Monetary Authority of Singapore Warns of Domestic Debt Bubble!

More example of what  I call as: 

...global political or mainstream institutions or establishments, CANNOT deny the existence of bubbles anymore. So their recourse has been to either downplay on the risks or put an escape clause to exonerate them when risks transforms into reality

Singapore’s central bank, the Monetary Authority of Singapore, warns of escalating domestic leverage

From Yahoo.com

Corporate debt-to-GDP ratio hit 78% in Q2.

The Monetary Authority of Singapore today raised the alarm over the spike in local debt. In its annual Financial Stability Review, the MAS stated that the corporate debt-to-GDP ratio hit 78% in the second quarter, up significantly from just 52% in Q2 2008.

The report further noted that the household debt-to-income ratio has also edged up from 1.9 times in 2008 to 2.3 times in 2013.

“An interest rate hike combined with an earnings shock could increase the number of financially distressed corporates and households,” the MAS stated.

The MAS also said that still-elevated property prices and increasing cross-border banking exposure also warrants close attention.

“MAS is monitoring the above risks closely and taking pre-emptive measures to address them,” it said. 

These warnings from political authorities have been coming in so frequently. 

Doesn’t the MAS realize that ‘this time is different’? Debt stock, prices of stock markets and real estate can only rise forever?

Well of course the MAS can do something. They can pop the bubble. But they are afraid to do so. They dread the consequence: the implosion of unproductive debt or debt deflation

They don’t seem to realize that this will happen anyway. And for them to continue to inflate the debt bubble will pose as a BIGGER problem tomorrow than today, e.g. corporate debt-to-gdp at 78% today vis-à-vis 52% 2008. So how much will it be 6 months now 80% and rising???

The problem has been debt based speculation and consumption which comes from easy money policies. So the solution is to tighten money.

So like almost every central bank, dithering to tighten means that the only available remedy has been to “signal” the problem rather than to act on it.

Again the same dynamic: I recognize the problem of addiction but a withdrawal syndrome would even be more cataclysmic

Like many major central banks, for the MAS, HOPE has become the only strategy