I think the decision to leave interest rates at 3.5% is going to be disastrous for the Malysian economy. In a slowing economic environment, any reduction in borrowing costs would be welcome and we have witnessed economies elsewhere crimping their rates to stimulate economic activity but the reverse is true in Canland. what is surprising is the decision comes in the wake of moderating inflationary pressures (though still high). Anyway much of that inflation was due to the silly fuel-hike in June and not due to monetary policy anyway.
It is high time, the guvnor come clean about the hard truths of the malaysian economy and the local banking sector which my sources tell me are on the brink of a mini meltdown of their own what with bets on subprimes, credit swaps etc unraveling + plus ill advised forays into the jungles of Indonesia and elsewhere.
Coming on the heels of the shelving of megaprojects, the peculiar price of local pump petrol despite plummeting world prices (below the June levels certainly), the deposit guarantees and now the proposed gradual dismantling of the NEP + the termination of 50K contract staff, the net outflow of foreign funds .. the stench of the elephant carcass is getting so strong that you possibly cannot cover it up with fake Dior "Poison" can you unless you are magician.. but then the magic conjuring of economic data has long been a Canland forte in recent times.
Dont give us the canard of a surplus current account, i for one am not stupid enough not to know that when capital goods + luxury stuff imports slow down, a surplus is the result and it aint healthy as it is a sign of an anaemic economy - an indicator of an underlying deceleration in economic activity. Well..i am just a farmer ..right?
Revert: I think the real truth about the economy needs to be told NOW..... not after. i dont think the hoilloi polli will enjoy eating dust as a lifestyle choice. They are already doing that in Haiti.
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