The King : “Now we’re almost facing calamity because we’re not careful with our spending”

The King speaks rarely… And when he does, it’s useful to decipher… the message.

Of course, thai medias can’t comment a lot.

But we can. 😉

And the last “sortie” of the King is striking I believe.

His Majesty the King offered encouraging words to Bank of Thailand Governor Tarisa Watanagase and her team in the central bank’s monetary policy and reserves management.

“I wish that you could manage the money to billion or 10 billion without depleting it, so that the country has money to spend,” said the King.

“I wish you achieve a success for your hard work. I also wish you manage it well to prevent the country from disaster. Now we’re almost facing calamity because we’re not careful with our spending.”

“I know that you’re tired from your work and even get criticism that you don’t do it right. I would like to thank all of you for coming here today and work hard so that the country has money to spend. Anybody who is in charge of the country’s fiscal management must understand what is important for the country.” (Nation)

I’m wondering what are thinking all the bozos at the government ? All the clowns and their short term compulsive political obsessions to “boost the economy” with “stimulus policies”

What Samak is thinking with his budget deficit ? And his tax cuts on diesel and gasohol for… 6 months ? Along with the “free” rides for buses, trains… and other goodies for a total estimated costs of 47 billions ?

It’s important to note that the Bank Of Thailand is absolutly not responsible for “fiscal” policies. So the message is clearly sent to the government.

And furthermore, the BOT was underfire recently, because they increased interest rates, and of course the clowns were calling for rates cuts to “boost” the economy.

So again, the support the Kings gives to the BOT is a message sent to the gvt.

UPDATE
More details on the speech : “His Majesty’s timely lesson in prudence” (editorial).

(Following a comment from a reader) :

It is a kind of contradiction to praise the BOT’s action, and to warn to be “careful with spendings” when we have indeed negative real interests (see my chart).

Indeed, in such situation (low deposit rates and high inflation = negative interest rates)… mechanically -and theortically- it’s an incentive to spend rather than to save.

I say theortically because other factors can bend this link (for instance fears of future for instance could force people to save, and/or postpone buyings, and/or hoard cash even though they would loose purchasing power by doing so).

6 Responses to “The King : “Now we’re almost facing calamity because we’re not careful with our spending””


  1. 1 Bangkok Pundit 21 August 2008 at 7:02 pm

    I am surprised you didn’t comment on this:

    “I wish that you could manage the money to billion or 10 billion without depleting it, so that the country has money to spend,” said the King.

    BP: This seemed to be the focus quote on TV.

  2. 2 ThaiCrisis 22 August 2008 at 12:03 am

    Well I didn’t comment it… because I was not sure to understand it correctly (to the contrary of the second quote).
    😉

    My interpretation : he speaks about the international reserve currency of the BOT (right now 100+ billions USD), and whishes that the BOT manages it well, etc.

    Without “depleting it” might be a link with the idea of some of the clowns to “use” the international reserve currency to buy stuff… (yes some of them spoke about it).

    So if my interpreation is correct, this quote has less value/power than the sentence : “Now we’re almost facing calamity because we’re not careful with our spending.”

    This is a clear and strong signal sent to the gvt.

    We have to remember that the only policy, as far as economy is concerned, of Samak since february is :
    -boost
    -spend
    -give away

  3. 3 fdl 22 August 2008 at 1:10 am

    It’s usualy difficult to interpret HMK’s counsels. But “spending wisely” should be easy enough depending on one’s viewpoint.

    Was HMK referring to Thailand’s foreign currency reserves? Maybe . . because Thai memory quickly forgets 1997 crisis when depletion of Thailand’s foreign reserves made every Thai very poor indeed.

    Or was HMK referring to the Thai government’s policies to spur and encourage Thai peoples’ profligate spending habits? Maybe . . and those easy money and low-interest rate government policies seem to suggest so.

    But inflation in Thailand is raging to nearly double-digits and and with deposit rates at 3% – – encourages Thais to spend, not, save.

  4. 4 ThaiCrisis 22 August 2008 at 2:25 am

    -FDL
    The first part is indeed related to BOT foreign currency reserve.
    read here :
    http://www.nationmultimedia.com/2008/08/22/opinion/opinion_30081161.php

    After, you’re perfectly right to say (I should have said it) that it is a kind of contradiction to praise the BOT’s action, and to warn to be “careful with spendings” when we have indeed negative real interests !

    See my chart :
    https://thaicrisis.wordpress.com/2008/06/18/chart-real-interest-rate-was-negative-32-months-on-50/

    Indeed, in such situation (low deposit rates and high inflation = negative interest rates)… mechanically it’s a incentive to spend rather than to save.


  1. 1 Sufficient discipline, sufficient wealth Trackback on 22 August 2008 at 12:26 am
  2. 2 BKK News Feed Archive - Q3/08 Trackback on 22 August 2008 at 4:10 am

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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