Wednesday, September 12, 2007

Bus fare hike, inflation and you


What is the headline in Straits Times today? What is the topic discussed on 93.8FM this morning?
Bus fare hike, my friends. But it is only 1-2 cents increase next month, you may say. Why is Edgar making a big fuss out of this 2-cent issue?
Assuming a Jane is paying $1 bus fare today, with another 30 years to retirement and that bus fare increase at 2 cents per annum, you would be paying $1.60 for the same trip in 30 years' time.
You would be drawing down on your savings to pay for your daily expenses.
Inflation is a disease that all should be very concerned with.

P/S - China equities experienced their biggest one-day drop in over 2 months yesterday in reaction to news that China's inflation rate surged to a 10-year high last month.