Ben Bernanke and Wall Street’s Too Big To Fail Banks have declared total currency war against the rest of the world when the Fed announced that it will pump $600 billion virtual toilet money into the system in the next few months.
But, Bank Negara and the Finance Ministry are sleeping in the belief that the Malaysian economy has decoupled from the ravages of the global financial crisis.
Hot money has been pouring into emerging markets and leading financial analysts and bankers in Malaysia have all welcomed this development. The mantra is that hot money will boost the stock market. The Kuala Lumpur Composite Index has already reached an all time high. Our policy makers are dancing with glee, boasting that this surge in the market reflects growing confidence by fund managers in our economy. Have we not heard this mantra just before the global financial tsunami in 2007?
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