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World Demonstration

Medium of 2010, I have predicted, the world will face few major problem, some of the properties in Malaysia will collapse within 18 months, the principle is very simple, everybody is over invest in the properties market then it will raise up the market price, some of the properties price in Kuala Lumpur already raise up more than 30-40% within a year. Of course, some old location yet raising that high, but the worldwide inflation will put up a material price increase, this is a high risks for the new development. From the past 3 month growth and the worst weather, most of the material price will raise up again may be another 30-60% within 3-6 months. If oil price growth every month, (according my prediction, the oil price may up to USD 150-180 by end of 2011, it is due to the high demand during the period.) Then, it will affected the shipping cost and all energy price will increase.

High Inflation

Although last 3 months the worst weather will affect the harvest output and reduce the total supply for most of the initial goods, but it was happen for the past years of supply, but the food prices increase more than 30%, may be up to another 30% in the next 6 months, Most of the countries can¡¯t escape from these. Then the high inflation will happen in most countries in the world. If the high price remaining for more than 6 months, a lot of countries will be suffer in their economy crisis, and the wave will much more bigger compare with 2007.

High NPL

More banks will collapse and close down especially those small size bankers, because they may face a high Non-Performance Loan (NPL); of course, the sales volume will increase due the high price and high demand of USD. At the same time, it is also a high risk for bank, financial institution and others industry will affected at the same time.

Weak USD via Strong USD

Because, when most of the cost will increase, the peoples will not get fast increment in their salaries, second, the prepayment will reduce or go weak when the people do not have adequate cash for their housing loan and other prepayment. Third, weak purchasing power will narrow the market, at the same time the trader may face a high price cost in their business. Finally, most of these countries may be a international financing aid for their countries, therefore they will get an USD loan from the international bankers or IMF. During their loan USD is in weak price of course the country can sustain their prepayment. Unfortunately, something will happen when USD go strong, Example, if Malaysian government taking loan from International Bank in RM3.05 via USD 1.00, what happen when Strong USD, then the price may back to RM 3.80 via USD 1.00; it is happen in 1997 in Asia Economy Turmoil.

When all these mention happen, then the countries and the region will face a social problem, people will start go to the street , blaming their government; then thing will go worst the peoples will demonstrate and riots.

Countries and Regional Demonstration

For my prediction before the step into 2011, by end of 2010, I have predict a lot of countries in Africa (It may more than 10 countries, especially those countries go relationship with China), Arab countries, (those OPEC member and oil supply countries) and those countries have a financial aid from China and those countries surrounding and border of China, will face the politic risks of demonstration in their countries. Because , the small group of people want the world in suffer and worst situation, then they can start offering their finance and loan to these countries. Oil, Food and Housing price is the major issue creating by this small group of people, unfortunately, a lot of people in the countries, like Malaysia or even in China, they don¡¯t believe or trust to their government. Actually, like China government have some many policy to prevent the housing price increase and come out a lot of policy to prevent the over supply of their houses, but the group of rich still rushing to purchase the house; and the people still can¡¯t understand, their government had done a lot of ground work, it is what I told my Shanghai friend during my time in Shanghai 2007. And the people still blaming the government, In Malaysia, it is happen and the Central Bank Governor have mention earlier, but the house price is still increasing, the people must responsibilities to their own attitude. I believe like Malaysia and China government can prevent another wave or tsunami of the demonstration in the countries.

(this is a prediction and analysis due to the present world situation, it is not a comment or information for your investment decision)

Cham, Owi Tong

Strategy Affairs

Kuala Lumpur