Abhisit : “we need to borrow more money…”

Every sunday, there is something about Abhisit.

The alleged Prime Minister is speaking live on TV the day before. Each week. So there is always something to pick up…

This week is a good vintage. πŸ˜‰ Ready ?

The government needs to seek more loans to support its economic stimulus plan in the second phase, Prime Minister Abhisit Vejjajiva said.

Yes. The government is broke. It was obvious. They were in denial. The crisis slashes revenues, and the government is throwing money on stupid “stimulus” policies… So, no escape : deficit. But they want more !

He said it is necessary for the government to borrow more money to ensure that 1.5 million people would still be employed.

Two lunacies in one sentence. Beyond the fact that the government wants to substitute itself to private sector to create/save jobs… it wants to do it with… borrowed money !

Let’s remember the golden rule : government doesn’t create jobs per se.

Without additional loans, the economy could worsen, Mr Abhisit said on Sunday’s “Confidence in Thailand with Prime Minister Abhisit” television sho..

He assured that its spending would not affect the monetary and financial disciplines.

Another lunacy. Discipline ? ! To borrow money, even in Thai Lalaland, costs money. It’s called… “interests”. Must be a detail for the so-called “Oxford educated” Prime Minister.

This decision will directly impact the budget. It’s obvious. But little Abhisit thinks he can says huge lies on TV, with a nice smile and his nice haircut. After all : he thinks that the thai people are deeply, I mean really deeply, stupid.

Probably 99,98 % of the common thai know perfectly well that the expression “borrowed money” is often the beginning of problems…


He expressed confidence that temporarily raising the public debt to 60 per cent of the country’s gross domestic product (GDP) is appropriate and manageable.

According to the premier, obtaining loans is not complicated, since it is like borrowing money to invest in a business. But the difference is the government will have to shoulder all the burdens by itself.

Oh my god, it’s the Daytona 500 of the insanity… a festival. A fireworks. πŸ˜‰

The sentence is so totally absurd, stupid… well… I have to give the benefit of the doubt to Abhisit (must be a drunk reporter/editor at Bangkok Post).

To increase the tax revenue collection, taxes on alcoholic beverage products could be raised, he added.

Sure. On one hand Doctor Abhisit Jekyll cuts taxes (a few gifts to his friends in the real estate business) and he’s spending like crazy on stupid “stimulus” ideas, then mister Abhisit Hyde complains that taxes collections are going down and that the deficit is increasing, and then eventually… he wants to raise taxes.

Go figure. What an amateur.

“If the government stays passive, two to three million people could be out of jobs and they could create social problems. Last quarter, the economy shrank four per cent, and if the government is not doing anything this year, it could plunge nine per cent,” said the prime minister. (Bangkok Post)

Ah, eventually, Abhisit is lucid : yes we are going down. At high speed.

But there is nothing he can do about it.

Abhisit and the Democrat Party (and their Frankenstein Government) will be the sacrificial lambs of the crisis.

Thaksin is waiting. Behind. Outside. He’s laughing. And then he will pick up Thailand… like a fruit.

What an irony…

17 Responses to “Abhisit : “we need to borrow more money…””


  1. 1 ray 29 March 2009 at 7:08 am

    give abhisit one year in power and it will be dejavu 1997 only worse. then people will really want thaksin back in power.i dont really like thaksin but atleast we know who was in control.

    this is lunacy. if thailand was even immune to the financial to begin with , now the pm is making sure we will be going down with the rest of the western countries that tax and spend and borrow and spend.
    the govt. should cut income taxes 50% across the board. even co-operate taxes and have a string attach that no laying off people. any company that expands this year wil not have to pay any taxes ie 0% for 5 years.
    for tourism its pretty late for stimulus because people(foreign tourists) are cuttign back as never seen before.
    thaiand should learn from china. that is foreign reserves especially us dollars should be used to secure oil for long term, as we are net importers of oil .you just need to be a good copycat to do that!!

  2. 2 ray 29 March 2009 at 9:30 am

    give abhisit one year in power and it will be dejavu 1997 only worse. then people will really want thaksin back in power.i dont really like thaksin but atleast we know who was in control.

    this is lunacy. if thailand was even immune to the financial to begin with , now the pm is making sure we will be going down with the rest of the western countries that tax and spend and borrow and spend.
    the govt. should cut income taxes 50% across the board. even co-operate taxes and have a string attach that no laying off people. any company that expands this year wil not have to pay any taxes ie 0% for 5 years.
    for tourism its pretty late for stimulus because people(foreign tourists) are cuttign back as never seen before.
    thaiand should learn from china. that is foreign reserves especially us dollars should be used to secure oil for long term, as we are net importers of oil .you just need to be a good copycat to do that!!
    OH! You’re my new favorite blogger fyi

  3. 3 George P Tuckeer 29 March 2009 at 12:23 pm

    After profligacy, there should be austerity, not more profligacy. The economy needs time to shakeout, absorb any overcapacity and wean out weak companies. There *has* to be some pain for longer term health, there’s no way around it. Middle class aspirations and expectations have to be lowered.

    Those among the poor who will be most affected need to be directly helped with training, food stamps-type program and affordable housing till they get back on their feet.

    Those who benefited the most in the go-go days have to be prepared to take some punches.

    Unfortunately it’s borrow and spend like there’s no tomorrow.

  4. 4 ThaiCrisis 29 March 2009 at 1:43 pm

    Unfortunately, this disease, this virus has spread worldwide. The gvts in every country are doing everything they can to avoid the pain… They will merely postpone it.

    Let’s wait for the G20. It’s going to be a festival of voidness + powerlessness + big words.

  5. 5 Bedwyr 29 March 2009 at 1:56 pm

    Interesting to note in the same article, Abhisit now volunteers the same 9% number he poured scorn on a few short weeks ago.

    Man got no shame dude.

    Bedwyr

  6. 6 Chris 29 March 2009 at 1:57 pm

    Please help us non-economist with what must be a simple explanation why a country with 100 Billion USD in its reserves would need to borrow one half a billion USD from China to help pay for its stimulus package?

    Why not just draw down a half a billion USD from the 100 billion USD of reserves?

  7. 7 ThaiCrisis 29 March 2009 at 2:14 pm

    Because the Bank Of Thailand is jealous of its treasury. πŸ˜‰ They won’t share. Furthermore, on the paper, the BOT is “independant”.
    πŸ˜‰
    More seriously, I think it’s a good question. However :

    -if they start to allow this… then all drifts would be conceivable… Politicians would naturally put their hands on all those dollars… they know themselves very well, this is why they take great care to not give to the world such idea… πŸ˜‰

    -according to standard policies, foreign currency reserves are not like a treasury, that could be used during bad times. Their purpose is to stabilize the exchange rates, to back the local currency.

    -the foundation of the whole building is one word, and only one : confidence. They are terrified… Ask yourself : what the THB would worth… if the reserves vanish ?

    -the reaction of the market could be devastating if the simple idea of dirty politicians stealing from the coffers become a reality…

    -furthermore, all the central banks holding USD (cash and assets) are terrified. If they start to “use” those USD, they would have to sale them first… What would be the effect on the currency USD then ? And the US debt market ? China has 739 billions (!!!, january 2009) in US treasury securities !
    And Japan 634 billions. Do you see China and Japan “using” this “money” ? No. For the same reasons than Thailand (on an even greater scale).
    http://www.treas.gov/tic/mfh.txt

    I prepare an article on… on those US Treasury securities and Thailand… It’s tasty…

  8. 8 Marvo 29 March 2009 at 4:53 pm

    “To increase the tax revenue collection, taxes on alcoholic beverage products could be raised,” he added.

    OK, tell me….

    What’s the benefit on raising taxation on something that you’re going to ban the sale of? (poster shakes head in total resignation).

  9. 9 ThaiCrisis 29 March 2009 at 4:57 pm

    Very good point Marvo !
    πŸ˜‰

  10. 10 fall 29 March 2009 at 5:08 pm

    Good catch, Marvo.

  11. 11 Leopold 29 March 2009 at 5:20 pm

    Actually, breaking the BOT’s piggy bank was recently proposed by Thaksin in his speech to the red shirts.
    http://manager.co.th/Home/ViewNews.aspx?NewsID=9520000035536&Keyword=%b7%d1%a1%c9%d4%b3 (sorry, couldn’t find the one in English)
    It was his “grand plan” to solve the economic crisis. What I’m upset the most is, the Democrats couldn’t pick this up and counter it with something like your clarification, ThaiCrisis. Economics 101 for Thai people wouldn’t hurt.

  12. 12 George P Tuckeer 30 March 2009 at 2:34 am

    Relying on huge foreign exchange holdings as the source of a country’s own confidence and as the source for supplying confidence to others is a wasteful, dead-end road. Once you accumulate that money you can never actually spend it (as explained by TC above). In fact, you have to keep adding to it to show you aren’t slipping. It’s a drug that keeps on taking money away from worthwhile domestic investments like infrastructure, health and education.

    The steady accumulation of domestic investments in infrastructure, health and education is the road that leads to true confidence.

    Whether we are talking about individuals or countries, true confidence comes from within and not from how much one has in the bank.

  13. 13 prokester 30 March 2009 at 6:25 am

    Looks like Thai CDS spreads are moving up again. Still low, but on the move none the less.

  14. 14 ThaiCrisis 30 March 2009 at 6:49 am

    Where do you follow the CDS ? I would like to study the matter. Thanks.

  15. 15 Lothar 30 March 2009 at 5:38 pm

    @George:

    Yes you are completely right. The whole Central Bank System is insane. It’s not only the foreign currency holdings. It’s also the idea that you need to issue treasury bonds to have a justification to print more money is just stupid (and costs a lot of money in interest rates).

    If greedy politicans are more of a danger then central bankers?
    I have a very strong opinion on this and thats why i went to the “We don’t pay for your crisis” demonstration in Berlin yesterday.

    It’s so obvious that the G20 meeting will be a total desaster. England and USA are not going any step to reduce there financial sector and so there will be no cure.

  16. 16 Lothar 30 March 2009 at 10:08 pm

    @Ray:

    I have to say sorry but lower taxes will not do anything. You think that it is just a question to get people back to the old level of spendings and investment.

    You do not understand the crisis – it’s the system of constant growth that is to question here. Growth with all this competition and industrial technology is not possible anymore to the required level to compensate the interest level.

    We don’t need to go back to more spendings we need a different system. Share not growth. Community not Capitalism.

  17. 17 George P Tuckeer 31 March 2009 at 3:36 am

    @ Lothar

    Correct. Tinkering with the system with things like stimulus, lowering/raising taxes, etc will achieve nothing. There are fundamental wrongs that need major re-balance.

    Individuals earning tens, even hundreds of millions a year just doesn’t make sense unless these individuals are able to part oceans with a wave of a staff. Individuals with assets in the billions is an insane situation, even if these individuals decide to use their wealth for ‘good’ – a ‘good’ that they decide on.

    I’m not saying there should be communism; we’ve all seen that it doesn’t work. While this isn’t the place to make a lengthy post, let me just say that the Scandinavian model seems to be the closest to an equitable, workable system and that would be a good place to start. Vested interests are fighting tooth and nail (and winning) to preserve their privileges so change will not come easily or, I’m afraid, peacefully.

    In every country, it should begin with education, healthcare and meeting basic nutritional needs of all citizens. It actually doesn’t cost much to improve basic literacy, health and family planing education and clean, healthy diet. In many cases ll that’s lacking is the will.


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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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