Monday, August 8, 2011

Collapse of GIC and Temasek Holdings 2: GIC crashes

Within a little more than ten days, all major stock indices have plunged with S&P down around 14%. Right now, I can't find any fundamental reason that stock market will rise. Probably QE to infinity will help somehow, at great cost. But the real solution is nothing short of revolution or drastic reformation, that overthrows the current corrupt world order.

GIC results benchmark against gold. Source: GIC

Our reserves inevitably are hit due to the fact that GIC is playing poker all over the world. All those "talents" in GIC seem not be able to match the results of old days central banks when reserves are held in gold. Delving deeper into GIC's result, we can conclude that in real terms, GIC is losing monies.

The gain of gold is not an increase in value per se but due to monies printing. So anything below the yield of gold implies that the asset is losing its value. With the economic storm coming over the next few years, it is likely that GIC is going to lose all our CPF.

While stock is plunging like nobody, gold just broke another record against Sing dollar today, hitting S$2092. 

3 comments:

ngpy said...

HOW REALIABLE IS VERITAS THAT IF GIC WERE TO COLLAPSE THEY WILL LOSE ALL THE CPF MONEY. THAN CPF MEMBERS SHOULD BE FOREWARN TO WITHDRAW THEIR CPF MONEY WHEN EVER POSSIBLE

Veritas said...

Re ngpy:
Do not dream of getting back CPF unless you decide to migrate.

GIC is a cesspool organization to distribute income from the poor to the rich, as well as giving monies freely to USA.

Your suggestion is tantamount to breaking the piggy banks of our elite.

Anonymous said...

I think they are holding UBS investment at cost because its a convertible bond. But the conversion price of 47.7 franc is way above current market price of 17 franc. That dollop is $14b sucker punch. If someone can do the rough guestimate, the $14b should at least be written down by 60% to 70%, so paper loss of $9b to $10b. Yet the 5 year return has been stuck at that 5% range forever. Of course their return is in USD (they conveniently forgot to highlight that unlike MAS - that shows how deceitful and disingenious thse folks are, even compared to the MAS). So maybe the saving grace is the strength of the swiss franc, but now the interest rate of the franc is negative, I doubt those Italians and Frenchies would be rushing to deposit their savings in switzerland, so lets see what their return shows next year.