Singapore must guard against the danger of rising inflation

Inflation is a result of expectations of higher prices in the future, which drives people to spend more in the present. This then leads to a vicious cycle of higher demand causing higher prices and inflation rising over time. As the Singapore economy is inexplicably tied to the property market and because properties belong to a “high-value” asset class, expectations of capital gains in the property market will likely cause rising inflation in the country. 

Whilst recent figures suggest that inflation in Singapore remain subdued, it would nonetheless be prudent to guard against the dangers of rising inflation in Singapore, especially amid recent bullishness in the property market.
 
Rising inflation generally creates a downward pressure to the Singapore dollar, which will likely lead to a more serious social class divide in Singapore. The recent Institute of Policy Studies (IPS) study has already provided evidence of a social divide in the country, based on class rather than on gender, religion, race, etc. With rising inflation leading to a depreciation of the Singapore dollar and imports becoming more expensive, the low-income group will have much more to suffer compared with the high-income group due to basic necessities costing more. Moreover, as the high-income earners typically having more resources at hand, they are better able to hedge any prolong and continuing weakness in the Singapore dollar through investing and various leveraging means. More pronounced social stratification is certainly undesirable for any country from the perspective of nation building and political stability, as we witnessed from the chain of events unfolding in the US and Europe in the past year.

So what are the safeguards against rising inflation, perhaps in the near to medium term?

The government has done an excellent job at taming the property market. Such cooling measures must continue to stay unless and until the demand for property meaningfully subsides or at least tapers. In fact, more cooling measures should be implemented if the demand for property surges; tough for property developers but necessary.

Our Monetary Authority of Singapore (MAS) must also continue their excellent work e.g. in allowing the Singapore dollar to gradually appreciate. Indeed, our MAS serves as the nation's guardian in ensuring robust financial and social systems in the country. Additionally, with looming tax hikes possibly in the form of an increase in the goods-and-services tax (GST), it may be even more critical to allow a gradual appreciation of the Singapore dollar to rein in inflation and assist the low-income group.

Living with mindfulness

Our digital world presents us with immense opportunities and challenges alike. To be sure, we have been hugely empowered by digital connectivity where knowledge is gained by the mere click of a button. Indeed the digital generation has much to be grateful for such empowerment. But, at the same time, we are constantly faced with an onslaught of digital media that constantly vie for our attention on a daily - if not hourly - basis. From the latest Facebook postings to the most current stock prices, we are driven to seek out the newest updates that happen almost instantaneously. The combination of such empowerment and our relentless pursuit of digital information has inadvertently made us become more insular and less focused. The current state of affairs should be remedied.

The practice of mindfulness traces its ancient roots back to the time of the Buddha at around 500 B.C. The Buddha taught mindfulness to monks and lay people to sharpen their mental faculties. The practice essentially involves directing one's mind at a primary activity - be it the simple act of in- and out-breathing, sitting/walking, or even urinating/defecating. If the distracted mind is 'jolted out' of the primary activity, one redirects the mind back to the primary activity as soon as s/he is aware that the mind is no longer directed at the primary activity. Such a practice supposedly sharpens one's mental faculties. On a non-spiritual level, the sharpened mind with a longer attention span allows one to better perform his or her daily routines, whereas on a spiritual level, it allows one's mind to reach a state of calm in which wisdom and liberation can be gained.

It should come as no surprise that the greatest achievements of mankind, be it in science or the arts, involve attention. The intellect of Thomas Jefferson and the works of William Shakespeare could not have been achieved without their ability to be attentive - in the case of Thomas Jefferson, his voracity in reading culminated in the Declaration of Independence; and in the case of William Shakespeare, the literary classics of Romeo & Juliet, Macbeth, etc. In fact, not even the beautiful sculptures at Union Station and the Library of Congress in DC could have been built without the precious mental commodity of attention.

Latest medical research has further proven that the practice of mindfulness leads to more grey matter in the brain (http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3004979). Reduction of grey matter has been associated with neurodegenerative disorders, such as Alzheimer's. Other medical benefits also include reduction in the stress level and lowering of blood pressure. We may also witness lower incidences of car accidents, if drivers direct the mind on driving (the primary activity) instead of toggling the mind incessantly between driving and texting whilst proclaiming the ability to multi-task as a form of self-aggrandisement.

Given our fast pace of life, injecting a dose of mindfulness in our daily living will definitely allow life to be more endurable and palatable, even exciting and enriching. As mindfulness can be practised anywhere and anytime, there can hardly be any excuse in not being mindful. I wish you a mindful day ahead!