Friday, October 10, 2008

England, Thailand and the Global Financial Crisis

What a disastrous end to an epic week! October 10th, 2008 - henceforth to be known as "10/10", no doubt. The day the world finally had to wake up to the fact that having a global economy means that when there is a problem in one economy, it will quickly become a problem in all other economies due to their implicit global inter-connectivity, regardless of the claims of some rather foolish national leaders who until very recently were denying that their particular countries would be affected by the "Anglo-Saxon Problem" (are you feeling it now Germany? Japan? Arab Nations?).

An unprecedented global financial crisis such as this needs rapid, radical, globally co-ordinated responses to resolve it - and so far it has received none of real worth other than a rather paltry (though unique in history) round of worldwide interest rate cuts on Wednesday. The consequence of this virtual inaction at the highest levels is that (quite predictably) the entire global economy has now imploded, with stock markets all around the world suffering from massive drops of 20% or more over the course of the week. It's a good job the weekend has arrived to put a brake on things, although quite what will happen on Monday morning when business resumes is anyone's guess. Even if the belated G7 and Group of 20 meetings that are taking place over the weekend come up with any really good plans of action, I think it will not really help much in the short term now, and that things will get worse for a while yet before they can start improving. Oh dear. Life in England and Thailand may never be quite the same again.

One thing that has been puzzling me more than anything through all of this, given my dual English and Thai life, is the GB Pound to Thai Baht exchange rate. Today the rate is around 58 Baht to the Pound, which is really low compared to recent years - earlier this year for example it was 68 Baht. Although the UK economy is under severe downward pressure at the moment, history shows that Thailand (with its export-driven economy) is traditionally the weaker of the two economies in times of economic woe such as now. That the Baht is so strong against the Pound therefore seems to me to be rather at odds with general long-term reality. Weird.

Like pretty much everyone everywhere, I am now suffering some financial difficulties, although thankfully I have no loans and no credit to worry about, so I will get off much more lightly than most people during this crisis I suppose. I am truly sorry to see that so many hard-working people will lose so much now through no real fault of their own. That this all seems to have been initially caused by the unbridled greed and stupidity of a relatively small number of fatcat bankers and financial traders in the US and UK (and replicated at least in part in other countries too - again, you know who you are!) is what really cuts the most here. These people must be made accountable for what they have caused, and must be severely punished (including having personal bankruptcy forced on them all in my opinion) in order to set an example so that it will not happen again.

I was heartened to see that the British Prime Minister, Gordon Brown, said he wanted to see the perpetrators punished, though I doubt any such punishments will be anywhere near severe enough if and when they are meted out. These few tens of thousands of greedy, selfish, stupid people have almost destroyed the entire world economy for goodness sake! They are global financial terrorists! They have done far more damage than anything Osama Bin Laden has ever done!! Make no mistake - many people will die as a direct result of this disaster, either through despair-driven suicide, stress-induced illness, increased violent crime, or a sudden lack of medical funds and facilities in poorer countries. And millions upon millions of people everywhere now face severe financial hardship for many years to come. So the greedy fatcats that have caused this must be made to pay a very heavy price, as swiftly as possible - no excuses!