1. The just-updated Economic Time™ for Thailand is a mirage: we currently diagnose an excess supply of money and excess supply of goods.
2. However, we cannot caution enough that this Economic Time is morphing into a cat on a hot tin roof:
a. First, inflation, especially the demand-pull type, is rising;
b. Second, fourth quarter GDP (up 5.8% in real terms over 4Q07) was driven very much by government outlays, and
c. Finally, we just do not think that global investors are going to flock to a market where populist domestic politics are getting rickety along with those in neighboring countries.
3. As economists, we note with particular concern that the new PM, Samak, wants monetary policy to be growth-friendly. This concerns us: Thailand’s inflation needs to be controlled by the Central Bank. But he well could disallow this.
4. Caveat emptor!