With Thai economy flat-lining, it's time to look inward for answers

[Prbkk]

Central banks the world over have been competitively devaluing their currency as interest rates have been manipulated for 30 years toward zero. To the extent global economic growth has been the malinvestment of unrepayable credit, the inevitable deflationary (or hyper-inflationary a la Venezuela now, depending on the political control over the central bank) collapse will be global as well.

Yes, but now we see the Baht at artificially high levels. Demand for it seems to be coming from those who see an economic recovery. The recovery won't come with Thai products struggling to compete because of the high currency. Catch 22.

The Baht NEEDS to be at 33 or 34...then we would see a pickup ( maybe a pickup in inflation as well, but manageable)

[wileycoyote]

Excellent Posting

[CobraSnakeNecktie]

Fairly predictable.

They forget all the foreign economic inputs like tourists, expats, real estate investment etc and get drunk on the idea they don't need non thai's.

Pass a gaggle of new rules to prevent cultural/racial dilution and then slowly realize they are suffocating their GNP.

It's like a watching a child on a merry go round who thinks they are really riding a horse.

[Thai at Heart]

So this puts Thailand way below the average for the region. Maybe Thailand has killed the golden goose with all its infighting and coups, maybe the golden era has gone.

http://www.worldbank.org/en/news/press-release/2014/04/07/east-asian-economies-expected-to-grow-at-a-stable-pace-in-2014

Excluding China, the developing countries in the region will grow by 5.0 percent, slightly down from 5.2 percent last year.

Thailand -2.3 7.8 0.1 7.7 1.8

http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG

A very model of instability.

[powerkick]

 

"Inconsistent economic performance prompts us to ask what has gone wrong"

Is the writer of this article a total idiot or what ? Where was he for the past 12 months ? Did he realize that a bunch of economical morons have played "shut down the country" for the past year or so scaring away in the process tourists and investors alike.

"Let's take a break and do some rethinking." Yes, that's a good advise ....

 

"Yes, that's good advice..." S&G squad.

[jcisco]

I want it.and want it now,thats how people think today,

regards Worgeordie

hmmm. More likely.

I want it, I need it

The self interest has evolved substantially I feel.

[slipperx]

All governments think about is growth,growth is whats killing the world,make more

sell more,yes humans want the best of everything,thats how we are,instead of all

this growth,just make do with what we have,the World has finite resources,better

to slow down the growth and make what we have left available for future populations.

I want it.and want it now,thats how people think today,

regards Worgeordie

I don't think you understand the dynamics of the fiat currencies we have today and the control of the world by the bankers which requires growth and the inflation that goes with it to keep the show on the road.

Will be good for everyone in the long run when it all collapses - which it will eventually.

[Don Aleman]

" A flat lining economy " is exactly what one who ignores repeated good advice, on any subject, deserves.

[BSJ]

I am glad no one put the emphasis on the "R" word. God forgive anyone that says 'RECESSION'!

[Mister Fixit]

When I was in Swampy last month, en route to the UK, it was almost empty at 6 pm - a normally very busy time. There were a few hundred travellers max.

On my return a few weeks ago, it was the same, but that was at 1 am, so numbers down, but nevertheless, it was quite a shock to see so few people there.

[Mister Fixit]

Central banks the world over have been competitively devaluing their currency as interest rates have been manipulated for 30 years toward zero. To the extent global economic growth has been the malinvestment of unrepayable credit, the inevitable deflationary (or hyper-inflationary a la Venezuela now, depending on the political control over the central bank) collapse will be global as well.

Yes, but now we see the Baht at artificially high levels. Demand for it seems to be coming from those who see an economic recovery. The recovery won't come with Thai products struggling to compete because of the high currency. Catch 22.

The Baht NEEDS to be at 33 or 34...then we would see a pickup ( maybe a pickup in inflation as well, but manageable)

I hope you mean to the US dollar ...

Edited August 29, 2014 by Mister Fixit

[Thailand]

So this puts Thailand way below the average for the region. Maybe Thailand has killed the golden goose with all its infighting and coups, maybe the golden era has gone.

http://www.worldbank.org/en/news/press-release/2014/04/07/east-asian-economies-expected-to-grow-at-a-stable-pace-in-2014

Excluding China, the developing countries in the region will grow by 5.0 percent, slightly down from 5.2 percent last year.

Thailand -2.3 7.8 0.1 7.7 1.8

http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG

A very model of instability.

But they have worked very hard to get to these dizzy heights.

[mathias24]

"Inconsistent economic performance prompts us to ask what has gone wrong"

Is the writer of this article a total idiot or what ? Where was he for the past 12 months ? Did he realize that a bunch of economical morons have played "shut down the country" for the past year or so scaring away in the process tourists and investors alike.

"Let's take a break and do some rethinking." Yes, that's a good advise ....

If what I have heard is true that they are in the New Year ordering all bars to close at midnight and even in hotels it will be illegal to sell drinks after that time then God help the tourist industry. How many people go abroad to enjoy relaxed opening hours or bars to be told at midningt go to bed as the entertainment is over with NO partying into the early hours. What idiot dreampt that one up

[mathias24]

Bars, restaurants and hotel bars to close at midnight in the New Year with NO more alcohol being served after that time or that is the rumour I have heard. So come to sunny Thailand and party through the night, I don't think so it what I have heard is true, so from the New Year go to bed at midnight and do not party through the night. Great place to come and can see Cambodia, Laos, Vietnam etc picking up the lost Thai holiday business

[SteveFong]

All governments think about is growth,growth is whats killing the world,make more

sell more,yes humans want the best of everything,thats how we are,instead of all

this growth,just make do with what we have,the World has finite resources,better

to slow down the growth and make what we have left available for future populations.

I want it.and want it now,thats how people think today,

regards Worgeordie

I don't think you understand the dynamics of the fiat currencies we have today and the control of the world by the bankers which requires growth and the inflation that goes with it to keep the show on the road.

Will be good for everyone in the long run when it all collapses - which it will eventually.

tell us how it will be good for 7 Billion people to live without banks and loans?

[slipperx]

All governments think about is growth,growth is whats killing the world,make more

sell more,yes humans want the best of everything,thats how we are,instead of all

this growth,just make do with what we have,the World has finite resources,better

to slow down the growth and make what we have left available for future populations.

I want it.and want it now,thats how people think today,

regards Worgeordie

I don't think you understand the dynamics of the fiat currencies we have today and the control of the world by the bankers which requires growth and the inflation that goes with it to keep the show on the road.

Will be good for everyone in the long run when it all collapses - which it will eventually.

tell us how it will be good for 7 Billion people to live without banks and loans?

My point is not that banks and loans are not needed but rather that the system as it exists today (where money is simply paper and trust rather than paper supported by tangible assets) is not sustainable. It was introduced by the Americans when the gold standard was abolished because it restricted the ability to print money. We very nearly had a financial collapse a few years back and banks only survived because of massive intervention. You might ask the Cypriots how they feel about their money being stolen to pay for the errors of the banks. I don't think they will be the last nor the only people who suffer a similar fate.

Bottom line is the banking system is run by unscrupulous people who are controlling the world and one day trust in them will disappear entirely at which point the whole shebang will collapse because in reality it has no substance. Money is multiplied hundreds if times through banks lending on multiples of deposits in every country and with every bank. If people wanted to withdraw their money all at one go there would be 99% who would get nothing because only 1% of the money is real.

Over the last 100 years the bank lending multipliers have grown exponentially to fuel growth because governments could not print money as it would affect their exchange rates so governments and particularly the Americans stopped reporting money supply data and increased lending multipliers instead and have been using this method ever since. It has a limit though because eventually the multiplier will become so great that there is insufficient cash for a days business. We are past what is safe already and now running on trust but it is wearing very thin and millions have suffered as a result.

It is a huge subject and you need to search a little because governments are not keen on all the people becoming aware of the facts as it could well be the catalyst for financial meltdown.

I am not being melodramatic either by the way, not is this some conspiracy theory.

Edited August 30, 2014 by slipperx

[leggo]

Personally I don't believe in statistics, especially in a country where it's quite obvious that they are massaged. I remember posting over a year ago that this is what would happen (I'm no genius though, as several other members posted similar.) I am always amazed at how so called economists are so behind the ball park -don't they ever go out in the streets??!! Living in Rayong ,one of the most prosperous towns in the country one can guage the economy by the amount of shops, restaurants and scooter dealers that have closed (Obviously some don't know how to manage their businesses but a lot just have no customers) And the Thais suffer from the same problem as the French - if a business opens that is successful you absolutely must open the same , preferably next door. In our local shopping mall there are at least six ice cream venors with prices ranging from 10bht to 100bht a scoop! Too much consumption on credit cards has ruined the economy - too many shopping malls all selling the same thing too. In order for the Thai economy the country needs to start getting creative and not copying everybody else's ideas - most of the branded stuff on sale is now more expensive than in Europe although it was made in China - too many greedy people chasing less and less spenders!

[slipperx]

Its very simple. Less people want to invest here for many self evident reasons and commercial policies that encourage foreign private investment are out dated and uncompetitive. Thailand needs foresight and aggressive commercial change throughout the system. Until then, watch the decline continue.

If you rely on foreign investment for growth you are giving other countries power over your economy. This is generally a bad thing, because one day they will leave.

Not if it is private investment which is almost always the case so faulty thinking on your part maybe?

[marcusd]

Its very simple. Less people want to invest here for many self evident reasons and commercial policies that encourage foreign private investment are out dated and uncompetitive. Thailand needs foresight and aggressive commercial change throughout the system. Until then, watch the decline continue.

So it's not because of the Junta?

nothing at all. Under previous governments... All ... Not just the last one... Rules for investing ownership. Control and staffing make business hard

looking at opening up countries like Myanmar Vietnam and so forth... There remain opportunities to have more control of your investment and lower wage costs.

That's why you invest overseas. Otherwise you keep your money at home

[marcusd]

Central banks the world over have been competitively devaluing their currency as interest rates have been manipulated for 30 years toward zero. To the extent global economic growth has been the malinvestment of unrepayable credit, the inevitable deflationary (or hyper-inflationary a la Venezuela now, depending on the political control over the central bank) collapse will be global as well.

Yes, but now we see the Baht at artificially high levels. Demand for it seems to be coming from those who see an economic recovery. The recovery won't come with Thai products struggling to compete because of the high currency. Catch 22.

The Baht NEEDS to be at 33 or 34...then we would see a pickup ( maybe a pickup in inflation as well, but manageable)

I couldn't agree more. Thai goods are not competitive overseas. Wages going up here male exports more expensive and so less desirable.

A higher baht will affect oil gas electricity and luxury items minimally but do wonders to kick off exports which are the backbone of Thailands economy