Transcript of the above video: 

As the title of this video suggests, we are discussing the Central Bank here in Thailand. I thought of making this video after reading a recent article from the Bangkok Post, bangkokpost.com, with one of my favourite authors in the Bangkok Post. He writes a lot on economics; his name is Chartchai Parasuk. The article is titled: BoT, Government may have wrong inflation data. Quoting directly: "According to the BoT's own data collection," and for those who are unaware, BoT is the Bank of Thailand; that's the Central Bank here in Thailand, sort of the analog if you will of the Federal Reserve or the Bank of England. Quoting directly: "According to the BoT's own data collection, the actual inflation rate might be close to 4.8% not well below 1% as compiled by the Ministry of Commerce."

Yeah, for those who are unaware, this is one of those situations of, a quote attributed to Teddy Roosevelt and others "there are lies, damn lies and statistics." Unfortunately, Central Banks as well as other Government Agencies, in this case for example comparing to the Ministry of Commerce here in Thailand, various agencies that sort of monitor the economy and then set like monetary policy will oftentimes use the most optimistic figures if you will regarding inflation. And in America the mechanisms that they use, the methodologies that they use to gauge inflation are kind of absurd at this point. Things like what are called hedonic adjustments for example that say that oh this car is worth more now because you have satellite radio in it than a car that was made in the 80s or something. That it's inherently more valuable and therefore there's less inflation associated with that. There are various means and methods of sort of manipulating the inflation data, CPI (Consumer Price Index) for example. It's my understanding it doesn't take into account food and fuel, but then it supposedly is indicative or is a metric of inflation. Well that's rather ridiculous. They also use some other things like for housing costs, they use this metric of what it would be if you were renting your own house. Well I'm not renting my own house; I own my house. All kinds of things associated with data pertaining to the metrics of inflation, all around the world it has been my observation that there's a lot of manipulation going on. In fact there's a whole website, Shadow stats, Shadow Government Statistics run by a guy named John Williams who actually continues to use old metrics for inflation to see where they would be were we to continue to use like the metrics we used back in the 80s. It is a rather interesting site. That being said, quoting further: "The BoT collects data on seven essential products namely gasohol fuel, vegetable oil, eggs, diesel fuel, cooking gas, chicken meat and pork meat over the course of five years. The average annual price increase for those products is 4.79%. No wonder Thai consumers persistently complain that today's cost of living is high. If the MOC's (that is Ministry of Commerce) inflation rate is an accurate representation of the price pressure, Thai consumers should not be complaining as the average Ministry of Commerce inflation rate is only 0.27% per annum."

Again, I liken this to going back to the FED in the United States where they are using all sorts of things to measure inflation that really don't measure inflation very well. Now again, reasonable people can disagree but quoting again: "Gasohol fuel, vegetable oil, eggs, diesel fuel, cooking gas, chicken, meat and pork meat." That's probably pretty indicative of real inflation, especially consumer inflation for the vast majority of Thais. Notice beef isn't mentioned on there. Well beef's not exactly, they eat beef here in Thailand but it's not as much a staple food especially of the broadest cross section of Thais as would be chicken meat and pork meat. So again in my opinion they are at least trying on some level. That said, quoting further: "Which data is real and should be used as the benchmark for inflation rate setting? The BoT collected data or MOC data?" Well I think it's pretty clear there. Quoting further: "My answer is neither. Real inflation could be far higher than both the BoT and the MOC estimates. My argument is that the Consumer Price Index is fundamentally flawed as it does not reflect rising debt payments." Now that's a good point there. I urge those who are watching this video, if you're really interested in the overall analysis, check out that article in detail Bangkok Post, bangkokpost.com. Fair enough, I think that the author brings up a good point. You're not factoring in debt and there's many folks here in Thailand that have to deal with personal consumer debt.

That said, I think it is worth pointing out that at least the Bank of Thailand is trying to actually gauge the cost of things that the rank and file Thais are actually trying to buy, and I think again I don't think any, as I said before food and fuel aren't even considered in the American CPI context. So again things like “gasohol fuel, vegetable oil, eggs, diesel fuel, cooking gas, chicken, meat and pork meat” those are pretty good indicators of real inflation. I kind of wish perhaps the FED would be a little bit more like the Bank of Thailand with that regard. But that said, as the author noted, they themselves may not be getting the best metric on where inflation is actually at, again because they're not taking into account things like debt, so that's worth pointing out. That said, all things considered, I'll take a Central Bank who at least is trying in good faith to ascertain what the actual rate of inflation is here in the Kingdom of Thailand.