Rumors, the main enemy of the rupiah

Rumors, the main enemy of the rupiah

JAKARTA (JP): Judging by his voice, my cousin Tony was
certainly in panic when he called me. In low tones he said: "Be
careful, don't tell anybody what I'm going to tell you, but the
'bald man' is dead."

"Which bald man?" I asked, not understanding his anxiety.

"The one and only," he answered, "You know, Oom Liem. I know
that you have your money in his bank, so you'd better withdraw
everything."

"Everything?" I couldn't believe my ears. "Why? I know that
the Chinese like a lavish funeral, but would they use my money
for his funeral? Would they bury him like the emperors in the old
days, with a whole terra cotta army and all his jewelry and
ceramic collection? Even if they do, I am sure that he has gone
global and has competent executives to manage his bank."

"I can't tell you right now over the phone, but you better
hurry and go to one of the branches."

"And why don't you go?" I snapped.

"I have," was the answer. "I am standing in line right in
front of a bank. There is a long line already." I heard a funny
noise then and knew that his battery was low. He had been calling
all his friends from his cellular phone.

That was a few weeks ago. More rumors followed, such as dollar
accounts being frozen, more banks closing and then, the pinnacle
of all the rumors: The president had died.

All these rumors sent the dollar to record highs and it has
not come down since. In the meantime, the mass panic over money
matters spread and whether rumor mongers told the rumors to get a
kick out of it or whether there was some truth in it, we don't
know.

But I would like to share a conversation that I overheard
recently. It was between my cousin Tony and his grandmother, who
is 90, when he advised her to buy dollars with her savings. This
lady had worked hard almost all her life to put her children
through university.

She said: "First we had the devaluation of 1950, where the
rupiah became only one-third of its value. Then, the bank notes
with the picture of a tiger on it was declared invalid.

"I forget what the value was, but I remember it was a lot of
money that we lost. What could we do about it? No rumors preceded
these events. They were announced and we had to accept it.

"Just a little depression and then we started all over again.
We worked harder to make up for the loss because your father,
your aunts and uncles, seven in all, had to finish their studies.

"I knew that only when they had a degree would they advance in
life. We didn't put our money in banks then, we never had any
money.

"If there was some left, we hid it in the mattress and slept
on it. We lived frugally and almost never went out because going
out meant spending money. We just saved and saved ...

"But to no avail, because we were hit by devaluation after
devaluation. For some time there was no devaluation, yet the
dollar decreased in value.

"Every time I wanted to buy a new sarong, I had to pay more
for it, until I couldn't afford the nice hand-painted ones.

"I have also noticed that people do not save anymore. They go
out and enjoy life. 'Live first class and die tourist class' is
the adage for today.

"In my day, it was the other way round. Now we have high-rise
buildings, one more beautiful than the other, and you tell me to
keep my money there. Yet, they turn out to be an unsafe place to
keep my money.

"And do you know what, I now regret that you have enjoyed such
a good education in the United States. Now, everything American
is good for you.

"You eat ribs, steak and chicken from America. Your children
enjoy pizza and ice cream from America.

"But I don't like that junk, I can't sleep without rice in my
stomach. And now you want me to save American dollars. Do you
think I can spend it in the market to buy fruit and vegetables?"

On hearing these words, grandson hugged grandma and gave her a
big kiss.

"Oh grandma," he said, "Your attitude towards money is the
best, but that's because you have slept on it for almost the
whole century!"

-- Myra Sidharta