The world's economy is now taking center stage in every government's agenda, and top on most people in managing the economy of their respective countries. The future looks bleak while everyone is praying for a quick recovery if at all they cannot be cushioned.
Over the last few months, I am sure we find the wealth that we have worked so hard over the last 20 - 30 years being eroded. At times of unstable environment, whatever instruments and hedging mechanism available out there is not helping either. In my case, I have learned that when the environment is unstable, the hedging mechanism may not work in favor. Take the case of exchange rate hedging, while we can buy and hedge the currency that we need for future, it can work the reverse when you are overbook into the position. In my case, I had bought into the Sterling Pound at the rate around MYR 6.49 to 1.0 Sterling Pound and looking back, now that the sterling pound has weaken to around MYR 5.50 to 1 Sterling Pound, it had actually resulted in me losing out about MYR 50,000 to hedge the initial fund required for my son's education in London.
Likewise, the Australian dollars has also weaken from about MYR 3.1 to 1.0 AUD to now about MYR2.3 to 1.0 AUD, it has also caused me to lose about MYR10,000.00 While frustrated on one hand, yet I find it hard to complain for over the longer term, it would be better for the MYR to strengthen as this will be beneficial for future exchanges. This of course is true only if the existing rate can sustain for some time.
While recession appears imminent all round, yet the cost of living has gone up. When the oil price was about USD 150 per barrel, it created chaos wordwide, with many suppliers raising prices of essential goods that drives up cost of living. Now that oil prices has dropped to around USD50 per barrel, and hardly 4 months ago only, no one would have imagined this to happen. Now that oil prices have gone by more than 50%, yet the suppliers are taking their time, if at all willing to reduce the prices. While suppliers are quick to raise prices, but they are very slow to react when it worked against them.
And what are the Authority and Government doing about this. Let's hope the people of authority are doing enough to bring about some action to address such injustice and restore equity to the people on the ground.
And let us all pray that the world economy will recover quick enough to bring relief to all the countries on this globe and that world economy stability returns.
Posted by
Ivan
Why He Disappeared ?
