Achieving 2011 Financial Goals

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By Steve Siebold, Author -- How Rich People Think

If your goal for 2011 is to improve your finances, changing the size of your wallet begins with changing how you think about money. The biggest difference between rich people and the middle class is the beliefs, thoughts and philosophies about money between the two groups. Not only are they numerous, they're also extreme!

Fear and Scarcity vs. Freedom, Abundance and Possibility

Driven by the fear of loss and uncertainty of the future, the masses focus on how to protect and hoard their money, especially during difficult times like these. World-class thinkers understand the importance of saving and investing, but they direct their energy toward accumulating wealth through serving people and solving problems. When an economic correction occurs, the fear-based saver suffers catastrophic losses that may take years to recover. While the world-class suffer similar losses, they quickly turn their attention to financial opportunities that present themselves in a society of suddenly terrified people. While the masses are selling for short-term survival, the great ones are buying for long-term success. One group is operating from fear, the other, from abundance. Instead of clipping coupons and living frugally, reject the nickel and dime thinking of the masses. Focus your energy where it belongs: on the big money.

Logic Rather Than Emotion

Few people are able to think about money without clouding the subject with negative emotion. An ordinarily smart, well-educated and otherwise successful person can be instantly transformed into a fear-based, scarcity driven thinker whose greatest financial aspiration is to retire comfortably. The world class sees money for what it is and what it is not, through the eyes of logic. The great ones know money is a critical tool that presents options and opportunities. They also know if you're not happy without it, you won't be happy with it. But while money has little to do with happiness, it's one of the most important tools in the game of life, and without the psychological chains binding them, champions earn all they can. When it comes to thinking about money, put your emotions on the shelf and let reason be your guide.

Don't Wait for Your Ship to Come In; Build Your Own Ship

The average person subconsciously believes he's going to be discovered, saved or made rich by an outside force in the future. The world class knows no one is coming to their rescue, and if their life is going to be uncommon in any way, it will be through their own efforts. The foundational principle they live by is self-reliance and personal responsibility. They're not counting on the government to bail them out or their family to care for them in old age. Champions don't wait for things to happen, they make things happen. While the masses wait around for help, the great ones go to work and fight, never counting on help or support to arrive. They know that getting rich is an inside job.

Action Mentality vs. Lottery Mentality

The masses love the lottery because deep down they believe it's their only chance to get rich. The fact is they're probably right. Not because they're not capable, but because they don't have faith in their own abilities, and their beliefs about money limit their financial success. The middle-class is self-destructive, especially when it comes to money. They will always struggle financially unless they are somehow able to break the mold cast in childhood telling them only crooks and lucky people get rich. The world class has empowering beliefs about money that leads them to effective, daily action that serves as the foundation of their financial success. The great ones know talk is cheap, and the only way to get wealthy is to take action. The truth is the middle class has all the desire they need, but they lack the beliefs to wake their desire. The cause of their inaction is not lack of desire, but lack of empowering beliefs regarding the acquisition of money.

Hard Word vs. Leverage

If hard work was the secret to financial success, every construction worker and cocktail waitress would be rich. The wealthy strategically focus their efforts on the most profitable areas of their business while leveraging their contacts, credibility, and resources to maximize the results of every action they take. World-class performers work hard, but not in the traditional sense. Hard work to the wealthy means out-thinking their competitors and leveraging the collective brainpower of their advisers. While the middle class is mentally and physically exhausted at the end of the day, the world class is fresh and excited about thinking of new solutions and ideas that will keep the middle class employed. As a result, the middle class lives paycheck to paycheck and the world class lives without limits. The only real difference lies in their approach and ability to use leverage in place of linear effort. The average person is playing life's proverbial slot machine, while the wealthy own the slot machines.

Believe You Deserve to Be Rich

There is a persuasive belief among the masses that tells them they don't have the right, nor are they good enough as human beings to ask, hope or pray for prosperity beyond their basic needs. Who am I, they ask themselves, to become a millionaire? Who am I to get what I really want? Who am I to live a lifestyle fit for a king? The world class asks, why not me? I'm as good as anyone else and I deserve to be rich. If I serve others by solving problems, why shouldn't I be rewarded with a fortune? And since they have this belief, their behavior moves them toward the manifestation of their dreams. Whether they actually deserve to be rich is irrelevant. Like all beliefs, they don't have to be true to be acted on. This is why some of the smartest people are among the poorest, while people of average intelligence build fortunes through their beliefs, positive expectations and focus.

If you want to get rich, dissect your beliefs about money and upgrade them to the world class. If you want to improve your finances in 2011 and become wealthy, it starts with your mindset. The bottom line: Think like a millionaire to become a millionaire.

Steve Siebold is author of the new book How Rich People Think, which compares 100 thoughts and beliefs about money between rich people and the middle class. Siebold is one of the world's most noted experts in the field of mental toughness training. He's interviewed some of the world's richest people over the past 26 years to find out how the wealthy really see money. His mental toughness clientele includes world-class athletes, Fortune 500 companies, and entrepreneurs. Click here for more information and to download five free chapters of the book.

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ABC ways: Looking back to surge forward

By BUNN NAGARA

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The ABC for China – Ang Lee, Bruce Lee and Confucius – can help explain its rise today.

LAST Tuesday, the Chinese government unveiled a statue of Confucius at Tiananmen Square in Beijing.

This was the first stage of a refurbished China National Museum adjacent to the square. However, the implications of placing a statue of the iconic sage at an iconic location run deeper.

In the Maoist era, Confucians were derided and oppressed. Mao had narrowly linked Confucianism with China’s feudal past and its excesses, underestimating the philosophy’s enduring popularity.

That began to change after Mao’s demise and the end of his disastrous Great Leap Forward and Cultural Revolution. Today’s Dengist China has “rediscovered” Confucius as the main icon of a proud and progressive culture with universal appeal.

Confucius stressed piety, ethics, order, tolerance, education and societal welfare. He also championed harmony, which is useful for a China hoping that major world powers would accommodate its rise, and forgiveness, which helps to improve relations with past imperial powers that had wronged China.

American political philosopher Daniel Bell, based at Beijing’s Tsinghua University, finds that growing materialism has also prompted China’s leaders to emphasise values in society. He says China’s present focus on “harmony” also opposes Maoist ideas of violent revolution.

Even after 2,500 years, Confucius’ teachings continue to resonate for many Chinese. More importantly, they are not seen to contradict Com­munist Party doctrine but instead help to promote social order and political stability while the party itself loses its ideological edge.

China’s embrace of Taiwanese-born film director Ang Lee, now a naturalised US citizen, is also indicative of Beijing’s trajectory. Since the mainland has always claimed the island as its province, Lee’s roots were never a problem for Beijing, even after his parents had fled Mao’s forces on the mainland.

Following Lee’s critical acclaim worldwide, his brush with the former DPP government of Taiwan found more fans on the mainland despite some uncertain receptions from Beijing itself. When the independence-inclined DPP sought to supplant “Chinese” with “Taiwanese” identity, Lee refused to be manipulated and insisted he was proud to be Chinese.

An official mainland newspaper reportedly dubbed Lee “the pride of the Chinese people”. Beijing then invited him to be an artistic director for the opening and closing ceremonies of the 2008 Beijing Olympics.

China’s belated embrace of martial arts icon Bruce Lee is similar, amounting to a national homecoming for a star in popular culture that an older Communist Party could never stomach. But like Ang Lee, Bruce Lee had achieved international success, even Western renown, by championing Chinese culture.

Bruce Lee’s life was even more of a morality tale for a modern China rising from its humiliating experience of foreign imperial powers. Although US-born, he grew up in Hong Kong and returned to the US as a teen to seek his fortune.

Lee had believed in America as the land of opportunity for all. Instead he came away disappointed, encountering racial discrimination from a prospective mother-in-law to prospective Hollywood producers.
He then went back to Hong Kong for his career. Success came with his first martial arts title The Big Boss, then with the second, Fists of Fury (1972), his most popular film among Chinese audiences.

The story dramatises the international status of the Chinese in history. It is also adapted from the passing of Chinwoo Athletic Association founder Huo Yuanjia, albeit brought forward some three decades to the 1930s to highlight the oppression China suffered under Imperial Japan.

Bruce Lee’s character Chen Zhen would later feature in no less than 11 remakes and sequels in film and television. The 1994 Jet Li remake Fist of Legend sees a more textured treatment of oppression, racial prejudice and the Japanese, suggesting a more nuanced attitude in today’s China.

However, China’s acclaim of Lee had to be posthumous. In the early 1970s, prospective reformer Deng Xiaoping and his family were still being hounded by Maoist Red Guards.

Today, a 19m-high statue of Bruce Lee stands near a Bruce Lee Museum in Shunde, Guangdong Province. Both are part of a park named Bruce Lee Paradise.

An even larger, eight-legged (in different kicking positions) statue of Lee stands at 30m in nearby Foshan, his ancestral hometown. It is scheduled to go on a world tour this year.

Although Confucius’ statue stands at “only” 9.5m including its base, its location is critical. Tiananmen Square is not only a popular meeting point and tourist destination, it was the site of the 1976 “Tiananmen Incident” in which an assembly of mourners were deemed a challenge to the state.

In 1989, the Tiananmen Square uprising rose against corruption and other evils, then turned into a mass critique of the state. Some Falun Gong members would also use the square to demonstrate or canvass for support.
Confucius’ statue is placed centrally, which makes Mao’s 6m portrait on one side detract from a harmonious symmetry. That could be resolved by either placing another portrait, perhaps Deng’s, on the other side, or relocating Mao’s portrait to a storage area.

The Soviet Union had long ago done away with Stalin’s renown along with his purges. It later collapsed from a weak economy and the absence of popular icons to rally the people, which is quite unlike today’s China.

Ang Lee, Bruce Lee and Confucius may together spell a new form of Chinese nationalism. If so, it is a soft nationalism directed largely inwards for national cohesion.

Beijing might have found it wiser to govern through the heart of people’s sense of belonging than with naked force. But it should also beware of how cultural pride can sometimes grow uncontrollably and spill quickly into extremist racial sentiment.

Putting a dent in the universe

Leadersip lessons from Steve Jobs

SCIENCE OF BUILDING LEADERS By ROSHAN THIRAN

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“I want to put a dent in the universe” Steve Jobs, Apple CEO

A few weeks ago, I received a book from publisher McGraw-Hill on Steve Jobs by communications coach Carmine Gallo.

I started recollecting the “Think Different” Apple ad campaign. The ad was the starting point in Steve Job's revival of a company he founded, was fired from and later brought back to turnaround.

The ad was memorable because it was essentially about Steve Job's leadership and his desire to “change the world.”

The copy of the ad, read by Richard Dreyfuss, goes like this: “Here's to the crazy ones. The misfits. The rebels. The trouble-makers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. And the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones that do.”

This campaign featured Thomas Edison, Einstein, Gandhi, Amelia Earheart and other Apple heroes.
Steve explained that “you can tell a lot about a person by who his or her heroes are” and his role models were people who “changed the world”.

Steven Paul Jobs has become “the most successful CEO today” according to Jack Welch, reshaping the computer, entertainment, music, telecommunications and the book industries.

Born to Joanne Schieble and Abdulfattah Jandali, a Syrian, he was adopted by Paul and Clara Jobs who promised his biological parents that they would send Steve to college.

Steve did go to Reed College but dropped out after one semester.

Although dropping out, he continued attending classes he was passionate about. He worked briefly at Hewlett-Packard meeting Steve Wozniak, who would later co-found Apple with him, then took a job with Atari to save money to go to India to “find himself”.

He travelled to India and came back a Buddhist with his head shaved and wearing traditional Indian clothing.

Steve began that trip wanting to “change the world” but he did not know how. During his time in India, he realised that “maybe Thomas Edison did a lot more to improve the world than Karl Marx or Neem Karolie Baba put together.”

Steve's trip to India convinced him that his purpose on earth was “to put a dent in the universe” through innovation like his great role model Thomas Edison.

Studying Steve's leadership, I uncovered that he, like Mandela, Gandhi, Napoleon, Jack Welch and other great leaders, all began their leadership journey in silent retreat “finding themselves and their passion”.

In fact, interestingly, I found six key steps which enabled all great leaders across time to “put a dent in the universe”.

The steps are as follows:
1. Take time to be with yourself to know yourself and find out what you truly love to do and what drives you
2. Define your vision of a better tomorrow and redefine it till the vision excites you
3. Sell and excite the world with the message of your vision
4. Build a plan of execution to achieve this vision, including the mobilisation of people to ensure the vision becomes a reality
5. Say “NO” to distractions and focus relentlessly on achieving the vision
6. Execute! Execute! Execute! and keep executing flawlessly with high quality overcoming obstacles that come your way

Finding yourself and your passion

Steve Jobs dropped out of college, disappointing his parents in the process. But he was always curious claiming, “the minute I dropped out I could stop taking the required classes that didn't interest me, and dropping in on the ones that looked interesting.”

He attended a calligraphy class because he was passionate about typefaces even though he knew that this class had no “hope of any practical application in my life.” Yet ten years later, this calligraphy class was the reason that the Macintosh had beautiful typography.

Steve believes his philosophy of following his heart is a key part of leadership adding “you must have the courage to follow your heart and intuition. They somehow already know what you truly want to become.”

Then Steve went to India spending time with the surroundings and the Creator discovering his “calling.”

In fact, when Steve in an interview with the Smithsonian postulates: “I think you should go get a job as a busboy or something until you find something you are really passionate about. I'm convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure PERSEVERANCE. It is so hard. There are such rough moments that I think most people give up. Unless you have a lot of passion, you're not going to survive. You're going to give up. So, you've got to have an idea, or a problem or a wrong that you want to do right that you are passionate about, otherwise you are not going to have the perseverance to stick it through. I think that's half the battle right there.”

And he is right. You have got to find what you love and are passionate about first.

Define your vision of a better tomorrow

Steve always sees a future with possibilities.
He looks beyond today and sees something better in everything. He saw computers as much more than dreary productivity tools. He saw the MP3 player as more than a Walkman.

On the iPhone, he remarked, “We all had cellphones. We just hated them, they were so awful to use. The software was terrible. The hardware wasn't very good,” and so he challenged his team, “Let's make a great phone that we fall in love with. We're going to do it. Let's try.' It was the same with the iPad. Steve had a way of seeing a greater future.

In Gallo's book, he cites a story where Steve was recruiting a top talent to Apple 30 years ago.
This talent asked, “What is your vision for the personal computer?” For the next hour, Steve painted a picture of how personal computers were going to change the world.

He weaved his vision of how it would change everything from work, education, entertainment and everything. After hearing Steve's vision, he immediately signed up to work at Apple, a small startup then.

Great leaders have vision. According to former Apple leader Trip Hawkins, “Steve has the power of vision that is almost frightening. When Steve believes in something, the power of that vision can literally sweep aside any objections or problems.”

Articulate the vision

One of the key leadership lessons Steve internalised is the CEO's role as company evangelist and vision spokesperson. Leaders can dream big visions but can they articulate that vision ensuring it's appealing, vibrant, and gripping?

How does Steve message his vision so perfectly? Firstly, he is passionate about the vision and his energy flows from this passion. More importantly, he spends hours practicing and preparing ensuring his vision is fully understood.

A BusinessWeek week article notes that Steve's articulation of his vision “comes only after gruelling hours of practice.”
And he communicates by simply allowing you to visualise the vision. Most leaders have visions but the problem is they don't communicate that vision effectively.

Mobilising people to execute the vision

A big part about Steve's leadership is his ability to hire people who are “inspired to make the dream a reality” (Gallo).

Ultimately, people are the key to success as no single idea Steve had would have been successful had not others joined his crusade.

Similarly, Martin Luther King and Gandhi did not develop followers just by his inspiring speeches.
Instead, they spent the greater part bonding, building coalitions, and connecting with communities one person at a time.

Their powerful agenda moved forward as they mobilised people together on a personal level.
Great leaders have powerful one-on-one dialogues mobilising people to their cause.

Focusing on the journey

Steve Jobs seems to be all over the place with so many new ideas and innovative products. Yet, he was extremely focused and clear where his journey required him to go.

Steve said, “the people who are doing the work are the moving force behind Apple. My job is to create a space for them, to clear out the rest of the organisation and keep it at bay.”

He ensures that he removes hindrances from the focus.

Focusing on the most important issues means you have to say “NO to 1000 things” including distractions, which is difficult to do.

Steve adds, “Apple is a US$30bil company, yet we've got less than 30 major products. The great consumer electronics companies of the past had thousands of products. We tend to focus much more. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

Steve is clearly focused on a few key items that will truly “make a dent in the universe” adding, “I'm actually as proud of many of the things we haven't done as the things we have done.”

Likewise, we too can learn to prioritise and focus on truly value-added vision-related activity.

Execute flawlessly

It's easy to execute on your vision when things go well. Usually, things never go to plan.

Steve recalls, “at Pixar making Toy Story, there came a time when we were forced to admit that the story wasn't great. We stopped production for five months.”

At Pixar, there was a story crisis' for every film. And at Apple, according to Steve, there is a crisis for almost every single major project or product. But executing flawlessly means overcoming these challenges and tribulations through discipline, as he claims, “To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of discipline.” Every Monday, Steve has a marathon process' meeting with his team.

He says, “what we do every Monday is we review the whole business. And we do it every single week.” Ram Charan, famous business guru whom I interviewed recently on the “Leaderonomics Show” wrote a book on execution.

The key message is the same as Steve execution is boring and tedious and repetitive. But it's this rigour that ultimately enables organisations to be successful. Steve understood the power of ruthless execution. Finally, every journey will require overcoming obstacles.

At 21, Steve was the charismatic boy wonder who co-founded Apple.

He was worth US$200mil by 25, but was thrown out of the company he founded by age 30.

Steve lost everything when kicked out of Apple and could easily have given up and thrown in the towel. But he started all over again with NeXT and Pixar not losing his passion. Leadership is never an easy journey. It is hard work and filled with challenges.

Steve recently had to fight two near-death experiences with cancer but takes the positives out of it saying, “remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life.”

No one said leadership was easy but it is definitely worth the journey.

Roshan Thiran is CEO of Leaderonomics, a social enterprise passionate about creating more Steve Jobs in our nation. To watch video interviews and learn from great leaders from across the world, login to www.leaderonomics.com/theleaderonomicsshow

‘Go east, young man’

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Tan Sri Lin See-Yan takes a nostalgic trip to his hometown Ipoh with his whole family in tow.

I SPENT the year-end holidays with my entire family, plus two new grandkids in tow on a nostalgic “balik kampong” trip to Ipoh.

Our target was The Banjaran, a new resort and spa perched at the foot of limestone hills and caves in Tambun (world famous for its pomelos) outside Ipoh. It's a world class hot-springs retreat with only 25 villas (each with its own hot-spring jacuzzi and swimming pool). It's an eco-friendly resort with lots of green (even a spice garden) and picture perfect surroundings. It comes with a fantastic wine-cellar set inside natural high ceiling limestone caves, complete with Malaysian style Bali-Thai type spa that provides complete relaxation. It also has a pool of garra rufa fishes that love to chew-up dead and excess hard cells your feet may spare.

This venture is the brainchild of Tan Sri Jeffrey Cheah who must be congratulated for creating a visionary retreat, using to the maximum all that nature has endowed around the scenic caves. It's a treat.

Ipoh
Ipoh was built on the riches of tin-mining. With tin now a distant memory, Ipoh is at the heart of a thriving industry of small businesses besides nearby oil palm plantations, thriving E&E foundries and chip makers, and small farms growing groundnuts (world famous Menglembu), pomelos, star fruits and seedless guava. Ipoh has always been famous for its food especially hawker food, offering the best there is in Asia from fresh large-headed Tualang udang gala (prawns) to its thick and juicy bean sprouts, from delicious baby-bottom-soft sa-hor-fun to its amazing chicken-feet preparations; from the smoothest ice-kacang there is to its best spread of traditional hawker food imaginable. It is not uncommon to eat five times a day here (we did six!).

What impressed me is the vibrant spirit of private enterprise that Ipoh has come to be now famous innovation in biscuit making, coffee and charcoal toast, ornamental fish, delicate tow-fu-fa, unusually large tropical fruits, and ready-to-serve food, including exotic sea-food. For me, a must is dry curry-mee and sui-kau for breakfast and sa-hor-fun soup plus beef tendon balls for lunch, dunked down with lots of Ipoh coffee.

The last time I was here, most shops were small, dirty and crowded (but with long queues). At my favourite place in old town, the owner has since embraced technology new and bigger premises, now clean and spacious, computerised ordering from a long wish list, and spread-sheet billing and accounting.

Business is thriving. There is also Ipoh's famous biscuits, like the delicious curry-puff shaped pastry with steamed coconut-egg jam filling sells like hot cakes: most buying 5-10 boxes of 10 each; only Singaporeans buy them by the 100s. No doubt, private entrepreneurship is thriving no government assistance (want government to remain hands-off and just improve service delivery). It's not just local business they export and attract tourists. Unfortunately, the town remains rundown with little renewal. What a pity. But its new suburbs are modern.

Looking forward to 2011, they are an optimistic bunch. It's this optimism about what they do in Ipoh that impresses me. They are transforming. Better government facilitation in terms of ready availability of finance, quick access to land for expansion, and improved infrastructure and logistics are what is needed to solidify this transformation. In Ipoh, the beginning of transformation is on the move. This is as it should be throughout Malaysia. There is hope yet.

Shift in optimism
Hope and change overused words since the great recession. For the past 400 years, the West monopolised optimism. Their intellectual discourse on enlightenment eventually led to harnessing of technology and modern management to impose their will on the world. US founders offered not just life and liberty but also the pursuit of happiness. Optimism is now shifting you want to prosper, go east; that's where the action is. Growing pessimism in the United States is overwhelming politics as shown in the mid-terms.

Winning Republicans are hardly optimistic reflecting I think rather more anger and resentment. Europe is no better, with mass demonstrations from Athens to Dublin, London to Paris, Rome to Madrid. I sense there is pessimism even at the euro-zone core. The best seller in Germany is T. Sarrazin's Germany Does Away with Itself. The French have J-P Chevenement's Is France Finished, and French Melancholy by E. Zemmour.

In contrast, modern art in China is colourful and bright, portraying rising materialism, growing prosperity and open lifestyle. Painting is aggressive and innovative; always ready to experiment. The contrasting attitudes have become more marked since the recession which shook the very foundations of the system the West built, and have now lost confidence in.

The growing growth gap is stark. China and India will each grow by close to 10% in 2011 (like in the previous two years). With recovery, the United States will grow 3% and euro-zone, 2%.

Unemployment is worse: near 10% in US where more than 1 million may have given up looking for work. Europe is even worse unemployment is very high among youth in Germany; 41% of Spanish youth is unemployed. The malaise goes deeper. Growing numbers of American parents worry their children's living standards may be worse than theirs. After all, medium workers' real income has remained more or less the same since mid-70s. They worry that failing schools and lack of suitable jobs will handicap them in pursuit of the American dream. European dreams are different they remain cosy in their EU-cocoon with generous welfare security. But high debt and rising social discontent in the context of an aging population are not making it easy to continue carrying the burden of unaffordable entitlements.

Emerging Asia is in constant motion building infrastructure and logistic hubs, and institutes of higher learning. China's university population has quadrupled in past 20 years. Unesco estimates 38% of world scientific researchers is based in emerging nations in 2007 (30% in 2002). Chinese and Indian world class enterprises now compete aggressively with their western counterparts. In technology, these firms are redefining the boundaries of the possible.

Harvard's Prof D. Jongenson sees Asian emerging markets as the “most dynamic eclipsing others such as Brazil and Russia the size of the Chinese economy (will be) on par with the United States by early 2020.” This may be difficult for many Americans to swallow. He warns the US should brace for social unrest amid blame over who lost US global economic primacy.

US growth prospects
The US “new normal” remains: sluggish growth, stubbornly high unemployment and weak inflation same like last year. The growth forecasts have since shifted higher for '11 to 3-3%. This is driven by extraordinary policy measures, including QE2 (a second quantitative easing by the Fed pumping US$600 into the economy by buying government bonds) and the 2nd stimulus package (US$800b through extension of the Bush-era tax cuts and a temporary reduction in payroll tax).

However, Harvard's Prof. M. Feldstein believes the outlook is less sanguine. The impact of fiscal expansion will be modest at best. The dire situation of state and local governments is likely to be a drag on growth. Indeed, growth was boosted in '10 by a fall in household savings. But households now worry about uncertain future, return to paring back debt and stocking more away - purely precautionary saving. Prof. S. Johnson of MIT puts it more bluntly: damage from the crisis and its aftermath have dealt US prominence a permanent blow - “The age of American predominance is over.” I believe the new normal will stay for some time mainly because US and European governments are unwilling to grasp the nettle on exit strategies.

The policy dilemmas before the major governments are clear: (i) in US, there is no political will to restructure - I see continuing resistance to the new reality of sluggish growth; (ii) in Europe, governments were forced to intervene with their balance sheets which implications are now being played out; and (iii) in China, management of continuing rapid growth has to deal now with rising pressures on inflation and the yuan. This has led Mr M. El-Erian of Pimco (the largest global bond investor) to conclude: “you see the muddling through approach continuing. Everybody might now want to kick the can down the road. The problem is that the longer you muddle through, the more you create problems. I see the new normal as being stable for a while yet.”

Impact of rising debt
More serious is contagion of the European debt crisis which started with bailout of Greece and then Ireland. Will this reach Portugal and Spain? The problem is likely to widen: (i) how far reaching will this impact other parts of Europe; and (ii) it's just a matter of time before this concern assumes

macro-proportions covering the entire national debt, including private sector. Soon, the worry will shift to banks and companies as they will now find it harder to borrow. The risk is if Spain is not protected, bigger nations will be next in line. Unlike Japan and Italy (where private sectors are net savers), Spain remains vulnerable even though its government debt is relatively lower, but it carries enormous company and household debt. Debt to GNP ratio of government and banks combined in the US, UK, core euro-zone and peripheral Europe are all at 150-200%. That's higher than at any time in the past century. How big is this problem?

Harvard's Prof Rogoff and Reinhart's research suggests a country's growth potential slows significantly once debt/GDP ratio exceeds 90% a level the US is at today. I agree with Rogoff at this time the crisis will not affect US and the majors they still have cards to play. Psychology, too, plays a big part since US is grounded more in growth than inflation and Europe being dead set against inflation will trade-off growth. Between the US and Europe, my bet is on Europe to be the first to raise interest rates. So, more pain for Europe.

Looking forward, some nations are unlikely to handle their debt overhang without restructuring, a la Argentina 2002. This is a messy process, with other high-debt nations swept in the contagion. In a globalised world, how big the problem becomes depends on confidence. So we do have a fragile situation not only in Europe but US as well. This situation is serious: in the event creditors and debtors worldwide erupt into a full-scale war, debt-financed growth will become history. Creditors do get tired of kicking the can down the road and debtors can get adjustment/austerity fatigue. Such an impasse can only be resolved in the long run through a transfer of wealth from creditors to debtors. I think the fear of default will eventually get creditors to blink first.

Fault lines haven't gone away
While it is clear the world economy has now recovered, it is also clear the crisis is far from over. This is because the deep fault lines uncovered during the crisis are still within the Western economies and global economic structure. According to Chicago's Prof Raghuram, they present two risks: (i) structural export dependency particularly in Japan, Germany and China; and (ii) unresolved clash of financial systems making it difficult to forge integration.

They will threaten global stability in two ways: (a) pre-mature tightening of monetary and fiscal policies poses the danger of tipping the world back to recession; and (b) failure to secure a medium-term structural shift to fiscal austerity, so vital for sustainable global recovery. So, the world remains a dangerous place; but nothing moves in straight lines.

One thing is certain: the West is not the power it used to be; their consumers cannot be relied upon as they used to be; and their financial standing are not as good as it used to be. Structural reform is needed to avoid another global crisis ahead. At the heart of it all is the US it may have missed the chance to rein in its largest financial institutions, many of which remain too big to fail and are getting bigger. In the long run, US must face reality inevitably it will be over taken by China as the world's largest economy; and the centre of economic power will gravitate to Asia. But America as the biggest mover will be in place for a long time.

As 2010 ends, Asia moves on aggressively. Manufacturing in Korea and Taiwan accelerated in December even as expansion in China and India slowed, with US and Europe supporting the region's exports. Overall, the world had a good 4Q10 as the US economy also continued to grow although the underlying fundamentals remain weak. But the world wakens to new challenges. The Internet now provides ready access to information for all, which previously was reserved for just a few. Medical advances are making strides in overcoming diseases and extending lifespan for the benefit of all. History reminds us that for so long only the privileged few can look forward to a better life. Today the masses in Asia can. Prudent growth and benevolent management will make this possible. Surely, that's good enough reason to be optimistic.

Former banker, Dr Lin is a Harvard educated economist and a British Chartered Scientist who now spends time writing, teaching & promoting the public interest.

Facebook comes of age

WHY NOT? By WONG SAI WAN

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FB is now more than just a social media for the young. It is also a meeting ground for all – fathers, mothers, actresses, superstars and, especially, crooks.

A NEW survey found that 12% of parents punish their kids by banning social networking sites. The other 88% punish their kids by joining social networking sites themselves.

This was what a colleague put on his Facebook status recently. He probably put it up in jest, but for me it was so poignant because like him, we are probably as active, if not more active, than our teenage children on the popular social network.

Although most of us replied in equal jest on his Facebook page, I could not help a quick stocktaking of the truth of the status comment.

When Times’ Man of the Year Mark Zuckerberg put together Facebook for the clever students at Harvard, he did it for the young crowd. And when he started taking it to cybersphere, he also wanted to attract teenagers.

There are now 550 million users on Facebook, which Zuckerberg supposedly founded eight years ago when he was just a 19-year-old sophomore at Harvard.

Time magazine, in its report on Zukerberg being chosen as its man of the year, noted that “one out of every dozen people on the planet has a Facebook account.

“They speak 75 languages and collectively lavish more than 700 billion minutes on FB, as its users affectionately call it, every month. Its membership is currently growing at a rate of about 700,000 people a day”.

These statistics are astounding, especially when you consider that 70% of FB users are from outside the United States. We in Malaysia are among the major users – records show that more than 9.5 million Malaysians now hold a Facebook account of whom 45% are male and 51% female. The rest did not state their gender.

The growth rate for FB in Malaysia has really been tremendous. In 2009, we recorded a growth rate of over 300% from just over 450,000 users a year before to 3.9 million. By last December, this figure exploded to 9.5 million. And yet we are only number four in Asia.

“Today, there are over 32 million Indonesians using Facebook. The Philippines is behind Indonesia, with over 18 million, followed by India (16.9 million), Malaysia (9.5 million) and Taiwan (8.7 million),” reports GreyReview which studies tech and social media trends.

This got me thinking about why I got into Facebook. I can’t even remember exactly when I signed up for a FB account, but it was in 2008. It was for a very good reason – my son and daughter (aged 15 and nine then) were thinking of signing up. I just wanted to know why they were doing it.

After all, we have read horror stories of fiends and monsters lurking in Cyberspace to prey on the young ones. I just wanted to be there in case these beasts hang around Facebook.

At first, I approached it like a cautious father, checking out every possibility of how corrupting FB could be. Then I realised the joy of connecting with colleagues and how it allowed me to carry out some “innocent fun” – posting naughty messages on people’s walls.

I started collecting friends and it became a race with my colleagues to see who could get more. At present, I have 1,173 friends, but like most Malaysians I doubt I know 70% of them personally.

Instead of the kids being lured into the deep by the “evils of Facebook”, it was I who became addicted. I found it such a stress reliever, although quite time-consuming and quite distracting from the real world.

I now understand why many companies ban their staff from getting on to their FB accounts in the office, but as a user I dare say that it has become an important networking and communication tool.

Banning FB in the office is another act of denial because with 550 million people into it, businesses would do better to get on board to see what the fuss is all about. It is estimated that FB and Zuckerberg raked in some US$2bil (RM6.1bil) last year.

Anyway, my policing of the kids’ cyber use, especially on FB, has come to naught. Rather, the three of us are “friends” in each other’s FB pages and we use our accounts to pass each other messages, especially those we don’t want their mother to read.

I would say FB has enabled the three of us to share a bond, especially since I spend more than 15 hours a day away from the house.

As a journalist, I have had many reliable tip-offs for stories via Facebook, especially from new found friends and as well as from old ones re-established via this network.

I have also made great friends through Facebook. A bunch of us who are all golfers have become close pals, poking fun at each other or springing some pranks at the slightest opportunity.

Yes, there are also some nasty people on FB. A friend of mine who had just moved back to his hometown of Kuching, had his account hijacked by an evil person located in Thailand.

This dastardly person tried to trick me into sending him some money using my friend’s FB identity. Luckily, my friend alerted me in time.

This taught me a lesson and I now change my FB password every three weeks or so.

Then a few days ago, I had a strange request from someone wanting to be added as a friend. This person claimed to be former Thai PM Thaksin Shinawatra. This person even tried to chat online with me, saying he was indeed Thaksin and was now in Moscow.

When I put his claim as a link, he immediately “unfriended” me and blocked me from his Facebook page. I have either thwarted a crook or missed the opportunity of a lifetime to interview this elusive politician.

Whatever it is, Facebook is a modern trend that will probably be replaced by something else in the next few months but till then it has shrunk the world tremendously and our distances just got a lot smaller.

> The Star Executive Editor Wong Sai Wan’s favourite Facebook application used to be the Word Twist game, but now likes uploading pictures straight from his Blackberry.

Chinese yuan among world's safest currencies: expert

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The Chinese yuan is "one of the safest currencies in the world," global investment expert Jim Rogers said here Wednesday.

Speaking on an occasion at the well-known Union League Club of Chicago, the chairman of Rogers Holdings recommended that global investors hold the Chinese yuan, or renminbi.

Citing China's extraordinary economic growth in the past 30 years, he said that China is "changing the world already" and "will continue to change the world."

Turning to the U.S. dollar, he said that the American currency has now been reduced to "a terribly flawed alternative," with the United States being "the largest debt nation in history."

The legendary investor also lashed out at the United States' second round of quantitative easing, saying that it was "totally wrong" for the Federal Reserve to print a large amount of money.

Source:Xinhua

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Confucius in Tiananmen

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Confucius shows up on Tiananmen Square

In this Wednesday photo, Chinese paramilitary policemen stands guard in front of a sculpture of the ancient philosopher Confucius on displayed in near the Tiananmen Square in Beijing, China's capital. Photo: AP. 

There’s a new face keeping Chairman Mao company on Tiananmen Square.

A mammoth sculpture of the ancient philosopher Confucius was unveiled this week off one side of the vast plaza. It’s a juxtaposition for a square the ruling Communist Party treats as politically hallowed ground- a mausoleum holding revolutionary leader Mao Zedong’s body sits in the middle and his giant portrait hangs at one end.

Placing the statue at China’s political heart is the government’s most visible endorsement yet of the 2,500-year-old sage and, selectively, his teachings.

Confucius is enjoying a revival, in books and films, on TV and in classrooms. His message of harmonious social order and deference to authority is unthreatening to the party, while his emphasis on ethics resonates among Chinese coping with fast-paced social change on the back of torrid economic growth.

The government is increasingly marshalling his popularity to bolster national identity. “The rise of a big country requires a cultural foundation, and Chinese culture upholds the spirit of harmony,” said Wu Weishan, the sculptor, who has made more than 200 statues of the philosopher. “The essential thoughts of Confucius are love, kindness, wisdom and generosity. And peace and prosperity are what the people are striving for.”

The 31-foot (9.5-meter) bronze sculpture depicts a robed Confucius with a serious expression and sits on the east side of the square, facing in the direction of Mao’s portrait and amid the bustle of Beijing. Chinese tourists busily snapped photos and agreed that Confucius’ teachings bear a message for modern China. “Confucianism has been governing the lives and ethics of Chinese for thousands of years,” said 25-year-old engineer Cui Xiaozhan, on a business trip from the eastern city of Qingdao. “We should study it. But everyone is too busy and tired.”

Confucius laid down a code of ethics that was adopted as a quasi-religious national philosophy of governance and personal behaviour. His teachings emphasized duty to family, respect for learning, virtuous behaviour and obedience of individuals to the state.

Confucius comeback continues with Tiananmen statue 

 

AFP – People walk pass a bronze 7.9-metre-tall Confucius statue in front of the renovated National Museum of …

BEIJING (AFP) – China has unveiled a statue of Confucius on Tiananmen Square -- the latest sign of the ancient philosopher's comeback after decades in which his teachings were suppressed by Mao Zedong.
The 7.9-metre (26-feet) tall statue stands at an entrance to China's National Museum, which fronts Tiananmen Square and its communist monuments such as late revolutionary leader Mao's tomb in the heart of the capital.

The teachings of China's most famous philosopher, who was born in 551 BC, centred on peace, harmony and each citizen's duty to respect their superiors.

They became a virtual state religion but were denounced as feudal and banned under Mao's communist regime, particularly during the icon-smashing years of the radical Cultural Revolution.

The 1966-76 mass political movement against "old" ways and thinking was originally launched by Mao in a bid to neutralise potential political rivals.

But Confucius' teachings have enjoyed an officially-sanctioned rehabilitation under the current Communist Party leadership amid the wholesale abandonment of Maoist thought.

The new statue faces across Beijing's main thoroughfare toward the Forbidden City, the former Chinese imperial home, where a huge portrait of Mao hangs over the complex's entrance.

The National Museum, which is on the east side of the square, has been closed for more than three years for a major renovation. Media reports said it could reopen this year.

The Beijing Daily newspaper quoted an unnamed official as saying the statue was erected this week to recognise Confucius' status as a "symbol of traditional Chinese culture and a calling card of Chinese culture".
With government support, Confucius institutes have been established around the world with the aim of promoting the Chinese language and culture.

In 2009, a Confucius biopic backed by the government was released to coincide with National Day on October 1, which that year marked the 60th anniversary of Mao's 1949 declaration of the People's Republic of China.

Last September, Chinese officials in Beijing marked the philosopher's birthday at a ceremony in a Confucian temple, the first time it was celebrated in the capital since at least 1949.

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