From Bloomberg
Thaksin's advice to the ruling People Power Party, which was founded by his loyalists and won the first post-coup election in December, suggests he wants to continue exercising political clout, said Suriyasai Katasila of the Campaign for Popular Democracy, an activist group that opposed Thaksin when in office.
``He is running the government behind the stage now, and will come back for sure once he proves his innocence in front of the justice system,'' Suriyasai said. ``His words on the economy have much influence because the team running Thailand's economic policy at the moment is basically his.''
Thaksin, who remains a popular figure for his policy of grants to poor villages, presided over Thailand's fastest economic growth in a decade. In the interview, he said the Southeast Asian nation's interest rates need to be lower to boost confidence among consumers and investors.
I'm not saying that I'm an economics genius, but shouldn't we keep the inflation in mind? One thing that I can say for sure is, cutting rate is not an answer in this economic situation.
Sure, Japan did it, but again ... Japan did it... in the 90's!
Is that really what we should follow?
Also, low interest rate won't help in boosting confidences. Oil and food prices will keep the consumers down for a while, so the only thing lowering interest rate would do is, fueling inflation, which consequently punishes those who save money, kills the poors and makes Thailand a laughingstock like Shinawatra himself.
Update: Tarisa Wantanagase, the Bank of Thailand governor, in the
Post...
Ms Tarisa said easing monetary policy _ cutting interest rates _ to boost consumption was out of context as it would only further increase the cost of living. Central banks worldwide tighten monetary policy in the face of rising inflation.
''An interest rate reduction is impossible. The central bank is the only institution to look after inflation. If [the central bank] fails to create confidence that inflation will be well taken care of, public psychology will be that inflation is on the rise,'' Ms Tarisa said.
Looks like I'm an economics genius after all :P