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Thai government to finance digital wallet scheme with 500 billion baht loan


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Posted
  On 11/11/2023 at 3:13 AM, webfact said:

earning less than 70,000 baht per month with less than 500,000 baht in bank deposits.

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A. that will account for nearly 99% of the population,

B. what a digital wallet again and how its suppose to work?

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Posted
  On 11/11/2023 at 3:41 AM, ezzra said:

A. that will account for nearly 99% of the population,

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I did not believe you, so I googled.

 

Then I found Asean Now article stating exactly this.

 

Very unbelievable. Who buys all the condos and cars? If this is all financed on loans then who approves the loans on such a small budget.

 

Crazy.

Posted
  On 11/11/2023 at 4:07 AM, Celsius said:

 

I did not believe you, so I googled.

 

Then I found Asean Now article stating exactly this.

 

Very unbelievable. Who buys all the condos and cars? If this is all financed on loans then who approves the loans on such a small budget.

 

Crazy.

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When you live in Thailand 35+ years like i did you'll come to know a lot of information about this country...

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Posted
  On 11/11/2023 at 3:57 AM, JoePai said:

Ask a teenager  

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I did asked a teenager and this is what i was told: Digital wallets allow you to pay when you're shopping using your device so that you don't need to carry your cards around. You enter and store your credit card, debit card, or bank account information and can then use your device to pay for purchases. Digital wallets can also store:1. Gift cards. Membership cards.

BUT... how a person who's already find it hard to make ends meet can afford themselves another burden of a loan? is the PM will give free money? no, It's a loan, and a loan you have to repay with interest...

Posted
  On 11/11/2023 at 4:59 AM, ezzra said:

BUT... how a person who's already find it hard to make ends meet can afford themselves another burden of a loan? is the PM will give free money? no, It's a loan, and a loan you have to repay with interest...

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Interesting as this is highly inflationary.  Whoever the bondholder(s), they are essentially digging an economic grave with the plans of jumping in.  Inflation hits, rates have to increase to slow inflation, bond holders take the hit.  The bondholder(s) is (are) going to lose money.  I wonder what fools plan to finance this idiotic scheme when you can see the outcome a mile away?

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Posted
  On 11/11/2023 at 5:11 AM, connda said:


Interesting as this is highly inflationary.  Whoever the bondholder(s), they are essentially digging an economic grave with the plans of jumping in.  Inflation hits, rates have to increase to slow inflation, bond holders take the hit.  The bondholder(s) is (are) going to lose money.  I wonder what fools plan to finance this idiotic scheme when you can see the outcome a mile away?

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I have read that bonds won't be issued to finance this, instead, the government will take a loan from a Government owned bank. Constitutionally speaking there is no precedent whereby the bank is allowed to lend to the government on this scale, doing so would also put the loan and the bank under the gaze of BOT since they have responsibility for all banks and their finding levels. Assuming there is a loan and the interest rate is decent, funding the interest payments out of the annual budget shouldn't be difficult but at some point, the principle must be repaid and I don't see how they can do that.

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Posted
  On 11/11/2023 at 4:59 AM, connda said:


....and then comes the inflation as the money supply in Thailand is amped.  Then over the course of the next couple of years, inflation will claw back the 10K THB and more. 
Expats should enjoy the inflated exchange rate as Thai currency loses value.

I wonder who will holding the bag for the 500 billion THB "loan?"  The bondholders are going to be sorry.
 

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I would not bank (no pun intended) on the TBT losing strength. 

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Posted
  On 11/11/2023 at 4:59 AM, connda said:


....and then comes the inflation as the money supply in Thailand is amped.  Then over the course of the next couple of years, inflation will claw back the 10K THB and more. 
Expats should enjoy the inflated exchange rate as Thai currency loses value.

I wonder who will holding the bag for the 500 billion THB "loan?"  The bondholders are going to be sorry.
 

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I don’t know that the bond holders will be sorry. Right now, Thai sovereign debt holds - as I recall - mid Investment grade ratings.. and if I’m not mistaken, direct Thai government bonds are “general obligation” debts - thus backed by the governments full taxation ability.  Different than say special purpose bonds which would be backed only by revenue from XYZ project… 

 

To me, the more.. realistic risk, as I see it, isn’t P&I repayment risk, but the risk that someone like Moody’s, Fitch or S&P cut the ratings on this kind of debt, after it’s issuance, causing the yield to rise as the price falls…. making it hard for a bond holder to resell in the secondary market or to use it as collateral for other investments (or margining). 

 

Posted
  Quote

In terms of raising funds for the programme, the prime minister revealed that a bill proposing a special loan of 500 billion baht is the most practical approach. 

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Who's he going to ask? Might try Jay Powell. He gives that out just about every week.

Posted
  On 11/11/2023 at 3:13 AM, webfact said:

The Thai government has plans to secure a loan of 500 billion baht in order to finance a digital wallet scheme, revealed Prime Minister Srettha Thavisin.

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Can I borrow.... now where've I heard that before?

Posted

I am curious as to how the exclusion of 6 million people works.  Less than 4 million pay income tax which starts at 25k per month net of basic deductions. So excluding everyone in the tax net is still short by over 2 million people.  So they must be confident there are several million people with extremely low incomes who have over 500,000 in the bank.  If this is really true, they should investigate all of them for income tax evasion.

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Posted
  On 11/11/2023 at 8:00 AM, Dogmatix said:

I am curious as to how the exclusion of 6 million people works.  Less than 4 million pay income tax which starts at 25k per month net of basic deductions. So excluding everyone in the tax net is still short by over 2 million people.  So they must be confident there are several million people with extremely low incomes who have over 500,000 in the bank.  If this is really true, they should investigate all of them for income tax evasion.

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As with covid payments, I imagine only those people who pay into the social security fund or who are in receipt of some other form of welfare, will be ellieble.

Posted
  On 11/11/2023 at 4:53 AM, Ben Zioner said:

I've always  thought that Thai politics were low, but borrowing 500 Billion  THB to bribe the people is way beyond anything I could imagine. And if he gets thrown out, the next government will pay.

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Clearly a man with his finger on the pulse of most Western democracies, and how not a single one of them tries to bribe voters with their own money in the lead up to an election.  The question is not whether the current UK gubmint will do this to try and get re-elected, but how much.

 

PH

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