Good news that Thailand is...

out of military dictatorship but she falls back into the Chieftain mode all over again.

If you're new and just find me through the Internet. Last year, I decided not to write anything while I lived in a country with military dictatorship. Now Thailand is back to democracy, for a while, at least. So I don't have to keep my opinion to myself anymore.

Since right now, the world economy is about to go into winter. Having democracy back, Thai economy can start again. The reason why the world economy is going to winter? Anyone should be able to translate the incidents in the recent weeks.

The US Federal Reserve ("FED") has activated expansionary monetary policy by reducing interest rate by 0.75%. US FED hopes to increase US GDP and depreciate US Dollar. This is a direct response to curb US economy going into recession by Sub-Prime problem.

This policy will depreciate US Dollar further, making exports from all emerging countries more expensive. All emerging countries, Thailand included, will have to brace for impact by declining orders from the US.

So all emerging countries will take a hit. Some may be hit hard such as the ones that has US as the major trading partner such as China and Thailand. The fact is that since all Asian Central Banks hold large amount of US Dollars (US Assets/Bonds) so all Asian Central Banks will not let US Dollar to decline by lending to US Government (by buying even more US treasury/bond) to keep US Dollar afloat.

In the private sector, however, the Capital Markets in emerging countries will boom because money will flow out of the US Capital markets in fear of US Dollar depreciation and sinking US interest rate.

Why am I talking about US economy and emerging economy?

It's because Asian economy will be worse due to less export to the US. While Asian economy is going down, Asian Capital Markets are going up. So popularism government, like Thailand, will use the fact that Stock Exchange of Thailand is heating up because of their good governance. But the fact is otherwise.

So in the year 2008, Asian economy will tank but stock markets will grow. I forecast that the new chieftain will embrace the news of booming Thai Stock Exchange as to grow this popularism regime.

I intend to write about countries with Confucius culture could develop much faster than countries without. Until next time. Happy New Year!