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Dorkins

Asia's Cash-Short Consumers Clean Out Their Closets

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An interesting video about consumer behaviour in the Far East:

http://www.reuters.com/video/2099/01/01/reuters-tv-video?videoId=270938052

Summary: Middle class Asian women have started pawning their designer handbags (which cost 4-5 figures in USD). Only about half of them ever buy the handbags back. In general household debt is rising quickly in these countries.

Maybe all is not well back home for the middle classes in Singapore, Malaysia, HK etc who up to now have been buying large amounts of new build property in London.

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Indonesia's blowing up nicely.

I'm sure it is, but why wouldn't their central bank just print to buy government bonds if things got difficult? Everybody's at it nowadays, indeed if they didn't start monetising debt ASAP this unorthodox policy stance might spook the markets.

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Yes. Interesting times ahead.

Will the city of London Survive.

Iceland: financial centre terminated

Cyprus: financial centre terminated. Where next? London? HK? Singapore?

Bail in's seem all the rage now with Poland. Now the US govt has said it wont insure offshore based accounts any longer. All very deflationary. Such conditions dont favour the parastic nature of the London economy.

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This doesn't surprise me at all. It's been boom time all over South East Asia - and judging by people I know out there I suspected much of it has been consumer debt driven. Your average middle class Malaysian loves their kitchen - and I know at least a couple who spent more on extending and refitting theirs than buying their house back in the 90s. Needless to say it's all on credit and they are now stuck at home watching telly because they can't afford to go out while they are paying for it.

It turns out that your hard working frugal South East Asian is not so very different from your lazy spendthrift Westerner after all.

I visited the Petronas towers twice in 10 years. The first time in 97 after the collapse of tiger economies - it was absolutely deserted. I was the only person, bar shop staff, walking around on some of the floors of the shopping complex. In 2007, it was completely rammed.

Perhaps 2014/15 will see it deserted again?

Edited by StainlessSteelCat

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