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Over the next three months, the Bank of England will turn to quantitative monetary easing. In simple terms, it will print money by injecting some £75 billion (Bt3.9 trillion) into the UK economy to prevent the deepest slump since the 1930s. If necessary, the Bank of England, with support from Chancellor Alistair Darling, would infuse as much as £200 billion into the system by purchasing government gilts and commercial assets to stave off the recession, cure the malfunctioning banking system and prop up consumer and business credit.

The first tranche will be bought on Wednesday. The Bank of England hopes the capital will find its way into the hands of consumers and businesses, thereby boosting demand.

Many countries should feel very nervous by now. For this means that the UK has exhausted its tools and no longer cares about potential hyperinflation down the road.

The UK no longer wants to borrow money. It has brought interest rates down to 0.5 per cent, the lowest level in 315 years. What if other countries start to print money like the UK?

We may examine the lessons in history. In 2001, Japan sought to escape from the lost decade of the deep recession of the 1990s by printing yen. It didn't lead to disaster. But it did not encourage Japanese banks to step up lending or consumers to spend more. But at that time Japan was the only country to do so and to face a recession.

During the Weimar Republic, the German government in 1923 resorted to printing money because it was forced to pay massive reparations to the Allies after World War I.

The hyperinflation that ensued destroyed the value of the currency and Germany lost all of its wealth. After that lesson, Germans have become the most conservative people when it comes to combating inflation.

Zimbabwe is now facing hyperinflation. The government has a tendency to print money to finance state spending. Its inflation has shot up to 230 million per cent. Its currency is worth almost nothing.

Now practically all the countries in the world are tumbling into yawning recession. If many of them abandon monetary discipline by following the UK's path, they may be tempted to print money too because they all want to go for popular measures to perk up the economy.

This mentality, if it gets out of control, will leave the world with a tsunami of worthless liquidity. The world may probably lose confidence in currencies.

So far Thailand has resisted the temptation to mint money. The economy is sliding into a deep recession. Instead of telling the Bank of Thailand to print money, the Abhisit government has resorted to borrowing, both from home and abroad, to finance the budget deficit.

Recently, the Cabinet approved the Finance Ministry's proposal to borrow Bt70 billion from overseas institutions to finance infrastructure projects.

Both the central bank and the government must re-examine global economic conditions very closely. If we were to continue to see a free-fall, with an L-shaped recession, then it would be wise for the government not to create any additional debt burden.

The government's fiscal position remains healthy compared with most countries in the world. It would serve the national interest if the government stopped foreign borrowing and minimised deficit spending.

This would save taxpayers' money for the even harsher rainy days. Lavish deficit spending now would only amount to flushing water down the drain.

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.