So, another proof of weak government leading to a good economy?

I have mentioned in my earlier blog Hang Seng plunge causing a stir from critiques about weak government leading to a strong economy. 

The simple reason is a lack of interference from government allowing organic growth of the economy. I used Taiwan as a good example where government interference is low and that a weak government of Hong Kong may also result in a recovery for the Hong Kong economy.

The reason is simple, a strong government enable government with more power to rule over people and a reduction in check and balance. This leads to corruption, nepotism and bad governmental decision. Final result, a corrupt government and the use of the country system to kill off political opponents. 

This is a common trend. We can see from the trend in USA now the level of corruption cause the whole country to rot. We have incompetent politicians delivering bad policies and polarizing in their positions. USA as I see it is on deterioration.

Same thing with Malaysia, with so many years under the governance of a single coalition,  bad policies were introduced and implemented over and over again leading to the present state of the country. The reason for Malaysia to be so racially polarized.

I did not vote for the present government in Malaysia's latest election. I have voted for one guaranteed to fail, it was Mahathir's party. I anticipated Anwar's team to win the election. Even so, I wanted to ensure that they did not win big, at least not through my vote. I preferred a minority government where it can only be tasked to perform standard function and not meddle with the society. 

Let the society with ability to grow organically while the politicians busy fighting each other. Further more, while the government was formed as a result of a new coalition, it is of a weak partnership, with, how can say it? "sleeping in the same bed with different dream". Every single action result in criticism from the public. The government is afraid of the people. This should be the right way to enable a country's growth.

In my earlier entry On the road to radicalization under the leadership of Anwar Ibrahim, I was negative on KLSE. I anticipated a weaker economy as the government continued to deteriorate. Even so, I expected KLSE to at least rise back to its 55-week moving average (with resistance potential resistance between 1,471 to 1,508.) before further retreat.

Fig 1. KLSE weekly chart

KLSE's performance actually surprised me, breaking through its 144-week moving average and stayed above the higher side of my resistance expectation of 1,508. It reached a high of 1,534 and broke the downward trendline.

The question here is whether this is a false break? Will the counter retreat after this?

In its minor move, KLSE hovers between its 100% (1,508) to its 127%(1,534) projection. It has also broke the boundary of a rectangle formation, with potential target of 1,634.

In its major move, I will only expect resistance between 1,674 to 1,860.

So am I right that a weak government is actually good for the country?