In times of inflation, the key investment principle to remember is to protect your wealth from being depleted due to inflation. But just how do we do that when investment returns on i.e. savings & deposits are even lower than the perceived rate of inflation?
While the wealth of the government is not the wealth of the people, we shouldn't be shocked when they decide to reduce and/or remove subsidies - in other words telling the people to spend more of their (the people's) wealth on things that the government feels is right.
Facing reality, ready or not, inflation is a growing problem in Malaysia and continued subsidy rationalization will only make it worse. But wait, isn't it the government's top priority to curb inflation? I guess not!
I for one am already experiencing the aggravated effects of the recent increase of 10% in the price of petrol. High petrol prices sets off inflationary pressures that have a dramatic effect on us (The Rakyat) making us suffer from a rise in prices for the Essentials (Food & Water, Housing and Electricity). When prices are rising and up, they stay up! Need I say more?
Elsewhere in the world, petrol prices are closely watched as they have the ability to trigger a spiral of rising prices. When that happens, what happens? INFLATION INCREASES!
While this article may not be picked anytime soon by the brains behind the latest price hike, I hope that whoever does will at least make sense of why inflation should be curbed.
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