Some central banks, such as those in Canada, Britain, Sweden, Australia, and New Zealand, operate monetary policy by setting strict inflation targets.  The thinking is that it is very difficult to hit monetary growth targets and, even then, to know how changes in the money supply will impact the economy.  So central banks should continually adjust monetary growth to hit a desired inflation rate. There is some good logic to this trial-and-error approach, given the imprecision of monetary policy in practice.

Some impact may be felt from China, but they aren’t moving rates all by themselves. The fed on hold has an effect. But surely there are other impacts, yes?

An article in the Bangkok post  leads me to believe that Thailand is in trouble financially, and that they are trying to manage it using advanced financial engineering. That is akin to Fannie Mae and Freddie Mac, two US examples that scare the heck out of me.

I hope they can pay that debt when due, otherwise it’s crack up the printing press and devalue the currency time. That’s what they are trying to avoid with these swaps.