Singapore is a small but prosperous country that conducts business within the global economy, which it has no control over. To make wise investments, Singaporeans must understand the forces driving global economic developments, as these forces will ultimately determine Singapore's stock market, property market, currency value, and trade volumes. The document goes on to explain that the global economy is in crisis because too much credit has been created worldwide that cannot be repaid. It uses the analogy of the global economy being like an inflated rubber raft that is sinking due to holes created by debt defaults.

1. THE GLOBAL
ECONOMIC FORCES:
WHAT INVESTORS
MUST KNOW?
Part 1: Singapore And The Global
Economy

2. Singapore is a small, but
very prosperous, city-
state conducting
business within a global
economy over which it
has no control.

3. To invest wisely, it is
not enough to know
what is happening
locally, Singaporeans
must have a firm
understanding of the
forces driving global
economic
developments.

4. Because it will be those
forces that ultimately
determine the direction of
the Singapore stock
market, the Singapore
property market, the
value of the Singapore
dollar and trade volumes.

5. While the global economy
is far too complex for
anyone to fully
understand, it is possible
to grasp the most
important aspects of it at
any one time.

6. The global economy is in
crisis because so much
credit has been created
around the world that it
cannot all be repaid. The
modern financial system
is highly leveraged and
poorly regulated.

7. Therefore, a relatively
small amount of credit
defaults could cause a
systemic collapse that
would destroy most of
the world’s savings.
That very nearly
happened in 2008.

8. To picture this situation
more clearly, we can
picture the global
economy like a giant
rubber raft – but one that
has been inflated with
credit instead of air.

9. Floating on top of the
raft are all the asset
classes (stocks, bonds,
commodities and real
estate) and the world’s
population of seven
billion people.
Unfortunately, the raft
has become
fundamentally defective

10. The income of the
seven billion people is
insufficient to service
the interest on all of the
debt that has been
created and keep the
raft afloat.

11. Another problem is the credit that is continually
being destroyed by defaults causes holes in the raft.
And that’s where we are now – on a sinking raft.
Continuation on Part 2

12. Success Resources Pte Ltd
Main Office: 10/11 Pahang Street, Singapore
198611
Toll Free: 1800 7822 377
Direct: +65 6299 4677
Fax: +65 6295 2441
Email: info.sg@srpl.net
Website: http://www.srpl.net