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When America Sneezes

America is in troubles. In fact America is in deep sh*t.

Apart from the sub-prime mortgage crisis, other problems America is facing are:

  • The falling value of the US dollars – about 10% against the Sing dollar since last year
  • The price of crude oil shooting up to record level – more than  US100/barrel
  • 75 million baby-boomers cashing out their 401k for retirement in the next 10 years
  • The widening trade deficit with her major trading partners –  creating billions of dollars in deficit

Economists and academics have indicated  that the US may  already be in a  recession.

As the biggest economy and consumer market in the world, when America sneezes the whole world will catch a cold . A recession in the US could mean an end to all the good things here namely  a booming economy, record employment  and a healthy stock market.

Some Perspectives From Singapore & Asia

BBC News Coverage of US Recession and Downturns (January 18, 2008)
Dim lights

What are the implications for us?

  • Our export to the US and other markets will slow down
  • As the Sing dollar strengthens,  our cost of living would go up- the prices of most essential and commodity products have already gone up and inflation is about 6% at last count.
  • The stock market would slide following the patterns of Dow Jones. It has already lost 20% from the high of 3800 points
  • Companies may need to cut cost to stay in business and  will  move to lower-cost countries like Vietnam, China and India for their operations

“Retrenchments will take place.”

The following are some of the pre-emptive actions Singaporeans can take to soften the impact of a declining economic situation.

Action Plan

  1. For those of you who does not save regularly, its time to put aside some money for the proverbial rainy day. I can assure you , this may be a thunderstorm in the making.
So how much should you save?
Every well-known financial expert from Robert Kiyosaki  to Suze Orman will advise you to put aside at least 10% of your monthly income into a savings plan or an investment account.
When is the best time to save?
Most experts will tell “Its yesterday.
And  when is the next best time to save?
“Its today.”
  1. For those who are employees, its time to buckle up and upgrade your skill-set .

Re-invent yourself by attending courses and workshops to stay abreast and ahead. Start adding more values and contribution to your company. Take up more responsibilities because when push comes to shove , the employee who brings in the most values and profits will get to stay. Bosses want and value employees who brings in  profits that add to the company bottom-line. If they want love and loyalty they would probably get a dog.

  1. Like the proverb says: “Every cloud has a silver lining.” Especially in a crisis there are many opportunities if you open your eyes and mind to it. Some of these are: 
    • The recently announced budget is a pro-people and pro-business budget
    • The Government will spend more to boost the economy
    • Some Blue chip shares in our Stock market become more affordable
    • The escalating prices of properties will stabilize
    • The high prices of many essential and commodity goods will have to come down

Act Now

Whether America is in a recession is a foregone conclusion. However by taking immediate and pre-emptive actions like having a savings plan, upgrading your skill set or looking out for an opportunity, you will be in a better position even if America is hospitalized.

 

 

Article contributed by Charles Loh, a self-employed businessman and a member of the Asia Entrepreneur Association

Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it        Web: www.asiaea.org

 

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