"Why did I go back? Why? Because it's important. It's the collapse of capitalism and the collapse of our society. It is. Our way of life is going to change."
- Oliver Stone on why he made the sequel to his blockbuster "Wall Street"[Link]
There is an extremely interesting book called "Debt and Delusion" by Peter Warburton about the failure of the current economic system brought about by an increased level of debt[Link]. Warburton wrote about how unchecked credit expansion creation through the issuance of bonds, securitization and central bank actions has led to an unsustainable illusion of personal wealth and national prosperity. This would be "just another book" about the recent financial crisis written to jump on the bandwagon of fear and uncertainty except that it was written in the year 2000 when the global economy appeared to be in great shape. Warburton was able to see through the illusion of wealth to write this prophetic book. The last part of the book talked about how central banks will try to monetize debt when the collapse starts to delay the day of reckoning but the attempt to shore up the system will prove futile....I believe there is a good chance that Warburton will be proven right.
“A great book to read about this present generation’s massive debt is a book by Peter Warburton called Debt & Delusion. It’s a little dry at times, but ... there are some great points that Peter makes about how Western Civilization has become too dependent on debt.” (David N. Vaughn, Gold Letter, Inc., February 6, 2004)
"Private Property Launches : they are still HOT, HOT, HOT"
-Straits Times. 16 March 2010[Link]
You ever wonder how property prices rise? In a healthy market, property prices rise with the general increase in household income. When the property prices rise faster than income for an extended period of time, the average debt taken up by a household for purchase of property has to increase to support the rising prices. Rising debt in some ways give an illusion of prosperity on the way up. So Singaporean's wealth in the form of property depends on future generation's willingness to take on ever higher levels of debt to buy the property from us. MM Lee warned that if the GDP does not keep growing, our property prices will fall and our wealth will vanish! Singaporeans have about 50% of their wealth invested in residential property[Link] and wealth depends on the amount of debt buyers are willing to shoulder in the future. Packing more and more people onto this little island is one sure way of forcing prices up by getting more people willing to shoulder the heavier debt.
The next crisis whenever it may be ...might as what Oliver Stone said change our way of life. People may start to view debt in a different light rejecting the idea of 30 year mortgages as slavery and our 'property wealth' can simply disappear and the little PAP magic trick of asset enhancement operates in reverse fashion to take many of us back to poverty.