Monday, June 30, 2014

On Feb 2, 2014, an election was held in Thailand, which was won by Yingluck Shiniwatra, re-electing her administration to a second term.

Following that election, the Bank of Thailand effectively froze the money supply and began marching it back month by month for the past 3 months. This monetary contraction took place directly in the face of a recession. ETDA reports Thailand's GDP contracted -0.6% in the first quarter of 2014.(1) International Business Times reported on February 13, 2014 that investment in Thailand had fallen four straight months.(2)

 Why would the Bank of Thailand, which has expanded money supply consistently every month (214 months) for 18 years of published data
( ) suddenly find it necessary, in the midst of a recession - in the middle of falling tourism and falling investment - and with almost no positive economic forecast to be found anywhere - suddenly start constricting the monetary aggregate in Feb 2014? When, according to Milton Friedman's conservative framework, contraction of money supply almost certainly guarantees a slowing of economic activity and growth. This is the process which former US Central Bank Fed Chairman Benjamin Bernanke announced clearly and openly at Milton Friedman's 90th birthday party, as the kind of fiscal policy which caused the First Great Depression.(3) And Bernanke implied that this mistake would never be made again.

Why then would the BOT seek to stifle the Thai economy and risk further slow down and damage to GDP?

It might be suggested that the aim was, in complicity and conjunction with the military junta and PDRC, to cripple the economy in order to foment dissatisfaction with the Phua Thai Yingluck Shiniwatra administration which received a popular public mandate by being re-elected on Feb 2, and thereby contribute to the coup d'etat against democracy in Thailand. What other explanation could there possibly be?

1 - Thailand Electronic Transactions Development Agency - Thai Economic Performance in Q1 and Outlook for 2014

2 - Thailand Economic Outlook 2014: 3.5% GDP Growth As Political Impasse Drags On Much Longer Than Expected By Sophie Song February 13 2014

3 - Remarks by Governor Ben S. Bernanke At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois

1 comment:

  1. Hi Tom, I just read your comment at NBL and would like your permission to share it on FB alog wth a link to your blog.
    You can contact me: Mattmyrn Inparis (FB) or

    This is the comment I am referring to: Wester Says:
    July 11th, 2014 at 7:11 am

    I now have the unenviable, one of the first positions to comment. I am writing from Thailand, under the grip of a brutal military coup detat that has overturned the government, outlawed elections, set up a stazi gulag witchhunting snitcher police stat, closed hundreds of community radio stations, implemented wild censorship and placed soldiers in every broadcast and print newsroom in the country as well as on the beaches in tourist areas, is capturing people on the streets and in public venues for holding up blank signs, wearing the wrong t-shirt, eating non-Thai “foreign” cuisine like sandwiches, reading 1984 in public, singing songs with tht ewrong lyrics or playing the French national anthem on your phone. Thousands of democracy activists were rounded up, put in a military gulag. No accurate numbers exist as to who was tortured, who is still missing, or what is really going on anywhere.

    I am a kindergarten and high school teacher. My students and their families are under severe threat. None of their pain is theoretical. t is very real. And it is not trumped by everyone’s complete annihilation 25 or 30 years down the road. If you are implying that there is nothing that can or should be done on their behalf, then I guess that you are probably a severely depressed nihilist, and as James Joyce said of Mr. Duffy, that you like so many others are probably living somewhere outside your actual body.

    I draw a line straight from the misery of people I see and work with every day to the endless wretched denial of people all over the developed first world who endlessly rationalize whatever comforts and privileges they enjoy which are born directly off the backs of imiserated and violently suppressed working populations in Thailand, and all over the world.

    While you and others are enjoying their last remaining days on Earth, other less advantaged people, who are equally human and equally terrified, will be suffering more, and worse than you can ever allow yourself to imagine while you all are dealing with your angst by proffing this bizarre idea of capitulatory nothingness and nihilistic violence while doing less than nothing to ameliorate the horror of the rest of the world now dying under the boot of civilization from which you all have reaped the most benefit and comfort.

    As long as you keep making excuse after excuse, you’ll get no sympathy from me and probably deserve none from anyone else.