THE ENIGMA OF SINGAPORE NATIONAL RESERVES AT GIC

The Bogeyman .... Jack Prelutsky

In the desolate depths of a perilous place

The bogeyman lurks, with a snarl on his face.

Never dare, never dare

To approach his dark lair

For he's waiting . . . just waiting . . . to get you.

Singapore is well governed with a few bogeymen. The national reserves is one of them. The sum total of Singapore's national reserves held by GIC (Government Investment Corpn) is a tightly kept secret of the Singapore government. If the numbers are published, somehow the whole country will come tumbling down. The official explainer is if the reserves are disclosed, Singapore may be exposed to speculative currency attacks. It does'nt educate that speculative attacks occur with currencies in a fixed rate regime. British Sterling was fixed to the DEM and BTH was fixed to USD when UK and Thailand came under attack not too long ago.

The secrecy generates national reserves pundits and conspiracy theories. Prof Christopher Balding, Kenneth Jeyaretnam, Leong Mun Wai and a host of others, have all made their suggestions how large the reserves really are. The police will not be instructed to haul anyone in for spreading misinformation, however wild the figure one suggests. The government, in fact, loves the wild guessing going on. It's a poker game, keep them guessing.

It is so opaque not even the President nor the cabinet knows. I would count those with the knowledge to include the Minister of Finance, top management in MAS and GIC, Accountant General, and of course the Prime Minister who chairs the GIC (along with his lawyer and top guys in the PM Office). I'm guessing not even the current CEO of Temasek is in the know. His predecessor obviously had insider knowledge by virture of sharing the PM's bed.

Does it surprise anyone the top guns in MAS, MOF and PMO have special trajectories in career paths. As far as I'm concerned, the guessing game for PM Lee's successor is over the moment Lawrence Wong was made Finance Minister. That is, unless he drops the ball somehow.

What are national reserves:

These are accumulated budget surpluses. Some countries with natural resources such as oil, the revenue are set aside as reserves for future generations. In the case of Singapore, proceeds from government land sales cannot be spent by law, it is set aside as reserves.

National reserves are public reserves, ie owned by the government and belonging to Singaporeans collectively. To get some perspective, anyone taking up a US citizenship assumes a national debt burden of US$69,000. If Singapore national reserves is S$1T, each new citizen gets a share of S$280,000.

The 2 Sovereign Wealth Funds, Temasek and GIC, manage the reserves. A portion of the government's deposit with MAS are land sales proceeds and surplus not yet transgerred to GIC. Only Temasek funds are publicised, the total national reserves thus remain opaque.

The Official Foreign Reserves (OFR) is not part of national reserves. It is the foreign assets accumulated by the MAS for its monetary management requirements. As at Dec 2021 it was about S$553B.

GIC investments:

Apart from budget surpluses and proceeds from government land sales, the government issues several types of securities which it cannot spend but transfers to GIC to invest. These are :

SSGS (Special Singapore Government Securities): 

These are non-tradeable S$ debt instrument issued by the government and subscribed solely by the Central Provident Fund Board. CPF retirement fund is invested solely in SSGS which earns a guaranteed interest slightly above bank deposit rates.

SGS (Singapore Government Securities): 

These are tradeable long-dated SGD debt issues by the government and sold by public auction. The purpose of these securities is to establish the SGD yield curve. 

Treasury Bills: 

T-bills are debt issues similar to SGS except they are very short-dated.

SSB (Singapore Savings Bonds): 

These are retail bonds issued for individual investors to invest in a safe and long term paper.

RMGS (Reserve Management Government Securities): 

These are non-tradeable debt instruments denominated in foreign currencies and subscribed solely by MAS. The central bank uses its official foreign reserves to pay for the RMGS. These proceeds cannot be spent by the government. They are transferred to GIC for long term investments. The issuance of RMGS is determined by MAS according to its capability to liquidate excess Official Foreign Reserve requirements. At the moment, a figure of S$180B has been mentioned as the excess OFR that MAS has on its books and which will potentially be converted to RMGS in the foreseeable future.

How big is the national reserves with GIC: 

The total investment portfolio of GIC, if revealed, should by stupefying. But how much of these are national reserves?

How much of GIC's funds are from reserves is the billion $ question. A huge chunk of the funds are debts. (1)SSGS are debts to CPF contributors, (2)SGS, T-bills and SSB are debts to securities holders, and (3)RMGS are debts to MAS. Although MAS purchases foreign currencies in its market intervention by printing money, these S$ were sterilised by issuing MAS Bills. RMGS are thus debts to the ultimate holders of MAS Bills. And how much are the outstanding amount of MAS Bills in MAS books at the moment? Surprise! -- its S$182b as at Dec 2021.

Government securities have been increasing about 5%-8% annually in the last several years. The OFR from MAS is similarly on the uptrend. How much of year on year increases of the investment portfolio is attributable to these increases versus value-added?

Is the real reason for the opacity of the general reserves numbers designed to obfuscate debt and reserves? The MAS and the government operates within the requirements of the Government Securities Act, Local Treasury Bills Act and the MAS Amendment Bill. Technically, the system permits the possibility of the government building debt to bloat GIC investment portfolio.

There is a significant cost to the non-reserves fund. One wonders if there is an internal imputed cost of funds to determine real performance.  It can be safely assumed GIC executive compensation would be on par with Temasek. This ought to be at the highest bar as Temasek benchmarks rewards to the fund management sector where outrageous compensation is the norm.  One can only wonder because executive compensation of the sovereign wealth funds is yet another Singapore bogeyman.

A REVIEW OF NMP LEONG'S PARLIAMENT SPEECH ON MAS AMENDMENT BILL

In the parliamentary debate on the MAS Amendment Bill, Nominated MP Leong Mun Wai voiced his concern that this legislation may lead to monetarisation of government spending which is a path to ruination. I'm afraid Leong's reading of the bill and some of the points he raised, were incorrect.

First, a point of clarity for my readers who are not versed with 2 words inherent in government money matters - 'monetary' and 'fiscal'. Monetary policy or matter refers to activities that are directed toward influencing the quantity of money and credit in an economy. Whereas fiscal policy is all about government revenue (taxation, fees, etc) and spending. Monetary matters is the purview of MAS, the Ministry of Finance takes care of the fiscal. Open economies hold a sacrosanct view the independence of the central bank is of paramount importance. The exceptions are Singapore and totalitarian states. For Singapore, the leaders have long believed it is the discipline of governance that matters, and not something that is easily institutionalised away. Leong sees the Bill as paving the way for MAS to create money for government spending.

Since independence, Singapore has gone through a few monetary systems. We were in the Sterling Area with SGD pegged to British Sterling, then pegged to the Dollar under the Bretton Woods Agreement. With the collapse of Bretton Woods in the 1970s, the SGD was fixed to a basket of undisclosed foreign currencies. 

The decades after World War II presented great economic lessons that Singapore's founding fathers took note. First, currencies pegged to metals or other major currencies invariably see massive depreciation when the country has prolonged trade deficits, such as happened to UK and US. Second was the economic theories propounded by John Maynard Keynes, which was very popular in the postbelum years. Keynesian theory had what Singapore founding fathers saw as a major flaw. It proposes total employment via government spending - that a state can spend its way to economic recovery. This doctrine of taking public debt or printing money for spending led to the economic demise of several newly decolonised states.

Against this background in 1985, the government had to make some key decisions. These were:
a. The SGD was allowed to float freely. In internatioal monetary dealings, countries are faced with a trilemma, or unholy trinity - (i) fixed exchange rate, (ii) capital mobility, (iii) sovereign monetary management. These 3 can never work at the same time due to the mathematics of unconvered interest rate parity condition. Countries can only go with 2 policy choices. Singapore abandoned the fixed exchange rate.
b. The exchange rate, instead of the interest rate, was to be used to manage inflation. It was the view that this is a more appropriate choice given Singapore's entreport economy.
c. SGD to be 100% or more covered by foreign currencies. (I believe this refers only to the notes and coins issued, not the entire money supply M2 which includes digital money).
d. Budget deficits will not be tolerated. Singapore thus avoids a pitfall that lie at the heart of money problems of other governments -- funding fiscal demands by monetising debt, ie central bank money creation. Singapore leaders stressed that demands for better public services can only be met by higher taxes and fees.
e. The MAS was established in 1971 but the Currency Board was allowed to remain. It was an oddity to have a central bank and a currency board system operating at the same time. This was simply the government's way of making a statement that MAS will not be printing money, an effort aimed at building confidence in SGD at the time when it was floated freely.

These watershed monetary and fiscal policy that crystallised was a cabinet decision in 1985. As narrated by Dr Goh Keng Swee the Dpy Prime Minister, and defacto chief economist of the country, all cabinet members had to write down the rational for their decisions. As it turned out, the decision was unanimous. These were fundamental principles to live by, which has never been abandoned, and which the MAS Amendment Bill will not circumvent.

Actually, there have been 2 changes. (a) the Currency Board was merged into the MAS in 2002. By then, SGD confidence had been established, so it was a non-event. The administrative function of printing notes and coins are now handled by MAS. It does not mean the printing of money to spend. (2) In recent times, the government has allowed municipalities to take on debt for infra  development projects. This was to take advantage of Singapore's good credit rating and cheap money. I would have liked to see some discussions on this but there has been none in the public domain. Would be great if Leong can raise this in parliament so we can see some data, particularly with US inflation hitting 7% under the capable Biden admin, and a US$3T spending on the way, higher interest rates are imminent.

This blog is not intended as a refutation of Leong, whom I applaud for bringing his concerns up in parliament for debate. This is what MPs are supposed to do. The workings of MAS, monetary and fiscal matters, are often quite complex. The purpose here is to share my understanding of some of the issues, which happens to be at odds with Leong's views. Leong's basic points are in italics. The numbers are his.

"2. The reserves are actually accumulated through a mechanism which operates on a few key principles put in place in the 1980s by the late Dr Goh Keng Swee. The mechanism essentially uses our large pool of domestic savings to soak up the foreign money that flows into Singapore......".

The large pool of domestic savings is in the CPF which are invested in non-tradeable SSGS (Special Singapore Govt Securities). The government in turn placed these funds with GIC to invest. It has nothing to do with capital inflows.

"5. However, this Bill opens up the possibility of the Government accumulating foreign reserves through simply getting MAS to print Singapore dollars...."

"11. ..... The MAS can utilise the government deposits or increase the supply of Singapore dollars to accumulate foreign reserves." 

"12. ..... Accordingly, the accumulation of reserves is limited by the amount of excess savings we have."

"14. ..... If the Government wishes to continue accumulating foreign reserves, MAS will have to print new Singapore dollars, since there are no government deposits to pay for it.

In its forex market intervention when MAS purchases foreign currencies, it does so by simply crediting counterparty bank's SGD Reserve a/c at MAS in exchange for the foreign currency. That is, MAS simply digitally 'prints' the SGD to pay for the foreign currencies. Technically, MAS has unlimited capacity to buy foreign currencies. It has been printing SGD to purchase foreign currencies all along. Government deposits play no roles in MAS forex market intervention. The amendment bill changes nothing.

The increase in the supply of SGD printed causes inflation. The SGD is mopped up by issuance of MAS Bills. The sales of these are settled by MAS debiting banks' Reserve a/cs. By this way, MAS sterilises the SGD printed. 

"15 & 16. .... in 2020 and 2021....sudden surge in foreign money inflow. This in turn has caused the accelerated rise in property prices from 2020 till today. .... foreign reserve increases .... amounting to $180 billion ...... far exceeding the targeted OFR limit of $325 billion, so the excess is due to be transferred to GIC."

There is a mistaken notion by almost everyone, that foreign money comes into Singapore to buy equities, properties, our export products, etc caused pressure on the exchange rate; Singapore is so prosperous, economy so great, foreign capital keeps pouring in, MAS mops up the foreign currency to prevent the SGD appreciation, thus ending up with the huge excess in OFR. This is true to a certain extent, but the reality is real commerce-based capital inflows contribute to only a small portion of forex volume. Forex is a massive market that overshadows all other financial markets combined. Commerce-based trades form only 10% of the volume. Overwhelming volume is from speculation and hedging activities. As Singapore internationalises the SGD, its volume rises. Currently SGD is trading way above its belt. It ranks 13th highest traded currency in the world. In 2019 Singapore was the 3rd biggest forex market in the world and the daily volume of SGD traded was a massive US$57b. As for the huge SGD180b increase in OFR in 2020/2021 (which blogger Critical Spectator erroneously extolled was part of the SGD230b gain in wealth by Singapore during the pandemic), I have not done any data analytics, but I venture an educated guess a huge factor is attributable to the crazy upswing in valuation of cryptocurrencies. Just take this in - the SGD/BTC (bitcoin) ranks as the 10th highest fiat/crypto pair in volume traded.

"17. However, under the present rule, the foreign reserves cannot be transferred from MAS to GIC if the foreign reserves were not paid for by government deposits. The Government and MAS, the central bank, are independent entities operationally and the Government cannot take assets away from MAS without paying for it."

There are 2 points to clarify here. Firstly, it is not a case of MAS transferring OFR to GIC, as media has described. It is MOF transferring national reserves (budget surplus and proceeds from land sales) to GIC. MAS was merely liquidating from its excess OFR to fund the deposit withdrawal by MOF. Secondly, government deposits with MAS consists of national reserves not yet transferred to GIC plus its fiscal collections (current year taxes, fees, fines, etc). To state the obvious, portions of the deposits cannot be transferred as they are meant for fiscal purposes.

The government surplus built up is not sufficient to allow MAS to totally liquidate their excess OFR.

"19. This Bill thus opens up the possibility for the Government to pressure MAS to print more Singapore dollars to accumulate foreign reserves and then buy them over from MAS with RMGS. Needless to say, this runs the danger of a collapse in monetary and fiscal policy discipline, leading to hyperinflation."

Yes the RMGS (Reserve Management Govt Securities) is a debt instrument that allows MAS to use its OFR to buy so the MOF can then transfer the foreign currencies to GIC for long term investment. There is no need to wait till MOF has accumulated enough national reserves in its deposits at MAS. So again note the right terminology. MAS liquidates its OFR to buy RMGS. Its not a case of MAS transferring OFR to GIC.

However Leong got a few things wrong here. The RMGS is a monetary tool, not a fiscal tool. The issuance and redemption is determined by MAS. RMGS is foreign currency denominated and non-tradeable. MAS is simply replacing one asset with another in its books -- from OFR to RMGS. MAS subscribes for the RMGS with its foreign currencies. MOF cannot spend the foreign currency proceeds, but transfers them to GIC for investment.

Basically the government maintains 2 sets of books. The Consolidated Fund records fiscal transactions, and a Security Fund records debt instrument transactions. RMGS transactions are recorded in the Security Fund, with the assets within a sinking fund. There is clarity and no monetising the fiscal, ie no MAS money printing to fund government expenditure.

"5. ..... However, this Bill opens up the possibility of the Government accumulating foreign reserves through simply getting MAS to print Singapore dollars. This is effected through Clause 2 of this Bill which deletes and substitutes section 23(6) of the MAS Act to allow the MAS to subscribe to the Reserve Management Government Securities (RMGS) although section 23(5) states that MAS shall not directly subscribe for any securities issued by the Government or any public authority. Hence this is a major change in the conduct of our monetary policy. In layman’s terms, while MAS cannot do quantitative easing in the past, it can potentially do so if this Bill is passed. So we have to bear that in mind."

Again, I think Leong got it wrong. Government issuance of bonds and T-bills is not about borrowing for spending. These securities are issued to establish a SGD yield curve. A yield curve is a fundamental barometer in an open economy to benchmark cost of debt as well as computation of economic expectations. Section 23(5) that forbids MAS from directly subscribing to govt bonds and T-bills is not meant to prevent central bank monetising government spending. It is meant to dispel market fear of government price fixing in the auction of government securities.

Section 23 (6) now allows MAS to subscribe directly for the issuance of RMGS. These are non-tradeable foreign currency denominated instruments the purpose of which is purely as a mechanism for MAS to liquidate OFR and for the government to transfer the currency proceeds to GIC to invest. The question of price fixing or monetising government spending never arises.

MAS manages credit in the market by the Liquidity Ratio that banks must comply. Increasing the ratio causes banks to tighten credit in the market, reducing it causes credit relaxation, thus more SGD liquidity. MAS has never utilised quantitative easing or tapering by buying or selling government securities like the Fed in US. In any case, RMGS is non-marketable and also foreign currency denominated, thus the issue is moot.

"21. Question 1: We appreciate the two sets of safeguards that the Minister for Finance has explained but how do you explain the fiscal operations in 2020/2021 where one one hand the Government is accumulating about $180 billion of new reserves with RMGS and on the other hand, spending $53 billion on the Covid-19, should this be defined as monetising of government spending too?"

Finance Minister Heng Swee Keat explained in 2020 S$18.9b came from current reserves, and S$22B from loans which were thus 'fiscally neutral'. The S$18.9b were helicopter drops, written off as government expenses and came from MOF deposits at MAS, the portion of deposits from national reserves not yet transferred to GIC. I'm guessing another S$11b in 2021 were similarly treated. The S$22b related to loan programme package for corporates. MAS provides a credit line to participating banks that they can draw on to fund loans to their qualifying customers. When banks draw on the MAS line, the central bank simply credit the banks' Reserve accounts. In other words, MAS resorted to printing money. I blogged about this in The Answer to "Where Is Singapore Government Borrowing S$22B Loan From?" in Jun 2020. Printing SGD is MAS monetary function, and in this case, it is a lender of last resort responsibility. It was not monetising government spending, hence Heng 's "fiscal neutral" term. 

The danger of central bank printing money, whether it is for government spending or not, is in the multiplier effect of fractional banking which can lead to a higher supply of money in the economy, thus causing inflation. This was definitely the case with MAS printing money for the Covid corporate loan support programme which I blogged in Jul 2020 "Government does not want you to know MAS is printing money for Covid-19 aid package" . There was indeed a marked spike in the SGD money supply in qtr 4 of 2020. 

The rest of Leong's speech touched on national reserves which I do not cover here. I shall however, end with a cliffhanger. My next related blog I boldly claim to know the real reason why the government refuses to disclose the complete national reserves held by GIC. Stay tuned.

Related blog:

MAS Amendment Bill will make Singapore hold highest public debt in the world

MAS AMENDMENT BILL WILL MAKE SINGAPORE HOLD HIGHEST PUBLIC DEBT IN THE WORLD

Mark my word. Singapore will soon hold the highest public debt in the world. But it's not what you think.

MAS and price stability :

One of the main responsibility of MAS is to maintain price stability in the country. Instead of managing the prices of each product and service, MAS does this by focusing on one single price - the SGD exchange rate.

Some central banks, like the US Federal Reserve Bank, manage inflation using the interest rate. Others, like MAS, manage by the exchange rate. On a day-today basis, the spot rate is a function of supply and demand, ie the liquidity of SGD has an important function. The spot rate is highly volatile. MAS manages by allowing the rate to move within a band. When the rate moves to the upper band, MAS intervenes in the market to buy foreign currency (sell SGD), thus bringing the rate down. On the other hand, when the rate moves to the lower band, MAS intervenes to sell foreign currency (buy SGD), which forces the rate up.

In the long run, the SGD exchange rate is a function of how the Singapore economy performs. As Singapore is a floating rate regime, the MAS allows the SGD to find its equilibrium. It does not, and cannot, control the exchange rate in the long run.

Where does MAS get the money to settle the market intervention purchases :

To buy the foreign currency is no problem for MAS. E.g. when MAS purchases USD from a bank, it pays SGD by simply crediting the bank's Reserve a/c with the central bank. MAS creates the SGD out of nowhere. This is digital money 'printing' by the central bank. The counterparty bank remits the USD to MAS' a/c with the Fed at NY.

However, to sell the foreign currency, eg Yen, MAS must first have the Yen in its account with the Bank of Tokyo, the Japanses central bank. MAS pays Yen from its account at BOT. To receive the SGD, MAS debits the counterparty bank's Reserve account..

Intervention in the forex market is part and parcel of MAS's monetary policy management. This requires MAS to take care of 2 critical issues. (1) In practical terms, MAS has unlimited capacity to buy all the foreign currency it needs since it pays for them simply by "printing" SGD out of thin air. Unrestrained "printing" of SGD is inflationary as too much money circulating in the economy puts downward pressure on its value. MAS must control the amount of money in circulation caused by "printing" SGD to pay for the foreign currencise.
(2) MAS must always hold substantial balance of foreign currencies at all times.

Sterilising the SGD "printing":

MAS mops up the SGD 'printed' in its market intervention operation by a process called 'sterilisation'. This is done by issuance of MAS bills. Banks and investors purchase these SGD securities which are settled by MAS debiting banks' Reserve a/c with the central bank. This nullifies the inflationary effect on SGD "printed", or in central banking lingo, the SGD is "sterilised". There is no increase of money in circulation.

In effect, foreign currency purchased are funded by debt in the form of MAS bills. Hence MAS has an increase in assets (foreign currence) counter-balanced by an increase in liability (securities, ie debt).

How much foreign currencies should MAS hold:

To answer this question, one needs to know the purpose for forex reserves. It is (1) to influence the SGD exchange rate as described above; (2) to maintain confidence in the SGD (which is fiat, a currency not backed by anything); and (3) to backup balance of payments of the country (this is the international inflow and outflow of funds out of various activities like trade, investment, remittances, aid, foreign-currency debt servicing, other financial activities etc.)

MAS holds these foreign currencies so the economy can absorb any external shocks. By experience, MAS takes the view an optimum size is about 65%-75% of the GDP. Based on 2020 GDP of SGD459b, the holdings should be SGD298b to SGD344b. This works out to about 7 months of Singapore's import.

Official Foreign Reserves (OFR) :

MAS invests these foreign currency holdings in liquid foreign assets as very short term investments. This include deposits with other central banks in demand accounts (which earns no interest), overnight and short-term deposits, foreign Treasury bills/bonds, Special Drawing Rights, and Gold. The aggregate of these is known as Singapore's OFR.

There is a holding cost to keeping all these foreign currencies. Firstly, the market intervention may incure exchange losses. Secondly, there is debt servicing which may be higher than the interest received on the short term investments.

Country Reserves :

Every country has revenue, mostly from taxes. Lucky countries have income from natural resources like oil. Each year, excess revenue over expenditure goes to build up the country's reserves.

Singapore is unique in 2 aspects. (1) By law, Singapore government cannot borrow to fund expenditure. The government cannot have a deficit budget. It is in the happy position of having budget surpluses all these years. (2) The proceeds of government land sales cannot by spent. All these funds are transferred into the national reserve.

The MAS is the government's banker. The Ministry of Finance deposits all incoming money into its account at MAS and periodically transfers surpluses to GIC or Temasek to invest.

The national reserve is state funds, which is public money. It belongs to Singaporeans collectively. It is managed by GIC and partly by Temasek.

The mistakes people make about Singapore National Reserves:

In trying to quantify Singapore national reserves, many make 3 common mistakes:
(1) They assume GIC investments are all national reserves. It is not. GIC manages the government's reserves, and funds from Special Singapore Government Securities. These SSGS funds are Central Provident Fund money which the government invests on behalf of the CPF Board. Since GIC co-mingles the invesment, there is no way to determine, on valuation basis, how much of the investments are national reserves and how much belong to CPF managed funds.
(2) They include OFR as part of national reserve. It is not. The OFR is simply liquid foreign assets MAS maintains to manage their monetary policy.
(3) They exclude government deposits with the MAS. The central bank is the government's banker. The Ministry of Finance deposits incoming funds with MAS. These deposits would include surpluses and land sales proceeds not yet transferred to GIC. That is, a portion of the MOF's deposit with MAS are national reserves.

Three misconceptions in MAS' increase of OFR :

(1) The economic success of Singapore caused the increase in OFR. This is not completely correct. A currency strengthens or weakens against another has much to do with their trading patterns and balance of payments relationship. Take Philippines for example. Its huge diaspora of overseas workers remit a massive USD30b home.
(2) Investors and businesses poured in massive foreign currencies for SGD assets. This is totally incorrect. The Foreign Exchange market is the biggest financial market in the world. It is bigger than all the other financial markets combined.  Singapore is an important financial centre. In 2019 Singapore was ranked 3rd in the world with average FX volume of USD633b per day. The 5 top currencies traded in Singapore are USD, JPY, EUR, AUD and SGD in that order. The daily volume of SGD traded in 2019 was USD57b. To have a sense of perspective, this was a hefty 42% increase from 2016. But the reality is trade and economic activies driven forex deals form a very low volumn. As high as 90% of the trades are actually driven by speculative and hedging activities.
(3) The increase in OFR means Singapore wealth has increased. This is wrong. This increase is simply due to MAS managing its monetary policy. It does not represent increase in national wealth as a popular foreigner called 'Critical Spectator', an avid supporter of PAP, once erroneously claimed Singapore grew richer by over S$200b with S$160b from increase in OFR.

Transfer of OFR to GIC :

When OFR is in excess of requirements, MAS can technically invest it in better yielding longer term and higher risk assets. However, MAS is a regulatory body, not an investment agency. This acess OFR is transferred to GIC to better manage the funds. The transfer is by set-off against MOF deposits with MAS. Thus MAS sees a reduction in asset (OFR) and liability (Government deposits).

This has been mentioned as a transfer of OFR to GIC which led most people, such as Critical Spectsator, to hold an incorrect view that OFR is government reserves, it is wealth. The view is a misinterpretation from a wrong perspective. Remember, MOF deposits at MAS comprises of revenue receipts, and budget surpluses (inclusive of land sales proceeds) not yet transferred to GIC. It is the surplus component of MOF deposits that is being transferred to GIC. In other words, it is a fiscal decision, the normal transfer by the government of its surplus. MOF makes a withdrawal and MAS liquidates some OFR assets to fund the cashout. Fundamentally, it is a case of MOF transferring its surplus to GIC, not MAS transferring OFR to GIC. 

This procedure imposes a limitation on the amount of OFR that MAS can liquidate. It depends on the quantum of surplus that the government has deposited at the MAS. This has led to a situation where MAS' excess OFR cannot be fully liquidated, causing it to be left invested in low-yielding assets.

Proposed MAS Amendment Bill :

This is where the MAS Amendment Bill comes in. It seeks to remove the need for government surplus to be built up for the MAS to liquidate excess OFR.

The proposed procedure will see the MOF issuing foreign currency RMSG (Reserves Management Singapore Security). MAS subscribes directly for these instruments and pays for it using the OFR which MOF then transfers to GIC.

What this means to MAS is a replacement of one asset class with another. Excess OFR is replaced by RMSG, which is a debt from the government. The government will then better invest excess funds in higher yield assets under GIC. The instrument is purely a technical way to work the process as they are non-marketable and reside only in the books of MAS. The SGD580b cap on RMSG issuance is basically just an administrative number.

The proposed legislation provides the transparency that the process is purely a monetary and not a fiscal initiative. It is not about MOF creating debt to fund expenditure. The decision for timing, quantum and currency of RMSG to be issued is for MAS to make, as well as redemption requests.

Blurring the Reserves in GIC :

Those who are seeking to determine the real worth of Singapore reserves will have to appreciate that the investments of GIC will be funded by 3 components -- CPF funds, RMSG funds and surplus + land sales proceeds. Only the 3rd component qualify as national reserves.

In case of need when OFR has fallen below required threshold, MAS can initiate the redemption of RMSG and move foreign currencies back to beef up OFR numbers. That call may well require GIC to make forced sales of long term assets, quite possibly with losses.

Singapore as the highest indebted country :

Singapore is currently ranked 5th country with the highest public or national debt. With RMGS in play, Singapore will soon overtake Japan with the dubious honour of becoming the highest indebted country in the world. But don't loose sleep over this. Like Japan, the national debt is all mostly domestic. In Singapore's case, the national debt is mostly SSGS (from CPF money) and RMGS (OFR money from MAS). Both of these are money that the government, by law, cannot spend away.

SINGAPORE FREEMASONRY ACCORDING TO M. RAVI

Like many, I have passed by this building along Coleman Street countless times without realising it's a local enigmatic edifice. This is the Freemason Hall of Singapore, built in 1879. It's not as if they were trying to be secretive about it. After all there is The Masons Table, a restaurant open to the public, and in recent years, they conduct guided tours.

A recent video posted by M. Ravi in his inimitable swasbuckling way had me on the edge of the seat. Here is the video, with permission.

Ravi claimed to be like most people, unwary of the existence of the society in Singapore. He understood it to be populated by those in the legal profession. His robust commentary is a juxtaposition of what is in the public domain and some revelation or allegation.

Under the Societies Act section 14, all societies not registered are deemed unlawful. Freemasons are formed as 'lodges'. A check at the Registrar of Societies showed there are 21 lodges registered in Singapore. Triads are not registered thus illegal. Ravi called the Freemason a secret society. I trust he meant the secretive way of their conduct, and not the legal status.

There are actually 21 registered Freemason societies. Here's the list.

Some observations on the list.

- The first lodge is a peculiarity. It was registered on 17 Apr 1962 prior to the the Societies Act which was passed in 1966!
- There was a flurry of activities in 2016. 8 new lodges were registered. What transpired?
-There is another registered lodge called The Grand Lodge of Singapore registered address 27 Jalan Malu Malu, Sembawang Springs Estate. This may not be a Freemason lodge. I left ths out of the list.
- National Library archieve article indicated there were 33 lodges in 2010. If this is factual, then there were indeed secret societies and Ravi is right.
- The Zetland in the East Lodge is the first lodge formed in 1845. This was registered in 2017, which means it was a secret society from 1966 till 2017.

What exactly is Freemasonry? It grew out of medieval mason guilds. A likely explanation of its origin is these craftsmen were commissioned to construct all sorts of buildings like castles and churches. They used the product of their work to embed various secrets by way of design, structures, adornments into the architecture. By use of codes and esoteric symbolism, these masons had a way of understanding secrets revealed by each other.

In modern times, the society of brick laying masons have been hijacked by completely different creatures. Instead of craftsmen, it's a society of the rich, famous and powerful upper crust of society. A study of known Freemason personalities show they can be found in various leadership positions in all spheres of human activities - powerful politicians, titans of business, luminous academecians, intellectuals, professionals of all sorts. Sir Stamford Raffles was a Freemason. So was Sir Winston Churchill. One third of US Presidents were Freemasons. They profess their society seeks to improve the personal development of members and to do good to the community they are in. Behind secretive walls, it is clearly an organisation in the business of influence peddling and a king maker. It has the power to influence public lives of nations.

Conspiracy theories hound the society, but many members will swear there is nothing sinister about them. Membership is organised by levels or degrees. Joining qualifications are not onerous except it requires recommendation by 2 existing members. However, at the upper Lodges, members need to be a Master of a Lodge. One belief is there is a society within a society. At the lower levels, members enjoy the camaraderie, networking and participate in philanthropic projects, oblivious to the higher level's true Freemason objective of seeking esoteric knowledge and work at influencing public policies.

Internet connectivity has made privacy more challenging to secretive groups. The Bildenburg Group was just conspiracy, but today they hold their meetings in public. The Illuminati was nonsense we were told, but today they come into the open under the guise of the World Economic Forum.  They all try to open up to public scrutiny with some facade or another. And so with Freemason, it's a society within a society.

Freemasons communicate using esoteric symbols and recognise each other with special handshakes. Like the Triads (Chinese crime syndicates) that have clans, Freemasons have Lodges. There are more similarities. Freemasons, like the secret society crime syndicates of Chinese Triads, Japanese Yakuzas and Indian Thuggees, Italian Casa Nostra, they hold secretive initiation ceremonies which involve cultish rites and taking of secretive oaths, often in the dead of night.  Triad rituals often involve blood, Freemason's involve ritual death signifying rebirth (This rite  came to light in a 2004 fatal accident in NY where an inductee was accidentally shot with a live bullet in an initiation ceremony, somewhat like the Alec Baldwin shooting incident). The Triads have their paraphernalia, Freemasons have their aprons, emblems and badges.

Under the Societies Act Section 23 it is illegal to use Triad rituals and possession of writings, seals, banners or insignia of or relating to any triad society. Just wondering if the same should apply to Freemasons.

Freemasons say they uphold moral values and one of their requirements is members must believe in God, in whichever belief system one professes. Supposedly a belief in the God of Money is OK. Some point to the 'G' in their emblem as reference to God, and some said it stands for God of Geometry, no doubt a blasphemy. They reference the Bible often, but never Jesus. Ravi made reference to Knights Templar and Presbyterians. History buffs may point out that Freemasons came 200 years after Knights Templar disappeared. As for Presbyterians and other Protestants, I know nothing.  The Roman Catholic Church decreed excommunication on Catholic Freemasons in 1738. The Eastern Orthodox Church banned Freemason in 1917 in line with the Soviet Government. In 1933 the Greek Orthodox Church condemned it as a heathen mystery religion 

It seems their God is a Supreme Being, the Chief Architect of the Universe. The writer Stephen Knight in "The Brotherhood" published 1984, claimed to have uncovered the name of the masonic God. Members that are inducted into the highest level, the 3rd degree, to only these are the name "Jahbulon" the Supreme Being revealed. Jahbulon is a portmanteau of "Jah" for "Yahweh" the God of Israel, "Bul' for Baal, the Canaanite Goddess for fertility, and "On" for Orsiris, the Egyptian God of the underworld. Knight claimed this name is a conversation killer with the Freemasons that he knew. If Knight is right, and what most people suspect, there is demonic worshiping. The imagery of their room decoration, always black and white chequered floor. light and shadowed areas, black and white colour scheme, hints to something of the occult.

Today's Freemason comes from certain lineages. From the names, it seems the Dutch, English, Scottish and French lodges have been established here. Freemason lodges are in  important cities all over the world. If it is indeed clandestine at its core, then it is an organisation that has infiltrated hundreds of countries. The Singapore ruling party is one that is vigilant to threats to their power and will immediately squash them before it materialise. For example, Lee Kuan Yew saw a political threat in the Commissioner of the then Singapore Civil Defence Force. The SCDF was restructured. The late Francis Seow became a threat when he was elected President of Law Society, because he then had a platform. He was hounded into self-exile. It is hard to reconcile this paranoia of political threat to the reticence when a foreigner comes into Singapore and establishes a legal secret society, with ties to master lodges in other countries.

In reality, Freemason is not a society governed by rules and regulation. It is a fraternity, a brotherhood, governed by sworn oath and loyalty. Brotherhood is troublesome in conflict of interest situations. In 1987 James Fallows described Philippines as a 'damaged culture'. I spent about 10 years in the country where I had the opportunity to observe up close the challenges Flipinos have in breaking out of that culture. It was clear to me their one great stumbling block is the prevalence of fraternities of law schools. These brotherhood of lawyers place fraternity loyalty before duty and country, providing countless episodes of erroneous decisions in the courts and public service appointments, as well as frustrations in the judicial process. It is disconcerting that Ravi mentioned the Singapore Freemasons are mostly from the legal profession.

That this building has withstood the test of time for 143 years and not fallen prey to bulldozers of new city development planners, or decreed a heritage site, attests to the power and connections of the masons.

    

   

 

THE HOBGLOBIN OF THE SINGAPOREAN PSYCHE

A lone German standing with arms folded in a sea of Sieg Heil (victory) or Nazi or Hitler salute. This 1936 photo is the icon for courage, individualism and independent critical thinking. The young man was August Landmesser who had been a Nazi party member for 2 years until he met Irene Eckler. Their marriage licence was disapproved because Irene was Jewish.  Under Nuremberg Laws, Aryans were not allowed to marry non-Aryans. Anti-miscegenation law was meant to preserve the purity of the German race. They tried to fled for Denmark but were arrested. August was kicked out of the Nazi Party and jailed for the crime of "Rassenchande" or race defilement. Later he left prison, got drafted and went MIA (missing in action). Irene went to concentration camp and was euthanised. They had 2 daughters who were fostered out, never to see each other again. The elder girl, Ingrid, later wrote a book of their persecution "A family torn apart by "Rassenschande"

Fast forward today, I came across a comment by Sally (not her real name) at the Prime Minister's FB page. PM Lee posted Dec 21 on the children vax programme where he encouraged parents to get their children to vax. Sally explained how they have been brought up to trust the authorities to do the right things and how she is "compelled to believe that whatever Gov.sg chooses for us, it is for our own good".

I hesitate to point out her inappropriate use of 'compelled'. Did she not have free will to make that comment? Perhaps the neural state had been conditioned. Nevertheless, her faith in authority is most admirable, or most compelling, to appropriately use her vocabulary here.

From the hallowed halls of parliament, Minister of Education Chan Chun Sing taught "cotton comes from sheep". Sally is not the exception, but a typical product of our education system. The minister has very little to worry about for he will have lots of sheep to produce his cotton.  

As surely as each part of our body has a function, our brain is meant for us to think independently. For Socrates, an un-examined life is not worth living.  As for Plato, he understood the shadows in his imaginary cave are unreal. The quest for knowledge, and thus free from the shackles of pre-conditioned minds, requires of us to leave Plato's cave and examine, ie study and question, what life throws at us.

There was a time when we could trust political and clerical leaders, community elders, professional expertise, media, etc. Today the world is enveloped in a fog of mis-information, fact suppression, and black flags. The older generation will remember Steven Lee, the newscaster of Radio Television Singapore. A stoic, serious looking Steven in black and white, who did exactly what he was supposed to do every evening -- simply a deadpan delivery of the news and nothing else. Today's mainstream media serves political masters and news have become  propaganda. With obscene salaries north of US$10m, the Rachel Maddows, Don Lemons, Chris Cuomos, Joy Reids, etc will say anything to please their leftist bosses.  There are no balanced views anymore. It's all unashamedly partisan salesmanship.

There was a time when we held papers like New York Times, Time Magazine, etc. in high esteem. Today Washington Post is the defacto propaganda machine of the Democrat Party. What does it say when the National Geographic recently carried the editorial on a book by Leftist writer who wrote the young Kyle Rittenhouse killed 3 black men in the Kenosha riot when the court had cleared him of any wrong doing in an incident which involved no black Americans. The intent of course was to continue the Left's narrative of "white supremacist terrorism", and attack the conservative Right. What is the consequence when almost all the so-called 'fact-check' sites are funded by Leftist organisations and internet search engines suppress some particular narratives.

Here in Singapore, our Ministry of Health on Jan 5 lodged a police report against a Facebook group called 'Heal The Divide'. Note that this is just a social media community, not an activist group. MOH alleged that the group "has exhorted parents through a message on their Telegram channel on Dec 27 2021, to visit the paediatric vaccination centres to overwhelm on-site medical staff with questions. Such an act will greatly disrupt operations at our paediatric vaccination centres, and amount to an instigation of harassment of the medical staff."

I have no knowledge of what Iris Koh from the FB group disseminated via Telegram. If this blurred image (I cannot recall where I copied this from) is what MOH is referring to, I'm inclined to say it's worse than a case of making a mountain out of a molehill. Iris was simply suggesting to parents to ask questions if they have any unanswered concerns. The MOH is being paranoia over a non-issue. It went into a Ministry of Truth hyperbole overdrive with "exhorted","overwhelm", "instigation". "harassment". The ministry is asking Singaporeans to remain as sheep. Ask no questions.

Pardon a short digression with a story of many years ago. I once accompanied a child to a clinic. The doctor had a notice on the wall of do's and don't when in consultation. Amongst these - do not ask unnecessary questions; do not suggest medication ("if you know your medication, you don't need to be here" -- not the exact words, but same sentiment). During the consultation, the doctor paid no attention to me. Not once did he acknowledge my presence. I tried to offer my observation of the child's condition but it seemed I was invisible. At the end of the consultation I told the doctor I'm betting your practice will close shop in 6 months. Indeed, he was gone after several months. We have a right, and indeed if we have concerns, we should ask. I support vaccination but I am anti-mRNA and DNA vector vax and would have preferred to remain un-vax.  Due to need for mobility, I took the Sinovac. I did'nt just roll up the sleeve and receive the jab. I asked to be shown the Sinovac bottle. Yes siree, trust is at an all time low.

In all fairness, MOH has some good websites that provide very comprehensive information for parents. However, questions must always be entertained. I could think of many. For example, MOH advises that children with adverse reactions to components of the vax may be exempted, but how many parents know what these are? Even the MOH is precluded from complete knowledge because Bill Gates dictated that trade secrets in patents must prevail. MOH is confident of the safety, but CDC carried a report of clinical trial showing serious adverse event is at a high 5%. Taiwan, HK and UK stopped their 2nd dose for children pending resolution of some concerns (Taiwan has since resumed the vax). Vietnam has reported 5 deaths and 200 hospitalised. 2 Nov 2021 the British Medical Journal carried a report of findings by Pfizer whistleblower that their clinical trials had integrity issues.

Ralph Waldo Emerson once said : “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines."

This quote has profound relevance in our times. By consistency, Emerson was referring to a cowardly stickiness to safe grounds, no questioning of anything, not exploring out, simply doing the same things over and over robotic manner. The 'hobglobin' is the elf, rogue or devil playing in your brain. To understand Emerson, his full quote is enlightening:

“A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do. He may as well concern himself with his shadow on the wall. Speak what you think now in hard words, and to-morrow speak what to-morrow thinks in hard words again, though it contradict every thing you said to-day. — 'Ah, so you shall be sure to be misunderstood.' — Is it so bad, then, to be misunderstood? Pythagoras was misunderstood, and Socrates, and Jesus, and Luther, and Copernicus, and Galileo, and Newton, and every pure and wise spirit that ever took flesh. To be great is to be misunderstood.”

Was Iris misunderstood? I have my blogs and Facebook posts suppressed by Big Tech, been to FB jail on several occasions. Could I have been misunderstood too?

Turning the lights off brains and taking the path of foolish consistency in the current age of information tyranny, is coping by apeing the ostritch. This is exactly what's happening in this unprecendented pandemic management and it's a universal malaise. It's in all levels in governments, the general public, medical professions, the scientific world, and of course in big tech and media. Sally will be absolutely comfortable with the status quo. Everybody has a red line of sorts. I wonder what defines Sally's. Perhaps like the German August Landmesser and the Jew Irene Eckler, we will face a vaccine-differentiated regulation anti-miscegenation policy --- the un-vaxxed persons will not be allowed to marry the vaxxed.

WILL PAP LET THE PEOPLE EAT CAKE

The infamous quote "Let them eat cake" is attributed to Queen Marie Antoinette of France although there exists no evidence that she actually uttered those words. It was most certainly black flag propaganda at the turn of the 18th century, when France was experiencing economic hardship. The quote hit a nerve as the poor at the time did not eat cake. It displayed the nobility's apathy and total lack of understanding the plight of the marginalised. This contributed to the frenzy of the hatred for the noble class by the disenfranchised and alienated French poor, fueling the fire to the burning cry for Liberte.

In present day times, the public figures' world is full of virtue signalling. How does one look into the heart of men, or women? It is through the company they keep, or support, and the little action or omission, or what they say. Flight logs showed Bill Clinton visited Jeffrey Epstein at his orgy island 21 times. God knows how many times Prince Andrew visited. It is also through the little Freudian slips they utter which betray Faustian inner thoughts.

Top on the list is Hillary Clinton's "Basket of deplorables". Typical of the upper crust that leads the progressive ideological left, Hillary is all about power and control. Socialist idealism is a facade. It is a great tragedy that youngsters today incline toward the virtue signals of people like Hillary, and hold revisionist views of leftist philosopher greats of the past such as Karl Marx, Che Guevara, Jean Rousseau, blissfully unaware that these were racist, misogynistic, and contemptuous of the poor. Hillary hold Trump voters in utter contempt as 'deplorables', oblivious to the fact that these are millions of blue collar workers who produce the energy, food and other necessities of creature needs.

Lee Kuan Yew's old pal Henry Kissinger, is another good illustration. In the book The Final Days, Kissinger was quoted calling the elderlies "the useless eaters", a term he referred to people who are past the age of economic contribution to society. Quite clearly, the sick, the handicapped un-employables, the low-lifes in society, are within this category.

When it comes to such contemptuous Freudian slips, our local upper crust elites have proven themselves to be just as colourful. Let's revel in some of these.

First to come to mind is the 2016 pornographic quote "You need a very small space to have sex” from Josephine Teo, Senior Minister of State at the time. As head of National Population and Talent Division, progeneration was her portfolio. The context was the long queue for a government built HDB apartment. There is a priority scheme for married couples but it is conditional on them having a child. It is a chicken and egg issue which does not help those planning a family. The minister suggested to qualify for the scheme, couples can always have less discreet ways of producing the babies first, which can be accomplished in a small space. It is not a matter of non-resolution of the specific issue, but the manner it was brushed aside.

And who can forget the one time CEO of SMRT, m/s Saw Phiak Hwa, whose answer at an ambush interview to a question on large crowds at the train stations where she famously retorted "People can board the train - it is whether they choose to". Of course when such an utterance returns to bite, she put it off as taken out of context. No matter, the take-it-or-leave-it attitude betrayed an apathy that is simply indefensible. It did'nt help when photos appeared of a Mercedes, a Ferrari, and a Spyder motorbike at her carpark. She explained off that, as a spinster, she has every right to splash her close to $2m salary on herself. Elites don't understand the masses do not have choices of transportation like her.

PM Lee Hsien Loong's unquotable quote "mee siam mai hum" in 2006 went viral locally. He was innocently trying to poke fun at one of Mr Brown's parody podcast. In American lingo, he tried to display street cred (to have credibility and acceptability by the people on the streets). He was asking for a local dish sans cockles when this has never ever come with the mollusc. "Mee siam" is a traditional simple dish that Singaporeans slurp up at side-street corner foodstalls. It may well have been a Freudian slip, but most see it as a betrayal of complete detachment from the lives of ordinary folks by the exalted one.

In 2004 the National Kidney Foundation sued the Straits Times for defamation in an article which suggested mis-use of charity funds. The suit collapsed and backfired as massive abuses were revealed - first class air travels, gold-plated faucets, and an astounding S$600,000 paycheck for CEO T.T. Durai, a huge sum in those days, and even for today. As public outcry ensued, the wife of then Prime Minister Mr Goh Chok Tong, stepped into the fray. In defence of the CEO, who happens to be a friend, Mrs Goh defiantly said "S$600,000 a year is peanuts". In late 1990s, Lee Kuan Yew implemented a world-unique ministerial pay scheme pegged to certain top jobs in the private sector. It had the dual objective of equitable compensation to attract top talent and dis-incentivise corruption. In the run up debates on ministerial salaries, Lee had often stressed it is not right to pay peanuts to ministers whose responsibilities far outweigh executives in the private sector. Somehow, Lee's "peanuts" had a wisp of wisdom. But coming from Mrs Goh, it sounded plastic, an abject condescension from the high and mighty which probably sits at the top of the totem pole of what rankles the ordinary Singaporeans to this day.

In 2013 Minister Khaw Boon Wan said "Smaller Medisave means you're lazy and save less". Yes, Minister. we all know the aunties and uncles working as cleaners at the food court will never, in their live-time, accumulate Medisave balances what you do in 3 months. But we know they work 12 hours a day and oh yes, their pittance contribution to Medisave collectively helped in some way to pay for your heart by-pass treatment which cost you only S$8 in cash personally. With no minimum wage, the elites have no idea the poor are scraping the bottom of the barrel.

"If you can't afford chicken, you can always eat fish" came from our very own President Halimah Yacob. At the personal level, I think she is a fine lady. But surely it is difficult to differentiate the president's quote from the queen's "if the people cannot eat bread, let them eat cake".

Such disparaging and contemptuous remarks, unfortunately, are'nt exhaustive. I could continue, example "How much do you want? Do you want 3 meals in a hawker center, food court or restaurant?" from Minister Vivian B, or "Everybody has a car. We have two -- we are professionals, we need to travel" by defeated PAP candidate Kok PK. Or the unkindest cut from President Tony Tan to ex-Minister of State for Education the good Dr Tay Eng Soon, not to waste money on the "lost causes", those low achievers in the Technical Training Institutes. The streets of tree-line elitist conclaves are littered with such derogatory apathetic stones thrown at the poor.

Our times are'nt very different from the French Revolution - economic uncertainties, rising costs, resource shortages, disappearing jobs, big government, a shrinking middle class. All leading to a growing angst against those that governs and those that monopolises wealth. History has shown that the display of contempt by the upper crust elitist aristocratic, the bourgeoisie class, on the proletariat worker class, did'nt end well for them in the 1790s as the French Revolution went into its excesses.

In reality, the quote in original French was “Qu’ils mangent de la brioche” which means "Let them eat brioche". For tax purposes at the time, there were 4 categories of bread. The cheapest basic bread was called the 'le pain paysan' ('pain' is bread in French, pronounced as 'pan'). The next tier is called 'brioche de marchand'. Brioche is made with eggs and butter. To protect the poor, the basic bread was subsidised at regulated price. With pegged prices lower then production cost, bakeries dropped this product and sold only the next 3 tiers of bread. As basic bread disappeared from shelves, the queen suggested people eat the next cheapest bread, the brioche. Marie Antoinette was simply in sync with liberal demands for free enterprise and less government market intervention.

If Marie Antoinette did in fact utter that quote, then the French Revolution could well have chopped off the head of a queen who shared the same liberal ideologies as the baying crowd on 16 Oct 1793 at the place known today as Place de la Concorde. A most cruel irony for the queen to end up on the guillotine.

The lesson for the day is avoid callous "let the people eat cake" kind of statements. Whilst it may be manifestly reasonable to ask people to eat market-priced cakes, it is more palatable if the message comes with more empathy.