Predictions that the world would go into a deep and prolonged recession did not come true in 2009 due to all around the world effort to save world economic from drop into recession had come to a success. But if the financial system it self is the problem how long they can support it?

When US facing subprime crisis Asia economic is in good shape and due to the world number one is about to collapse due to they over spending Asia also get effected. What we know is the Federal Reserve is printing money over USD1 trillion in 2009. This money conjured out of the thin air and did not base on gold value. So the plan appears to be, to allow the dollar to drift down so that American goods remain cheap for export and therefore send enough of their money to the U.S. to help address all these mega problems. Due to USD is the world currencies so when USD drop ours money like RM need to devalue also to make sure the cap did not be too big. If too big Malaysia export to all around the world will be drop because the goods is in USD.

Throughout the last century, all the countries that were spending beyond its means had to pay the price when their currencies were devalued. Argentina, Mexico, Thailand and even big economies such as Germany, Britain and Japan all paid the price except one - the US the price pay by Asia.

The situation look unfair but this is the financial system we now using. Asia countries mostly keep reserve in currencies were by the Western countries mostly keep reserve in gold. But in this year 2009 China and India have start to keep more physical gold, China is telling the rest of the world that any diversification of their reserves away from the dollar will be made gradually. But as the debt grows larger and larger, the day will come when even the Chinese government will be asking themselves: "How long can we continue to subsidize the high spending white men?" There money has to go somewhere and the somewhere is gold.

The current financial system money value have go beyond gold value and Asia is using currencies reserve financial system but Western is using gold reserve financial system, any collapse in credit crunch will effect Asia badly we all will pay the price above white men over spending.



Happy New Year And Wishing All A Good Investment Return In 2010