“People curse the man who hoards grain, but blessing crowns him who is willing to sell.” (Proverbs 11:26
For the past 2-3 months whenever I go marketing with the maid, I can acutely feel the impact of inflation. The officially published figure for the month of October is 3.3%; in reality, man-in-the street knows that it is much higher than that. China’s figure is 4.4% and expected to rise to 5.4% next year. I think this also applies to most Asian countries despite the strengthening of their currencies against Euro & US dollars. On the other hand, in US, the Federal Reserve is more worried about deflation as the official inflation of 1% is deemed too low, so there is room to reflate the economy by printing more money and keeps the interest rate ultra low.
The source of inflation basically has to do more with runaway food prices than otherwise. China can produce everything under the sun at a rapid speed, but not for agricultural products. We know that down the road we will face higher food prices with higher domestic demands from China and India, but I am surprised by the sharp hikes for the last few months despite no severe droughts or floods takes place recently. Clearly there are hot monies gone into speculating commodities that even non-perishable items like cotton, turmeric,barley, prices have gone up. My Chinese herbs which have held steadily since June last year, now have also increased from $4 to $5 per packet recently.
In local context, there may be one more reason why food prices have gone up: there are more rich people in Singapore than ever before! My friend who used to go to Ghim Moh wet market on the weekends. This place is popular among people staying in the west because things there are cheap and fresh. Now no more, she said, as she found out why - when she observed her Honda Jazz is surrounded by increasing number of big and posh cars in that wet market’s car park!
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