For my own records

From Business Times

Published October 5, 2007

MM Lee: Stagflation can still make comeback He cautions against too much euphoria in the current state of the economy By CHUANG PECK MING

Noting that inflation is already up, he said: 'And because inflation is high, there is little room for the US Federal Reserve to further lower interest rates without risking higher inflation. And inflation will mean a repeat of the problems of inflation and low growth rates, the stagflation of the 1970s and early 1980s.'

Prices in stock markets around the world would plunge, which in turn would bring lower spending and declining economies, Mr Lee said at a forum hosted by the Nanyang Technological University Students' Union.

Sounding a cautionary note against 'too much euphoria' in the current state of the economy, he told students at the forum that he wanted to give 'the dark side' of the current picture of sunny growth outlook and soaring stock prices.

'Stock markets are now hitting record highs - these are excessive and not supported by fundamentals,' Mr Lee said. 'The underlying problem has not gone away. The sub-prime mortgages problem is still not cleaned up. These were high-risk loans to people who did not have the means to repay.'

He noted that other nagging worries have also surfaced: commodity prices are rising - oil, gold, corn, wheat, iron, coal, all commodities.


Singapore's Economy Shows Signs of Overheating, Economists Say
By Shamim Adam Bloomberg

Oct. 5 (Bloomberg) -- Singapore's economy risks overheating as home prices reach the highest in a decade, companies hire workers at an unprecedented pace and the stock market soars to record levels, economists say.

Inflation at a 12-year high and an economy expanding ``a little too rapidly'' mean signs of overheating are ``a few too many for comfort,'' Robert Prior-Wandesforde, an economist at HSBC Holdings Plc in Singapore, said in an Oct. 3 report.
...
``The overheating problem in India and China has now spilled over to Singapore,'' Deyi Tan, an economist at Morgan Stanley in Singapore, wrote in an Oct. 3 report. ``Not only has persistently strong growth resulted in an office space crunch, labor supply needs have also led to a jump in the foreign population. Residential property is booming and expat schools are oversubscribed.''