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

[4MyEgo]

3 hours ago, connda said:

Every Thai political party will get into the action and will bring the Thai economy down to promote their own lust for power and control. 

 

Have you not heard that they already pay voters, my wife and her family always get a few hundred baht to vote for political parties, it's part of the system here, it's just not in the open to westerners.

[smedly]

imagine if they had a welfare system like most western countries have, this 10,000b would be paid every month to millions of people, having to take out a loan to fund a one off payment tells everything 

[vangrop]

What can you do with that tiny tiny tiny amount. In less than 3 days Pattaya it will vanished

[peter zwart]

8 hours ago, dinsdale said:

Bt500,000,000,000 loan to hopefully create stimulus which will be over in a week or so once everybody spends the 10k and believe me the 10k won't last long. "Pie in the Sky" comes to mind. 

going to be good times for the lottery boys

[Venom]

4 hours ago, peter zwart said:

going to be good times for the lottery boys

Only if they have the means to except digital currency.  💵

[Gknrd]

9 hours ago, smedly said:

imagine if they had a welfare system like most western countries have, this 10,000b would be paid every month to millions of people, having to take out a loan to fund a one off payment tells everything 

Don't worry farang taxes next year will fund the next round of government vote buying, and put a new Benz in all their driveways..

No loans next year. 

[DonniePeverley]

14 hours ago, 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.

 

Visted a condo, viewed 3 different rooms. All owned by Chinese. 

 

Not actively looking to rent it out either, happy to keep it empty. 

[jacko45k]

Well a lot of locals financed their Friday night session with a loan on the strength of this windfall!

[Henryford]

18 hours ago, ezzra said:

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...

 

It will go onto the National Debt and like all these schemes in the West it will never be repaid. Countries like the USA and UK can barely afford to pay the interest servicing their debt.

[Mike Lister]

15 minutes ago, Henryford said:

 

It will go onto the National Debt and like all these schemes in the West it will never be repaid. Countries like the USA and UK can barely afford to pay the interest servicing their debt.

Yes, but, it either has to be collateralised in the form of bonds or the Ministry of Finance has to take on the loan and pay the interest until the principle is repaid, presumably it's the latter and the loan will be added to the government debt load.  500 bill. is a huge amount to add to the debt load.

 

"Public debt outstanding as of April 30th, 2022 was at 10,046,605.17 million Baht, comprised 98.26% of local currency debt and 1.74% of foreign currency debt. Classified by remaining maturity, the long-term debt outstanding was 85.28% of total public debt and short-term debt outstanding was 14.72% of total public debt".

 

https://www.pdmo.go.th/pdmomedia/documents/2022/Jun/4. สรุปสถานะหนี้สาธารณะ สิ้นเดือน เม.ย. 2565 Eng.pdf

 

EDIT TO ADD:

 

I just came across the official debt list below, it gives chapter and verse of what is owed:

 

https://www.pdmo.go.th/pdmomedia/documents/2023/Jul/Quartery Update_July_2023_รวมทั้งหมด_v2.pdf

Edited November 12, 2023 by Mike Lister

[Walker88]

1 hour ago, Mike Lister said:

Yes, but, it either has to be collateralised in the form of bonds or the Ministry of Finance has to take on the loan and pay the interest until the principle is repaid, presumably it's the latter and the loan will be added to the government debt load.  500 bill. is a huge amount to add to the debt load.

 

"Public debt outstanding as of April 30th, 2022 was at 10,046,605.17 million Baht, comprised 98.26% of local currency debt and 1.74% of foreign currency debt. Classified by remaining maturity, the long-term debt outstanding was 85.28% of total public debt and short-term debt outstanding was 14.72% of total public debt".

 

https://www.pdmo.go.th/pdmomedia/documents/2022/Jun/4. สรุปสถานะหนี้สาธารณะ สิ้นเดือน เม.ย. 2565 Eng.pdf

 

EDIT TO ADD:

 

I just came across the official debt list below, it gives chapter and verse of what is owed:

 

https://www.pdmo.go.th/pdmomedia/documents/2023/Jul/Quartery Update_July_2023_รวมทั้งหมด_v2.pdf

This scheme is a one-off 5% addition to outstanding public debt. It is almost equal to the yearly budget deficit, so the two combined look to be adding 10% to outstanding public debt in just one year (if my math is correct). Pretty massive.

 

I suspect this new debt will be treated like all the old debt, which is it is never really paid off, but rather just serviced, and then rolled over at maturity. As this is a borrowing from a State bank, it won't be exactly like a bond rollover/reissue, but the loan will just be renegotiated.

 

This is really how all sovereign debt works. We all collectively agree that it doesn't matter so long as the debt is serviced (interest paid). There is some endpoint somewhere, where we collectively admit it's madness, but that point hasn't come yet. (The scariest thing in your LINKED article is Japan's public debt. Japan may be the canary in the coal mine, as the sharp fall in the yen---to 151.5/$---might suggest that collective realization of madness is upon us.)

 

I'm not sure what 10,000 baht for 50 million Thais will do. I'll go out on a limb and guess it will not be used to pay down the very high average Household Debt Thais have, but instead will be used to buy booze, lottery tickets, and as a downpayment on a new iPhone 15, which means the other 30,000 baht for the iPhone will be financed, adding to the high outstanding Household Debt.

 

The world is in a competitive race to the bottom regarding debt. This digital wallet scheme is just the latest sovereign scheme to mortgage citizens' future. The Perfect Storm that is coming is that virtually every developed and developing country has a declining birthrate, yet the debt structure and social obligations are based on a Pyramid Scheme. With the population pyramid inverting (especially in Japan), finally we might be seeing the beginning of the end of this wild debt cycle.

 

To extrapolate on to the world as a whole, my guess is people will make decisions not based on the level of debt of any particular sovereign, but rather based on which economies are best able to weather the coming storm. Perhaps it will seem ironic to some, but I would guess this is dollar positive, yen negative, and emerging nation negative, which means, inter alia, the baht. It will unfold as a spinning coin.....ever-increasing until the coin is almost horizontal and at max speed....and then: silence.

 

I look at this Thai scheme, then consider other sovereign debt, then consider declining populations who will assume all this debt, then consider the coming massive impact on employment that Artificial Intelligence represents, and it scares the bejesus out of me.

 

 

Edited November 12, 2023 by Walker88

[Mike Lister]

3 minutes ago, Walker88 said:

This scheme is a one-off 5% addition to outstanding public debt. It is almost equal to the yearly budget deficit, so the two combined look to be adding 10% to outstanding public debt in just one year (if my math is correct). Pretty massive.

 

I suspect this new debt will be treated like all the old debt, which is it is never really paid off, but rather just serviced, and then rolled over at maturity. As this is a borrowing from a State bank, it won't be exactly like a bond rollover/reissue, but the loan will just be renegotiated.

 

This is really how all sovereign debt works. We all collectively agree that it doesn't matter so long as the debt is serviced (interest paid). There is some endpoint somewhere, where we collectively admit it's madness, but that point hasn't come yet. (The scariest thing in your LINKED article is Japan's public debt. Japan may be the canary in the coal mine, as the sharp fall in the yen---to 151.5/$---might suggest that collective realization of madness is upon us.)

 

I'm not sure what 10,000 baht for 50 million Thais will do. I'll go out on a limb and guess it will not be used to pay down the very high average Household Debt Thais have, but instead will be used to buy booze, lottery tickets, and as a downpayment on a new iPhone 15, which means the other 30,000 baht for the iPhone will be financed, adding to the high outstanding Household Debt.

 

The world is in a competitive race to the bottom regarding debt. This digital wallet scheme is just the latest sovereign scheme to mortgage citizen's future. The Perfect Storm that is coming is that virtually every developed and developing country has a declining birthrate, yet the debt structure and social obligations are based on a Pyramid Scheme. With the population pyramid inverting (especially in Japan), finally we might be seeing the beginning of the end of this wild debt cycle.

 

To extrapolate on to the world as a whole, my guess is people will make decisions not based on the level of debt of any particular sovereign, but rather based on which economies are best able to weather the coming storm. Perhaps it will seem ironic to some, but I would guess this is dollar positive, yen negative, and emerging nation nation, which means, inter alia, the baht. It will unfold as a spinning coin.....ever-increasing until the coin is almost horizontal and at max speed....and then: silence.

 

I look at this Thai scheme, then consider other sovereign debt, then consider declining populations who will assume all this debt, then consider the coming massive impact on employment that Artificial Intelligence represents, and it scares the bejesus out of me.

 

 

The two big things that the Thai economy has going for it are its high levels of Foreign Currency Reserves and it's low levels of government debt, in particular its low levels of foreign currency loans. It's those two things that help most to keep the Baht as strong as it is. By increasing government debt from 60% of GDP to 70%, that erodes one of their main economic mainstays. IF GDP increases, as a result of this giveaway, the ratio of GDP to debt will fall and government will look like hero's. If however GDP falls, that 70% will go even higher and that is the real problem. 

 

Similarly, if GDP increases, household debt as a percentage of GDP will fall and yet again, government will look like hero's even though the actual debt figure has probably increased.

 

No, you're not going out on a limb, the money is not permitted to be used to pay down debt, it is solely intended for purchases and to circulate within the domestic economy.

[realfunster]

I take this as a further sign that the Thai economy is fundamentally struggling.

 

Srettha notes the unimpressive growth rate for the past 15 years, of course, not helped by all the political instability.

 

PT have tried the usual Plan A for the past 20 years of flogging the tourism horse, with limited success. Now the usual Plan B, some kind of cash injection into the economy.

 

I believe they are much wider systemic issues that need to be addressed if Thailand really wants to move forward from lower middle income levels.

 

But that would take some serious self-reflection and loosening of tight grips by vested interests.

I can’t say I am hopeful of either of those happening. 

[Eric Loh]

36 minutes ago, Mike Lister said:

The two big things that the Thai economy has going for it are its high levels of Foreign Currency Reserves and it's low levels of government debt, in particular its low levels of foreign currency loans. It's those two things that help most to keep the Baht as strong as it is. By increasing government debt from 60% of GDP to 70%, that erodes one of their main economic mainstays. IF GDP increases, as a result of this giveaway, the ratio of GDP to debt will fall and government will look like hero's. If however GDP falls, that 70% will go even higher and that is the real problem. 

 

Similarly, if GDP increases, household debt as a percentage of GDP will fall and yet again, government will look like hero's even though the actual debt figure has probably increased.

 

No, you're not going out on a limb, the money is not permitted to be used to pay down debt, it is solely intended for purchases and to circulate within the domestic economy.

Good points raised by you. Excessive external borrowings was major reason for the 1997 financial crisis. 
 

State Finance & Financial Discipline Committee’s framework limit Debt GDP ratio at 70%. 2022 saw the all time high of 60% debt GDP ratio based on the GDP of $495B. Debts due numerous covid measures to help the general public and SME. Pre covid GDP in 2019 was $543 B. 2024 GDP will most likely to be slightly better than 2019 due to launching of various stimulus packages. In the respect, debt GDP ratio may not reach 70%. 
 

The digital wallet borrowings will mostly from the 4 SFI banks and they are allowed 15-25% for single lending limit of capital funds. 
 

 

 

 

 

 

[Guderian]

On 11/11/2023 at 10:35 AM, Celsius said:

I think it is a great idea.

 

My only question is why not up it to 50,000 baht per handout.

 

Or 1 million?

 

Yes, good question. I believe that the mathematical geniuses employed by the government have run the numbers and developed the scenarios and gamed their strategies, and learnt that there simply aren't enough foreigners tax resident in Thailand to be able to raise much more than 500 billion Baht. As usual, the Thai politicians have everything worked out to ten decimal places and know exactly what they're doing, what could possibly go wrong? lol.

[Bobthegimp]

On 11/12/2023 at 8:18 AM, Walker88 said:

I'm not sure what 10,000 baht for 50 million Thais will do. I'll go out on a limb and guess it will not be used to pay down the very high average Household Debt Thais have, but instead will be used to buy booze, lottery tickets, and as a downpayment on a new iPhone 15, which means the other 30,000 baht for the iPhone will be financed, adding to the high outstanding Household Debt

 

 

Excellent post. 

The reason it will be a "digital wallet" is so that the government can dictate what the money is spent on, where the money is spent, and whom the true beneficiaries of this largess will be. 

 

Not only will the money end up directly in the hands of the largest corporations/best friends of the government, it will also decimate the competition those corporations now face.  10k baht might not go far in Pattaya, but it buys a lot of rice and som tam fixings, which could starve non favoured businesses of income for long enough to bankrupt them. 

 

Another point is that the debt will never be repaid. It will start as MMT and carry on until the Great Reset and transition to CBDCs is completed.  This new tax interpretation could be a piece of the puzzle.  

[Mike Lister]

3 minutes ago, Bobthegimp said:

 

Excellent post. 

The reason it will be a "digital wallet" is so that the government can dictate what the money is spent on, where the money is spent, and whom the true beneficiaries of this largess will be. 

 

Not only will the money end up directly in the hands of the largest corporations/best friends of the government, it will also decimate the competition those corporations now face.  10k baht might not go far in Pattaya, but it buys a lot of rice and som tam fixings, which could starve non favoured businesses of income for long enough to bankrupt them. 

 

Another point is that the debt will never be repaid. It will start as MMT and carry on until the Great Reset and transition to CBDCs is completed.  This new tax interpretation could be a piece of the puzzle.  

The government has already said the money must be spent in the local community, not all of them have a Central Mall etc.

[huangnon]

Basically these muppets will do anything to introduce the digital money system. Supposed 'money' that can be turned on and off at will, limited use to the area you live to prevent you traveling, has an expiry date if you don't spend it, taxes you at source for spending on things your Govt frowns upon or your social-credit score, and basically uses your supposed assets to control every aspect of your life.

[tomazbodner]

So 500 billion loan for 400 billion scheme which is so limited most can't buy anything with it.

 

PM Sretthas government begins to flounder - Thai Examiner

 

 

[Karma80]

I'm going to plunge the country into debt, just so people can spend 10k at 7-11. Transformative?

 

The sad part is that this was offered up as a bribe to buy votes, but never actually got them the votes. The people didn't want you here.

[Venom]

On 11/11/2023 at 5:52 PM, Henryford said:

 

It will go onto the National Debt and like all these schemes in the West it will never be repaid. Countries like the USA and UK can barely afford to pay the interest servicing their debt.

 

Devaluing the currency by ten percent a year is one solution 

 

 

 

 

 

 

 

 

Edited November 14, 2023 by Venom