The largest financial discrepancies in history ever!

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An honorable member of the Coffee Shop Has Just Posted the Following:

http://www.tremeritus.com/2015/06/25...in-spore-ever/

The largest financial discrepancies in history ever!


June 25th, 2015 |
Author: Contributions




Dr Christopher Balding


Singapore public finances contain the largest unexplained financial
discrepancies in human history. That may sound like a grandiose rhetorical
bombast, but it is a completely and entirely accurate description of existing
data. Using nothing more complex than addition, subtraction, compounding
interest, and official Singaporean public financial records, anyone can easily
see that enormous discrepancies exist.

The financial irregularities in Singaporean financials are easy to spot when
attempting to simply accept all their claims as true and valid. It is a
straightforward mathematical impossibility that all their claims about their
finances are true. Let us present the fundamentals of what Singapore is
claiming.

1. From 1974 to 2014, Singapore enjoyed operational surpluses totaling $369
   billion SGD.
2. From 1974 to 2014, Singapore increased public indebtedness from $5 billion
   SGD to approximately $388 billion SGD. Singapore claims that this was for
   investment purposes and given the operational surpluses, it had no need to be
   consumed via public expenditure.
3. From 1974 to 2014, Singapore enjoyed total free cash flow from operational
   surplus and net liability incurrence, totaling $822 billion SGD.
4. From 1974 to 2014, Temasek Holdings claimed an annualized 16% return
   beginning with a $374 million SGD portfolio value at inception.
5. For most of its existence, the Government Investment Corporation of
   Singapore has claimed a long term annualized return of 7% in USD terms.
6. The Singapore government lists financial assets of $834 billion SGD on its
   public balance sheet.

Those are the facts that the Singaporean government claims to be
true. Without knowing anything about finance or conducting in-depth analysis
everyone should find two claims by Singapore completely contradictory: if
Singapore enjoyed such free cash flow of $822 billion SGD for 41 years, how can
its claims to produce stellar to world-beating investment returns be reconciled
with their declaration of only $834 billion in financial assets?

Using conservative estimates that account for debt servicing costs, currency
losses from USD returns, and matching existing declared government cash holdings
with the assumption that cash earns no return, if we accept Temasek and GIC
claims about their returns along with the declared financial assets on the
public balance sheet there remains a $670 billion SGD or $499 billion USD
discrepancy. Using a slightly less conservative assumption on cash holdings
produces a discrepancy, while still using the claims of the Singaporean
government, of $848 billion SGD or $631 billion USD.

It must be strongly emphasized that these estimates are produced using
official Singapore financial data and assuming that the claims of the Singapore
government, Temasek, and GIC are true and accurate. If the claims by the
Singapore government and its related entities are to be believed, then enormous
discrepancies exist as to what their declared assets are and what they should
have. It belies common sense that $822 billion SGD can be invested over 41 years
and produce only $834 bilion SGD even after accounting for debt service and
currency losses.

In the days and weeks ahead, I will be writing extensively on Singaporean
public finances taking different parts of the data, entities, and key official
involved to provide clear evidence of the discrepancy. This will include a large
amount of collected data which will be released for anyone to review. This will
include evidence of how key Singaporeans have benefited enormously from this
flow of money, historical examples of financial impropriety, and raise serious
questions about ongoing financial transfers.

Based upon all available evidence, while it may seem rhetorical flourish, all
existing evidence indicates that Singapore is sitting on the largest unexplained
discrepancies ever.

Christopher
Balding

* The writer is a professor of business and
economics at HSBC Business School, Peking University Graduate School. An expert
in sovereign wealth funds, he has published in such leading journals as the
Review of International Economics, the Journal of Public Economic Theory, and
the International Finance Review, on such diverse topics as CDS pricing, the
WTO, and the economics of adoption and abortion. His work has been cited by a
variety of media outlets including the Wall Street Journal and the Financial
Times. Prof Balding received his Phd from the University of California, Irvine
and worked in private equity prior to entering academia. This article first
appeared in his blog, www.facebook.com/baldingsworld.


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