I mentioned elsewhere (not sure which post or even this blog) that things didn’t look good for Indonesia.
Someone argued with me, saying it would take 5 years for the economic crisis to hit home. BOLLOX….
Not to put too fine a point on it, Indonesia's exports rose 30.3 percent in August, Imports from outside trade zones increased 45.4 percent. That’s bad news. There is still a trade surplus, but its falling rapidly.
Consumer prices rose 1 percent in September. They have risen over 12 percent over the last year. That’s bad news too. The cost of living is rising rapidly. Thats too much....
The central bank is increasing its policy rate to 9.4 percent. It has to increase the rate to control runaway inflation. But doing so will damage investment…
Stock values are falling, down about 10% today. The steepest fall ever.
The Indonesian President SBY has called for an emergency crisis meeting today. Bank Indonesia has $58.36 billion of reserves, which are sufficient to meet 4.6 months of imports.
In simpler terms Indonesia survives by exporting produce from its large workforce. Local market purchasing power is limited. A large percentage of the population live from hand to mouth, with little or no savings. But those exports are falling compared to imports, and the general cost of living is rising dramatically. Exports will fall a lot further as consumer confidence in the west is eroded. And 4.6 months takes you to February…..
This is all bad news for everyone……
A few months ago I mentioned Krismon Mk2. Everyone laughed... Is anyone still laughing?
Monday, October 6, 2008
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Wow, six companies worth 5.5% of the entire Indonesian stock market just defaulted on a loan and were suspended.
Those guys who laughed at my Krismon Mk2 predictions might want to look at what happened in mk1….
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