About economic processes in Thailand - UPDATE
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by Jean-Paul Sartre
(UPDATE: This article takes strong THB as fact. This has proven to be an illusion since, see at the end of the article.)
We are seeing the government's propaganda here and there that how artificial strengthening of THB have strengthened our economy, prices decreased, and "exporters" showing up selling goods in our domestic market.
I am sad to disappoint those who was believing these statements, but there are several factual and conceptional errors in the above propaganda.
Buying up THB means that the amount of gold in the bank will be less. Yes, if you sum up the bank accounts in gold using actual change rates, you have even increased the nominal amount of money of the bank. But without real economic growth you cannot realize this "profit", as putting the money on the market would make as much inflation as it has wrapped up. The only way the bank could realize the profit by buying goods on the domestic market fast (or do things which equal to this in effect), thus creating not just inflation, but also shortage of goods. In this way every thai citizen would pay the profit who have some baht in their pocket or buys in the domestic market. Thus high currency value is not a positive thing in itself.
To understand the price mechanisms, one have to be aware of some global economic facts:
- There is an increased productivity worldwide (minus Thailand) created by world war.
- There is a sharp decrease in consuming due to the coffe break in the war and electionless time (party elections do not make many people to move).
- Because of the above facts prices have significantly dropped everywhere in the world.
Above I was talking about prices in gold. Due to stonger THB, prices did not decrease here in the same pace as in other parts of the world. This is why "exporters" (note the notional ambiguisness here. they actually import to Thailand) have shown up, and BRINGING OUT GOLD FROM THE COUNTRY.
In short term importing companies will actually make THB a bit stronger, as they heaping up THB in their acounts. But as soon as they realize they profit, changing THB to gold, inflation will occur.
This means that domestic companies (and employees in the long term) are in trouble. I am seeing prices on the market which are barely profitable given our high vages, which have just increased with stronger THB.
Yes, the above means that employees in the short term have more money: higher vages, lower prices. But they are the ones who will throw out gold beyond the borders of the country, and make companies unprofitable, thus making economy collapse in the long run.
UPDATE:
The THB-to gold exchange rates since erep day 475 are below. Note that until day 480 I measured it on the thb-for-gold side, and since day 481 I measure it on the gold-for-thb side. The current thb-for-gold rate is 0.011, and the amount on that side is nearly 200 gold.
475 0.011
476 0.011
477 0.011
478 0.011
479 0.01
480 0.012
481 0.00952380952381
482 0.00952380952381
483 0.009708737864078
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Maybe we should just force a war upon everyone so we can all make profits for our companies...
We do not have to force war, they will fire up anyway. Just bring 'em home, and leave the conflict part to others.
So your update is switching its medium halfway through to offer some decreasing number. What is your point? Trying to further confuse people?
Gentyle:
If you can read the numbers, no confusion here. It just means that the strengthening of THB was so transient it not even seen with daily sampling. Even I did not think that Bl1ndn3ss's program will be so ineffective even in this relatively easy subtask. I thought he has at least some rough estimate on how much money is needed to raise the rate.
"If there would be war at home, you could fight one and loose 10 wellness, and go to the hospital earning 20. I would earn 40, because there is a Q4 hospital here."
Indeed, but if you check the level of the wellness of the average citizen you will see that it decreases and not increases with war.
Most people give more attention to the experience they gain from war than they do to the level of production of the company they work for.
", I did refer to the fact that it was stronger for a moment only because you have bought some up."
If I dont sell it (and I have no intenttion to) it will stay strong.
Quoting myself (in case you didnt get it the first time around): "When you buy up the currency available and you dont sell it in the monetary market you increase the its value"
"Anyone above 2.5 skill should be able to produce more than they consume for normal living"
That depends on the quality of the product. But lets ignore that fact for a moment.
Not everyone works in companies that make the goods that they want to buy.
I'll give you an example: Weapons companies have close to 0 sales in eThai. That means that every worker in the weapons companies arent actually producing anything for eThailand.
Was that clear enough?
You honestly think that the reason I do not want an MPP is the decrease in wellness?
Do you realise that I am one of the few persons that actually thinks we should join PEACE. I guess you havent been in eThailand that long.
Do you know why I dont sign the PEACE agreement (and has president and commander of the military I every right to)? Because there are a lot of citizens that dont think we should join.
And I am not one to enforce my ideas on anyone else.
And that what you're doing when you say you want an MPP at any cost...
Again, you talk without knowing.
I said in many places including in various comments on various articles and in the IRC chat that it would cost between 200 and 250G to take the THB to a reasonable level.
The central bank spent, so far, a little over 100G and we had an increase of almost 50% in the amount of THB in the account.
Going from 70.000THB to more than 100.000THB in just 10 days.
It's tough to say whether war increases or decreases average productivity. My gut says, and at some point in the past I believe there was an exhaustive statistical analysis by Pearlswine in the US, that it would increase overall productivity somewhat, mainly because the older, and hence more skilled, citizens did try to come out of war with higher wellness.
That said, the amount of labor that is shifted into weapon production does raise the price of food, moving tickets, and gifts, so saying that it helps the economy isn't always true. What it does do is make people spend a lot of money that provides less utility than it would otherwise.
War is a mixed blessing for the economy in other words. Aside from this, Bl1ndn3ss said it first and better on all points I believe.
Mr President,
we had the same problem with the citizens in eHungary. They fought too much for the rank, for xp. But I use the past tense, because most of our people gave up this bad habit.
And if people don't fight in the war they must buy houses, gifts, expensive, high quality food. But I haven't done an exact calculation so I might be wrong. 🙂