There are signs…Inflation is on the up in most countries. Malaysia just announced it hit 4.4%, mainly due to the rising cost of food.

Interest rates are climbing to curb inflation. Bank Negara, Malaysia’s central Bank; has increased rates twice this year. At least another two increases are expected before year-end. The 4.4% increase from the usual average of 2.5%; will see to that.

In layman’s terms, it means “stop buying!” The everyday person is affected.


Governments reduce interest rates to encourage people to spend in hopes of self-propelling the economy.

An overheating market can be seen when there is a rush to spend money on too few goods available, causing prices to soar very quickly. This can be seen in the share market, too.

When signs show of an overheating market, interest rates are raised. The brunt falls on the everyday person, the same person that was encouraged to spend in the first place.

Now, that same person has to live with headaches, worry, high debt, depression at times leading to suicide.

All these financial hardships also leads to easy withdrawal access from the forced savings retirement funds like the Employees Provident Fund (EPF) in Malaysia. The government allowed for 4 withdrawals during the recent Covid-19 pandemic. Is there no end in sight of this financial abuse to the everyday person?


Cashflow in the Malaysian market (1)
To help understand this system, a simple way of looking at this is generally laid out in front of us: Let us say there is RM100 billion cash flowing in the market.
Money is used on food, housing and travel (motor vehicles, etc).
Next, some is used on luxuries and lifestyle.
A major portion of that is used for investment. These investments include, share, equities, fixed deposits, savings and other types of investment. Here, we are looking at investment by individuals, small-to-medium enterprises and businesses.

At anytime, RM100 billion circulates in Malaysia. If investments are attractive, the public may cut down spending and invest more in their investments. When they do this, it will cause a situation to have more products available and less consumers, meaning goods available outstrip demand. If this situation prolongs for a period of time; it may force the price of goods downwards.

The same came be said if the situation reverses where there is more cash in the market than goods. Too many people chasing too few goods, causing the prices of goods to spike upwards.


Can we call this “financial abuse”? Well, it is quite simple. In a free market, businesses are allowed to advertise and entice. No wrongdoing there. It is the everyday person that would have to learn to be responsible in his fiduciary decisions. It is a free world (in most parts), after all.

I welcome businesses with all their advertising and enticing. With all their cajoling, coaxing, soft sell, hard sell, sweet sell. Picture yourself in the acres of room in the rear passenger seat of a motor carriage that oozes with charm, looks and class; upholstered with only the very best of leathers and material that money can buy.

The strength in the whole process lies within you, me, us. We decide if we are to buy / acquire or not.

1. This is a very simplified explanation for the general readership, especially people without financial knowledge. I have purposely left out keypoints like foreign direct investment and other factors to keep the explanation at its very basics – entry level. It is assumed here that loans taken out; do not involve cash from the system.

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