The poor gets hurt the most when the economy turns bad.
Where on earth is that Tarisa women, the head of the Bank of Thailand, at a major conference call by the Bank of Thailand that finally admits that now is the time for relaxed monetary position?
The same Tarisa who for so long says interest rates in Thailand didn’t have to come down, and going against all mainstream economist in Thailand who called for an interest rate reduction and relaxed monetary position ever since Somchai became the government three months ago.
It is real incredible how this Tarisa person, who was criticized by so many economist of knowing nothing about economics, could have refused to relaxed and lower interest rates for so long. In rates cutting world wide round after round, Tarisa stood like a stiff in the dead zone and refused to move. All in all about a thousand economist have been yelling to Tarisa for months on end that, “Didn’t they teach you in Central Bank School that monetary position takes about 3-6 months to work itself through the economic system.”
So it is pretty clear that if Tarisa wants to relaxed, it is important to relaxed early on, before the slowdown hits-ie, if you relaxed when it slowdown hits, you are too late to avert it but will have to ride the slowdown until the new position works through. So if you don’t act early to cut it off, you damage the economy when it is not necessary.
And crazily, this Tarisa person wasn’t there to take the heat, when the Bank of Thailand announced that Thailand’s economy has slowed down significantly on all sides-like tourism going into the negative by 16% and export expended by some 4% and 3rd and 4th quarter GDP will be a dismal 3-4%, not the 5% projected by the Bank of Thailand.
It is fortunate for Tarisa, that the government in Thailand these days are so weak it can’t muster the will or the popularity to do anything controversial.
Because if this was most country with a government that can function, Tarisa’s head would be on the chopping block by now, for being so wrong and taking Thailand straight into the dead zone with the crazy anti-inflationary tight money supply policy-when most businesses were reporting contraction and banks are reporting more careful credit extension.
It is the job of the Central Bank to moderate the economic cycle. meaning when it is too hot, the Central Bank puts on the break and when it slows-down too much, the Central Bank stimulates it. No Central Bank anywhere in the world is doing it like Tarisa-meaning, when it slows, slows it down further.
So how bad is the Thai economy at the moment? Well, real estate transaction has dropped by half, industrial production is at 68%, below 70% for the first time in 2 years, consumers confidence down to 47.3, investments expanded a dismal 2.6% and all sort of deficits are now being reported-and off course 3rd quarter GDP at the 4% range with this quarter lower than that.
And lastly, the stock market down to about 400 index points, with foreigners selling out close to nothing left in Thailand. So things are pretty bad!
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