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New ABP Business Center

Economic meltdown?

New ABP Business Center

Nopniwat Krailerg

A new project, “ABP Business Center”, has been initiated by Vimoot Chindasilpa, managing director of Chindasilpa Co., Ltd., with the purposes of supporting business expansion in Chiang Mai and to be a center of business relations located amidst natural scenery. The Airport Business Center is only a five minutes drive from Chiang Mai Airport, and already has many business occupants.

Vimoot Chindasilpa, Managing Director Chindasilpa Co., Ltd.

Businesses have three choices: Smart Office, areas for rent provided with full options such as furniture and other facilities; Virtual Office, office for investment brokers or businessmen looking for modern services featuring high speed internet; and thirdly, a Business Center Meeting Room, an area which can be rented for meetings, seminars, training sessions and presentations for existing or potential customers. This room is able to accommodate 150 people, and is equipped with audiovisual aids such as VDO Conferencing.

Economic meltdown?

Two economists count the costs

Peter McKenzie-Brown

A spellbinding presentation mesmerized the Chiang Mai West Rotary Club last week. In a spicy departure from the customary fare at these weekly dinners, investment specialist Alfred Kelly proposed that the world economy is headed toward a kind of meltdown.

“This one will be different from the crises of the late 1990s,” he said, “because those problems began in the periphery (Thailand, Russia, Argentina, Mexico) of the world economy. This one will originate in the heartland of global economic power: America.”

For evidence, he hauled in the usual suspects: In America, huge deficits in the balance of payments and government spending; high oil and other commodity prices; the declining dollar; “unsustainable” inflation in real estate and some other assets; immense levels of consumer debt in many western countries and a background of increasing interest rates. He believes the fundamental cause of these interrelated woes is an American-inspired credit bubble.

Since U.S. policy-maker Alan Greenspan made his famous 1996 comments about “irrational exuberance” in the stock markets, Mr. Kelly argued, American authorities have done little to reign in expanding money supply. This has encouraged the western world (in particular the United States) to live beyond its means, Mr. Kelly said.

American prosperity “is dependent on $2 billion per day of foreign aid” – the amount the US borrows from overseas. “How long,” Mr. Kelly asked, “will the rest of the world be willing to support America’s excesses?” He concluded that “many ingredients are now coming together to cause global destabilization.”

To protect themselves, investors should consider moving into the currencies of some resource-rich countries (Canada, Australia) and some Asian countries Thailand, China, Malaysia. He also believes precious metals and gold stocks will serve as a haven in the coming storm.

In a rare moment of levity during the discussion, former United Nations economist Peter Kouwenberg noted that Prime Minister Thaksin had recently referred to Thailand as “a nation of fortune-tellers.” But according to the prime minister, he explained, “only 3 percent of the fortunes they tell ever come true.” Then Mr. Kouwenberg delivered his punch line: “Tonight we seem to be in the presence of a misfortune-teller. I think capitalism is more dynamic and flexible than many people can really imagine,” he said.

Throwing in his own reflections on global geo-economics, Mr. Kouwenberg suggested that the biggest changes in the foreseeable future will be in Asia. Here, China will continue to grow in strength at the expense of Japan. And this “will create a second superpower in the world, putting the planet in a healthier balance than there is today.”

On this point, the sparring partners reached clear agreement. Borrowing a concept from psychology, Mr. Kelly argued that “cognitive dissonance sometimes causes you to lose sight of what is going on in periods of fundamental change. The coming crisis will be painful, but ultimately healthy. Asia will make the difference.”

The Rotary Club of Chiang Mai West meets Tuesday evenings (7 p.m.) at the Amari Rincome Hotel. Guests are welcome.