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
( http://www2.bot.or.th/statistics/ReportPage.aspx?reportID=7&language=eng ) 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 http://www.etda.or.th/etda_website/nesdb-documents/QGDP1-2557_06.pdf
2 - Thailand Economic Outlook 2014: 3.5% GDP Growth As Political Impasse Drags On Much Longer Than Expected By Sophie Song February 13 2014 http://www.ibtimes.com/thailand-economic-outlook-2014-35-gdp-growth-political-impasse-drags-much-longer-expected-1555077
3 - Remarks by Governor Ben S. Bernanke At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/