Reasons of change

[Lite Beer]

Academic says Thai economy is approaching recession

BANGKOK: -- The Thai economy is approaching recession with the growth rate projection for the first half of the year to register 2.5 percent in the best case scenario or minus 0.5 percent in the worst case scenario, said Mr Anusorn Thamjai, dean of the economics faculty of Rangsit University.

He attributed the dismal growth rate to the ongoing political conflict which, he claimed, has already caused 490 billion baht in damages from lost opportunities and investment loss.

However, he warned that loss could spiral to one trillion baht in value in case the conflict has descended into a civil war, widespread bloodshed or a coup.

Despite global economic recovery which has benefited Thai exports, he said that political conflict has affected tourism business, caused delay in the dispensing of government budget and rice repayments to farmers under the rice pledging scheme.

Mr Anusorn suggested that the government lower policy rate from 2.25 percent to 1.5 percent to stimulate the economy.

Regarding the plight confronted by rice farmers over delayed repayments, he said the government must improve its efficiency in unloading its huge rice stockpiles with minimum loss and, at the same time, must convince financial institutions to have faith in the government so that they will be willing to lend to the government so it will be able to repay the farmers.

Source: http://englishnews.thaipbs.or.th/academic-says-thai-economy-approaching-recession/?utm_source=rss&utm_medium=rss&utm_campaign=academic-says-thai-economy-approaching-recession

-- Thai PBS 2014-02-04

[ikurauni]

I bet many investors got intimidated by the crisis.

There is an increased financial risk associated with this political conflict.

How many times have they done this in the past several years? Investors are pulling the money from Thailand.

There is a real estate bubble already.

Many foreign companies suffered by the mega flood a few years ago.

The financial risk here is much greater now.

The government has a huge debt from the rice scheme.

It is not all Yingluck's fault but she made a great amount of contributions to the current situation.

[lostmebike]

'...convince financial institutions to have faith in the government so that they will be willing to lend to the government so it will be able to repay the farmers.'

Is that not a next to impossible thing to do right now though? Who does have faith in this government?

[onni4me]

Well, the world economy is not doing so great either. Due to money printing, quantitative easing, tapering...all these nice words to cover the fact that central banks are issuing new virtual money through their computers each and every day to keep the bubble from bursting. The fractional money system has been in place from 1984 Reagan period when all these niceties including Free Trade Agreements and such came in to equation.

As result, everyone seems to own banks against these imaginary monies all real assets they have and there lies the problem. When the shit hits the ceiling, the real assets go to these banks and the BIG MONEY that owns them.

I also would like to loan fictitious money to everyone and when they failed to pay just simply take everything from them. This system fits Thailand extremely well since the whole country is owned by few families that got real money to take what they want. Real money is the one based on real assets. I don't consider stocks, derivatives, credit default swaps or such papers as real assets when things go pear shaped.

I see tough times ahead and wouldn't be at all surprised to see local or global war igniting from the monetary policies applied. Policies are based on eternal growth and that is not sustainable - it is a bubble waiting to burst. In Thailand's case around 7% GDP growth per annum to keep the boat afloat. Good luck with that.

[bushwacker]

I think this guy is missing the boat! There is no government!

[Pib]

The govt seems to be saying they won't reach the 4% or even 3% growth they expected in their crystal political balls from a few months ago....they are now mumbling maybe only 2.5% like this academic is projecting as a best case. Knowing government's routinely make forecasts on the high side, I expect we'll see more very reluctant GDP revisions downward by the govt over the coming months and 2.5% GDP growth may indeed be a best case scenario which is low for an emerging market like Thailand....for a mature market like the U.S. or Eurozone 2.5% is OK (not great, but OK).

[BestBitterPhuket]

Is Suthep short selling stocks on the SET?

[Daniel Boon]

my view is simplistic ...

money is the representative of energy; there is only so much energy available.

there are two types of motivators supply and demand, that set a value on energy / growth.

Humans seem to believe that growth is exponential (or at least those that herd humans do); however, the one thing all have taken for granted is energy, which is finite (puts a cap on growth); the concentrated forms of solar energy known as 'fossil fuels'.

Mr Anusorn Thamjai is correct, but it is not just Thailand, it is the world that is in recession and headed for a depression.

When (fossil fuel) energy was cheap (less than $40 a barrel) and demand for product was high (with corporate government, the world over, promoting population growth under the guise of defense from neighbouring countries); however the cost of diminishing energy supplies has more than double.

As 'onni4me' wrote, bankers facilitated lines of credit without factually having the money to do so ... this is where the theft commenced, where people were allowed to borrow against future energy / money.

The penny dropped some time ago; we have seen countries populations utilized for minimum wages, and when they do not comply, those industries were moved; even the Chines have a growing number of previously employed people now unemployed because a) workers in other countries with work for less, environmental issues are ignored and c) those in government facilitate tax and other advantages for a piece of the action.

So back to my original point. Earth has a finite energy source; we have all but expended it and the 'money' that is floating in the system are promissory notes written to the factor of (say) 80 against energy that factually exists.

Originally, I always considered Peak Oil as that point in time where - like a milkshake drink - the last dregs were sucked up though the straw; however, Peak Oil actually is where the energy-cost of locating, extracting and refining is greater than the energy it will generate / people can afford.

Every species propagates until such a point in time where it overruns the resources to support it.

[SheungWan]

my view is simplistic ...

money is the representative of energy; there is only so much energy available.

there are two types of motivators supply and demand, that set a value on energy / growth.

Humans seem to believe that growth is exponential (or at least those that herd humans do); however, the one thing all have taken for granted is energy, which is finite (puts a cap on growth); the concentrated forms of solar energy known as 'fossil fuels'.

Mr Anusorn Thamjai is correct, but it is not just Thailand, it is the world that is in recession and headed for a depression.

When (fossil fuel) energy was cheap (less than $40 a barrel) and demand for product was high (with corporate government, the world over, promoting population growth under the guise of defense from neighbouring countries); however the cost of diminishing energy supplies has more than double.

As 'onni4me' wrote, bankers facilitated lines of credit without factually having the money to do so ... this is where the theft commenced, where people were allowed to borrow against future energy / money.

The penny dropped some time ago; we have seen countries populations utilized for minimum wages, and when they do not comply, those industries were moved; even the Chines have a growing number of previously employed people now unemployed because a) workers in other countries with work for less, environmental issues are ignored and c) those in government facilitate tax and other advantages for a piece of the action.

So back to my original point. Earth has a finite energy source; we have all but expended it and the 'money' that is floating in the system are promissory notes written to the factor of (say) 80 against energy that factually exists.

Originally, I always considered Peak Oil as that point in time where - like a milkshake drink - the last dregs were sucked up though the straw; however, Peak Oil actually is where the energy-cost of locating, extracting and refining is greater than the energy it will generate / people can afford.

Every species propagates until such a point in time where it overruns the resources to support it.

Hello! Its the Malthusian Energy Team back in town!

[Daniel Boon]

you have theory? please articulate it ...

(mine evolved before hearing of Malthus)

IMO, it is unlikely - based on the economists of today - that Malthus came up with population growth; he articulated 'his views' (regarding population) in Essay on the Principle of Population (1798), for which he collected empirical data to support his thesis.

My point being, he wrote a thesis that was only accepted based on the work of others

Comparatively; some American corporation owning the genome, or food seed (or registering the name 'ugg boot' and claiming ownership despite someone else having established it elsewhere ...)

[NeverSure]

my view is simplistic ...

money is the representative of energy; there is only so much energy available.

there are two types of motivators supply and demand, that set a value on energy / growth.

Humans seem to believe that growth is exponential (or at least those that herd humans do); however, the one thing all have taken for granted is energy, which is finite (puts a cap on growth); the concentrated forms of solar energy known as 'fossil fuels'.

Mr Anusorn Thamjai is correct, but it is not just Thailand, it is the world that is in recession and headed for a depression.

When (fossil fuel) energy was cheap (less than $40 a barrel) and demand for product was high (with corporate government, the world over, promoting population growth under the guise of defense from neighbouring countries); however the cost of diminishing energy supplies has more than double.

As 'onni4me' wrote, bankers facilitated lines of credit without factually having the money to do so ... this is where the theft commenced, where people were allowed to borrow against future energy / money.

The penny dropped some time ago; we have seen countries populations utilized for minimum wages, and when they do not comply, those industries were moved; even the Chines have a growing number of previously employed people now unemployed because a) workers in other countries with work for less, environmental issues are ignored and c) those in government facilitate tax and other advantages for a piece of the action.

So back to my original point. Earth has a finite energy source; we have all but expended it and the 'money' that is floating in the system are promissory notes written to the factor of (say) 80 against energy that factually exists.

Originally, I always considered Peak Oil as that point in time where - like a milkshake drink - the last dregs were sucked up though the straw; however, Peak Oil actually is where the energy-cost of locating, extracting and refining is greater than the energy it will generate / people can afford.

Every species propagates until such a point in time where it overruns the resources to support it.

Wow. That took a lot of energy, pun intended.

You're behind the curve. Globally, we are finding oil and gas faster than we are using it. "Peak Oil" is getting farther and farther away. That's not to mention coal which we have learned to burn cleanly and of which there is an overabundance.

Did you know that the US has more proven oil reserves than all of the rest of the world combined? It will pass Saudi Arabia as the world's #1 oil producer in the next couple of years, will become energy independent before 2020, and then will become a net exporter of oil? That's just on private land. The US Government owns more than 1/2 the land W. of the Rockies including the Rockies, and most of Alaska where there is known to be more oil.

The US has 88,000 miles of saltwater shoreline which contains a lot of oil and gas which isn't being tapped.

The US has 100 years worth of natural gas already drilled and available.

That's just the US and newer sources such as Brazil, Canada, Myanmar and other places keep finding oil. Did you know that Canada is now the #1 supplier of oil to the US? Some might guess the Middle East including Saudi Arabia, but they are way down the list of suppliers to the US. Russia keeps finding and producing oil.

I would hazard a guess that within 100 years some bright fellow will invent a practical replacement for oil and gas as energy. Something to do with hydrogen or nuclear fusion? Something that hasn't been dreamed of yet?

If you're looking for the end of mankind, look for a reason other than running out of energy.

[Daniel Boon]

NeverSure ... your name says it all ..- (paradoxical pun?)

you are behind the curve ... the reason fracking happens is because easily accessible oil reserves are depleted; would you try to access oil from inhospitable places if it were easy to find?

You - like so many gullible people - believe what you read about "oil rich USA" what a crock; do some research on the American Energy site, or the world energy stocks ...

So the USA is flush with oil, but has to buy (he direst) oil from Canada? you are delusional ... but some people are like that and it takes all types ...

[mmh8]

in the run of things it is pretty safe to say that a recession is approaching, sooner or later

[SheungWan]

in the run of things it is pretty safe to say that a recession is approaching, sooner or later

That was useful.

[onni4me]

This virtual debt can be paid in only so many ways. Tax hikes are very unpopular. Deflating the value of money is more indirect but puts up all prices eventually. Third and probably least popular is cutting salaries and benefits.

The problem with virtual asset bubble now is that it is far more than all the existing 'real money' in this world of ours. All derivatives and CDS's only make it hundred times worse. We will finally see inflation eating up all worth of our savings and prices - if not going up strongly - becoming more and more expensive to purchase (taking many years more to achieve).

The system is at fault and at the moment money flows to stocks since there are very few other assets making better returns. In my view we will see a burst like 1929. Even then it took couple of years to really hit the consumers.

Gloomy days are ahead and I suppose we will see the symptoms towards the end of this year. Only thing what one can do is buy real assets like land and houses. I wouldn't put my money at the stock market now.

[onni4me]

I forgot to mention that the root of all evil are things like derivatives and CDS's. They are not controlled by anyone. Bankers did the control away during the Alain Greenspan period suggesting that free market was the best way to go ahead.

This free market unleashed is just becoming more and more unstable and when the reality hits these same bankers are calling for taxpayer money to save them.

As free as it gets, I suppose. Winnings are private and losses belong to all of us.

[Daniel Boon]

I wouldn't put my money into property, unless you mean food producing property ...

property values are based on affordability, if there is no income ... how will people buy?

[Tomtomtom69]

Finally a man who speaks the truth. His words mirror what I've been told numerous times over the past 2 months or so by many friends in the know. Apart from tourist, import-export related businesses, including many forms of manufacturing have been hard hit. Foreign investors are staying away; foreign importers are no longer purchasing, or the numbers of their orders have dropped; thousands of Thais and numerous foreigners have lost their jobs; new hiring is being frozen. Numerous job opportunities I've been offered over the past couple of months have been frozen because the businesses concerned haven't got enough orders to allow their businesses to move forward; in fact, all of the companies concerned are starting to let many of their staff go (initially on unpaid leave and in many cases they are being retrenched) as they simply don't have enough money to pay them. Therefore new hiring is just about the last thing they can afford and is thus their last priority right now, sad but true.

Let's hope the political situation starts to improve and investor confidence returns. Unfortunately if recent events are anything to go by (Trad bombing, Ratchaprasong bombing, farmer protests, red shirts threatening to come to Bangkok etc.), things could get a lot worse before they get better.

[Daniel Boon]

the political jostling is unrelated to the impending recession / depression ... any politician with half an idea recognizes that reprisals await those in power when TSHTF...

[bartender100]

my view is simplistic ...

money is the representative of energy; there is only so much energy available.

there are two types of motivators supply and demand, that set a value on energy / growth.

Humans seem to believe that growth is exponential (or at least those that herd humans do); however, the one thing all have taken for granted is energy, which is finite (puts a cap on growth); the concentrated forms of solar energy known as 'fossil fuels'.

Mr Anusorn Thamjai is correct, but it is not just Thailand, it is the world that is in recession and headed for a depression.

When (fossil fuel) energy was cheap (less than $40 a barrel) and demand for product was high (with corporate government, the world over, promoting population growth under the guise of defense from neighbouring countries); however the cost of diminishing energy supplies has more than double.

As 'onni4me' wrote, bankers facilitated lines of credit without factually having the money to do so ... this is where the theft commenced, where people were allowed to borrow against future energy / money.

The penny dropped some time ago; we have seen countries populations utilized for minimum wages, and when they do not comply, those industries were moved; even the Chines have a growing number of previously employed people now unemployed because a) workers in other countries with work for less, environmental issues are ignored and c) those in government facilitate tax and other advantages for a piece of the action.

So back to my original point. Earth has a finite energy source; we have all but expended it and the 'money' that is floating in the system are promissory notes written to the factor of (say) 80 against energy that factually exists.

Originally, I always considered Peak Oil as that point in time where - like a milkshake drink - the last dregs were sucked up though the straw; however, Peak Oil actually is where the energy-cost of locating, extracting and refining is greater than the energy it will generate / people can afford.

Every species propagates until such a point in time where it overruns the resources to support it.

Wow. That took a lot of energy, pun intended.

You're behind the curve. Globally, we are finding oil and gas faster than we are using it. "Peak Oil" is getting farther and farther away. That's not to mention coal which we have learned to burn cleanly and of which there is an overabundance.

Did you know that the US has more proven oil reserves than all of the rest of the world combined? It will pass Saudi Arabia as the world's #1 oil producer in the next couple of years, will become energy independent before 2020, and then will become a net exporter of oil? That's just on private land. The US Government owns more than 1/2 the land W. of the Rockies including the Rockies, and most of Alaska where there is known to be more oil.

The US has 88,000 miles of saltwater shoreline which contains a lot of oil and gas which isn't being tapped.

The US has 100 years worth of natural gas already drilled and available.

That's just the US and newer sources such as Brazil, Canada, Myanmar and other places keep finding oil. Did you know that Canada is now the #1 supplier of oil to the US? Some might guess the Middle East including Saudi Arabia, but they are way down the list of suppliers to the US. Russia keeps finding and producing oil.

I would hazard a guess that within 100 years some bright fellow will invent a practical replacement for oil and gas as energy. Something to do with hydrogen or nuclear fusion? Something that hasn't been dreamed of yet?

If you're looking for the end of mankind, look for a reason other than running out of energy.

Kurdistan has been finding plenty of the stuff recently, and they are only just starting, at least one "elephant" field in Shaikan, 3 times larger than the North Sea Brent field, all onshore and cheap to extract

Edited February 25, 2014 by bartender100

[Daniel Boon]

ahh yes, the 'we're saved' North Sea oil fields ... about to go dry ...

[SheungWan]

I wouldn't put my money into property, unless you mean food producing property ...

property values are based on affordability, if there is no income ... how will people buy?

Could you afford Central London property if you wanted to?

[SheungWan]

I forgot to mention that the root of all evil are things like derivatives and CDS's. They are not controlled by anyone. Bankers did the control away during the Alain Greenspan period suggesting that free market was the best way to go ahead.

This free market unleashed is just becoming more and more unstable and when the reality hits these same bankers are calling for taxpayer money to save them.

As free as it gets, I suppose. Winnings are private and losses belong to all of us.

You might be able to make an informed comment if you understood how derivatives work, but in the meantime.......

[Daniel Boon]

SheungWan ... you asked "Could you afford Central London property if you wanted to?" ... an odd question ...

I just indicated that IMO, only property that is food producing, and close enough to trade or sell surplus and far enough away to reduce people taking the food ...

'derivatives' ... think of a pyramid scheme (like Amway) where you don't work, you just get others to work for you, all with a gaze on a life of abundance as the motivation ... what could possible go wrong???

[i claudius]

SheungWan ... you asked "Could you afford Central London property if you wanted to?" ... an odd question ...

I just indicated that IMO, only property that is food producing, and close enough to trade or sell surplus and far enough away to reduce people taking the food ...

'derivatives' ... think of a pyramid scheme (like Amway) where you don't work, you just get others to work for you, all with a gaze on a life of abundance as the motivation ... what could possible go wrong???

Nothing wrong with Amway ,my wife loves them and makes a lot of money each month .

[i claudius]

SheungWan ... you asked "Could you afford Central London property if you wanted to?" ... an odd question ...

I just indicated that IMO, only property that is food producing, and close enough to trade or sell surplus and far enough away to reduce people taking the food ...

'derivatives' ... think of a pyramid scheme (like Amway) where you don't work, you just get others to work for you, all with a gaze on a life of abundance as the motivation ... what could possible go wrong???

Nothing wrong with Amway ,my wife loves them and makes a lot of money each month .