As I had predicted - Thailand can use rice as international currency reserves

[Nikolay Kryachkov]

Hi,

that news came from "Desperate times thatcall for drastic action"

http://nationmultimedia.com/2009/03/09/opinion/opinion_30097443.php

"Equally important is how the Bank of Thailand is going to manage its
international reserves. Most of its reserves are now in US dollars. Is
the dollar still a safe haven, given the severity of the US financial
crisis and the need for the US to mobilise massive public funds to
bail out financial institutions and the economy as a whole?

If the greenback is not safe, then is gold safer? Gold might have been
subject to speculative buying in recent months as investors lost their
appetite for currencies and equities.

This time the dilemma for the banking authorities is to think
carefully about how to preserve our international reserves. Singapore
has lost a chunk of its reserves to the global financial market
meltdown.

In Thailand's case, is it perhaps time for the central bank to absorb
offshore baht in Singapore to pre-empt future currency attacks. Some
Bt1 trillion of offshore baht is now parked in Singapore banks.

Second, is there any possibility of resorting to Thai rice as reserves
in the event that most other global assets lose their value in the
global meltdown?

With the world in turmoil, the only valuable resource that Thailand
has is rice.

In theory, we can use rice as international reserves. The mechanism
should be the same as the commodity currency system.

In principle rice can also function as money because it meets the
three criteria of medium of exchange, unit of account and store of
value.

Since Thailand exports about 10 million tonnes of rice a year, out of
the global rice trade of 27 million tonnes a year, it is a major
player in the global rice industry.

If Thailand can control rice supply like Opec does for oil, a
production cut will surely raise the price.

If Thailand comes up with a system in which supply is dictated by a
central authority, then controlling supply will be possible.

If no other instruments are safe at this hour, perhaps it is a good
idea to explore the possibility of using rice as international
reserves. Rice has value in itself. People have to eat rice every
day".

Do you remember "Rice and other natural money"

http://knowledgeperson.blogspot.com/2008/05/rice-and-other-natural-money.html

"The Global Natural Money Board"?

http://groups.google.com/group/KnowledgePersons/browse_thread/thread/39be3e6e1ece0369

Not everything is clear with rice reserves. How do you think will they
manage with interest for the rice backed currency?

Nikolay

[Nikolay Kryachkov]

По-русски

"Как предсказывал - Таиланд возможно сделает рис обеспечением своей
национальной валюты"

http://knowledgeperson.blogspot.com/2009/03/blog-post.html

Николай

> http://knowledgeperson.blogspot.com/2008/05/rice-and-other-natural-mo...

>
> "The Global Natural Money Board"?
>

> http://groups.google.com/group/KnowledgePersons/browse_thread/thread/...