Going Down Further?

Bank Negara Malaysia cut the interest rates few days ago, will the RBA do the same as well on 3rd Feb? It seems more likely than not, the question should be "how much will RBA cut this time?".

Worldwide economy is struggling and nobody is excepted including the ever denying Malaysia :) USA, China, Europe, etc.

Some are predicting a cut of 100pts though I'm thinking probably around the 75 pts are more likely. No matter what, it's a good Easter present for all of those who are in debts! Not so good news for those holding cash on variable interest rates.

Now the question is, what can we do? Our assets are shrinking by the day. Our superannuation funds lost about 20% alone in 2008! What used to be our best shield for retirement has become one of the worst performers!

Some might say as long as we have cash, it should be allright. True in some sense but only if you're living in one area and not travelling or interacting with the outside world. With AUD devaluation recently, we're probably 30% poorer than what we were a year ago. So unless you're on a island with no outside connection, you're affected no matter what.

Governments around the world has been encouraging people to continue spending to boost the economy. I don't know about you but I wouldn't. I rather spend wisely on necessity, not desires. I've heard Governments giving cash for people to spend, which is silly I think! Why don't the government spend it themselves in improving infrastructures or facilities? As long as the money is moving, it's OK for the economy!

So, the message is clear: Buckle up, people! It's going to be a bumpy ride!