Paying the Price

The below comments and conclusions are my own, based on my own understanding of current events and economics. The links provided are for reading reference and information is not drawn from them at the time of writing. Any similarities to existing analysis is pure coincidence.


For a time, our economy was on the way up. Expats were moving in; bringing life to the night scene and boosting the property market. Locals were filling up high paying jobs. This led to a demand for low-tech workers and so they were imported in, further driving up rental prices. Inflation was going up but times were good.
-Oct 2007 - Singapore's Economy Shows Signs of Overheating, Economists Say: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a9PGNPBpu1nI

The high costs of rental spilled over the the resale market as PRs got fed up with escalating prices. This cooled down the rental market a little. Everyone was waiting for the bubble to burst.

Prices of commodities were rising. Some point to the growing purchasing power of China as the cause. Some pointed to the misguided concept of bio-fuel, which competed with grain for farmland. These hid the hands of speculators who manipulated global prices to their selfish ends.
-Aug 2008 - Oil Prices: Blame Speculators: http://www.businessweek.com/debateroom/archives/2008/08/oil_prices_blam.html

The Singapore Government stepped in to reel in the escalating costs of living. Through NTUC, they promoted cheaper house brands. With MAS, they allowed the Singapore Dollar to rise. While the promotion of house brands were critised by some as a sham, the strengthening Singapore Dollar stablised prices.
-Apr 2008 - Asian currencies rise as MAS unexpected set higher trading range for Singapore Dollar: http://www.post1.net/lowem/entry/asian_currencies_rise_as_mas_unexpectedly_sets_higher_trading_range_for_singapore_dollar

Tourism took a dip, starting from June 2008.
-Nov 2008 - Tourist arrivals dip 8.1%: http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_307018.html

The fallout of the American lending system sent shock waves that reached every Capitalist system. Lehman was only the tip of the iceberg; European banks were also in trouble from careless lending. In stock markets, billions of value were wiped out. The bubble has burst.
-Sep 2008 - Asian markets tumble on Lehman collapse: http://edition.cnn.com/2008/WORLD/asiapcf/09/16/stocks.asia/index.html

In October, exports were reported to be down. MAS announced that it will let the Singapore Dollar fall.
-Oct 2008 - Forex - Singapore dollar falls after MAS leaves monetary policy unchanged : http://www.forbes.com/business/feeds/afx/2006/04/10/afx2661348.html

Conclusion:
Everything has cause and effect. The good times we enjoy now are the building stones of tomorrow's problems. Our current crisis is a culmination of "bad luck" - the costs of greed claiming their dues at the same time. I don't claim to be wiser than the rest; for I'm just compiling data.
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