"Why Singapore's economy is heading for an Iceland style meltdown" writes Jesse Colombo in Forbes Magazine 1/13/2014

Ladies and Gentlemen,

If you thought that Singapore will continue to ride the waves, to borrow a phrase from the British Empire, I am sorry to dampen your spirits.

I want to refer you to an article in Forbes Magazine of 1/13/2014 which has this very foreboding title "Why Singapore's economy is heading for an Iceland Style meltdown".

It says "In 2007, Iceland was celebrated for attaining the world’s highest standard of living according to the U.N.’s annual Human Development Index report. In less than a generation, the tiny North Atlantic island had transformed from a traditional fishing and tourism-based economic backwater into a finance and banking powerhouse, rocketing the country’s wealth and living standards to enviable new heights. Sadly, Iceland’s economic boom was an illusion based on a reckless credit and asset bubble that led to a terrifying financial crisis when it popped in 2008."

Please see http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/

The article compares the Iceland Bubble to what will happen to Singapore which it says is very similar in it's characteristics. Singapore he says is populated extensively by opportunists, speculators and profiteers who are stoking the frenzy in property prices which has gone through the roof, far ahead of it's real worth. He then says that the neighboring Asean countries from which most of this money comes are themselves over invested and themselves in bubble economies and are themselves unstable. When their bubbles pop, which he believes will inevitably happen sooner than later, so will be the Singaporean one.

He says the property market in Singapore is itself over-extended with far too many properties with even more properties in the pipe line. This, according to him, will result in an oversupply of properties which will result in a collapse of the real estate market and will itself extend to the rest of the economy.

He also refers to the huge borrowing of Singaporeans to finance their property purchases which can amount to as much as 60% of their income, not for using it as dwellings but purely for speculation. This unrelenting upward push of property prices by gamblers in the assumption that it will always be Charlie Boomtown, in an island no bigger than 710 sq. km, with nothing there  is simply suicidal.

If you thought about it, Singapore is just a lot of hype and hot air with very little substance. It is simply a place where profiteers and speculators come to make a fast buck. Thanks to the never ending hype and glitter put out by the government state owned media, of course from the outside it seems glamorous. Other than offshore banking and money laundering which has attracted all the world's finance executives to Singapore to service the illegal assets of Colombian and Burmese drug lords, the ever expanding building construction sector and tourism, there is nothing else besides.

With a foundation as hollow as that, it cannot expect to continue economic expansion indefinitely. The bubble has to burst and burst it will, leaving your property worthless.

In my earlier post of  "Singapore's property bubble; cause for alarm. HDB property owners beware" of Dec 23, 2013, I had said Singapore's HDB (government housing) lessees should beware of their properties becoming worthless and should sell now before it is too late. Especially since 90 year old Lee Kuan Yew is about to die and the island will suffer serious instability as a result.

This Forbes Magazine report on Singapore's false economy confirms my prediction of things to come. And it is not going to look nice.

I am not an economist, as I am a lawyer, and cannot say with any authority about these things. But you don't need to be one to see how bad it is. Huge numbers of young men walking around during lunchtime in shirtsleeves and neckties in downtown Singapore island and pushing pens in offshore banks cannot really support all this glitter and glass. It should be obvious to anyone with eyes.

Once again, clear out now when you can. Sell your HDB flat and clear out before it is too late.

Gopalan Nair
Attorney at Law
A Singaporean in Exile
Fremont, California USA
Tel: 510 491 8525
Email: nair.gopalan@yahoo.com