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Published on April 9, 2008

The price in dollars per barrel has risen more than 300 per cent. Similar developments can be found for hard and soft commodities, such as iron, nickel, wheat, rice, milk and pork.

The demise of the dollar came about due to the US pumping up the money supply and lowering interest rates to shorten the recession after the Nasdaq bubble popped. Coupled with record government spending and two wasteful wars, the dollar has fallen to all-time lows. When the world's "reserve currency" falls, commodity prices rise. Bear in mind that all other governments have also inflated the money supply to keep their currency from appreciating versus the dollar, thereby fuelling money inflation worldwide.

Food riots might be a theme of 2008.

There are signs that Mr Bernanke [US Federal Reserve chairman] has kept the money supply stable for the last eight months, which would signal a higher dollar and lower commodity prices. The question remains how long he will be allowed to pursue such a policy with a president at war and a housing/banking market falling apart?

In Thailand, the new PM is facing difficult choices. The populist initiatives delivered so far will likely be inefficient and costly. It is time for Mr Samak to step into the ring and deliver some much needed policy that can give Thais a chance to handle their daily lives:

1) Removal of tariffs on fertiliser and other input costs for the 20 million people living directly and indirectly on farms.

2) A stable money supply and market-based interest rates, strengthening the baht, and thereby reducing cost of food and fuel for the urban poor and farmers.

3) To alleviate the export sector and boost overall employment, the corporate tax rate should be cut from 30 to 20 per cent.

4) Liberalise transport and communication sectors to reduce costs for exporters.

5) Reduce the high interest margins of Thai banks.

Johnny C

Upcountry

Constitutional change must be approved by electorate

The real problem with the current Constitution amendment discussions is not what parts of the Constitution should be amended , but how the Constitution is amended. Let's not forget that in August 2007, nearly 57 per cent of voters opted for the current document, warts and all. Any amendments should again be put to the people for approval or rejection.

Unfortunately in Chapter 11 of the Constitution it states, in part, that "a motion for amendment must be proposed either by the Council of Ministers or members of the House of Representatives of not less than one third of the total number of existing members of the House of Representatives…." Giving politicians the authority to amend a constitution is akin to giving vampires a key to the blood bank.

My recommendation would be that the current Thai Parliament, as a priority, use the existing provisions to amend the 2007 Constitution so that future amendments, although they may be drafted by the Parliament, must be put to voters in the form of a referendum. Acceptance could be by either a simple majority or by a majority of votes in the majority of the provinces. Then and only then let the PPP-led government put its case to the people for further constitutional change.

W Lawrence

Bangkok

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