Are we again at the economic downturn?

Whether the Greek problem would hit Asia as hard as Europe, I think nobody can predict clearly. Giving current conditions, the clear advice is people should act more prudently. But does the government act in similar note? It seems to spend lavishly as GE is coming very soon.

People is advise to spend less on luxury items to ensure that they have enough in the bank as a buffer if they are thrown out of work in time of economic crisis. Banker has told us to determine the debts and assess the varied interest rates we paid.

The principle is to cut on the amount of expensive money, hold on to cheap money and maximize free money. High interest credit cards are the most expensive money in most people budget. The most cost-efficient way to use them is to pay off the balance each month.

Resist the urge to double your mortgage payments. Mortgages are cheap money assuming that your interest rate is relatively low and the interest is tax deductible.

Invest in mutual fund if you don’t know which stock to buy since most of us are not real investors.

The bottom line is we need to stay resilience in tough times. Even by taking a slow and steady approach, I think, we are reaping the benefits for years to come.

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Update: 8/10/11

What Tun Mahathir Says?

Dr M warns of long financial crisis

Tun Dr Mahathir Mohamad warned the ongoing global economic crisis will continue long into the future as the West continues spending in a “state of denial.”

The former prime minister said in his blog yesterday that Western countries continue “believing that they can somehow continue to remain rich. They are unable to behave like poor people.”

On the same day Datuk Seri Najib Razak tabled a budget that aims to rein in the deficit to 4.7 per cent, Dr Mahathir said the West “will not recover because they are still in a state of denial.

“They still believe they are rich, as rich as before they plunged into the crisis. They must keep up the big power wealthy country image even if their people have no jobs, riot and protest.

“The great financial crisis will be with us for a long time. Even when it is resolved the aftermath will see slow recovery for the giants of the West,” he wrote.

“How nice it would be if our pocket is picked, we are allowed to print some money to replace what is lost,” he said, mocking the United States’ quantitative easing measures which has seen its federal reserve print US$3 trillion (RM9.5 billion) since the start of the financial crisis in 2008.

“Now Britain is following in the footsteps of elder brother,” he added, referring to the United Kingdom’s recent move to print £75 billion (RM370 billion) to help distressed banks.

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Me: – in the similar principle?

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