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Saturday, 21 June 2008

The demise of ASEAN Economies

Courtesy of CNA forummer: ringbook


Vietnam as a Prelude
We saw the collapse of the Vietnamese economy in the past 6 weeks. Most people will agree with me that Vietnam has minimal impact on global economy. (Indonesia is the world’s 20th largest economy, Vietnam is only 60th). I asked myself why it happened. Vietnam’s economy is a bubble but not really that big, not worth the effort (you know what I mean?)

I suddenly realized that this is an invitation call for raiders to prepare their assault on ASEAN. To raid the financial system of an economy, there is no meat if it is already in a bad shape (limited downside). Maybe China and India are too big for the predators to swallow (like elephants), but ASEAN is slowly emerging as the deers & buffaloes in the food chain.

The Inevitable Collapse of Philippines
The media is exposing the rotten structure of the Philippines economy these days. In the past 10 weeks, Peso is down 10% against USD. No doubt soft commodities are getting expensive due to the increased usage of bio-diesel and change in diets, but since when, did we use rice for bio-diesel or use rice to feed poultry to produce more meat?

It is not easy to raid ASEAN after 1997-2000. The only way to upset the trade balance is to jack up the import prices of staple food. Yes, governments can choose to have price controls, ignore the futures market BUT once there is hunger or death in the country, the government will need to start hoarding from the market and fall into this trap to prevent civil unrest. (This is happening to Haiti now)

Sore Losers in Thailand?
It is weird that the oppositions are protesting against the latest elected parliament. At first I thought these are sore losers. Then I realized it doesn’t make sense for the opposition to do what they are doing right now. (They have been making noises for ten weeks):
- The new parliament is just instated, should they be given more time?
- If the new govt collapse, the Army will still be the one running the economy, not opposition.
- Don’t the opposition remember that they regretted having the military in power last year?

Oh well, we know that high rice prices will not mess up Thailand but we wouldn’t know if there are elements that try to mess up the stability 2nd largest economy in ASEAN.



Everyone is waiting for something to happen.


Hehee, please note that these are my personal opinions and they are not a call to buy USD and JPY. Just for discussion.

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