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My GF has been complaining that prices in the local market have been rising a lot over the last couple of weeks. We are in a tourist area, so a lot of the produce is sold to small restaurants and guest houses. The number of tourists is down and now, after the flurry over the New Year, has dropped off even further.

"Why are the prices rising?" is the question.

It isn't the price of fuel, which was the cause last year and the fall in price by almost 50% certainly does not seem to have filtered through to any price reductions here. And it isn't extra demand or a shortage of produce, the weather may be a bit colder, but surely the chickens don't stop laying eggs or the pigs stop getting fatter?

No, I think it is the Thai mind set, "I have to have "x" income, so if demand falls off I have to increase the prices".

Hmm, looks like I will be reducing the visits to the local market and travel some 20 clicks to the the next big market, where prices have NOT risen, as the produce is mostly sold to customers much less affected by the number of Farang eating.

When will all this hated world deflation finally deflate my actual living expenses?

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My GF has been complaining that prices in the local market have been rising a lot over the last couple of weeks. We are in a tourist area, so a lot of the produce is sold to small restaurants and guest houses. The number of tourists is down and now, after the flurry over the New Year, has dropped off even further.

"Why are the prices rising?" is the question.

It isn't the price of fuel, which was the cause last year and the fall in price by almost 50% certainly does not seem to have filtered through to any price reductions here. And it isn't extra demand or a shortage of produce, the weather may be a bit colder, but surely the chickens don't stop laying eggs or the pigs stop getting fatter?

No, I think it is the Thai mind set, "I have to have "x" income, so if demand falls off I have to increase the prices".

Hmm, looks like I will be reducing the visits to the local market and travel some 20 clicks to the the next big market, where prices have NOT risen, as the produce is mostly sold to customers much less affected by the number of Farang eating.

When will all this hated world deflation finally deflate my actual living expenses?

Deflation is beginning to occur in Western economies. At the moment we are only seeing reductions in inflation rates, but with reduced bank lending and lack of consumer confidence deflation will occur. How Thailand will handle it is anyone's guess - the usual "rules" of supply and demand don't work here. This is aggravated by Thailand's ability to create a different market for farang

An example to illustrate. Market trader is selling less and less to Thais each day, but does not reduce price. (Western economics suggest he would reduce to optimise his marginal profit) At end of week farang comes along and pays an exorbitant price. Trader is content as he has made his minimum profit target for the week on one sale.

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