Wednesday, April 11, 2012

Is CPF an empty shell ?

It was reported in the papers that Ministry of Finance will borrow another $170 billion raising the issue of govt securities to $490 billion. 80% of the increase will be issued to CPF.

The amount of govt securities issued has been on the raise, from $250 billion to $320 billion in 2009 and now $490 Billion.

We know CPF is the major buyer of govt securities. In order words, govt borrow cheaply from us. We are the helpless victims as we have no control over our money in CPF which give us peanuts interest in return well below the annual inflation rate.

Is CPF an empty shell ? Looks good on paper only. Most of the CPF money is tie up in govt securities or used by govt related companies to make risky investment. It is a no brainer to guess the real reason for all the CPF policies changes ever so frequent over the years.

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