That’s the beauty with cheating : you always find a bigger cheater than yourself.
And this is exactly what is happening in Asia (and around the world).
The crisis is worsening (see Dubai’s default), tensions and imbalances are increasing, and all the clowns try the same thing : The Beggar thy neighbor policy, in order to save their own exports, at the expenses of somebody else.
That’s the principle of the Beggar thy neighbor policy.
This is why it’s absurd to pretend that everybody can do it, at the same time. The Beggar thy neighbor policy implies that someone loses.
Someone has to lose.
Vietnam has devalued its currency (by 5,4 %, read here) and increased interest rates. Why ? “To contain inflation“.
The first part (devaluation) is of course totally surreal when you pretend to fight inflation. Sure Vietnam can survive without importing L’Oreal beauty creams for instance… but It can’t avoid to import oil. And already, gasoline prices have increased in the country. And like Thailand (and China), economic growth is based on cheap fuels.
So the devaluation increases the costs, costs are passed onto the consummers : prices rise. Inflation.
The vietnamese government, like the thai government, is living in Lala Land. They just want to boost their exports.
Effect on Thailand ? Overnight, thai goods, like rice, are 5,4 % more expensive compared to vietnamese rice.
Now, let’s see what Korn, the alleged Finances Minister, has to say.
“Vietnam’s decision to devalue the dong will not affect exports or other currencies in the region,” Korn told reporters. “Thailand has no plan to hike its interest rate any time soon.”
The minister said the premium quality of Thailand’s rice insulated it from competition with Vietnam. (Nation)
Insulated from competition ? Korn is an expert in bozoness. Not affecting other currencies in the region ? Ah ah ah, another medal.
[Chart of USD Index]
And in the background… the USD dollar is sinking. And will continue to sink. And Korn will continue to make inane comments, and the economic situation will continue to worsen.
Life is sweet. Let’s have another drink.
[You want to understand the reasons of Dubai’s debacle ? Look here… Asthonishing pictures… Everything was written, on the walls and at the top of hundreds of cranes, and the clowns, as usual, pretend today to be “surprised” ! ]