as more and more new investors invest with him, he would be able to pay the dividends long after the earlier investors had got back all the money they had invested. Besides the investors would continue to invest more as they receive the high dividends.

4. Generally the investor would be so happy with the high dividends that they would not complain. The authorities would therefore remain ignorant of the operations of the scheme. Besides if exposed and forced to stop the investors would lose all the money they had invested.

5. Madoff would not be the only one to operate this scheme. Actually no wealth is generated as the invested money is actually returned. Nevertheless the so-called dividends would contribute to the per capita and GDP of the country.

THANK YOU!

As posted by Dr. Mahathir Mohamad at Che Det on May 6, 2009 8:07 PM

My blog became one year old last week. (The first posting appeared on 1 May, 2008).

It had been an exciting journey to be able to share my thoughts with so many who had taken time to visit and comment on my postings.

When I first started blogging, I was merely trying to find ways of expressing myself after being blocked by the mainstream media.

I did not expect to receive such high hits (to date it is 18,710,769) and such thoughtful comments. I have tried my best to respond to these comments. But the commenters must know there are too many.

There had been times, especially when I was travelling, when I found it to be quite difficult to keep up with the postings but I am glad that I had managed to ensure my blog remains active.

I have to thank visitors and commenters for their continued support. Without that, I would not be inspired to continue blogging, at least not at the pace that I do.

I hope to be able to continue with my blogging and I also hope that your support will keep on coming.

Thank you.

THE HEDGE FUNDS

As posted by Dr. Mahathir Mohamad at Che Det on May 4, 2009 1:02 PM

(This is the fourth instalment in a series on the trends that led to the present financial crisis)

1. The business done by the hedge funds are more complex. But they too can borrow up to 30 times the investors' money they hold. They are therefore able to earn for the investor the profits from 30 times the investors' money. Even after paying interest to the banks and taking their share or commission, the earnings to the investor from 30 times his money would be very big - certainly far bigger than if the investor were to invest directly himself.

2. It is estimated that the 8000 hedge funds manage a total of 620 trillion dollars. Such is their game that the investors are assured of high profits. How they invest is often shrouded in secrecy. Much use is made of tax haven where they need not submit accounts of their study business.

3. The poorer countries are not much involved in the shadow businesses and their indices would reflect their economy much more accurately.

4. The present crisis is brought about by the right to create more money by the banks being too great that despite securing their business through insurance etc, their losses could not be covered even by the bank.

5. For example when they invest 30 times more than the money invested with them, the losses too would be 30 times more. They would still have to pay back to the banks the huge loans they had taken. There is no way they can do this. The money invested with them would not be enough. They would therefore drag down the banks with them.

6. Although the poor countries will be less affected, the crisis would still impoverish them.

7. The United States and other rich countries are trying to restore their wealth by trillions of dollars in bailouts. The world must know the trillions are not from taxes and other revenue collected by Governments. They are created.

8. Unfortunately the bailouts with this created money will not succeed in reviving the failed banks and businesses. This is because they cannot redeem themselves through normal legitimate businesses. The earnings would be too small. They can only do so by the same kind of dubious shadowy business they had been doing. But if they do this there would be another crisis, far worse than the present.

9. Because we allowed a group of selfish greedy people to abuse the system, this is the inevitable result.