By Tzu P Wong
When I read this article on inflation from K.Kathirgugan, I was so ‘entertained’ that I almost fell off my chair.
This article was part six of the articles he wrote on inflation and in this part, he basically suggested that EPF and BNM should hedge against future losses due to unsecured loan granted by local banks of which gov’t agencies like EPF, PNB, and Khazanah are major investors to any corporations like Genting Hong Kong in 2019. The latter, as we all know, has now gone insolvent with potentially no hope of ever recuperating any of the billions of ringgit in the unsecured loan.
And so he suggested in order to avoid this cross and indirect financial risks to our financial institutions, it is better for EPF and BNM to invest in Bitcoin as a hedge because, as he puts it, Bitcoin is by far the most secured investment due to scarcity (only 21 million Bitcoins) as compared to soft assets like foreign reserves in USD and other major currencies, or hard assets like gold and other precious metals that are currently held by BNM as security assets in their balance sheet.
Now, the Bitcoin part was the most intriguing, and by far the most bizarre.
I don’t know if he knows what he was talking about or has thoroughly examined the fundamental facts on Bitcoin. Bitcoin is not tangible, nor significantly important asset recognised by mainstream financial institutions or by any major countries like USA and EU, or even China (who has her own cryptocurrency backed by her huge foreign currency reserves and fiscal account surplus.)
For him to say that Bitcoin is a better bet than any of those soft and hard financial assets currently held by BNM makes me wonder if he ever knows the importance of risk analysis that is mandatory in any field in the modern world including those fields that he is currently involved in and certainly includes economics and the inflation topics that he has been writing about.
He needs to be extra careful when making suggestions to EPF and BNM (because we know there are not many smart people in these institutions given the fact that there were many scandals in BNM, in particular recently,) without having a deep understanding of the suggestion he is offering.
Now, let’s examine what are the risks that may be involved if we are to ‘dump’ our country reserves and our retirement funds into Bitcoin.
First, Bitcoin is an independent cryptocurrency, meaning Bitcoin’s platform is owned by no one and responsible to no one. So, the primary risk is when things go sour, Bitcoin holders will have no one to hold accountable for and basically, investors will just have to “eat themselves,” the Chinese way of putting that investors will just have to fend for themselves when things turn sour and nothing for them to fall back on.
And then Bitcoin is a digital currency that has to be stored digitally either in physical thumb drives that would subject to loss by theft or mistakenly misplaced and lost forever, or stored in your home computer that you may forget your own password (read: Me!) and thus forever lost in your own hardware; or you may choose to keep in some flimsy cryptocurrency websites that the operators may run away someday with all your hard-earned Bitcoin; or you may just simply get hacked and lose all your Bitcoins and never know what hit you.
Didn’t anyone tell you these common risks in the cyber world or do I have to show you incidents about the many incidents of people losing their Bitcoin that have been reported long and far over the last decade?
And then last but not least, when Bitcoins are exhausted and all 21 million coins have been harvested, there is no guarantee that some big government agencies like CIA or MI6 or Mossad won’t come up with another version of Bitcoin that operates on similar algorithm of the original Bitcoin. If this happens, walla, there will go your scarcity on Bitcoin or cryptocurrency.
If scarcity is what you are concerning about, then may I suggest that you look into Farmland or Agriculture Land, because land, especially good agriculture land or farmland, is not being invented anymore. And some of the big name billionaires like Bill Gates and Jeff Bezos are both eagerly investing on farm land and they themselves have already owned hundred of thousands of acres of prime farmlands. There are also REITs that invest in farmlands and the capital appreciation has seen an increase of more than 10% recently. And these are some of the websites that prove my points.
“How much land does Jeff Bezos own acreage? â ictsd.org”.
And if you ever read the Art of War by Sun Tzu, the introduction suggests that war is important to a nation, therefore war must be treated with utmost diligence. And there are four ways to engage in warfare: the best way to win a war is via strategy, next is diplomacy, next is show of force, last is go into actual battle (or attack the castles).
Why do I bring up The Art of War by Sun Tzu in this article? It is because the western hegemony powers are using this to control the world. As the saying goes, if one can know ahead of what the war mongers are thinking, that’s where the opportunity is.
The Western powers, especially the USA are using food as their primary strategic weapon, followed by their soft powers like Hollywood as their diplomatic weapon, then when these two won’t work, they will then show their military forces to intimidate their enemies by positioning their aircraft carriers near their enemies, and when all these three won’t work, only then will they go to actual war.
Henceforth, food is the primary weapon of choice by the Western hegemony powers and Farmland is the platform required to produce food to control the world. Now, can you see the importance of Farmland or Agriculture Land?
Since food is the prime weapon of the western hegemony powers and if we invest in Farmland or Agriculture Land now, we will surely hedge the right bet that we will not only be able to profit from it, we may save our life with it one day.
So, there you go, forget about your Bitcoin wet dream, go down to earth, invest in real economic activities, invest in Farmland or Agriculture Land, you can never go wrong to bet on food related investments. And Najib Razak was smart enough to see this in the Eagle Height Plantation in Indonesia. – New Malaysia Herald
About the writer: Tzu P Wong is an entrepreneur based in Sabah. He occasionally writes for the New Malaysia Herald and considers himself a party-less political nerd. A trouble shooter. A weird thinker who is still trying to figure out a way to tell for sure if SchrÃ¶dingerâs cat is dead or alive without checking on it.