The crisis erupted because George Soros with the financial backing of the US Federal Reserve start "SHORTING" the ringgit. At that time,Malaysia have only US$ 20 BILLION in foreign reserves and this amount is insufficient to defend the ringgit.
As a result,the economy of Malaysia collapsed and heading into depression.
Under the keynesian economics theory,when the country economy is heading towards depression and collapsing,it is the duty of the govt to PUMP PRIME the economy by spending money on project like infrastructure and other developments projects in order to create jobs and business growth and the economy will expand through the MULTIPLIER EFFECT.
This is due to the fact that foreign investment is non existent and Pump Priming is the only tool to get the economy going towards recovery.
Instead of doing the above move,Our Friend Anwar do the opposite and introduced the followings measure:-
1)Tightening and reduction in govt spending. THIS IS A STUPID MOVE as reduction of spending is a negative move that reduce economic activities which result in high unemployment with an increase in social problems.
2)Anwar like to listen to advice from the Americans and all this advice is DETRIMENTAL to the economy of Malaysia as the americans want to use Anwar to control Malaysia economically and politically.
3)Telling the Rakyat to tightened their belts by reducing personal spending and comsumption.This is a BODOH move by Anwar with the hope of KICKING OUT OLD MAN M as PM.
I am not a fan of Orang Tua but I respect him as he was right to implement Capital Control to save Malaysia and also in sacking Anwar.
I will be very worried if Anwar is the finance minister if Pakatan win the next election and I would prefer accountant Guan Eng to be the finance minister as he is known to be careful with the Rakyat money.
