By Richard S. Elrich, Asia Sentinel

For a recent black-tie awards presentation by Thai Princes Maha Chakri Sirindhorn amid the royal splendor of the Grand Palace’s Chakri Throne Hall in Bangkok, invited dignitaries included the prime minister, a princess, a former military junta leader, America’s newly-arrived ambassador and others.

But while a sumptuous banquet dinner was in preparation, many of the guests seemed more concerned about updates on the thousands of people protesting in the grimy streets a few miles away. Despite the relative calm that has descended on the city – relative, that is, to the violent events last April and May – these guests were uneasy. It is an unease that permeates the larger society outside the ornate palace’s gates. The benchmark SET index has lost nearly 8 percent since the first of the year after reaching a 14-year high as inflation concerns continue to mount. In addition, the Thai baht has fallen by nearly 4 percent in 2011, the worst performer among Asia’s 10 most traded currencies outside of Japan, according to the Bloomberg News Service.

Under paintings of past monarchs, and in front of an exquisite 200-year-old pillowed throne, army officers chatted about the possibility of Thailand descending into a violent revolution, or yet another coup, or seemingly Machiavellian moves by the military-backed government and their opponents to win the next election, which Prime Minister Abhisit Vejjajiva has said will be held be sometime this year. Some political analysts believe the polls will be called at some point in the first half of the year.

Guests punctuated their remarks by acknowledging the invited dignitaries, who included Abhisit and the 2006 coup’s junta leader, retired Supreme Army Commander Gen. Surayud Chulanont, who is now a member of the king’s Privy Council of personal advisers. The new U.S. Ambassador to Thailand, Kristie Kenney, was also present at the evening’s ceremony.

Some guests, including army officers, warned that the Red Shirts’ newest twice-monthly street blockades, which attracted 30,000 Reds during January, might escalate into a repeat of the April and May insurrection and clashes with the military, which left 91 people dead, mostly civilians.

One army officer said former Prime Minister Thaksin Shinawatra, whose overthrow in 2006 in a bloodless coup by the US-trained military kicked off four years of political turmoil, was fading away in self-imposed exile abroad. Some Red Shirts are now said to be squeezing the ousted billionaire for money, claiming to support him, but actually hoping to finance newer politicians in their post-Thaksin scheme, the officer said.

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