Singapore Media Watch

Thursday, October 26, 2006

Your views: Singapore should surely but swiftly shift out of its US$ holdings in reserves and diversify

With each passing day, we are constantly reminded of the vulnerability of the US$ (the US' ballooning deficits, etc) and countries and individuals with substantial holdings of the currency may well be better off taking many experts' advice of diversifying its investment portfolio and possibly shifting out of the currency altogether before the Doomsday (the collapse of the US$) happens, if it ever happens.

With the above worst case scenario, I hope the Singapore government has taken all possible scenarios into consideration in case the worst happens as it involves the citizens' hard-earned money in the reserves which the government is entrusted with.

I sincerely hope the government will not be caught off-guard should such an eventuality occur lest citizens direct their accusations of "I told you so!".

Like MM Lee' advice to the Americans on adopting the "multi-lateral" approach to dealing with terrorism, countries intent on bringing the US down may also adopt this "multi-lateral" approach by withdrawing their US$ holdings collectively, by which time, the "herd" instinct will prevail when everyone scrambles to get out. And if Singapore waits till then to act, I'm afraid it will be too little too late.

Imagine China (with a trillion US$ in reserves), Russia (long-time foe of the US but now with new found wealth in their rich oil and gar reserves), Japan, the Middle Eastern countries and the Europeans acting in concert?? Scary thought right? Will not happen? You bet!


Rgds

KAYE POH

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