Results 1 to 15 of 15
  1. #1
    Mid
    Mid is offline
    Thailand Expat
    Mid's Avatar
    Join Date
    Aug 2007
    Last Online
    @
    Posts
    1,413

    Thailand : simultaneous deflation, inflation ????????

    Government on preemptive path to counter simultaneous deflation, inflation



    BANGKOK, July 12 (TNA) -- The Thai government does not want to see both deflation and inflation occur at the same time due to the increase in goods prices resulting from rising oil prices in the country, Finance and Deputy Prime Minister Surapong Suebwonglee said Saturday.

    He said the government has been seeking measures to prevent and rectify problems of deflation and inflation, so they don't happen simultaneously, because it would be difficult to solve such an economic problem.

    Speaking of concerns over a possible tight money situation in the country during the second half of 2008 -- a condition which could cause problems for industrial and financial systems, Mr. Surapong said he is optimistic that if the government could tackle the inflation crisis, liquidity could improve.

    Banks are also overseeing liquidity problems, Mr. Surapong said, but they have sufficient financial instruments to mobilise deposits.

    Meanwhile, Kasikorn Bank president Prasarn Trairatvorakul allayed anxieties expressed by some economists who are fearful of possible liquidity problems during the second half of this year, saying that a short-term problem may occur with some industrial enterprises if banks reduce credit terms or debt repayment periods.

    Commercial banks have developed lending problem and risk prevention systems, Mr. Prasarn said, adding that they should not have many problems in attracting deposits from the public, but there still is no sign from government that it would absorb excess liquidity for use in spending on public utilities.

    Lending by commercial banks during the second half of 2008 may slow, but it would still be higher than last year because of continued private investment, Mr. Prasarn added. (TNA)-E111

    enews.mcot.net


    .............................


    deflation :

    A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit.

    inflation :

    A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.

    answers.com

  2. #2
    bkkandrew
    Guest
    ^Add. Stagflation, a potent mix of the two, currently being 'enjoyed' by US and UK, coming soon to these shores.

    Species last seen late 1970's...

  3. #3
    I am in Jail
    Butterfly's Avatar
    Join Date
    Mar 2006
    Last Online
    01-02-2019 @ 03:12 PM
    Posts
    39,832
    they are fucking clueless, and can't manage their monetary policy

    the answer will most likely be stagflation, like the rest of the world

    inflation would be ok, but it would come at the cost of a large drop in the THB

    deflation would also be ok, but the oil supply shock will not let that happen, so very unlikely
    Last edited by Butterfly; 12-07-2008 at 04:01 PM.

  4. #4
    Not an expat
    Fabian's Avatar
    Join Date
    Jul 2005
    Last Online
    04-09-2017 @ 09:31 PM
    Location
    Hamburg, cold dark Germany
    Posts
    5,381
    Quote Originally Posted by bkkandrew View Post
    ^Add. Stagflation, a potent mix of the two, currently being 'enjoyed' by US and UK, coming soon to these shores.

    Species last seen late 1970's...
    Stagflation is not a mix of inflation and deflation but inflation combined with alcking economy growth while in theory normally inflation goes along with high growth rates.

  5. #5
    Hansum Man! panama hat's Avatar
    Join Date
    Mar 2007
    Last Online
    Today @ 05:54 AM
    Location
    Way, Way South of the border now - thank God!
    Posts
    18,588
    I have a Postgrad in Economics . . . and don't understand a word the guys is saying.

    Be-jaysus, I could cut and paste so many articles crapping on this guy's lack of intelligence it would fill up the TD server . . .

    Bring in expats to run the country and see it flourish. (I mena professional expats, not the reprobates inhabiting this forum and certain locales of the country . . . umm, I add myself to the reprobate group)

  6. #6
    I am in Jail
    Butterfly's Avatar
    Join Date
    Mar 2006
    Last Online
    01-02-2019 @ 03:12 PM
    Posts
    39,832
    Quote Originally Posted by Fabian
    Stagflation is not a mix of inflation and deflation but inflation combined with alcking economy growth while in theory normally inflation goes along with high growth rates.
    stagflation is a recession with inflation (lower GDP with higher price level), deflation usually goes in pair with a recession, and I think that's what he meant, but again bkka probably doesn't know what he meant really

    Technically we were heading to a major world recession, hence price level would have gone down, unfortunately we have a supply shock (cost push inflation) and that is pushing the price level higher while GDP is decreasing,

    We could pull a 70s, and increase Aggregate Demand, but that would eventually lead to demand pull inflation and a spiraling inflation with an ever ending expectations of price increases

    We are currently witnessing negative REAL interest rates, something not seen since the 70s

  7. #7
    Thailand Expat
    William's Avatar
    Join Date
    Jul 2005
    Last Online
    19-05-2013 @ 06:37 AM
    Location
    In jail
    Posts
    5,822
    ^not too sure I wholly buy into that. I agree that the UK and US are probably looking at neg "real" interest rates, but other markets are certianly paying well. Especially those markets looking for cash depositors so as not to have to borrow from World markets.

    What we are seeing a move away from Central Banks setting benchmark interest rates that effect the housing markets. Which aligns with what I said above.

    We are also seeing that countries that "produce" - and export - commodities are doing OK.

    Hell, we may even start to see a rise in the wealth of southern african nation - what with the chinese and all.

    What we will, however, see is countries where individuals have over-spent will suffer. That's the problem the UK certainly has - and is why the economy in the UK may well suffer even more than the US from the credit crunch. From an Asian perspective, I certainly see the Thai in much the same boat as the Brits. Too much free credit and now is time to pay back.

  8. #8
    bkkandrew
    Guest
    Quote Originally Posted by Butterfly View Post

    stagflation is a recession with inflation (lower GDP with higher price level), deflation usually goes in pair with a recession, and I think that's what he meant, but again bkka probably doesn't know what he meant really
    It was an ironic comment. Irony is lost on some...

    Quote Originally Posted by Butterfly View Post
    We are currently witnessing negative REAL interest rates, something not seen since the 70s
    Nail on the head. This is one of the most significant developments of the credit cruch period.

  9. #9
    I am in Jail
    Butterfly's Avatar
    Join Date
    Mar 2006
    Last Online
    01-02-2019 @ 03:12 PM
    Posts
    39,832
    Quote Originally Posted by William
    but other markets are certianly paying well
    Please provide an example of such markets. I hope you are not referring to Russia, and the new commodities millionaires, they have a major excess liquidity issue, which is fueling their double digit inflation.

    Quote Originally Posted by William
    That's the problem the UK certainly has - and is why the economy in the UK may well suffer even more than the US from the credit crunch.
    Yep. UK doesn't enjoy the same flexibility that the US can exploit, and yet it will face a more severe crash. That said, the UK has been enjoying a full decade of growth with a stable social cover.

  10. #10
    Thailand Expat
    William's Avatar
    Join Date
    Jul 2005
    Last Online
    19-05-2013 @ 06:37 AM
    Location
    In jail
    Posts
    5,822
    Quote Originally Posted by Butterfly View Post
    Quote Originally Posted by William
    but other markets are certianly paying well
    Please provide an example of such markets. I hope you are not referring to Russia, and the new commodities millionaires, they have a major excess liquidity issue, which is fueling their double digit inflation.
    Well I'm getting close to 9% on my savings here in Sydney (although I do agree that mosty savings here are between 7 - 8.5%).

    I do also agree that if you factor in oil increases, real inflation [in Aus] may be a little higher than 9%, but if oil is not a day-to-day factor in your spending basket, in REAL terms you are probably getting a good deal (i.e. "real" inflation is the personal rise in cost of living).

  11. #11
    I am in Jail
    Butterfly's Avatar
    Join Date
    Mar 2006
    Last Online
    01-02-2019 @ 03:12 PM
    Posts
    39,832
    what's the inflation there ? your personal inflation statistics are actually irrelevant, you pay more across the board, as business have to adjust for rising costs, not only your personal consumption of oil or living expense. Unless you stay in your apartment and eat 6 months worth of the same food.

    if it's close to 9%, then you are basically in negative interest rates, as you pay taxes on those interest rates, so it's probably something like -1%
    Last edited by Butterfly; 14-07-2008 at 07:09 PM.

  12. #12
    Thailand Expat
    William's Avatar
    Join Date
    Jul 2005
    Last Online
    19-05-2013 @ 06:37 AM
    Location
    In jail
    Posts
    5,822
    ^I agree to a degree - and not overly sure why I want to labor the point - but inflation is based on a basket. In the UK for example you have inflation that looks at the rise of cost of living by basket that does not include increases in mortgage rates and those that do. I.E. inflation is a stastic in the UK that can be misleading. I believe that to be true in other parts of the world. In Aus, true inflation, if one were to factor in the 10 interest rate rise or more in the last 18 months, would be 9 or so percent. But my REAL cost of living increase is probably closer to 5%. QED, I believe I'm not doing too badly.

  13. #13
    Thailand Expat
    William's Avatar
    Join Date
    Jul 2005
    Last Online
    19-05-2013 @ 06:37 AM
    Location
    In jail
    Posts
    5,822
    BTW, if you listen to the RBA, inflation in Aus is about 3-4%, but that's also absolute crap!

  14. #14
    I am in Jail
    Butterfly's Avatar
    Join Date
    Mar 2006
    Last Online
    01-02-2019 @ 03:12 PM
    Posts
    39,832
    ^^ the inflation basket is biased, this is no secret. I think the UK had significant bias in their computation but this had been fixed over the years.

    Computing inflation is a difficult exercise, full of questions and issues that even academics can't always resolve. This is why you want to have a very low inflation, so you don't have to worry about the real impact. Once people spend more time avoiding inflation than do anything else then you have a major problem. Once people start computing their own inflation numbers because the official numbers are too high, then you have a problem.

    Your own computation only makes sense for your spending habits, not the interest rates or opportunity costs on your money. You have to use the rate that everyone is using. That is as an investor point of view.

    Inflation in Thailand is 10%, but for me it feels more like 20% or 25%

  15. #15
    I am in Jail
    Butterfly's Avatar
    Join Date
    Mar 2006
    Last Online
    01-02-2019 @ 03:12 PM
    Posts
    39,832
    Quote Originally Posted by William
    BTW, if you listen to the RBA, inflation in Aus is about 3-4%, but that's also absolute crap!
    that's because it's a political statistics, we have the same problem here in Europe. With the EURO introduction, we got hit with a 25% increase across the board, that was confirmed by "consumer" group research institute, and yet the government kept claiming that inflation was 2%, mostly because they didn't want to increase the salary of the government employees. So we got fucked by 30% and now we have also the oil shock, so we are double fucked.

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •