Anonymity is Resource

Most of people today underestimated the power of anonymity. They often trap themselves into a psychological framing of no-body can never to beat somebody. They therefore fall trap into process of looking for a free ride from the market leader.

In today world, the market is flood with, if not thousand, but million of product. An average hypermarket in big cities, have approximately 12,000 to 60,000 products. Still, most of the product are indirectly or directly relate to the big boys in the markets. Computer market, peopel relate themselves IBM, HP and Dell. Smart phone - Apple, HTC, Samsung. Paper product - kleenex. Ketchup - Heinz. They tend to imitate what the big boys is doing, as because they think they are no-body. The metooism and improved products are preached by today small companies . They think this is the only way to turn themselves from no-body to somebody. They want to become somebody before they have courages to do it their way. Unfortunately, often, the only scheme those metooism is keeping up with the jones with the big boy, and remain no-body.They never dare to announce themselves as "no-body" and has nothing to do with "somebody". They do not do it as their way, even though they might have a better innovation way of doing things. They underestimate the power of anonymity.

President Nixon is a "somebody" that almost everyone knew, but almost anybody can beat him. That just a extreme example, but not a isolated case. Today, even media is looking for new fresh young look to be introduce to make a new buzz. The audience are very knee to expect something news and underdog to come into market. Even former famous American film maker, printmaker and painter Andy Warhol once said " in future, everyone will be famous for 15 minutes." Therefore, when the 15 minute arrive, be prepare and make most of every second, to earn a extra minutes. Do not underestimate the power of anonymity. Keep it until you ready to spend it. And remember, if you wish to spend it, spend it big and wise.

Business - Is not About the Product

Today, we heard a lot of people saying they want to start a business to become rich. They claim to have a great idea with great product that will definitely make a business to be successful. But after years or 2, they often come back, it just not going to work. Business is just for the rich. Business never be a arena for people to win. It is a game for crock and con-men hang out. You need to be deceptive in order to be success. Therefore, business is for those who are evil.

I tend to agree on there are some negativism in business arena. But, i never agree on business is an arena of full of risks and evil. As in any arena, or life, there are always good and evil elements. So, what is the drawback, what make a business success and what make it fail? The key word is system. For any business, people often hypnotize themselves in finding an ultimate products. Product do place a certain important in business, but it is consider to be the least important among the factors that will affect the outcome of a business. Why? Because, there are thousand if not millions of idea, great products available across the globe. Even, in communities we are living in, we often heard and seen, idea of somebody are being realized by some company, and make of billion of it. Also, we seen good products unable to place any position in market no matter how goods is it. Ask about people who did bought burger from side road burger stand, they will tell you, it taste better than McDonald. But, they never make up to become a business scale like McDonald.

System it the key that make a business to success or otherwise. System that make up of strong mission, team, leadership and management. Those element is not arbitrary regardless from a small burger stand to a MNC. It might sound simple for certain business such as selling screw and nuts on internet, but the system thats is involved is equally complex in order to make it success and profitable. It is complexity on inside with simplicity on the outside that make a business to growth. Build a great system with great team, any kind of business you are in, success it just a matter of time.

Economic: It is Not About the Growth

Economic was never been a subject of study until 1800s, when Adam Smith introduce the concept of invisible hand (free market) that govern the stability of market. Economic had since become so important, especially in today world, as it is direct matter to the stability of civilization. Stability by means not unlimited growth barrier but balance in term of trade, innovation, consumption and ultimately civilization.

Today, many had caught themselves off guard to the meaning and purpose of economic study. Economist are now obsessed in to find a solution that could bring the economy growth limitlessly. They are against the fundamental principle of the economic study, the nature law of balance. The law of economic are the same as the law of gravity. It act upon regardless people recognize it or otherwise. In the economic study, the rule of thumb is "cycle". Cycle by mean, when there are something is up, something else has to be down. The tree does not grow into the sky. There be a time for it to come back to the ground. In term of so many mainstream economist and policies makers, they advocate of maintaining positive growth, surplus in trade and other economic gains every years, is nothing but a pipe dream. Instead of pursuing growth and surplus, trade balance is what should they pursue. As every surplus in trade, come with a deficit country. A sense of winner is relatively somebody has to be a loser. No one want to be a loser. Therefore, balance trade is the most harmony and jibe with the nature rule of economy. In the end, no one will be happy living alone as the wealthy person, but surrounded with depress and poor neighbor.

Today, many people are afraid of economy recession. They shouldn't be. As it just part of the cycle process as every spring will end with winter. Instead of afraid and panic, they should embrace it, understand it, and think positively toward every recession is a reset time of the game of economy (money). And it also can provide a better clean white sheet to start with for any economy reform, as a result of postmortem of previous economy model.

What is the value of Money

Ever since Money is introduced, it has become the most "important" element that human perceived in today world. Money has the magic and power to turn a person to do whatever its take in order to get it. Therefore, it has been a very famous quote about money : " money is not everything, but without money, there are nothing!"

So what exactly this money is all about? Money by means, is just a medium of exchange. It represent certain "perceived" value by people to buy and sell goods. In the ancient time, people trade by simply exchange goods among them. It is called the system barter. There are no medium of exchange exist. The difficulty come, when they try to have a fair trade among people. Question such as how many eggs worth a chicken? Then, money is invented. Shell, gold, and silver are the first to introduced as money. Then revolution came, paper money are introduced to replace hard money, since the government think that it is much better off to print money freely then to be constrained by the limited supply of gold and silver. Years goes by, people has accustom to paper money. The mind framing has reinforced the money position in human mind. It become such a big impact to people life, which it become a new opium in new civilization. It become so emotional, that people will do "stuff" to keep it, and take it from others. The truth is, money has no value. It is just an idea of value, a deceptive perceived value by people. Money is just a piece of paper. A paper that could be turn into nothing as it is. The money has no intrinsic value nor a tangible value. What we want, is ins't the money, but the stuffs that money could buy. The real value is the foods, the cars, the cloths and the charities. Therefore, people should not being too emotional attached to the pseudo paper money, but be more more generous to bring out true value that money still can produce before its pseudo value started to be eaten away by many factors such as inflation, excessive cheap credits and irresponsible government policies.

So, money is just money, it is nothing but a piece of paper. We should be concentrate of preserving and bringing out a valuable contribution, innovation and invention for the holistic benefit of society and environment while it still can, rather than pursuing and giving up the real valuable assets (earth, mother nature, ethic, peace) for such paper money. However, sadly, as I speak, many are still giving up the true value to a pseudo value.

Future Outlook of World Economy

The world economy will go through a dramatic changes in years to come. From industrial age to information age, and now conceptual age, we had and has gone through plenty of boom and burst. Ancient economist had trying to understand the nature of economic, to put it into a simplified perspective for generation to come, for the benefit of society as a whole. Theory and economy model was discovered and create by the wisdom of famous economist such as Adam smith, John Struat Mill, David Ricardo, Parson Malthus, Karl Max, Veblen Thorstein , John Maynard Keynes and Milton Friedman; from laissez faire economy model, utopia communism to current socialism-capitalism. Yet, non of those economy model can or will to bring out a perfect system.

Since the breakdown of Bretton Wood system, the economy outlook has been the gloomiest ever since. Government, specifically Uncle Sam for its own benefit, whose currency is the international trading currency, can virtually finance its expenses by simply creating money out of the blue. Such phenomenal, so far had been accepted by most of U.S trading partner is due to the confident to U.S taxes payers ability to pay off the debt someday in future. As by more than 5 decades since WWII, U.S state had proven to be the strongest nation in the word, she had become an exemplar for most of the nations in the world to emulate its administration system, including economy policies. Therefore, to maintain its advantage position as a nation who possess cheaper currency, by definition, for every surplus develop nation received from U.S, they need to print as much as its own currency to avoid any surge in the its forex exchange rate. Albeit, tree does not grow into the sky. The world now had fall trap into a paper money (fiat currency system) world, that one day, people will realize the paper money they are holding now, is nothing but figment of imagination value, a ponzi scheme that created by our government. History can reveal the future, as people often repeat the same mistake. Weimar republic during early 1910s in German had well depicted the Scenario and outcome of paper money policies.

In foreseeable future, we will see how fiat currency system will collapse in the scale that human race never encounter before. The perceived value will shift in phase from money (paper) to something human really need. There is no turning back. The intervention of government will no longer helpful, but to exacerbate the problem. Therefore, we must prepare and face the problem once and for all, for the biggest economy reset in year to come. Only the adaptable can survive the changes.

The Collapse of Monetarism

Monetarism is an economy model originated by John Maynard Keynes and Milton Friedman. Since the collapse of Bretton woods system on 1971, Monetarism had prevailed in our today economy world. In the concept of monetarism, it stated that, the stability of economy system can be controlled by regulating the money supply. By controlling the money supply, government is believed to be able to react effectively to the condition of the economy. A overheated market or depress market, government can mitigate its negative repercussion by controlling the money supply valve - interest rate & taxes.

The problem now, is there are too much money being supply into the market since the break down of Bretton Woods system. Statistic had shown a 2000% increase of money supply throughout the world from 1969 to 2002. The market flooded with cheap credit will create a huge assets bubble that will ultimately burst. Such phenomenal is not a "what if" scenario but "when" and "how big" scenario. Many implication can be seen throughout the 1990 to 2010, as property bubble and systemic failure of banking system in United state and Japan. Both country are been trying to use money supply to fix the current economy problem, but for more than 2 decade, the economy problem only to become bigger. Such form of keep pumping cheap credit to the market to stimulate the market will not only increase the debt burden of most government including the wealthiest G7 countries, but will ultimately making the government unable to pay the debt. For that, confident of the market toward the government will fall. Panic will occur. The money printed will become worthless. Commodities and intrinsic value items such as gold and silver will soar in price, turn the market of deflation to hyperinflation, such as happen during Wiemar Republic of German during 1910s.

It is true you may fight fire with fire, but it is impossible to fight water by water. Economy is all about liquidity. The world is trying to fight the liquidity with liquidity. It is no difference by making a drunken person to drink more, hoping, he might get better. Doing the same thing hoping for different result is what insanity all about.

Integration or Diversification

Integrate mean putting together and operate with harmony, diversify mean by putting apart and operate separately. In the world of investing and business, there is always a favor toward diversification. It the by far most acknowledged risk mitigation. That's why we often can hear financial experts from mutual funds, insurance and banking industries touting on the virtue of invest for the long term and diversify.

The facts is, most of the investor do not win by such diversify strategy. It does not mean they will always lose in monetary form. Diversification often making investor to be sort of break even. This is not diversification is bad. It is just because of its nature. Diversification is a strategy to "not lose", they not created to win. By definition of its nature rule, how could you to win by apply a "not to lose" strategy? Not to lose is not as same as winning. The closer definition of not to lose - obviously is "break even". Of course, the "break even" is only means of amount of money involve. Considering of inflation and time, diversification could be a very bad strategy to utilize.

Integration is a conglomeration of various form of investment vehicles, operate harmonically with a plan. Yes, the keyword is a plan. Investment to be rich is not a product, is a plan. A plan that is so unique structured based on individual circumstance to win with lowest risks, highest rewards and shortest time. Integration do not care on how glamor or grandiose a investment deal is. they are in care on how will such products will fit into they plan, to archive what they want. Integration make things more comprehensible, controllable and simple. Therefore, integration is a plan to win.

Goodbye 2010, Good Luck 2011

"it was the best of time, it was the worst of time" a famous quote by Charles Dickens, a famous British novelist, best described the economy outlook of the past decade. Saying good buy to 2010, and the end of the first decade of 21 century, I say we have yet to overcome all the obstacle of greatest changes in the age of globalization.

Looking at the past 10 years, from the dot-com boom and burst, collapse of financial institutions, subprime mortgage crisis, energy price in surge to international fiat-monetary system disputes, we had and have survived so far. Yet, the real challenges has yet to come. We are approaching to the true age of changes, changes where will happen in the speed of light. Therefore, we are much to learn, adapt and act upon to build a brighter future for us and the coming generation.

As history is how we learned. People believe history does represent future in some sense. I tend to agree. history does has the tendency to repeat itself, since human tend to repeat the same mistake, even though it might be in different pattern. So, what should we learn form the past 10 years in order to strive for the coming years? What are those challenges?

There are many big event and changes happened during the past 10 year since millennium. Some i personally believe to have great impact and implication to what might come in near future. Here are some which i would like to share with you all:

1. G-20 had replaced G-8 as the major international group to regulate international economy matters. This imply that, developed country had no longer dominate the world economy. Developing countries now has played a greater role to sustain and ensure the stability of international economy affair. BRIC will play a bigger role in years to come to replaced NATO nations and Japan. The formation and coordination between developed countries and developing countries will ultimately dictate the outcome of our future economy.
2. Notrth Korea and south Korea issues will be another key event to come in 2011. From Cheonan Incident to artillery assault by North Korea at South Korea's island, the tension between 2 nation has become heighten. North Korea had since abandon her offer by United Nation on the 6 parties talk to abandon her nuclear weapon project in exchange to economy aids. China has since act upon from her passive stand against North Korea issue, to host a re-talk between North Korea and the 6 parties on February 2011. President Lee Myung Bak from South Korea had agreed on the proposal provided North are sincerely committed to resolve the problem by peace. The outcome of the event will greatly influence the peace of the world for the coming future.
3. Developing country should gradually evolve from nation that exported-support-oriented country to becoming a self-technology sustainable countries. As there most products from developing countries are imported by developed nations, the current balance accounts crisis face by developed countries will greatly impact the economy growth of developing countries. Any collapses in any developed countries now will create a domino affect to the developing countries.
4. Greater globalization will continue to come in our future. The revolution of communication and financial technology will making the international trade become more flat. As book written by Thomas Friedman, "The world is flat"; this ideology will become more prevalence in years to come. For people who still live in the industrial age idea, they will be found more difficult to live and survive in the new world to come.
5. Climate changes and environmental issues. As notice in media, our world is indeed sick. Innovation of green technology will be the next trend if human would like to enjoy the privilege to enjoy the greatest thing in life in world. Fossil energy are no longer encourage to be the primary energy source. Deforestation must be stopped. Pollution both air and water must be controlled. Government and enforcement authorities must play a bigger role in regulate industrial player in global scale, educate them on the idea of balancing between economy and environmental benefit. If we wish our next generation to see deep blue sea and green forest, we should abandon any toxic application that will harm our world. or else - 2012 might come.

Above are some of the events that we need to take precaution for the years to come. In the end it is still up to each and everyone of us to wake up and act together to build a better and greater future for everyone to live in.

Happy New Year 2011!

Businesses Marketing - Positioning

Positioning is not a new terminology in business world. yet, most people speak of it, but failed to act on it. Positioning is a essential term in marketing internally and external. In today fast changing and abundance world, market is fill with if not thousand but million of services and products. Everyday, there are new innovation being introduced to the market. Consumer are given a much more choices when come to spending. Unlike during 1960s, 70s and 80s, there are less product and services to meet the needs of consumer. Big ads on tv screen and other sale perks had become prevalence during that time. Positioning seem to not be so important during those ages. Eventhough the concept of positioning had been raised by many marketing gurus such as Rosser Reeves (1910-1984) during 1950s, on his theory about USP (Unique Selling Proposition); many businesses, small and big ignore it. Until recent years, people start to seeing the important of being different. Hard Sell is no long sufficient in order to beat the market. Consumer has become smarter when come to spending. Simply provide needs will no longer be able to keep your business vibrant, since your competitor probably can provide what you provide. Therefore, differentiation has become the key element in business as pointed by jack Trout, in his book "Differentiate or Die". The title itself had clearly sending the message to the public. Businesses now need to position your standpoint, your niche market, your philosophy, your identity, your perceive value in the consumer's mind in a different way apart from your competitor. By correctly positioning your business stand point, you are in the sense of making competition irrelevant.

The Circle of Reality - Why Most People Can't be Rich

I had attend a seminar talk by a famous speaker Mdm. Tan yang Ho. I had learned something very interesting yet truthful. It is the circle of reality in our life.

In our everyday life, we are guided by a invisible force, called the circle of reality. We are guided by the circle regardless we notice or not its existence. So, what is the circle of reality is all about, and how it affect us in the path to build wealth?

Here I will tell you how I come about to understand the circle of reality. In our earliest life, when we were child, a toddler, a baby, we have a plain big circle of reality. Everything is possible in life, as often anything we ask for, we just need to cry, and walla, our wish often is fulfilled. Life is full of joy and disappointment seem to be so trivial, as we learn to walk, we wobble and fall again and again, we never give up and believe that we will definitely be able to walk and we did. Times goes by, and we are now a 9 years old primary standard one student. Remembering when teacher had given us an assignment to draw a elephant. Everyone is so excited and draw the elephant based on their imagination with their preferred colours. And imagine yourself drawn an pink elephant with wings on it. The teacher come over and take a look at the drawing, saying :" there are no such elephant, are you stupid?". From then on, the circle of reality become smaller.

When come to puberty age, being a teenager, believing falling in love is the best thing in life. And here goes a puppy love, but soon end up with breaking up. Now life seem to be ruins, disastrous like it was end of the world. Falling in love is worst nightmare in life. Such typical anecdote and episode again diluted the circle of reality in most people life.

Soon, we grown up, and started to have our first job, we believe by work hard we can be secured and successful in life. But soon after years and so, recession set in, despite seniority and hard work, the management decided to lay off those "obsolete" and "expensive" senior executive to be replaced by young and "cheaper" executive to reduce cost. Life again full of disappointment. The circle of reality now is almost disappear . The circle of reality turn form baby age of full of possibility into life that full of impossibility and disappointment. Ever since such pattern of life, we unconsciously shape our life into what I called cynicism. We would not believe in opportunities. We rather to believe opportunities to be something too good to be good than " no harm to try". Therefore, we lose many chances in life to change our life, to pursue and ensue wealth.

This is why, most of people today cannot be rich. Most of our life have greatly destroy the circle of reality that unconsciously shape our life pattern. When he circle of reality is gone, we lose faith, we do not believe. Therefore we failed. We failed because we fail to believe in ourself, to get whatever we desire and make it happen.

Determine and Desire

What it take to become rich? It take determination and desire. For most people, they want to be rich, but they never did because they do not want to pay the price. They do not want to pay the price not simply because of they cannot afford it, but it is because they do not have the strong desire to become rich. Being rich is something like an optional, or bonus to most people now days. As we are living in the abundance civilization and longest peace time human race had ever experienced in history, human tend to be complacent. Survival are no more a major crisis inmost countries across the globe. Most of us are born to be in the world that full of everything. Just find a secured job, with secured pay, you can afford the wonderful things in life that even a king could never be able to enjoy in ancient time. A big house, sport cars, and expensive vacation, is what most people, even the medium class can archive without necessary to be rich. So, why bother to live outside the comfort zone, to become rich. Why bother to risk everything they have now to become rich? Isn't security and comfort is more important? Well, as each of us are different, therefore, what is the priority in our life is different. For instance, some people panic to see a snake, and others exciting to see a snake. So, what make us different from the billionaire is the word - desire. Desire is the combination of hate and love. And as we all know, love and hate are the most powerful emotion humankind can possess. With the emotion of love to become rich, and hate not to become rich, desire create passion and determination. By then, miracle can happen since, it is often the product of determination. Determination can move mountain, determination can turn a steel bar into a fine needle. Determination can produce limitless energy to a person to archive what he about to archive, including to be rich.

New Right Brain Business Age

In the industrial age, the world economy is drive by our left-brain power - analytical strength , logic and utilitarianism. German and Japan are the best exemplar in the case, whereby, they are fast emerge again to be a formidable economy empire after defeated during world war 2. In those age, practicality and price are the essence of any businesses to outperform in the market.

In today information age, we are living in a longest peace time ever record in history civilization. We are living in the world of abundance, automation and 3 billion labour forces. In today business model, having a bunch of good engineer and high technology production system will not guarantee the success in business world. Left brain are no more sufficient to meet the consumer market today. For instance, we have a dozen of goods and services in the market now, whereby, we could virtually walk down to a 5 minutes walk shopping mall down the street to get virtually anything that we practically needed in daily life. From hygienic, entertainment, food to health care items, we have abundance of choices. All production today, compare to industrial age, are drive my automation system, manage by artificial intelligent, machines that are more efficient than human flesh in the way of left brain mechanism. Such dramatic changes has enable any business across the globe to produce a high quality product with less price. So, not the quality nor price that destine the success of a business, then what is it that matter?

In the abundance age we are living today, the key for us to outperform the rest is our right brain. The aesthetic side of our mind. Some use a different terminology like positioning or differentiate by a famous author Jack Trout. Other use the world of conceptual mind. Take for instance of a toilet brush. In the past, we purchase a toilet brush for a cheapest price, to do it job - clean the toilet bowl. That's all it mean to be marketable. But today, there are bunch of maker or factory can sell a good toilet brush. Other than it is safe and efficient to be use, other intangible element such as whimsical, beauty and colour become matter. Today people would then to buy a more expensive toilet brush than the ordinary one which possess quality such as a appearance that do not look like a toilet brush. People now are buying the art than buying the stuff. They are in buying a emotional stuff than a simple utility. This how our right brain come into play. Paula Antolleni once quote:" Design is a renaissance that combine technology, cognitive science, human need and beauty to produce something that the world does not know it was missing". Don Norman Said :" Aesthetic matter. Attractive things work better." Today, all business person need to become a designer. To think using their right brain. To create something that have identity, soul, meaning and emotion. In the new business world, it is not about price of practicality, is about the combination of "utility" and "significant". A whole new world to come that need a whole new mind to jibe.

Businesses Cycle

Business cycle is the common nature rule in economic. What goes up must come down. It is true and always true, since it had been depicted by Adam Smith since 1886. So, how we able to understand the business cycle?

Every business is drive by private consumption. For most major economy countries from G20 to 3rd world countries, private consumption making up the major share of annual gross domestic product. In the end, it is the customer that making a business to profit. Yet, most economist are only focusing on the spending pattern of the consumer. Rather they should be paid more attention to what drive those pattern. Apart form the psychological aspect, there are more about the economical aspect, that we can examine.

First of all, salary & wages is what drive consumer to spend. You could not spend if you do not have income. Unless you got a parent who left you hundred of million dollar heritage. Salary obviously is given by private sector - the employer. The economy size of company will ultimately decide the scale of salary, given there is no government wages control policy. Here is the key factor, the economy size of private sector. All private sector is funded by private investor or institution - private direct investment. The same goes to the question of "egg & chicken", "Private investment & private spending" , which drive which, which come first. Indeed, Private direct investment, is motivated by consumer spending. But, in business world, you can't dig hole only when you need to go to toilet. It will be too late. So, the motivator is what perspective and outlook of future consumer spending pattern - the future potential demand and supply. You need to place your money some place though, therefore, decision must be made, by means of calculated risk to potential projection return. Whenever there are prospective economy opportunities available, it will attract private investment. Every boost in private investment will therefore increase the economy scale of certain company. When new fund is introduced to a company, salary and wages normally will increase. New jobs will be created as well to accommodate a bigger and more aggressive business activities. Employment increase making consumer market even attractive. This will induce Productivity, hence, market supply will go up. While for every positive economy demographic, chances for demand to meet the supply is still high during the beginning business cycle. A sound proven economy activities will boost profitability therefore return of investment. Such episode will draw even more private investment. Again, more fund is received, the management of company will need to conjure new way to spend it. Here is the part which drive the ultimate break down in the business cycle. Excessive investment and mis-allocation of funds will likely to happen. While more jobs created, and there is higher productivity; there will started to plant a oversupply seed in the market. Apart from that, competitor will started to flow into the economy, since profitability had been proven from the first cycle of businesses. Now, the oversupply or market glutted will emerge, making price to go down. Profit will retreat. Less jobs will be required. No new private fund will be induce into market. Unemployment raise, making the consumer market even less attractive. And recession set in. Supply will withdraw to the limit where demand is higher again. And only then a new business cycle will begin. This how our economy work, and it will always work. You can't avoid economy bust, if there is an economy boom. So, it is always foolish to believe that market will ultimately goes up to the sky. What always make men kill is utopia optimistic. And a lot of amateur investor always got kill during the end of business cycle. Being optimistic is important, but realistic must play its role as well.

"The only way to avoid economy recession and contraction, is by to prevent a economy boom" John Maynard Keynes

Dollar Crisis - Major Impact To The Future Generation

Since 1973, under president Nixon administration, the fall of Bretton Wood system had planted a seed of global financial crisis. The new monetary system that replace Bretton Wood gold standard - Fiat Currency, had making country, especially United State to print as much money they desire to fund against imports and credits. Such phenomenal has create a irreversible disequilibrium in global financial system. On 2002, it has been reported money supply level in United state had set all time record high since peace time. The conservative estimation of 1.2 trillion us dollar of international reserve now available in the market. As replacement of dollar standard to gold standard, United state can purchase goods and services from other nation by debt. United state which her import are encompassing 75% larger than her export, has since became the major trading partner across the globe, especially those developing country such as china. Therefore, the stability of United State will direct effect the global economy health. The excessive cheap credit, Quantitative Easing policy, and the "helicopter" policy originated by Fed Chairman Ben Bernanke during credit crunch crisis in 2008, has help fuel the monetary instability - debasing the dollar. Such intention to ease a temporary pain of economy crisis and stimulation to prevent deflation as happened in Japan, will make the asset bubble easy to be created than sustained. Money are pumping into the market to encourage private sector to invest and create jobs. However, the action has cause back-fire to United State as private market started to feel confident against the credit worthiness of the country. Dollar market become less attractive, as private investors started to selling their holding. But, simply selling the dollar will not help to prevent from being part of the dollar crisis. As United State is the major import nation to most export countries across the globe, the value of dollar will direct effect to its earning. By selling the dollar and exchange to their own currency, this will simply inflated the value of their own currency therefore making export less attractive. So, major export country such as Japan and China, to avoid the negative impact to the export sector and income to the nation, they will rather using its us dollar revenue to reinvest into us dollar dominated assets. Again, such action will making assets bubble in United State even bigger. Since in basic economic, everything that goes up must come down. As the conclusion, the ripple effect will be the perfect storm of economy crisis in future, which will cost be paid by the future generation. This will not be a rhetoric. This will be the episode of the son to pay off the father's debt. The question is how the young generation be able to do it? What will happen if the economy totally collapse? Will we be able to enjoy the peacetime we enjoyed for the past 50 years? Economic has always been the reason to social stability. Weimar Republic in German during post WW1 is the best example. In my point of view, history does has the tendency to repeat itself, as human tend to repeat the same mistake again.

The Market Is More Important Than The Real Estate Deal

Location is the most important word when come to real estate investment. I am agreed. But, location is shouldn't be measured based on geographical alone. It has to be based on the market concept of supply and demand. In the idea case, a great location is based on the market that the supply is low and the demand is high. Meaning, even though a property that is located at a metropolitan city, it does not justify the soundness of the location. As in from the perspective of economic, "location" in real estate investment is the "market".

In real estate investment, the most frequent mistake that people make is making first priority on looking for a property deal. These type of amateur real estate investor always just go to any major cities, especially capital cities which the properties prices are high, and the communities seem to be crowded, starting to picking up 1 or 2 good looking houses, buying at broker offer price, and believe in a year or two, price will be higher. They always fall prey into the jargon and sale pitch that broker gave to them. They invest in gut feeling rather than a rational facts and findings.

In any place in today civilization, before looking for any property, the first priority is doing research to the market that you interested in, market research that will provide you information which related to supply and demand. For current supply normally is the number of housing start, a overhang rate of constructed building available, the new launching housing rate, and the unsold under or non- constructed units in the market. For future supply, that will be the pre-planned housing start in coming years. All these information can be obtained from well established broker firm, and real estate government agency. For the demand is a little bit tricky. Demand normally can be estimate from the absorption rate of new housing launch. In other word, it is the sale performance. Occupancy of the property in the given market also very related to the demand. If the vacancy is low, the demand is strong; if the vacancy is high, the demand is soft. Employment opportunities, schools and universities also a indication of demand for now and future. Population are in the function of employment, that the basic of economic. Housing price at particular market also has a very strong indicative to the demand. If the housing price on particular area is high, people at median income group could not afford to buy any houses. they are only about to rent. Therefore, rental market for medium cost apartment could be great vice versa. Buying right is profit when you buy, not when you sell. In order to archive that, the market is obviously more important than the property itself. Identify a market should come first when come to real estate investment!

Information Age - Change is Wealth

Berlin wall had tumbled down on 1989. It mark the end of industrial age that started 500 years ago, when Columbus sail out Atlantic ocean to seek a new trade route to east. Today, on 2010, our new information age, our new world is 21 years old. For the pass 21 years, we had witnessed the greatest pace of changes happening around us. From financial, social, politic to cultural, dozen of significant revelation and revolution had occurs. In the information age, the industrial age idea had became obsolete. For those who still live in the industrial age idea, they will lose. Industrial age idea such as the government has to take care the people, find a high paid job and work hard to climb corporate ladder, would not work in the information age. During the industrial, the problem is lack of information. Today, in the information age, there are too much information. The problem is how you be able to differentiate which information is good, unbiased and truthful. In the industrial age is how much you know that will make you rich. But, in the information age, is how fast you can learn and how compatible you to adapt with changes that keep continue coming in your everyday life that make you rich. For those we cannot keep up with the changes pace will be left out. The information age formula, Moore's law said that, the information processing capacity are doubling every 18 months. It means that, the information that you have know might expired in within 18 months. Meaning, today, you might be the king of the business, but tomorrow you might be out of businesses. In the information age, "changes" is wealth!

Insanity is "doing the same thing everyday to expect a different result"

How Energy Price Will Affect the World Economy

Energy is wealth. In today world and modern civilization, energy has become so essential above roof for our head and food on the table. Electricity light, refrigerator, vehicles, power plants, shopping complex, houses and even lamp street is powered by energy. Today oil and gas has become primary source of energy replacing coal. As we know that oil and gas is limited in supply as our consumption has set all time record high since oil field is discovered during 1859 by Colonel Drake in Titusville, Pennsylvania.

Since year 2002, oil price has been incidentally increase as consumption progressively absorbed most of the reminder of world's buffer of excess capacity, which reached 10 million barrels a day in 1986. In years past, the buffer of such excess capacity of oil being produced, natural disaster in the scale of Katrina and Rita will not produce any shock to the oil price. By 2005, even an unexpected maintenance shutdown in some big refineries plant in the world will drive the price higher. Oil price has been so sensitive as our daily consumption keep growing especially at some emerging country such as China which the consumption rate is growing at exponential pace. In US alone, there are 8 million of gas gazzling truck on road everyday, which consume up total gasoline more than all the vehicle added up in Europe.

In today market, there are many other uncertainty that will drive oil price crazy. Volatility has been highest since 1971 oil crisis in US under president Nixon administration. Terrorism that prevail across middle east and some other oil producing country will create a treat to the safety of its refineries plants. Any strike to those refineries plants will result oil price to spike overnight. It is true that there are numbers of innovation in oil and gas industries such as deep sea exploration, yet such the high cost of such operation will not mitigate the price of oil. OPEC, recently had very reluctant in increasing its output capacity to accommodate the increasing demand of oil from the world. Oil reserve from the developed country has gone very low from 113 billion barrel during 1997 to less than 80 billion barrel in 2006. Such depletion of reserve will soon run off, therefore there will be no buffer to any surge of demand from day to day. Price of oil will be so sensitive, with any sudden surge of demand will sky rocket the price. Even being reported there are number of new oil field are discovered, the refineries capacities could not promise to handle the new discovered oil, at least for few years to coming. It take years to upgrade the technology in refineries capacity, and it is very costly. Another treat is global warming and changes in climate across the globe. Numbers of disasters has been reported to hit oil producing country like Indonesia. Such unpredictable incident could create a shock in oil market.

Before the first gulf war during early 1990s, oil price has been about 20 usd per barrel. During 1991 to 1999, oil price are at the range of 20usd/barrel to 35usd/barrel. But since 2006, oil price had reach all time record high at more than 110usd/barrel. It all drive up by the factor of supply and demand. IEA (International Energy Agency) recent contingency forecast, assuming the OPEC will lag in expanding its crude oil capacity, the average world price of oil will be at 130 usd/barrel. Oil demand on 2030 will be surprisingly strong according to the IEA pundits at about 116 million barrel a day versus 84 million barrel a day during 2005. Such surge in demand which do not accommodate with proportional increase of supply will drive oil price to some astronomical number. What will you do if the price of oil increase more than 50% or even 100% overnight? What is your salary growth rate? Can you afford to drive your car anymore? What will affect to your spending pattern if energy bill is so high? Energy price will not only cause gasoline price increase but also, any businesses associated with it including transportation, manufacturing and even some other services provider. Your utility bill will be increase if the oil price is high.

Yet, not to be too pessimistic on current trend of oil price. many innovative measurement had been taken. Hybrid cars is introduced to replaced high fuel consumption vehicles. Conservative and renewable energy become more popular in developed country powered by wind and solar. Nuclear power is one of the key to replace power plant that run by hydrocarbon despite of it unpredictable aftermath reaction. Still, history had proven that most of the nuclear reactor across united state had found no dramatic side effect to people and environment. Study had justified that a great scare of Mile Island incident of interrelationship of nuclear power plant to thyroid cancer during 1979 - untrue. Nuclear power plant by prudently utilize, could create the energy that human race ever needed now. It does not emit any green houses gases as conventional hydrocarbon generated plant. Greenhouse effect has been another major issue apart from financial problem & terrorism that our civilization is facing now. Other innovative, is the battery technology. If such innovative is successful, and by apply such technology into cars and trucks on road, in US alone, you can save up 9.5 million of gasoline consumption and 2.5 million of diesel consumption daily on highway alone. If the new innovation of battery technology with alternative green energy can emerge in major way, soon, human race will be no longer rely on "black energy source". Could that be a euphoria realistic future or just a pipe dream? Only human race can answer that question with proper initiative actions.

Market Oriented or Government Oriented

On September 2008, the most major financial breakdown in the history broke out in United State. Numbers of blue chip company has filed for chapter 11. Lehman Brother had fallen during pre-financial crisis hit. Bear Stearns had been take over by JP Morgan at 2 dollar a share. The America flagship financial system has finally created the biggest creative destruction tools in the market - derivatives. Since year 2000, financial institutions had been creative in selling myriad type of derivatives to investor, touting how easy the laissez faire market enable people to make money. It was a great marketing, and great success sales. The concept is selling orange juice from orange. CDS - credit default swap is the best exemplar in the concept. People can hedge against mortgage pool that they actually do not involve or own. The banks was happy, since premium coming in from the CDS, and they think that people are betting against something that will not failed. But as usual, the "invisible hand of Adam Smith" always at operation and its always works in the laissez faire market. Greed set in, and those financial institutions start to sell more "orange" in order to sell more "orange juice" to the market. People who are no credit record can buy 200k worth of property. Maids can suddenly owned 3 houses across the street. And the bubble is on the way to growth. Like the law of gravity, you cannot defy the law of natural. Tree could not grow to sky, that is the time it die and come back to the ground. The bubble burst. And panic set in. The financial market is not at the brink of collapse. The effect is market oriented. It is the burst cycle after the boom. Yet, human nature always defy the bad side. Claims on the imperfections of market oriented economy system is the major factor of such break down. Too big to failed? Government then step in to prevent social economy problem. Government then start to bail out the problem company, or so called victim such as Citibank, BOA, AIG and GM. The new idea of save the bank and you shall save the market. But the truth is, once the money is given to the bank, the bank do not effectively liquid the fund to the market. They are on the path on protecting their own interest first before the market itself. Even on the time of recession, big bonuses are being paid out from those bailed out companies to their top executives. And, government again has to do something. More interventions are necessaries. New rules and policies is being imposed and restructured. Doff-Frank act was signed on July 2010 by president Obama to protect the consumers and investors in wall street. There are virtually no pure investment banking in United State after the event. Quota had been set on the allowable volume of derivatives. Transparency is the top priority. It is like everything you do or did, you need to ask for permission from the government. Capitalism had evolved into social capitalism. We had come to learn that central planned policies do not do any good to the economy growth. What is failed shall let it failed. What the government did is taking away the best lesson the market could learn during the crisis. They are in the sense of pushing the problem forward to the future generations. People are tend to repeat the same mistake because they know the government will save them. They never learn the lesson since they never actually fall down. Such manner of market behaviour will definitely bring the market to another crisis. The questions is, how many times the government can save it? And who going to pay for that?

Impact of Malaysia Budget 2011 to Malaysia Economy Outlook

On 15 Oct 2010, Putrajaya had announced on the her finalized 2011 budget plan. Among all the announcements, the one that will have the major ripple effect to Malaysia economy outlook is on the EPF (Employee Pension Fund) a.k.a KWSP role on local and abroad investment project. Budget plans that related to the involvement of EPF are:

1. EPF will undertake 10 billion Sungai Buloh development project
2. EPF will be allow to invest up to 20% of investment of overseas up from its original 6%. This is the very first time government has allow GLICs to be more aggressively involved in private capital market
3. EPF will join venture with UEM offer for PLUS Expressways at RM23 billion Cash

It mark that Malaysia Government has taking further step into intervene her free competitive market. The idea perhaps is adopted from John Maynard Keynes, Keynesian, whereby government intervention is needed in jump start a stagnant market to create jobs and spendings which what a market made of. However, the involvement of EPF will not do any good in jump start the market because EPF is a designated fund for retiree. It is a debt to be pay back to the people during retirement. The retirees who born on 1955-1959 which consist of more than 1 million in population will start to retire 2011. These retiree will start to withdraw their money from the pension fund. Assuming each retiree will withdraw RM50k; if my maths is right, 1 million retirees multiple by RM50k is equal to 50 billion Malaysia Ringgit. The hypothetical amount do not count immigrant which today made up quite a potion to Malaysia community. Since EPF will be putting up so much cash to its proposed project, how the fund be able to come up with the money to the retiree? The repercussion will either be simply printing more money (inflation), cut off or sell off investment in private market which will cause the stock market slump, or by increase taxes. Either one of it is very very bad for the economy.