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With inflation is on the rise, many are already feeling the pinch and more pain is expected next year. One Ringgit now will buy less things compared to a few months ago. Table 1 shows the recently announced price changes from the local authorities. The sharp depreciaton of the Ringgit has eroded the purchasing power of most people. Yuppie trends such as dining at fancy restaurants, foreign vacations are now less affordable. Parents have also had to call-off plans to send their children for further overseas studies. Table 1 Normandy's Inflation Watch Items Old Price New Price Chicken (farm price) 2.90/kg 3.05/kg Sugar 1.20/kg 1.45/kg Flour 1.00/kg 1.20/kg Filled milk (397gm and 525gm) 1.50/kg & 1.95/kg 1.60/kg & 2.05/kg Full cream milk (397gm and 525gm) 1.65/kg & 2.10/kg 1.75/kg & 2.20/kg Source: Normandy Research Note: Amount in Ringgit Malaysia Sugar and milk in Sabah and Sarawak - 10% higher The stampeding bull has awaked a furious bear. His awakening roar has caused the Malaysian stocks and currency to crash. What will happen next year? Has 1997 ignited the fuse for doom and gloom? As uncertainties remain, volatility will likely persist over the next one to two years. We cannot stop the economic clock ticking on. What we can do is to prepare for the gloom that is coming. There will be growing concerns over where and how to move assets. How best to position one self against the onslaught. Just as you would shutter up your doors and windows when a raging storm blows up, you can prepare yourself but it would involve sacrifices - you should be prepared to cut back and trim excesses. That does not mean however that everyone should cut spending or investing completely. We need demand to generate supply. We just need to spend carefully - buy local and invest wisely. Yes invest - as the saying goes "buy in gloom and profit in boom". Next week, we will look into planning and managing investments for 1998. Here Normandy would like to wish our readers a Happy New Year.