The ringgit is under pressure. Make no mistake about that. The billions the banking system wrote off, and the all but worthless value of the holdings in Danamodal and Danaharta, the large foreign exchange debts these cronies, courtiers and siblings of the establishment took in Labuan is not talked about, but must be accounted for. The government thinks not, but it only postpones the inevitable.

It can no more. The government blames all and sundry for what goes wrong, but how it plans to right it is seeped in mystery, and announced to the world at the last possible moment. It insists only it has the cure, and the nation is not allowed to discuss it or suggest improvements.

So we do not know how bad conditions are, and react from what we know and hear from the street, the market, rumours, the intelligent guesses. The government often misleads, asking the faithful to rush into the stock market when it should tell them to stay off. But when it does, it is a sign, right or wrong, of the establishment and its cronies jumping ship, its actions seen to benefit some at the expense of the many.

The government did plan to re-peg the ringgit - until after the Umno general assembly in June. A currency cannot remain at its level when that of its trading partners dip. The ringgit is now at 3.80 to the US dollar. But it is artificial, and Bank Negara may have allowed some major investments to be brought in at RM4.10 to the dollar. But it is only at the banks can you buy US dollars at the official peg; you pay more at the money changers.

Ringgit overpriced

The government's hand is forced by the declining Thai baht, which dropped to 50 for the US dollar though now closer to 45 bahts. Large transfers of US dollars to Malaysia are sent via Bangkok, so that the recipient gets more ringgit - as high as RM4.40 to the dollar - than if he had received it direct.

The ringgit is overpriced. This, with political uncertainties, the bailing out of MAS' principle shareholder, the Time dotCom fiasco, the reputed estrangement of the Prime Minister Dr Mahathir Mohamed with his finance minister, Daim Zainuddin, the overall unhappiness with the concentrating of the banking system under his aegis, the weakening economic situation, the continuing defiance of the jailed former deputy prime minister Anwar Ibrahim, adds to the general feeling of uncertain doom.

The stock market votes with its feet. The institutional investors, foreign and local, sold down their holdings, what with blatant last-minute manipulation of the stock exchange index via three government-controlled stocks with their total 35 per cent weightage. The RM3 billion in funds it made available only caused the stock market index to drop nearly 15 per cent in 12 days. And could go lower.

The re-pegging rumour is so rife that the government says it does not intend to. If the past is of any guide, proof is it would - must - be. Because the ringgit is so artlessly defended, it is a fair bet it would be revised downwards. What it would be is something else. I have heard the new peg to be between RM4.20 to RM4.80, with RM4.40 the likeliest. It cannot, however, remove the peg for it would then just crash through the currency roof.

Its profligacy catches up with it. It insists it is flush with funds that it announces projects and contracts costing billions in a wild spree. It tells any who would listen how well it manages the country's finances. All this is make believe. Privatisation exercises not only ended in failure but it also added tens of billions to the nation's debt. How that would be paid for is not revealed.

Harsher reality

The reality is harsher. The economy is in serious trouble. People are retrenched with abandon. Subcontractors close their shutters because they are not paid; they are not because the main contractors are not, because the principals have no money. Money is not coming in.

More are brought to bankruptcy these days than for several years - not for credit card defaults but for being caught in the economic squeeze. House prices come down because few want to buy them. Even restaurants are empty at lunch, when just six months ago you would have to wait for a table.

No doubt, some academic would put all these signs into a good article to show, with graphs and charts, how badly we do. But the raw material of that had sensed it early. When what is different from what the government tells us is, men and women fend for themselves. As now.

They believe the ringgit would be devalued. Pump priming or rushing to aid cronies, courtiers and siblings of the establishment cannot overcome it. Why does it not want the RM3 billion fiscal package in Parliament scrutinised? Why were members of parliament given copies of the Overall Perspective Plan 3, or OPP3, only minutes before debate on it began?

Once it was arrogance; now it is fear of being caught out. The Barisan Nasional can only rule firmly if its writ is unchallenged. It is now. The Malay questions its relevance. And not only the Malay. Its leaders cling to power long after their sell-by date. And this redounds on the government's efficacy in managing the country.

So what it says is disbelieved. So the opposite happens. To the ringgit, the stock market, the economy, whatever.