Plunging British Pound Saps Expat Pension Spending Power

[simoh1490]

Just now, smedly said:

so sterling must have dropped 25-20% against the euro too..........right

 

wrong, the euro and therefore all those who use that currency are almost just as badly affected against the BAHT

 

euro - sterling is exactly in the range it was 2011-2014 .................way before a majority in the UK voted to leave the EU sinking debacle

Every currency lost against THB, nobody won.

[champers]

4 hours ago, bkk_mike said:

I'd agree with you if, 21 years ago, I hadn't been in a meeting with the head FX trader in London at Chase (this was shortly after the merger with Chemical Bank, a few years before the merger with JPMorgan) where they discussed (in late 1996), about how they thought that they were overexposed to the THB and would look to reduce their positions.

 

The interesting thing - the reason given at the meeting for the decision to reduce their positions was that although Thailand had been stable for a few years and, at the time had a fixed exchange rate with the dollar, it was historically prone to political unrest and coups, so they thought the political risk wasn't effectively priced into the positions.

 

And what happened in 1997 - https://en.wikipedia.org/wiki/1997_Asian_financial_crisis

 

I'm just an IT developer (at the time, I was working on the migration from the old Chase FX system to the Chemical one - which is how I was in the meeting). But it definitely made me realise that actual experts (intelligent people who work full-time on something, rather than politicians or pundits or TV presenters) are far more likely to be correct than the average person on the street.

You have an interesting take on what you deem to be intelligent financial experts. Can you, therefore, explain how the financial crisis of 2007/8 came to pass? Not surprisingly, most people in the financial sector are purely motivated by profit and that goes hand in hand with greed.

I recommend watching the film The Big Short which gives a cynical view of the 2007/08 financial crash. I have watched it 3 times; the picture becomes clearer after each viewing (I am not from a financial background, so it took a while to sink in) and the film is also a very entertaining black comedy in its own right.

Edited January 2, 2018 by champers
Spellink errur

[simoh1490]

Just now, KarenBravo said:

I'm sure the government holds lots of currencies, but, what has that got to do with the basket of currencies that determine exchange rate. If four currencies make up 100% of the basket, then there cannot be another 21 currencies that you claim.

Logic innit!

The SDR basket is for IMF lending purposes, that basket alone does not determine the value of THB.

[midas]

7 hours ago, Samui Bodoh said:

And Brexit rears its ugly head...

 

Who didn't see this coming?

Makes no difference this phenomenon will happen all over the Eurozone sooner than later. The euro is another toilet paper currency

[KarenBravo]

Just now, simoh1490 said:

The SDR basket is for IMF lending purposes, that basket alone does not determine the value of THB.

Then, why did you bring it up? We're talking about the basket of currencies for exchange rate purposes.

Please provide a link to these 25 currencies.

[Khun Paul]

In the early part of this century, we were getting 70 + to mthe B aht for the Gbp, all of a sudden that dropped since then to date 28 Baht to the pound or about one third. so in fact it is true Expats are poorer, many that were here on just their Old age pensions are certainly struggling, those that hold company pensions or other pensions may well be ok, although with a third less spending power.

[simoh1490]

29 minutes ago, billd766 said:

 

I am a little confused with your explanation.

 

You say that the GBP is not up against the USD but that the USD is down against the GBP. In laymans terms that to means that the GBP IS up against the USD.

 

Next you follow it up with ifs, buts and maybes.

 

AFAIR the THB tracks a number of currencies and has done since the disastrous 1997 financial crash when it was tied to the USD.

 

"Perhaps" the THB will go below 40 but "maybe" it won't and "if" it doesn't then we will be better off "but" if it does, then we won't.

 

When a person says GBP is up against USD, that implies GBP has strengthened against USD and that was not the case. 

 

As for your other comments: all I can do is help explain it to you, understanding it is down to you.

[smedly]

4 minutes ago, simoh1490 said:

Every currency lost against THB, nobody won.

wow you are correct for once lol

 

making this thread about a plunging pound complete nonsense

 

it is in fact a strong Baht that has shafted most

 

as brexit matures sterling will strengthen and that is a whole different discussion not on topic here

[simoh1490]

2 minutes ago, KarenBravo said:

Then, why did you bring it up? We're talking about the basket of currencies for exchange rate purposes.

Please provide a link to these 25 currencies.

I wrote, "that basket alone", operative word being "alone".

 

I also wrote that THB tracks USD, to a greater degree, that being part of the managed float system operated by BOT. Managed float means that THB is allowed to float freely on FOREX markets, until such time its value (which is determined by the Forex markets, supply and demand) exceeds parameters set down by BOT, at which point BOT, er, manages or intervenes by buying or selling currency(ies) accordingly!

 

I gave you the link to the IMF's SDR rules so you could see that USD forms the majority holding of SDR currencies, thus confirming that USD is the major currency track. 

 

You do your own legwork, if you don't like my version of events, prove me wrong!

[KarenBravo]

1 minute ago, simoh1490 said:

I wrote, "that basket alone", operative word being "alone".

 

I also wrote that THB tracks USD, to a greater degree, that being part of the managed float system operated by BOT. Managed float means that THB is allowed to float freely on FOREX markets, until such time its value (which is determined by the Forex markets, supply and demand) exceeds parameters set down by BOT, at which point BOT, er, manages or intervenes by buying or selling currency(ies) accordingly!

 

I gave you the link to the IMF's SDR rules so you could see that USD forms the majority holding of SDR currencies, thus confirming that USD is the major currency track. 

 

You do your own legwork, if you don't like my version of events, prove me wrong!

No, you're claiming 25 currencies. The onus is on you to prove it.

[cookieqw]

their Is a lot of info supplied by the “ brains “ but governments only pick what is suitable to themselves. That’s why Dr. Kelly is not with us today.

[simoh1490]

15 minutes ago, Khun Paul said:

In the early part of this century, we were getting 70 + to mthe B aht for the Gbp, all of a sudden that dropped since then to date 28 Baht to the pound or about one third. so in fact it is true Expats are poorer, many that were here on just their Old age pensions are certainly struggling, those that hold company pensions or other pensions may well be ok, although with a third less spending power.

You're confusing the values of USD/THB with GBP/THB, GBP/THB was at 70+ at one point and currently, it's at around 43. USD/THB was set around 25 pre-crash but then fell to over 40, it's currently around 33. 

 

But the point you make about values and pensions is correct, except that many pensioners here were holding Thai assets as the value of their home currency fell, most notably the Pound. In many cases, expat pensioners have seen the value of their THB holdings soar against their home currency, which is why many have subsequently returned to live in the country where they were born.

[janclaes47]

20 minutes ago, simoh1490 said:

Every currency lost against THB, nobody won.

Really.

 

Below is exchange rate 29 December 2014 next to 29 December 2017.

 

I can only see 1 ( ONE ) currency that has tanked.

 

[simoh1490]

13 minutes ago, smedly said:

wow you are correct for once lol

 

making this thread about a plunging pound complete nonsense

 

it is in fact a strong Baht that has shafted most

 

as brexit matures sterling will strengthen and that is a whole different discussion not on topic here

There is no denying the value of GBP fell some 15% or more after the referendum, as others have said, the value fell from low 50's to around 43 today, the thread is therefore not a nonsense since USD also weakened around the same time which made THB look even more attractive. And the only people who have been shafted is those re4sident expats who would not or could not hedge into THB before the fall of the Pound, those who followed the age-old TVF rule of not bringing money into Thailand blah blah.

[Krataiboy]

6 hours ago, lovinglife said:

Prices are rising in Thailand so probably less. But £ is 44, same as Jan 2017

And slightly higher, if I remember rightly, than it was when I first arrived here two decades ago.

[simoh1490]

3 minutes ago, janclaes47 said:

Really.

 

Below is exchange rate 29 December 2014 next to 29 December 2017.

 

I can only see 1 ( ONE ) currency that has tanked.

 

Your time frame is too long, try mid 2016 through mid 2017.

[ResandePohm]

7 hours ago, Samui Bodoh said:

And Brexit rears its ugly head...

 

Who didn't see this coming?

Only moronic Brexit voters.

[simoh1490]

12 minutes ago, KarenBravo said:

No, you're claiming 25 currencies. The onus is on you to prove it.

If you accept the document you provided earlier is correct, BOT is required to manage the value of THB against a basket of ASEAN currencies. If that is correct, which it is, how would you guess they manage to do that if the only currencies they hold are the four SDR currencies!!!

[KarenBravo]

1 minute ago, simoh1490 said:

If you accept the document you provided earlier is correct, BOT is required to manage the value of THB against a basket of ASEAN currencies. If that is correct, which it is, how would you guess they manage to do that if the only currencies they hold are the four SDR currencies!!!

That's exactly what I want to know.

As you are the self-confessed expert, maybe you could enlighten us as to what the other 21 currencies that you claim are also in the basket actually are.

[simoh1490]

5 minutes ago, KarenBravo said:

That's exactly what I want to know.

As you are the self-confessed expert, maybe you could enlighten us as to what the other 21 currencies that you claim are also in the basket actually are.

Well, you could certainly reduce the number above by the number of ASEAN countries for a start, couldn't you. And then you could do some research and find out who Thailand's major trading partners are maybe that will yield clues, before long, you'll have your list. Alternatively, you could do a search on TVF and see the previous threads where this topic has been debated, at least twenty times previously I would guess!

 

Sorry, to add: I'm working under the assumption that you already know how to strengthen or weaken a currency and that is by buying or selling it, hard to do that if you don't already hold it!

Edited January 2, 2018 by simoh1490

[janclaes47]

6 minutes ago, simoh1490 said:

Your time frame is too long, try mid 2016 through mid 2017.

 

You mean, do some cherry picking.

 

Well yeah, the weatherman is also always right.

[cookieqw]

Just checked

im getting approx half a baht less for each pound this Xmas 

[simoh1490]

3 minutes ago, janclaes47 said:

 

You mean, do some cherry picking.

 

Well yeah, the weatherman is also always right.

We're discussing a specific timeframe here, The Referendum through to today, that's the subject of the article in the OP, exactly why you chose to go back to 2014 data escapes me.

[janclaes47]

12 minutes ago, simoh1490 said:

We're discussing a specific timeframe here, The Referendum through to today, that's the subject of the article in the OP, exactly why you chose to go back to 2014 data escapes me.

 

Because at the referendum date the exchange rate had already adjusted to the exit.

 

But to please you, here is the day BEFORE the referendum, I see that Euro has slightly increased in value, while Gbp has declined significantly.

And who cares which time period YOU want to discuss, only tho make your boat float, the below is what is written in the OP.

 

Quote

The spending power of their state and personal pensions has dipped by a fifth in the past two years, claims research by pension administrator Equiniti.

 

 

Wouldn't that be January 2016? Well look at the rate of 4 January 2016.

 

 

 

EDIT : Changed the exchange rate to the day BEFORE the referendum, since that would be more appropriate.

Edited January 2, 2018 by janclaes47

[KarenBravo]

20 minutes ago, simoh1490 said:

Well, you could certainly reduce the number above by the number of ASEAN countries for a start, couldn't you. And then you could do some research and find out who Thailand's major trading partners are maybe that will yield clues, before long, you'll have your list. Alternatively, you could do a search on TVF and see the previous threads where this topic has been debated, at least twenty times previously I would guess!

 

Sorry, to add: I'm working under the assumption that you already know how to strengthen or weaken a currency and that is by buying or selling it, hard to do that if you don't already hold it!

So....in other words, you don't know.

[KarenBravo]

25 minutes ago, simoh1490 said:

Well, you could certainly reduce the number above by the number of ASEAN countries for a start, couldn't you. And then you could do some research and find out who Thailand's major trading partners are maybe that will yield clues, before long, you'll have your list. Alternatively, you could do a search on TVF and see the previous threads where this topic has been debated, at least twenty times previously I would guess!

 

Sorry, to add: I'm working under the assumption that you already know how to strengthen or weaken a currency and that is by buying or selling it, hard to do that if you don't already hold it!

And there we have it folks.

The Emperor has no clothes.

Can't even back up his own statement that Thailand's basket of currencies has 25 different currencies.

So much for self-proclaimed experts.........

[simoh1490]

3 minutes ago, KarenBravo said:

So....in other words, you don't know.

I know from previous discussions on this subject that BOT holds around 25 foreign currencies, including SDR, including ASEAN and including trading partner currencies - here's a list of the top 15 trading partners and the associated percentages, you want the other ten, go look, end of!

 

http://www.worldstopexports.com/thailands-top-import-partners/

[KarenBravo]

5 minutes ago, simoh1490 said:

I know from previous discussions on this subject that BOT holds around 25 foreign currencies, including SDR, including ASEAN and including trading partner currencies - here's a list of the top 15 trading partners and the associated percentages, you want the other ten, go look, end of!

 

http://www.worldstopexports.com/thailands-top-import-partners/

15 isn't 25. Sorry, but "I know from previous discussions" just doesn't cut it and your unwillingness to provide proof, or try and shift the onus speaks volumes about you personally and your so-called expertise.

God save us from amateurs who think they're professionals......

Edited January 2, 2018 by KarenBravo

[simoh1490]

1 minute ago, KarenBravo said:

15 isn't 25. Sorry, but "I know from previous discussions" just doesn't cut it and your unwillingness to provide proof, or try and shift the onus speaks volumes about you personally and your so-called expertise.

You shifted my challenge of you where you said that THB no longer tracks USD, not since the 1990's, into whether I can produce a list of the currencies held by BOT and then on to a series of border line insults - I think we're done here, you and me.

 

 

 

[KarenBravo]

2 minutes ago, simoh1490 said:

You shifted my challenge of you where you said that THB no longer tracks USD, not since the 1990's, into whether I can produce a list of the currencies held by BOT and then on to a series of border line insults - I think we're done here, you and me.

 

 

 

Errrm.........I said 10 currencies were in the basket. You said 25 (it's in black and white).

I asked you to provide those currencies. You couldn't. No goal-post shifting on my part, just plenty of waffling on yours......