Mahathir’s words

FOUR TRILLION DOLLARS
By Dr. Mahathir Mohamad on September 21, 2010 1:50 PM | Permalink | Comments (37) | TrackBacks (0)
///1. How much is 4 trillion dollars? Star Business picking a report from foreign source says it is the value of Germany’s total output for one year.

2. I try to imagine the figure 4 trillion and wrote it down. It is 4,000,000,000,000. It is a lot, a great lot of money. But it is just the amount of dollars traded by the currency traders in just one day.

3. Yes, the currency traders are still at it, worldwide financial crisis notwithstanding.///– Mahathir

The financial crisis experienced by USA and other countries since 2008 was not linked to currency trading.

///4. Four trillion dollars worth of business in Germany in one year creates millions of jobs; spawns businesses big, medium and small; move millions of vehicles and trains, support a rich and highly developed Germany and the people of the country and much more.///– Mahahtir

The question of whether egg or chicken comes first might not have an answer. But the GDP of Germany came from the value added of all the business and activities summed together. It was not as though the government used all that money to generate those activities.

///5. But what does 4 trillion dollars in currency trade do? Apart from enriching a few players, nothing. No jobs are created, no businesses, big, medium or small spin off; no enhancement of international trade, no movements of goods or people, no sailing of ships or flights of aircraft, nothing.///– Mahathir

The same question would be more relevant asking about the windfall brought to the country by Petronas. Does the country gain from it in terms of social and economic development? Was it not used to benefit a few players as decided by the Prime Minister?

///6. 4 trillion a day and there are 365 days a year giving a total of 1,460 trillion or 1,460,000,000,000,000 in a year. So much money. But can we estimate how many of the earth’s 6.5 billion people benefit?///– Mahathir

Vow! We now hear the man talking about the welfare of 6.5 billion populations. Not long ago, he ignored the welfare of 10 million among 28 million Malaysians in the country.

///7. But currency trading can also do damage to millions and millions of people, destroy whole countries, bankrupt businesses and banks and cause recessions. We know because it happened to us in 1997-98. We know because currency trading is one of the causes of the current crisis.///– Mahathir
Currency trading only involved those who wanted to gain. In 1992, Malaysia traded on Sterling Pound against George Sorros who took the counter position. In the end Malaysia lost a billion pound and more with Sorros making clean profit. Mahahir blames Sorros to deflect from taking responsibility for the loss to the nation.

///8. What kind of system is this that permits and protects a few people at the expense of millions of helpless people, their countries, their businesses, their societies and their well-being. Is this what capitalism and free trade is all about?///– Mahathir

The more relevant question would be what type of democracy Malaysia has practiced whereby with trillion ringgit of revenue from Petronas in addition to other rich mineral resources the total GDP of the country at best equates that of Singapore. The per capita GDP of Malaysian is at most one-fifth that of Singapore, at currency exchange rate. What kind of government permits the Prime Minister the sole authority to utilize Petronas resources where the parliament does not have the right to oversee?

Free trade is free for all to trades, if you have the means. That is equality with no respect for religion. .

///9. I saw Mike Moore’s latest film, “Capitalism – A Love Story”, and was appalled by the crudeness of people playing with money.

10. People free from financial problems are persuaded by banks to mortgage their fully paid up homes so that they can have money to invest and make more money. The investments fail and there was no money to redeem the mortgaged home. The banks took posession of the homes and the previous owners were forced to move out. But they had no money left and could not even rent a house, Thus a house-owner is rendered homeless.///– Mahathir

It is more plausible to believe that people approach the banks to take up new loans hoping to make a profit rather than banks persuading individual to take loans. That argument is similar to talk about Chinese in Malaysia not being interested in government jobs when the government policy of disassociating job with economic functions aka NEP over the past four decades increased the percentage of Malay government servants from 75% in 1970 to 99% now, if teachers are excluded in the computation.

///11. This did not happen to one person. It happened to millions, The banks now own millions of houses. But nobody has enough money to buy them, nor can they borrow money to buy. Simply put the banks cannot get back the money they had lent and the banks fail. That is part of the story of the subprime loan failure which triggered the current crisis.///– Mahathir

The subprime loan system caused the current financial crisis. But that was not initiated by currency trading.

///12. It is now nearly three years since the current crisis began. Every now and again the experts will claim that the crisis has bottomed out. But then news came that the crisis is still on.

13. Now there is talk of a double-dip, of the recession going on to another recession. This is very likely simply because nothing is being done to stop the activities which led to the crisis. As we can see currency trading is still going on, if anything, on a larger scale. Much of the bailout money, billions of dollars worth, has produced nothing worthwhile. The bankers and their people have used a goodly sum of the bailout money for hefty bonuses, the hedge funds are still active and so is presumably the “leveraging” and many of the gambling that lead to the crisis are still in place.///– Mahathir

The dramatic growth in economic activities over the past decades had been made possible by financial derivatives. The financial crisis came about because those financial derivatives system ceased to function properly, for a while, just like firms experienced cash-flow problems. The economic activities would remain at the present level or worse had there been no financial derivatives system in place two decades ago. The argument should be whether the world should not have experienced the tremendous economic growth in the past and be contented with the slow growth without the advent of financial derivatives, or work to solve the antecedent problems associated with them. But these have nothing to do with currency trading.

///14. The leaders and their financial advisers in the great capitalist countries have learnt nothing. They continue to support the gambling and the manipulation. They are still influenced by their uncontrolled greed.///– Mahathir

It is odd that the greediest among the greedy persons who thinks nothing of corrupting the mindset of the majority of Malaysians to achieve personal aspiration to the extent of cutting tie to the Malayali race would criticize others as greedy. Well, they were willing to bet, to win or lose without assigning blames on others.

///15. The worldwide recession will not end until Wall Street ceases to control whatever Government the United States and the United Kingdom may have.///– Mahathir

The Wall Street helps create economic prosperity of America and the world enjoys some fallouts. The world can only hope that Obama administration does not destroy it.

If death is to be chosen, the choice of doing would be between the effect as light as feather or as heavy as the Mountain Tai. That every Chinese school children would have known, and TBH from his career certainly knew better.

MACC just wanted to delay the case with all diversion hoping that with time its shame could be diminished.