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Dynamite Economy 3 - Deadly Urgency
3.8 Can Nations inject Sovereign Funds to rescue Enterprises?
It is wrong, Why?
First, by injecting funds, does not change the dire situation this Enterprise is in.
Second, the whole world economy is in grave trouble, saving even all of Fortune 100 is not enough.
Third, injecting well governed funds to rescue, the effort is arduous, the effect of rescue is small,
the repercussion is shown here:
Sep 16, 2008 AIG, the biggest Insurance Group declared great losses, price drop from US$79 a year ago to $1.25. Not a world wide household name but a typical shrewd businessman, Oei Hong Leong bought 1 million share. The Fed gave a US$85b loan. The price escalated to $3.75 end of same day. Oei could easily move into his Free Private Hand more than double his original.
Immense money dispensed from Well Governed Sovereign Fund
Where they actually sink into?
How much money actually help the economy?
Where will myajory be used for?
Oei donated the shares to LKY School of Public Policy[1]
This solution is wrong, fundamentally wrong, so fundamental that injecting wealth into the market with Over Abundance Wealth, is as idiotic as injecting Sugar into Diabetics.
As pre-warned,[2],[3] by H1, 2008, after well governed sovereign funds, in smaller measure, were injected to rescue smaller failures, the impacted no longer limited to Non-factor of Production (financial instruments), Key-Factor of Production (energy, minerals, grains) sky-rocketed. It pulled the carpet of survival under all businesses.
With even small, initial injection of fund into Free Private Hand, has already overheated Energy, Commodities Prices!
The Carpet of survival for all Businesses, was pulled.
With such immense injection
we will be seeing Oil climbing up to $200 in few months time.
Which industries can survive?
How many employees will loss their livelihood?
With skills, brains, accesses, with earlier knowledge of failures, with no hope of next jobs
Major failures will come also from lawful slips, crimes, even for healthy organization.
Enron, Barings, Societ Generale will be child play overshadowed by more, bigger, countless fiasco?
Paralyze of world economy is a definite outcome!
[1] Lee Kuan Yew, Sep 16, 1923 - ; Founder of Singapore, among the contemporary of post anti-colonial era world leaders, led colonies , independent, THE ONLY who led progressed from Third World to First.
[2] “Dynamite Economy” Aug 8, 2007 http://www.cts-ideas.com/G0813DynamiteEconomy.pdf
[3] “Dynamite Economy - Proliferation, Wrong Solutions, Resolutions” Nov 12, 2007, http://www.cts-ideas.com/G1108DynamiteEconomyProliferation.pdf
