Thailand Could Face Double-digit Inflation In 2008

[ataloss]

Where will the opportunities be probably in land you got to find that guy who has some extra that he really isn't using about to lose his pickup. Then you can actually deal on price.

Thats one that has been common in this neck of the woods for years.

if Thai were to allow falang to buy land - that would perhaps prevent a property bubble burst and keep the economy rolling....

I know that sounds easy, but then later whoever authorizes this would be known as the person who sold the country out to foreigners and would be ruined.

It seems that a 99year lease would work for most everyone. Still belongs to LOS, but farang should be comfortable with 99years of use.

Excellent advice! AIDS deaths is tied with pickup repros as deal initiators.

[sriracha john]

Thai central bank chief concerned over rising inflation

BANGKOK:-- Bank of Thailand Governor Tarisa Watanagase on Friday voiced concerns regarding declining returns on savings and faster spending --rather than saving -- by consumers who in anticipation of higher inflation are buying now, stating that such action can push inflation to the double-digit level this year.

"Psychologically, if people think that the inflation rate will increase sharply, they will accelerate their spending. So, it is likely the inflation will surge to a double-digit level this year," she said.

Regarding a proposed reduction of the policy interest rate to stimulate the economy, she said such an action is impossible because the interest cut would boost the spending and so fuel the inflation rise.

"Reducing interest will encourage spending, which leads to a higher inflation rate. So, we can see almost all countries instead opting to raise interest rates," she said.

"In the United States, the Federal Reserve had previously cut key interest rates in a bid to stimulate the ailing economy, which was almost in recession at that time. Now, it begins to see a need to consider the interest hike to rein in higher inflationary pressures."

Mrs. Tarisa said the central bank is a sole agency responsible to oversee inflation. Accordingly, the bank must do its best to control inflation to boost consumer confidence. Otherwise, the inflation will surge incessantly.

The Commerce Ministry stated earlier that the consumer price index in May surged 7.6 per cent from the same month last year and 2.1 per cent from the previous month due to people's spending on education at the opening of new semester and higher transport costs upon the oil price hike.

-- TNA 2008-06-13

U Turn Ahead

Bank of Thailand confident average inflation in 2008 will be under 10%

BANGKOK, June 16 (TNA) - The average inflation in Thailand in 2008 is now projected to be lower than 10 per cent, Bank of Thailand (BoT) governor Tarisa Watanagase said Monday.

Mrs. Tarisa's remarks were made just three days after she had made cautionary remarks that Thailand's inflation this year could possibly hit two digits due to accelerated public spending in response to concerns about the sharp increase of inflation.

She said that average monthly inflation during the first five months this year stood at 5.8 per cent and if the average inflation for 2008 is to hit 10 per cent, it means that inflation for the remainder of seven months must be as high as 15 per cent which would be too severe.

This year's inflation will not reach double-digit levels, she affirmed, but emphasised that it is the responsibility of the BoT's Monetary Policy Committee (MPC) to closely monitor inflation in the country so that is did not to climb too high and jeopardise the national economy.

In principle, Mrs. Tarisa said, every central bank in the world would raise the interest rate if inflation in the particular country increases too high.

It would be done in a bid to curtail both consumer spending and inflationary pressure, she said, adding that the MPC has maintained its benchmark one-day repurchase rate at 3.25 per cent which is the lowest in the region, while the real interest rate contracted.

If the MPC's repurchase rate rises it will slightly hurt public spending, economic growth and production costs of entrepreneurs, she said.

The MPC will not meet before its scheduled meeting on July 16 because it considers that rising inflation is still "not too urgent" an issue, and the market and the public could over-react if a special meeting is held, she said.

Touching on the current weak baht against the US dollar, Mrs. Tarisa said the Thai currency's depreciation is in line with regional currencies as foreign investors unloaded stocks in Thailand and elsewhere in the region and repatriated money to the US after gaining confidence following signals sent by the US Federal Reserve that it would closely monitor inflation in the country.

Foreign investors now believe that the Fed will not lower its rate.

On Monday, the baht moved at around Bt33.28 against the dollar on the onshore market.

Edited June 16, 2008 by sriracha john

[cclub75]

I would like to comment here about the idea that commodity speculators hurt the prices. Senator Liberman come up with a "brilliant" idea to ban big financial institutions from future commodity trading.

I have not seen the details of his proposal but if it leads to ban on commodity ETF this will hurt individual investors quite badly.

"commodity speculators". Where ?

Since a few months, Saudi Arabia is repeating ad nauseam that the oil market is okay, with enough supply, blablabla.

And this week end : "okay we're going to increase production by 200 000" (after 300 000 last week).

And did you see this morning : effect ? Almost NIL. Oil prices should have decrease a lot with such announcement. We have a mere -0.60 %...

On the contrary it should go up : because the Saudis admission speaks a lot.

They lied.

[cclub75]

The MPC will not meet before its scheduled meeting on July 16 because it considers that rising inflation is still "not too urgent" an issue, and the market and the public could over-react if a special meeting is held, she said.

It's good to be a big ostrich (or a turkey...) , with the head into the sand.

You'll notice the "not too urgent". It's just urgent, but... not too much. Very thai.

Even when the BOT will be totally toasted (like in 97, but for other reasons), Miss Tarisa will continue to care about "over reaction of people", her face and probably her makeup and her hairstyle too.

[mumbu]

The MPC will not meet before its scheduled meeting on July 16 because it considers that rising inflation is still "not too urgent" an issue, and the market and the public could over-react if a special meeting is held, she said.

It's good to be a big ostrich (or a turkey...) , with the head into the sand.

You'll notice the "not too urgent". It's just urgent, but... not too much. Very thai.

Even when the BOT will be totally toasted (like in 97, but for other reasons), Miss Tarisa will continue to care about "over reaction of people", her face and probably her makeup and her hairstyle too.

The current discussion about what BOT will or will not do makes no sense to me. Thailand is too small player to effect US dollar-Thai baht exchange rate. Thus, strengthening or weakaning US dollar versus Thai baht reflects general strengthening or weakaning US dollar. There is a strong anti-correlation between the strength of dollar and price of oil. Thus, no matter in what direction Thai baht moves, it does not effect a price of oil in Thai baht terms (at least for now) and consequently a real level of inflation.

Like previous idiotic measures of BOT (control of capital inflows) made no sense and hurt investments and real estate in Thailand, I hope Teresa will not repeat this mistake (definitely induced by previous idiotic goverment) and will go with regional flow. The difference between 1997 and now is that Thailand has significant currency reserves and is in position to prevent volatile movements of Thai baht and thus prevent a deep crisis.

What is interesting in current situation is clear decoupling of Chinese Yuan (which continue to appreciate)

and most of other regional currencies. Of course, China has huge currency reserves and is in position to do whatever it wants with its currency. Probably, only Taiwan and Singapore are in similar position right now. Other regional currencies seems to go down (in line with growing trade deficits).

Edited June 16, 2008 by mumbu

[Priceless]

Ok not a statement a question.

If I understand correctly fule and food are not a part of the formula for the rate of inflation, If that is true. are we not already in double digit inflation? Since these aspects are not something the world is not going to function without.

[...]

Many central banks use two different measures of inflation:

- "Core" or "underlying" inflation, which does not include fuel and food prices.

- "Headline" inflation, which includes "everything", commonly measured by the CPI, Consumer Price Index.

The reason that many central banks use both these measures is that "headline inflation" is what hurts the average citizen (and many businesses) but "core inflation" is the only thing a central bank can do anything about, e.g. by adjusting the interest rates.

Thai (and many other) media are notoriously bad at indicating which measure they are talking/writing about. "Headline inflation" in Thailand was 7.6% at the end of May. This is the one that the BOT governor said could reach "double digits" by the end of the year. "Core inflation" was at 2.8% at the same time.

/ Priceless

[ray23]

Great explanation Thanks

[cclub75]

Poor Tarisa... she's toasted. Funny to see the reaction of Pridiyathorn (who was BOT governor a few years ago, before to become Finance Minister of... the Junta in 2006... he resigned beginning 2007).

Bank of Thailand Governor Tarisa Watanagase held an emergency press conference today to quell fears of a double-digit inflation growth in Thailand, following a seven per cent inflation increase in May.

The central bank governor used this opportunity to confirm that she isn't quitting her job, amidst speculations of great pressure on her from the government.

Democrat MP and Shadow Finance Minister Korn Chatikavanij stated that the finance minister has the authority to dismiss the central bank governor but it's a complex thing to do as it must be proven that the governor is incompetent or corrupt.

Meanwhile, former Finance Minister Pridiyathorn Devakula insists that the rumor about the central bank governor's dismissal is true on the grounds that she has not followed the government's orders.

http://www.thailandoutlook.tv/

[Old Man River]

quote]

The current discussion about what BOT will or will not do makes no sense to me. Thailand is too small player to effect US dollar-Thai baht exchange rate. Thus, strengthening or weakaning US dollar versus Thai baht reflects general strengthening or weakaning US dollar. There is a strong anti-correlation between the strength of dollar and price of oil. Thus, no matter in what direction Thai baht moves, it does not effect a price of oil in Thai baht terms (at least for now) and consequently a real level of inflation.

Actually, the government of Thailand is too small a player to affect the value of the USD vis a vis currencies other than the THB. It is not, however, too small a player to affect the value of THB/USD exchange rate and has been doing so for many, many years. Like all rates, this exchange rate depends on supply and demand and if a central bank is intervening, it affects the value. It is the same principal when the G8 steps in to support one of their currencies.

I don't understand your comment concerning the soaring price of oil and its impact on headline inflation. If the price of oil changed exactly as the USD/THB exchange rate, then it would be easier to understand. Please explain.

[Old Man River]

Poor Tarisa... she's toasted. Funny to see the reaction of Pridiyathorn (who was BOT governor a few years ago, before to become Finance Minister of... the Junta in 2006... he resigned beginning 2007).

Meanwhile, former Finance Minister Pridiyathorn Devakula insists that the rumor about the central bank governor's dismissal is true on the grounds that she has not followed the government's orders.

http://www.thailandoutlook.tv/

Actually, MR Pridyathorn, in his article in this morning's The Nation, said she is being set up by this government. Better you read this if you can understand it instead of making comments about her hairdo.

[ray23]

Well it looks to me likethe dollar is slipping a bit. Now to see if it's reflected in the baht. The truth day to day it's really hard understand. buy hey got nothing else to do

Yuo can bet if it goes south someone is going to take the heat and our lady is the perfect canidate.

Edited June 16, 2008 by ray23

[Old Man River]

Well it looks to me likethe dollar is slipping a bit. Now to see if it's reflected in the baht. The truth day to day it's really hard understand. buy hey got nothing else to do

Yuo can bet if it goes south someone is going to take the heat and our lady is the perfect canidate.

Until she is not and the government puts its shill in place. I am sure the person will have all the impressive credentials though.

[Johpa]

What about America's constant support for Israel? Regardless of Bush/Obama - Any mafia involed there? Just wondering..

Ah, that old classic diversion, blame it on the Jews, works every time century after century.

[sriracha john]

BANGKOK:-- Bank of Thailand Governor Tarisa Watanagase on Friday voiced concerns regarding declining returns on savings and faster spending --rather than saving -- by consumers who in anticipation of higher inflation are buying now, stating that such action can push inflation to the double-digit level this year.

"Psychologically, if people think that the inflation rate will increase sharply, they will accelerate their spending. So, it is likely the inflation will surge to a double-digit level this year," she said.

U Turn Ahead

Bank of Thailand confident average inflation in 2008 will be under 10%

BANGKOK, June 16 (TNA) - The average inflation in Thailand in 2008 is now projected to be lower than 10 per cent, Bank of Thailand (BoT) governor Tarisa Watanagase said Monday.

Mrs. Tarisa's remarks were made just three days after she had made cautionary remarks that Thailand's inflation this year could possibly hit two digits due to accelerated public spending in response to concerns about the sharp increase of inflation.

This year's inflation will not reach double-digit levels, she affirmed, but emphasised that it is the responsibility of the BoT's Monetary Policy Committee (MPC) to closely monitor inflation in the country so that is did not to climb too high and jeopardise the national economy.

U Turn Ahead (again)... sort of...

BoT says it can control inflation

Governor of the Bank of Thailand (BoT) Tarisa Watanagase expressed her confidence that the central bank can control the inflation rate and it may use monetary polices such as an interest rate increase to deal with inflation which is deemed too high.

The governor affirmed an interest rate increase will not affect the business sector as most of the cost of production of the sector is transportation expenses, not loan interests. Mrs Tarisa also suggests that the government should inject money to stimulate consumption and spending.

BoT, which is responsible for monetary policies, will oversee the economy indirectly, the governor says.

As for remarks by a BoT official * uhmm... that would mean her? * that the inflation rate is likely to hit two digits this year, the governor says a 2-digit inflation may occur in some months depending on the oil price.

- ThaiNews (today)

Edited June 16, 2008 by sriracha john

[mumbu]

quote]

The current discussion about what BOT will or will not do makes no sense to me. Thailand is too small player to effect US dollar-Thai baht exchange rate. Thus, strengthening or weakaning US dollar versus Thai baht reflects general strengthening or weakaning US dollar. There is a strong anti-correlation between the strength of dollar and price of oil. Thus, no matter in what direction Thai baht moves, it does not effect a price of oil in Thai baht terms (at least for now) and consequently a real level of inflation.

Actually, the government of Thailand is too small a player to affect the value of the USD vis a vis currencies other than the THB. It is not, however, too small a player to affect the value of THB/USD exchange rate and has been doing so for many, many years. Like all rates, this exchange rate depends on supply and demand and if a central bank is intervening, it affects the value. It is the same principal when the G8 steps in to support one of their currencies.

I don't understand your comment concerning the soaring price of oil and its impact on headline inflation. If the price of oil changed exactly as the USD/THB exchange rate, then it would be easier to understand. Please explain.

Thai government was not able to stop a demise of Thai baht in 1997, nor it was able to stop baht appreciation from 45 to dollar to 31 to dollar during the last couple of years. In both cases they tried but failed. They may be under the illusion that they can effect the echange rate but in reality they cannot and never did. Now we see the reverse of the course again and no matter what they do they cannot change the very powerful trends. Even bigger players like South Korea cannot do anything about their own exchange rate. One needs to be something like China or Japan to be able to do that.

On the contrary, Singapore can effectively control its exchange rate due to huge currency reserves

(they have one of the biggest sovereign wealth fund in the world), so does HK and Taiwan.

Of course, Thailand can simply fix its exchange rate but the price will be nonconvertibility of Thai baht(Malaysia did it in 1997). On the contrary, HK fixed its exchange rate to US dollar but can maintain this fix through market mechanisms (again because of huge currency reserves).

The facts simply do not confirm your statement: Thailand never was able to control its exchange rate.

In case of dramatic decline of Thai baht, the government can interfere to exchange markets with a better chance to succeed than in 1997 due to significantly higher currency reserves. Yet, this reserves are nowhere close to the levels necessary to maintain exchange rates through market mechanisms.

Another difference with 1997 is that Thai government debt is mostly Thai baht denominated which significantly decreases the possibility of default.

Regarding your second question.

Today is a good example: Dollar is down, price of oil is up. Thai baht may strengthen somewhat versus US dollar but oil is also up in dollar terms. Both effects somewhat compensate one another. Of course, it does not mean that the price of oil is fixed in baht terms. It simply shows that whatever Tarisa does will not effect the price of oil and hence (to significant extend) the level of inflation in Thailand. Again, South Korea is a good example. Much bigger player than Thailand but its rates are on hold. They understand that whatever they do will not influence their inflation level.

[ray23]

Dollar slips a bit then As long a this pattern exists there will be inflation, no matter where you are. SCB site shows the baht at 33.21 this morning

"SOARING CRUDE PRICES

Oil hits record of near $140

LONDON : Crude oil rocketed to a record high of almost US$140 a barrel yesterday despite news that Saudi Arabia was ready to raise output to help cool soaring energy costs. New York main oil futures contract, light sweet crude for July delivery reached $139.89, beating its all-time high of $139.12 recorded on June 6.

New York's main contract later pulled back to stand at $137.73.

''The current proposed (production) increase is set to lift Saudi's output to 9.7 million barrels per day in July, the highest monthly rate since August 1981, as reported by United Nations chief Ban Ki-moon over the weekend,'' said Kevin Norrish, an oil analyst at Barclays Capital.

''However, in our view, the move does not seem to be enough to reverse the recent strength in prices, as it does little to repeal the longer-term expectations for tight demand-supply balances.''

Traders added yesterday that oil prices were winning support from a weaker dollar. The market was also digesting news of a partial halt to oil production in Norway after a fire struck a North Sea platform on Sunday.

Mr Ban has said Saudi Arabian Oil Minister Ali al-Nuaimi plans to raise his kingdom's production by 200,000 barrels a day in July on top of an increase of 300,000 barrels made in June.

''They will respond positively whenever there is a request from their customers, so there is no shortage,'' Mr Ban said of Saudi Arabia after a weekend visit there, adding, ''they don't want to be blamed'' for high oil prices.

An official Saudi announcement could be made at a weekend summit of heads of state, oil ministers and business leaders in Jeddah. AFP "

[Old Man River]

quote]

The current discussion about what BOT will or will not do makes no sense to me. Thailand is too small player to effect US dollar-Thai baht exchange rate. Thus, strengthening or weakaning US dollar versus Thai baht reflects general strengthening or weakaning US dollar. There is a strong anti-correlation between the strength of dollar and price of oil. Thus, no matter in what direction Thai baht moves, it does not effect a price of oil in Thai baht terms (at least for now) and consequently a real level of inflation.

Actually, the government of Thailand is too small a player to affect the value of the USD vis a vis currencies other than the THB. It is not, however, too small a player to affect the value of THB/USD exchange rate and has been doing so for many, many years. Like all rates, this exchange rate depends on supply and demand and if a central bank is intervening, it affects the value. It is the same principal when the G8 steps in to support one of their currencies.

I don't understand your comment concerning the soaring price of oil and its impact on headline inflation. If the price of oil changed exactly as the USD/THB exchange rate, then it would be easier to understand. Please explain.

Thai government was not able to stop a demise of Thai baht in 1997, nor it was able to stop baht appreciation from 45 to dollar to 31 to dollar during the last couple of years. In both cases they tried but failed. They may be under the illusion that they can effect the echange rate but in reality they cannot and never did. Now we see the reverse of the course again and no matter what they do they cannot change the very powerful trends. Even bigger players like South Korea cannot do anything about their own exchange rate. One needs to be something like China or Japan to be able to do that.

On the contrary, Singapore can effectively control its exchange rate due to huge currency reserves

(they have one of the biggest sovereign wealth fund in the world), so does HK and Taiwan.

Of course, Thailand can simply fix its exchange rate but the price will be nonconvertibility of Thai baht(Malaysia did it in 1997). On the contrary, HK fixed its exchange rate to US dollar but can maintain this fix through market mechanisms (again because of huge currency reserves).

The facts simply do not confirm your statement: Thailand never was able to control its exchange rate.

In case of dramatic decline of Thai baht, the government can interfere to exchange markets with a better chance to succeed than in 1997 due to significantly higher currency reserves. Yet, this reserves are nowhere close to the levels necessary to maintain exchange rates through market mechanisms.

Another difference with 1997 is that Thai government debt is mostly Thai baht denominated which significantly decreases the possibility of default.

Regarding your second question.

Today is a good example: Dollar is down, price of oil is up. Thai baht may strengthen somewhat versus US dollar but oil is also up in dollar terms. Both effects somewhat compensate one another. Of course, it does not mean that the price of oil is fixed in baht terms. It simply shows that whatever Tarisa does will not effect the price of oil and hence (to significant extend) the level of inflation in Thailand. Again, South Korea is a good example. Much bigger player than Thailand but its rates are on hold. They understand that whatever they do will not influence their inflation level.

At the end of the day, it looks like we are discussing shades of the same thing. Thailand's floating exchange rate is considered a managed float not a free float because the BOT intercedes in the market from time to time and tweaks the THB/USD exchange rate. This does not stop large swings, but when the currency's fluctuations are minor, they can and have for many years interceded in the market to manage their currency.

While in 1997, the THB was not fixed per se, it was tied to a basket of currencies that was roughly 79 - 80% USD, followed by the DM and then the Yen (i.e. their main trading currencies at the time). For many years they achieved a very stable USD/THB exchange rate despite the THB being freely convertible. Hence, a currency does not need to be non-convertible to be stable. However, this type of basket will no longer work for a country like Thailand given their limited reserves to defend themselves which is why Tarisa has been talking with other Asian nations about setting up a fund to help each other if their currencies are attacked (by speculators). Their inability to defend this basket was shown in 1997 when hedge funds shorted the THB.

On the oil prices, there is no 1:1 ratio between any exchange rate and oil prices. That is what I thought you originally said, but your explanation of "somewhat compensating" shows me you understand it isn't a 1:1 relationship and there is simply way too many other factors at play in exchange rates. It would be nice if it was a 1:1 relationship though.

Note, when you say "whatever Tarisa does will not affect the price of oil", that is exactly correct. Central banks do not affect the prices of oil or food, hence they use core inflation as their measure. Governments use (or should use) headline inflation (includes oil and food prices) because their policies can affect this. In Thailand, Tarisa acts as the government spokesperson for things she has no control over. The BOT no longer has the autonomy it once had.

[cclub75]

Note, when you say "whatever Tarisa does will not affect the price of oil", that is exactly correct. Central banks do not affect the prices of oil or food, hence they use core inflation as their measure. Governments use (or should use) headline inflation (includes oil and food prices) because their policies can affect this. In Thailand, Tarisa acts as the government spokesperson for things she has no control over. The BOT no longer has the autonomy it once had.

Do you seriously believe that the BOT has ever had... autonomy ?

Furthermore I don't agree with "Central banks do not affect the prices of oil or food".

They can have an effect : at least on the imported commodities. With the exchange rate.

Oil is priced in USD.

Furthermore, the BOT could work (I mean really work, and not having tea parties) with the government (if we had a real one of course), to enhance the mix with with fiscal/regulations policies, directed by the gvt.

Especially, during crisis times (like now).

But of course, again and again, we have to say that it won't happen. Because the cure would be way too painfull (massive interest rates hikes, recession, end of bubbles). Particularily for the elite of course (the commoners are suffering, but it's their... function in Thailand )

I would take only one example : Energy Minister start to say that... trucks companies could get a subsidy of 3 THB per liter of diesel (like the bus companies had 2 weeks ago...). You see... they are digging their own grave... with a smile...

"Please mister executioner, 5 more minutes." Give us 6 months of subsidy... Someone will pay. But later.

Politicians don't change, don't learn. Particularily in Thailand.

In the middle of this storm... Miss Tarisa should aknowledge that she has exploded her own Peter Principle. And should go back to her hairstyle, and other face-saving exercises.

[mumbu]

quote]

The current discussion about what BOT will or will not do makes no sense to me. Thailand is too small player to effect US dollar-Thai baht exchange rate. Thus, strengthening or weakaning US dollar versus Thai baht reflects general strengthening or weakaning US dollar. There is a strong anti-correlation between the strength of dollar and price of oil. Thus, no matter in what direction Thai baht moves, it does not effect a price of oil in Thai baht terms (at least for now) and consequently a real level of inflation.

Actually, the government of Thailand is too small a player to affect the value of the USD vis a vis currencies other than the THB. It is not, however, too small a player to affect the value of THB/USD exchange rate and has been doing so for many, many years. Like all rates, this exchange rate depends on supply and demand and if a central bank is intervening, it affects the value. It is the same principal when the G8 steps in to support one of their currencies.

I don't understand your comment concerning the soaring price of oil and its impact on headline inflation. If the price of oil changed exactly as the USD/THB exchange rate, then it would be easier to understand. Please explain.

Thai government was not able to stop a demise of Thai baht in 1997, nor it was able to stop baht appreciation from 45 to dollar to 31 to dollar during the last couple of years. In both cases they tried but failed. They may be under the illusion that they can effect the echange rate but in reality they cannot and never did. Now we see the reverse of the course again and no matter what they do they cannot change the very powerful trends. Even bigger players like South Korea cannot do anything about their own exchange rate. One needs to be something like China or Japan to be able to do that.

On the contrary, Singapore can effectively control its exchange rate due to huge currency reserves

(they have one of the biggest sovereign wealth fund in the world), so does HK and Taiwan.

Of course, Thailand can simply fix its exchange rate but the price will be nonconvertibility of Thai baht(Malaysia did it in 1997). On the contrary, HK fixed its exchange rate to US dollar but can maintain this fix through market mechanisms (again because of huge currency reserves).

The facts simply do not confirm your statement: Thailand never was able to control its exchange rate.

In case of dramatic decline of Thai baht, the government can interfere to exchange markets with a better chance to succeed than in 1997 due to significantly higher currency reserves. Yet, this reserves are nowhere close to the levels necessary to maintain exchange rates through market mechanisms.

Another difference with 1997 is that Thai government debt is mostly Thai baht denominated which significantly decreases the possibility of default.

Regarding your second question.

Today is a good example: Dollar is down, price of oil is up. Thai baht may strengthen somewhat versus US dollar but oil is also up in dollar terms. Both effects somewhat compensate one another. Of course, it does not mean that the price of oil is fixed in baht terms. It simply shows that whatever Tarisa does will not effect the price of oil and hence (to significant extend) the level of inflation in Thailand. Again, South Korea is a good example. Much bigger player than Thailand but its rates are on hold. They understand that whatever they do will not influence their inflation level.

At the end of the day, it looks like we are discussing shades of the same thing. Thailand's floating exchange rate is considered a managed float not a free float because the BOT intercedes in the market from time to time and tweaks the THB/USD exchange rate. This does not stop large swings, but when the currency's fluctuations are minor, they can and have for many years interceded in the market to manage their currency.

While in 1997, the THB was not fixed per se, it was tied to a basket of currencies that was roughly 79 - 80% USD, followed by the DM and then the Yen (i.e. their main trading currencies at the time). For many years they achieved a very stable USD/THB exchange rate despite the THB being freely convertible. Hence, a currency does not need to be non-convertible to be stable. However, this type of basket will no longer work for a country like Thailand given their limited reserves to defend themselves which is why Tarisa has been talking with other Asian nations about setting up a fund to help each other if their currencies are attacked (by speculators). Their inability to defend this basket was shown in 1997 when hedge funds shorted the THB.

On the oil prices, there is no 1:1 ratio between any exchange rate and oil prices. That is what I thought you originally said, but your explanation of "somewhat compensating" shows me you understand it isn't a 1:1 relationship and there is simply way too many other factors at play in exchange rates. It would be nice if it was a 1:1 relationship though.

Note, when you say "whatever Tarisa does will not affect the price of oil", that is exactly correct. Central banks do not affect the prices of oil or food, hence they use core inflation as their measure. Governments use (or should use) headline inflation (includes oil and food prices) because their policies can affect this. In Thailand, Tarisa acts as the government spokesperson for things she has no control over. The BOT no longer has the autonomy it once had.

You are wrong. BOT never had the ability to maintain the stable exchange rate. If there were periods of relative stability, it is due to market conditions and fundamentals rather than "Hercules" efforts of BOT.

Indeed, qualitative behavior of various currencies in the region (Phil. Peso, Mal. ringit, Ind. rupiayh, Korean won) is quite similar despite the fact that corresponding governments use quite different tools to manage their exchange rate. When you refer to speculators, you, in fact, refer to market mechanism which among other things serve the purpose to find equilibrium in exchange rates.

You are also wrong when you are saying that managing currency exchange rates by targeting a basket of currencies is impossible under present market conditions. In fact, that is precisely what Singapore is currently doing. They manage to do that with a target which takes into account the level of inflation. In fact, MOS (Monetary Authority of Singapore which plays a role of Central bank over there) does not use interest rates as their monetary tool at all. Singapore dollar is freely convertible and tradable offshore.

It is, of course, possible only due to huge currency reserves and good fundamentals (trade surpluses, rate of growth etc).

The recent rise of Thai baht is a good example of total impotence of BOT. All their "measures" did nothing to stem it but did hurt Thai economy. Malaysia did nothing with essentially the same results. In the end of the day appreciation of regional currencies proved to be a positive thing in light of current threat of inflation. "Speculators" had nothing to do with that (as well as with crash of 1997 which objectively was unavoidable) as reasonable people like Badawi said all along .

[Old Man River]

quote]

The current discussion about what BOT will or will not do makes no sense to me. Thailand is too small player to effect US dollar-Thai baht exchange rate. Thus, strengthening or weakaning US dollar versus Thai baht reflects general strengthening or weakaning US dollar. There is a strong anti-correlation between the strength of dollar and price of oil. Thus, no matter in what direction Thai baht moves, it does not effect a price of oil in Thai baht terms (at least for now) and consequently a real level of inflation.

Actually, the government of Thailand is too small a player to affect the value of the USD vis a vis currencies other than the THB. It is not, however, too small a player to affect the value of THB/USD exchange rate and has been doing so for many, many years. Like all rates, this exchange rate depends on supply and demand and if a central bank is intervening, it affects the value. It is the same principal when the G8 steps in to support one of their currencies.

I don't understand your comment concerning the soaring price of oil and its impact on headline inflation. If the price of oil changed exactly as the USD/THB exchange rate, then it would be easier to understand. Please explain.

Thai government was not able to stop a demise of Thai baht in 1997, nor it was able to stop baht appreciation from 45 to dollar to 31 to dollar during the last couple of years. In both cases they tried but failed. They may be under the illusion that they can effect the echange rate but in reality they cannot and never did. Now we see the reverse of the course again and no matter what they do they cannot change the very powerful trends. Even bigger players like South Korea cannot do anything about their own exchange rate. One needs to be something like China or Japan to be able to do that.

On the contrary, Singapore can effectively control its exchange rate due to huge currency reserves

(they have one of the biggest sovereign wealth fund in the world), so does HK and Taiwan.

Of course, Thailand can simply fix its exchange rate but the price will be nonconvertibility of Thai baht(Malaysia did it in 1997). On the contrary, HK fixed its exchange rate to US dollar but can maintain this fix through market mechanisms (again because of huge currency reserves).

The facts simply do not confirm your statement: Thailand never was able to control its exchange rate.

In case of dramatic decline of Thai baht, the government can interfere to exchange markets with a better chance to succeed than in 1997 due to significantly higher currency reserves. Yet, this reserves are nowhere close to the levels necessary to maintain exchange rates through market mechanisms.

Another difference with 1997 is that Thai government debt is mostly Thai baht denominated which significantly decreases the possibility of default.

Regarding your second question.

Today is a good example: Dollar is down, price of oil is up. Thai baht may strengthen somewhat versus US dollar but oil is also up in dollar terms. Both effects somewhat compensate one another. Of course, it does not mean that the price of oil is fixed in baht terms. It simply shows that whatever Tarisa does will not effect the price of oil and hence (to significant extend) the level of inflation in Thailand. Again, South Korea is a good example. Much bigger player than Thailand but its rates are on hold. They understand that whatever they do will not influence their inflation level.

At the end of the day, it looks like we are discussing shades of the same thing. Thailand's floating exchange rate is considered a managed float not a free float because the BOT intercedes in the market from time to time and tweaks the THB/USD exchange rate. This does not stop large swings, but when the currency's fluctuations are minor, they can and have for many years interceded in the market to manage their currency.

While in 1997, the THB was not fixed per se, it was tied to a basket of currencies that was roughly 79 - 80% USD, followed by the DM and then the Yen (i.e. their main trading currencies at the time). For many years they achieved a very stable USD/THB exchange rate despite the THB being freely convertible. Hence, a currency does not need to be non-convertible to be stable. However, this type of basket will no longer work for a country like Thailand given their limited reserves to defend themselves which is why Tarisa has been talking with other Asian nations about setting up a fund to help each other if their currencies are attacked (by speculators). Their inability to defend this basket was shown in 1997 when hedge funds shorted the THB.

On the oil prices, there is no 1:1 ratio between any exchange rate and oil prices. That is what I thought you originally said, but your explanation of "somewhat compensating" shows me you understand it isn't a 1:1 relationship and there is simply way too many other factors at play in exchange rates. It would be nice if it was a 1:1 relationship though.

Note, when you say "whatever Tarisa does will not affect the price of oil", that is exactly correct. Central banks do not affect the prices of oil or food, hence they use core inflation as their measure. Governments use (or should use) headline inflation (includes oil and food prices) because their policies can affect this. In Thailand, Tarisa acts as the government spokesperson for things she has no control over. The BOT no longer has the autonomy it once had.

You are wrong. BOT never had the ability to maintain the stable exchange rate. If there were periods of relative stability, it is due to market conditions and fundamentals rather than "Hercules" efforts of BOT.

Indeed, qualitative behavior of various currencies in the region (Phil. Peso, Mal. ringit, Ind. rupiayh, Korean won) is quite similar despite the fact that corresponding governments use quite different tools to manage their exchange rate. When you refer to speculators, you, in fact, refer to market mechanism which among other things serve the purpose to find equilibrium in exchange rates.

You are also wrong when you are saying that managing currency exchange rates by targeting a basket of currencies is impossible under present market conditions. In fact, that is precisely what Singapore is currently doing. They manage to do that with a target which takes into account the level of inflation. In fact, MOS (Monetary Authority of Singapore which plays a role of Central bank over there) does not use interest rates as their monetary tool at all. Singapore dollar is freely convertible and tradable offshore.

It is, of course, possible only due to huge currency reserves and good fundamentals (trade surpluses, rate of growth etc).

The recent rise of Thai baht is a good example of total impotence of BOT. All their "measures" did nothing to stem it but did hurt Thai economy. Malaysia did nothing with essentially the same results. In the end of the day appreciation of regional currencies proved to be a positive thing in light of current threat of inflation. "Speculators" had nothing to do with that (as well as with crash of 1997 which objectively was unavoidable) as reasonable people like Badawi said all along .

A few comments. Yes, of course you are right. The basket of currencies the BOT used in the early 1990's that resulted in a stable USD/THB exchange rate had nothing to do with the BOT. It was pure coincidence.

My comments on speculators related to their shorting the THB in 1997. If you doubt they shorted the THB in 1997, please google it and spend the next 10 years reading about it.

On current ability to use a basket of currencies based on reserve position, I was referring to Thailand not Singapore. I thought this was Thailand.

Lastly, of course all the country's problems are the fault of the BOT. The economic problems must be blamed on the BOT. This and the previous government were economic whiz kids so we must blame the BOT, right?

[Old Man River]

Note, when you say "whatever Tarisa does will not affect the price of oil", that is exactly correct. Central banks do not affect the prices of oil or food, hence they use core inflation as their measure. Governments use (or should use) headline inflation (includes oil and food prices) because their policies can affect this. In Thailand, Tarisa acts as the government spokesperson for things she has no control over. The BOT no longer has the autonomy it once had.

Do you seriously believe that the BOT has ever had... autonomy ?

Furthermore I don't agree with "Central banks do not affect the prices of oil or food".

They can have an effect : at least on the imported commodities. With the exchange rate.

Oil is priced in USD.

Furthermore, the BOT could work (I mean really work, and not having tea parties) with the government (if we had a real one of course), to enhance the mix with with fiscal/regulations policies, directed by the gvt.

Especially, during crisis times (like now).

But of course, again and again, we have to say that it won't happen. Because the cure would be way too painfull (massive interest rates hikes, recession, end of bubbles). Particularily for the elite of course (the commoners are suffering, but it's their... function in Thailand )

I would take only one example : Energy Minister start to say that... trucks companies could get a subsidy of 3 THB per liter of diesel (like the bus companies had 2 weeks ago...). You see... they are digging their own grave... with a smile...

"Please mister executioner, 5 more minutes." Give us 6 months of subsidy... Someone will pay. But later.

Politicians don't change, don't learn. Particularily in Thailand.

In the middle of this storm... Miss Tarisa should aknowledge that she has exploded her own Peter Principle. And should go back to her hairstyle, and other face-saving exercises.

Cclub75, I don't know what it is about Tarisa's make-up and hairdo you find so interesting. I am more interested in things like the US Open, but then that is me.

Now to economics. I agree that the BOT was never completely autonomous in Thailand, but the recent law change have made it less than before. There was a time in the not so distant past when MR Pridyathorn and Tarisa went head to head with the former PM and his finance people over the KTB loans, which is now one of the court cases against Thaksin. Since you are in Thailand, I know you will remember it.

Cclub75, you think that central banks have an impact on oil and food prices due to their impact on exchange rates. Better you discuss this with Mumbu, who thinks governments cannot impact an exchange rate and there is no relation between the strength of the USD and the price of oil in THB terms. Direct quotes are: "There is a strong anti-correlation between the strength of dollar and price of oil. Thus, no matter in what direction Thai baht moves, it does not effect a price of oil in Thai baht terms (at least for now) and consequently a real level of inflation." Also, another quote: "Thai government was not able to stop a demise of Thai baht in 1997, nor it was able to stop baht appreciation from 45 to dollar to 31 to dollar during the last couple of years. In both cases they tried but failed. They may be under the illusion that they can effect the echange rate but in reality they cannot and never did."

By the way, oil is not the only energy related product in USD's. You know I know this and I know you know this so let's not be condescending.

Don't worry, the next BOT governor is likely someone with past BOT experience and is friendly with the former PM. You will like him.

I agree that interest rates are a tool that should have been used earlier than later, but then again, your favorite government isn't so keen on raising rates. After all, one of their main campaign promises was to lower prices. Not so easy in the real world.

BTW, I also find Thai Crisis an excellent source. Where does he find the time?

[ray23]

Doesn't sound like to me not everbody on here is convienced they can pull this one off

"

Keeping baht strong best way to curb inflation, says economist

BANGKOK, June 17 (TNA) – Keeping Thailand's baht strong is the the country's best approach to containing the current inflation, according to a leading economist.

Phatra Securities president Supavud Saichue said Thailand's surging inflation had not yet become an obstacle to economic growth.

However, the rate must be controlled to stay at around 3 per cent rather than the 7 per cent rate being experienced at present, or it would cause various problems to the economic system.

He said the Bank of Thailand had already kept the public informed of the interest rate rise intended to curb the inflation rate because the current rate is lower than it should be.

Asked about a way to contain inflation, Dr. Supavud said he viewed the most efficient approach to reducing inflation is to keep the baht stronger.

He conceded the public must accept the fact that product prices will go up if oil prices continue to rise. (TNA)"

[Tudo]

Just backing up the currency intervention with some verbal reenforcement I think. Difficult to see the BOT having the guts to raise interest rates now, even if they should. Would be like throwing oil on this political fire everybody seems worked up about.

BTDT: The mistake made in America was believing in recession-free capitalism. With the benefit of hindsight it looks like they should have taken the pain back in 2001. What Benanke could do now is announce that he intends to raise rates 25 points per month for the next 9-12 months. Reign the oil bubble in, give banks a sense of urgency with regards to righting their balance sheets. Forget avoiding recession, concentrate on avoiding long-term damage like that which has crippled Japan.

Wrong. The mistake America has made is thinking that socialism and prosperity can walk hand in hand.

It doesn't, not for the masses anyway. Never did, never will. They are diametrically opposed. Perhaps the greatest tragedy is that most of these nitwits can't even define it .

Edited June 19, 2008 by Tudo

[cclub75]

Cclub75, I don't know what it is about Tarisa's make-up and hairdo you find so interesting. I am more interested in things like the US Open, but then that is me.

On the contrary, it's highly interesting as a good contrarian indicator. ;-) Hairstyle is probably what she controls the most... Therefore, you can understand the current BOT's mood by looking at her.

Now to economics. I agree that the BOT was never completely autonomous in Thailand, but the recent law change have made it less than before. There was a time in the not so distant past when MR Pridyathorn and Tarisa went head to head with the former PM and his finance people over the KTB loans, which is now one of the court cases against Thaksin.

That's a fundamental mistake. You assume that when a law is enacted, the problem is solved.

I know the new BOT Act. But what's the point ? Everybody knows that a strong PM, or a strong Finance Minister can take his phone and make a deal directly with the BOT's governor. Despite all the laws in the world. it works like in Thailand.

But sure, on the paper, with the new law, the BOT's governor is going to be much more independant.

As to say, "before it was worse", again that's obvious, but it doesn't help us to understand the current situation.

Cclub75, you think that central banks have an impact on oil and food prices due to their impact on exchange rates. Better you discuss this with Mumbu, who thinks governments cannot impact an exchange rate and there is no relation between the strength of the USD and the price of oil in THB terms.

I don't really understand your point. I said that central banks can have an impact, via the exchange rate. But it can't of course solve the problem, alone. It's just a tool.

By the way, oil is not the only energy related product in USD's. You know I know this and I know you know this so let's not be condescending.

What are you talking about ? I'm not condescending ! What you say reinforce my own reasoning : many imported commodities are priced in USD (I was just mentioning oil as an example). Therefore if the BOT can increase the exchange rate THB-USD then it's a tool to fight inflation.

Don't worry, the next BOT governor is likely someone with past BOT experience and is friendly with the former PM. You will like him.

I agree that interest rates are a tool that should have been used earlier than later, but then again, your favorite government isn't so keen on raising rates. After all, one of their main campaign promises was to lower prices. Not so easy in the real world.

You're confused : my critics against the BOT are absolutly not politically motivated. And you should know that if I didn't like the Junta (I confess), I don't like neither the PPP's clowns and particularily Samak.

I refuse the rethoric : if you're not in one camp, then you're in the other one.

As far as economy is concerned, both camps have done a horrible job.

[Old Man River]

Cclub75, I don't know what it is about Tarisa's make-up and hairdo you find so interesting. I am more interested in things like the US Open, but then that is me.

On the contrary, it's highly interesting as a good contrarian indicator. ;-) Hairstyle is probably what she controls the most... Therefore, you can understand the current BOT's mood by looking at her.

Now to economics. I agree that the BOT was never completely autonomous in Thailand, but the recent law change have made it less than before. There was a time in the not so distant past when MR Pridyathorn and Tarisa went head to head with the former PM and his finance people over the KTB loans, which is now one of the court cases against Thaksin.

That's a fundamental mistake. You assume that when a law is enacted, the problem is solved.

I know the new BOT Act. But what's the point ? Everybody knows that a strong PM, or a strong Finance Minister can take his phone and make a deal directly with the BOT's governor. Despite all the laws in the world. it works like in Thailand.

But sure, on the paper, with the new law, the BOT's governor is going to be much more independant.

As to say, "before it was worse", again that's obvious, but it doesn't help us to understand the current situation.

Cclub75, you think that central banks have an impact on oil and food prices due to their impact on exchange rates. Better you discuss this with Mumbu, who thinks governments cannot impact an exchange rate and there is no relation between the strength of the USD and the price of oil in THB terms.

I don't really understand your point. I said that central banks can have an impact, via the exchange rate. But it can't of course solve the problem, alone. It's just a tool.

By the way, oil is not the only energy related product in USD's. You know I know this and I know you know this so let's not be condescending.

What are you talking about ? I'm not condescending ! What you say reinforce my own reasoning : many imported commodities are priced in USD (I was just mentioning oil as an example). Therefore if the BOT can increase the exchange rate THB-USD then it's a tool to fight inflation.

Don't worry, the next BOT governor is likely someone with past BOT experience and is friendly with the former PM. You will like him.

I agree that interest rates are a tool that should have been used earlier than later, but then again, your favorite government isn't so keen on raising rates. After all, one of their main campaign promises was to lower prices. Not so easy in the real world.

You're confused : my critics against the BOT are absolutly not politically motivated. And you should know that if I didn't like the Junta (I confess), I don't like neither the PPP's clowns and particularily Samak.

I refuse the rethoric : if you're not in one camp, then you're in the other one.

As far as economy is concerned, both camps have done a horrible job.

I am not as good as you are in splitting the message and putting in comments, so I will make my points one by one below:

Hairstyle - Let's skip this. You brought it up first and it should not be part of this discussion.

New BOT Act - The new act is designed to make the BOT less independent than before. It is a move in the wrong direction, but given this government, not surprising.

Central Banks Having an Impact on Food and Oil Prices Via the Exchange Rate - We agreed on this right from the beginning. I was referring to another poster who was arguing completely the opposite and I gave you his quotes. I had hoped you would debate with him as I was getting tired of it.

USD as Basis Currency for Oil - Sorry, I didn't understand why you were stating the obvious.

My comment on you're supporting the existing government - It was a cheap shot on my part. I know you don't support them. My bad.

Conclusion - I think the only thing we disagree on is the BOT Governor. Fair enough, but on the BankThai shares, she is being set up. Pridyathorn is clear on this, although the quote you chose to use was from an article that said the opposite. I thought you would know better and was surprised you quoted the article that was obviously incorrect. Pridyathorn's weekly column in The Nation was very clear on what this current government is trying to do.

[ray23]

Bot today said that the baht is stablizing becay use foriegners are bringing funds into a unnamed secondary market. Thai Borse fell 3% today and now has the destincition of being the worst performing market in S/E Asia.

Could it be that the baht stablizing because the dollar has been dropping. I've been watching all week for the baht to go back to 32 it didn't.

You know I don't mean to be rude, but the explantion just doesn't seem logical to me. I hope she has a better handle on this, then I do.

Any idea what secondary location she might have been speaking of?

Shell shut down it's oil production in the off shore region of Nigeria, due to attacks on the riggs. Now that is bound to help inflation.

Things are not really looking bright and cheery today

[Johpa]

Just backing up the currency intervention with some verbal reenforcement I think. Difficult to see the BOT having the guts to raise interest rates now, even if they should. Would be like throwing oil on this political fire everybody seems worked up about.

BTDT: The mistake made in America was believing in recession-free capitalism. With the benefit of hindsight it looks like they should have taken the pain back in 2001. What Benanke could do now is announce that he intends to raise rates 25 points per month for the next 9-12 months. Reign the oil bubble in, give banks a sense of urgency with regards to righting their balance sheets. Forget avoiding recession, concentrate on avoiding long-term damage like that which has crippled Japan.

Wrong. The mistake America has made is thinking that socialism and prosperity can walk hand in hand.

It doesn't, not for the masses anyway. Never did, never will. They are diametrically opposed. Perhaps the greatest tragedy is that most of these nitwits can't even define it .

Uh, before you begin talking about other nitwits, perhaps you can elaborate upon where you see socialism permeating American economic policy because, frankly, I just don't see it myself. Perhaps you can also elaborate on how you perceive 'prosperity'. Are you suggesting that a socialist country like Norway has not seen any increase in prosperity over the past 50 years? Is there an underground of square heads seeking to emigrate and flee economic oppression? And then perhaps you could be a wee bit more definitive and explain what it is exactly that your imagined nitwit can't define.

[Tudo]

Just backing up the currency intervention with some verbal reenforcement I think. Difficult to see the BOT having the guts to raise interest rates now, even if they should. Would be like throwing oil on this political fire everybody seems worked up about.

BTDT: The mistake made in America was believing in recession-free capitalism. With the benefit of hindsight it looks like they should have taken the pain back in 2001. What Benanke could do now is announce that he intends to raise rates 25 points per month for the next 9-12 months. Reign the oil bubble in, give banks a sense of urgency with regards to righting their balance sheets. Forget avoiding recession, concentrate on avoiding long-term damage like that which has crippled Japan.

Wrong. The mistake America has made is thinking that socialism and prosperity can walk hand in hand.

It doesn't, not for the masses anyway. Never did, never will. They are diametrically opposed. Perhaps the greatest tragedy is that most of these nitwits can't even define it .

Uh, before you begin talking about other nitwits, perhaps you can elaborate upon where you see socialism permeating American economic policy because, frankly, I just don't see it myself. Perhaps you can also elaborate on how you perceive 'prosperity'. Are you suggesting that a socialist country like Norway has not seen any increase in prosperity over the past 50 years? Is there an underground of square heads seeking to emigrate and flee economic oppression? And then perhaps you could be a wee bit more definitive and explain what it is exactly that your imagined nitwit can't define.

Obviously..........

And if in fact you live here,. you are exactly what I'm referring to. That's the type of ignorance that's resulted in the empire building all the way thru the lowest equity since 1945.

Well, duh, what's equity you might ask.

Look it up in a dictionary.

[ray23]

Is this really the best approach to inflation?

I understand the interest rates, but the logic of the other escapes me.

" Bank of Thailand issues call for spending spree

By Anoma Srisukkasem

The Nation

Published on June 21, 2008

The government should fully disburse its budget this year to boost economic growth to 6 per cent, a deputy governor of the Bank of Thailand (BOT) said yesterday.

She said this was because the central bank needed to raise its policy interest rate to fight inflation before it is too late.

Atchana Waiquamdee said the government could achieve 6-per-cent growth if its budget disbursement reached 94 per cent and state enterprises actually used at least 80 per cent of their investment budget.

Skyrocketing oil prices could affect economic growth, as the current price is already beyond the central bank's worst-case scenario of US$113 (Bt3,800) per barrel. But the better-than-expected US economy was a positive factor for the Kingdom's economy, she said.

The deputy governor said the central bank needed to control "inflation expectation" amid a negative real policy interest rate or else consumer spending would accelerate, which would fuel inflation incessantly.

Moreover, the country's capacity use is nearly full, because the labour market is tight with a low unemployment rate. Rising prices of goods and services will put additional pressure on wage adjustment, Atchana said.

"We must consider whether the real policy interest rate is proper for the economy. If we do not slow down inflation, it may not stay under control. This will force us to use a strong dose of medicine, which would eventually drag down the economy," she said.

"Giving gradual doses and keeping a close eye on whether the economy can bear them or not is better than letting inflation overshoot and eventually get out of control," the deputy governor said.

Nimit Nontapunthawat of Bangkok Bank said if inflation expectation was allowed to occur, inflation would be high and prolonged. This would dampen the country's savings, including deposits of Bt6 trillion, resulting in a slump in purchasing power and economic growth.

He predicts the baht will move between 32 and 34 to the US dollar this year. "

[Charleswehner]

There has been the usual Freeakmason slander of Joseph Kennedy. Sometimes it is Freeaks who slander him directly, sometimes it is embittered people who think they know things without doing proper research.

There was only one entry in which a Joseph Kennedy bought whiskey. That was from the Hague company in Canada. In their files the name "Joseph" appears beside the word "kennedy". Both names are common amongst the Irish, so it coulld have been anybody.

I repeat that he was the president of a bank, and made money from shares. Then he anticipated the Wall Street Crash and sold his shares in time.

It was a Freeakmason SLANDER that he was a bootlegger. However, Bush is indeed a Skull-and-Bones Freeak.

With money and time on his hands, he decided to enter politics. We are not talking Mafia, because the Mafia are tiny compared with the Freeakmasons. Joseph Kennedy was against the Freeaks, who had taken all the food out of Ireland at the time of the potato blight. His view - a correct one - was that the British government was as bad as Hitler. His view was that America should stay out of the Second World War, and it did until Pearl Harbor. Joseph Kennedy therefore saved many American lives.

His son was betrayed by Freeak doctors for twenty-one years. His disease began when he was nine, and he only got a correct diagnosis when he was thirty. After that, he was in treatment which saved his life. All other "doctors" had been Freeak fakes.

"We are opposed throughout the world by a monolithic and ruthless conspiracy that relies primarily on covert means to expand its sphere of influence", he said when he was four months in office (April 1961).

Then he set about clearing the Freeak advisors from the White House. He brought in fourteen honest university professors as advisors. The Freeaks were losing power, so they killed him.

Freeaks are terrorists who belive that ALL EVIL IS GOOD.

If you start chasing away investors by "bubble babble" and inflated talk of inflation, the Freeaks who control the press agencies will gladly spread the panic for you until your economy really collapses.

Every word of panic sends millions of Dollars of investment abroad.

Have faith in your nation, and call off the panic that this misguided minister started.

Charles Douglas Wehner