Inflation

In a free society, jobs are abundant, contrary to the belief that jobs are scarce. According to MOM, as of March 2012, there are 46800 job vacancies in Singapore. The problem is that most people don't want these jobs, because they are 'low-paying'. A more accurate description would be 'these jobs give low-purchasing power'. Why is that? Money-printing (inflation) is why.

I have my own index, called the kopi-index (rough-estimates). In 1970s, a fresh-grad can probably earn about $1400. A cup of kopi costs $0.20, so one's salary gives a purchasing power for 7,000 cups of kopi.

Today, a fresh-grad earns about $3k (looks like a 4x increase from the 1970s! Good!). A cup of kopi costs $1. One's salary gives a purchasing power for 3,000 cups of kopi.

Feeling wealthier?

Purchasing power has been diminished greatly by money-printing.
Inflation gives the illusion of wealth. This is the real and most significant reason behind the growth in the rich-poor gap (it's not caused by greedy businessmen), the widespread phenomenon of the dual-income family, and low birthrates.


Our grandparents talk about how prices keep rising over the past few decades. Their grandparents, however, would have talked about how prices kept falling in their era (during the gold standard).

Moral of the story: protect yourself!