To Disappear In 100 Years, Will History Repeat Itself?

 

OutSyed The Box

Friday, August 25, 2023

To Disappear In 100 Years, Will History Repeat Itself?

 

I received the following from a long time reader (thank you Charlie) who is a Malay.

It is brief and to the point. I have some comments of my own below here.

I keep repeating this to many people who I talk to. The problems that we have are not universal.  As I said before the Chinese, Indians, Dayaks, Ibans, Kadazans, Dusuns do not have as many problems.

Take that 18 year old Indian girl the other day. She does not have a problem. Her problem is one of success. She is among the top scoring Indian students and she was talking about other top scoring Indian students with 8As and so on.
Being a top scorer, achieving 8As is not a problem. It is a great success.

But other people with problems are preventing these people with no problems from achieving all the things that they can achieve. 
In brief there are people who do not have problems.
There are other people who have a whole spectrum of problems.
Then the people with problems go about creating problems for the people who do not have problems.
And then they think this is a very good thing to do.

I dont know how they can feel good about themselves.
I dont know what they ask for in their prayers : "Please guide us to create problems for all these people who do not seem to have problems."

But I would like to go back to that map and the short comment by Charlie about the Melaka Sultanate. Are we looking at another 100 year flash in the pan? Will this present 'civilisation' come to an end by 2057 ie in another 34 years. If I survive I will be 97 years old. 

So let me share some thoughts about what happened in Greece, Lebanon and Sri Lanka. Because on the road to self destruction other countries (like ours) can go down the same path.

Before a society self destructs it will go through pain. What type of pain will they suffer, for how long will it last and how many people will suffer. 

Imagine going to your bank ATM machine and trying to withdraw your money and the ATM machine says you can only withdraw RM50 per day (or per week). Or something like that. This is what happened in Lebanon and Greece. 

How did this happen? It is very simple. It is exactly the same way that you will get into financial trouble if you borrow too much money and then you cannot pay back your debts. When you spend more than you earn. When your income is no more enough to pay your debts. Your world will come crashing down.

In Greece, Lebanon, Sri Lanka the government borrowed too much money. The governments used 'fiscal deficits' or borrowing more money than the government's revenue for their annual Budget planning.

Every year the government borrowed more and more money and the government debt kept piling up. 

How did they borrow money? The governments issued bonds. They issued long term bonds maybe 10 years, 15 years or longer. Why? Because in 10 years or 15 years the politicians who borrowed the money will not be around anymore. They will be burning in hell. So it is the people, the tax payers, the future generations who must work, earn money, pay taxes to the government 15 years down the road and then that tax collection will be used to settle the debts incurred 15 years earlier. 

Its a neat but dirty trick. The politicians love these dirty tricks. Borrow money now, steal it, waste the money, give it to their cronies and then let the future generations pay back the debt.

Who did they borrow from? Usually the bonds will be "taken up" by the local funds first - in the domestic currency. Funders like pension funds (like our EPF), insurance companies, local banks etc.

If they wish to commit suicide faster they will borrow in foreign currencies from international lenders like the IMF, World Bank, foreign banks etc.

Then after borrowing all that money they have  to do two things : first pay the annual interest on the borrowings (bayar bunga) and then secondly pay back the principle amount of the loans. 

What really happens is that when one set of bonds becomes due for payment they just print more bonds, borrow more money and use it to pay off the earlier debt. In Malay 'hutang baru bayar hutang lama'.

This way the debt never gets settled and just keeps increasing.

Then one day something will happen. Government revenue will not be enough to pay the interest and principle anymore. Tak cukup duit. Lenders too will not lend anymore money to the government (this is what happened to Pakistan). So the government will default on their debt - usually to the local funders first.  

When this happens  the pension funds, the insurance companies and the local banks etc who lent money to the government (by buying the government bonds) will realise that they too are now short of billions of dollars, pounds, rupees or Ringgits. Their money is stuck with the government.

Then the next morning the pension funds will be short of money to pay their pensioner withdrawals (just like our EPF withdrawals), no money to pay insurance claims, no money to pay bank withdrawals from savings accounts, current accounts, fixed deposits etc. 

There is not enough cash in the entire system because the giant whale has defaulted on paying their debts. 

That is when the banks will say 'ATM withdrawals will be limited to RM100 per day' or something like that. This happened in Greece and Lebanon. (Dont know about Sri Lanka).

Now we come to the real horror story.

Our Malaysian gomen debt is now RM1.5 TRILLION.  (I am using publicly available information). This is slightly more than our GDP which is around RM1.4 TRILLION. 

Our annual budget was close to RM390 Billion. (This does not include that sudden RM1.0 billion payment (of RM100 each) for adults above 21 just before the six state elections or PR6N. Or that bonus payment for Civil Servants, that sudden allocation for temples etc. 

So the Budget was close to RM390 billion. Gomen revenue (2022) was only about RM295 Billion.

So the shortfall is about RM100 billion. And this has been going on for years.

That is how the gomen debt is now RM1.5 TRILLION.

Of that RM390 billion Budget, RM290 billion is  operating expenditure (bayar gaji dan pencen Civil Servants and such). 

Only RM100 billion is for development expenditure, including stupid, tak masuk akal projects like Renewable Energy  (the latest "scheme"  in town). 

Now read this:

"government debt and liabilities will reach RM1. 5 trillion. This year's (2023) debt service ratio is RM46 billion or 16% of revenue, which has exceeded the maximum threshold of 15% that has been practised all this while.

So the debt payment of RM46 billion in 2023 is at 16% of the gomen's revenue, exceeding the threshold of 15%.

This also means that at this pace it will take about 32 years to pay off the gomen's debt of RM1.5 TRILLION or RM1,500 BILLION - WITH NO MORE NEW BORROWINGS FOR 32 YEARS !! 

Do the politicians care? No. Because in 32 years all these politicians will be roasting in hell. They dont have to worry about us.

According to Charlie's map and comments above, this "100 year civilisation" may disappear by 2057 ie 34 years from now.

I think the ATM machines will run out of cash long before that.

So Tuan-Tuan dan Puan-Puan we are screwed.