What's with the Baht? ???

[johnarth]

4 hours ago, MaeJoMTB said:

A banana republic, crop prices at all time low, big companies fleeing and the people up to their eyes in debt ........ strong.

Not in any reality I live in.

same for me, when you look at the facts it does not add up

[simoh1490]

I couldn't find a post I wrote some months ago on the subject of foreign currency reserves but I may yet find it and if I do I'll post it, I'm certain somebody will raise this as a point. The post in question described the workings of the foreign currency reserves and their composition, in all the fund contains some 23 currencies (at a minimum). The currencies comprise SDR currencies (4) required by the IMF and those of major trading partners (9) AND critically, currencies of all ASEAN+1  (9)currencies also along with gold.

 

ASEAN membership requires all member countries to maintain the value of their home currency within a fairly tight range and in order to do this BOT needs THB to sell if the need arises. For accounting purposes, the reserves are accounted for in USD hence as exchange rates move the value of the holdings rise and fall, in recent weeks the value of USD has fallen and this has meant the value of BOT foreign currency reserves has soared to an all time high.

 

 

[Brunolem]

5 minutes ago, johnarth said:

same for me, when you look at the facts it does not add up

At first sight, it doesn't...but then you realize that everything is artificial in the West (+ Japan and China), a house of cards built on a giant mountain of debt!

 

When gravity is going to reassert itself, prudent countries such as Thailand will emerge almost intact while the actual top dogs will nurse a massive hangover for decades, if not longer...

 

The collossal retirement pension problem in the West is enough to sink their economies, and yet they still have many more massive problems to deal with...nothing like that in Thailand...

 

 

 

[Stevemercer]

The Thai Baht is by far the best performer of all Asian currencies. This will continue unless there is some sort of financial or political melt down. This seems unlikely in the near term (2018 and 2019).

 

Thai exports remain steady or are rising and, arguably, there doesn't appear to be a need for a weaker Baht to help exports. Of course, imports are now starting to outpace exports (meaning there is a rising current account deficit) and this could be a problem if it continues.

 

The Thai Government has many capital projects, including oversea Defence purchases, and a higher Baht will help with these. Those in Government still remember the Baht meltdown in 1987 and (whether conciously or unconciously) are more comfortable with a strong Baht.

 

Many western countries are keen to keep their currencies low to assist exports and to take the heat out of their economies (e.g. a lower currency effectively boosts the price of imports and indirectly lowers living standards.

 

The Thai Government keeps saying that a stronger Baht will not harm the economy. They are effectively talking up the Baht. The only way to bring the Baht down is to cut interest rates. The Government will not do this.

 

 

[Air Smiles]

21 minutes ago, johnarth said:

same for me, when you look at the facts it does not add up

 

Did you factor in the falang who cant buy enough baht at any price?

[Stevemercer]

8 minutes ago, Brunolem said:

At first sight, it doesn't...but then you realize that everything is artificial in the West (+ Japan and China), a house of cards built on a giant mountain of debt!

 

When gravity is going to reassert itself, prudent countries such as Thailand will emerge almost intact while the actual top dogs will nurse a massive hangover for decades, if not longer...

 

The collossal retirement pension problem in the West is enough to sink their economies, and yet they still have many more massive problems to deal with...nothing like that in Thailand...

 

 

 

I think Thailand has massive structural problems with too many public servants, unfunded pension schemes, public health costs spiraling out of control, and (biggest of all) an aging and declining population.

 

However, the funding crunch is still probably 5 - 10 years ago and so there is no need to worry about the problems now.

[SpeakeasyThai]

5 hours ago, RichardColeman said:

I look at it this way, if my wife and I can live OK with the pound/baht dropping to 42, then we will be OK when it rises again - eventually.  

and when it falls to 35 baht?

[RichardColeman]

3 minutes ago, SpeakeasyThai said:

and when it falls to 35 baht?

I put my lodgers rent up - and lots of UK nationals will be recycling tins and plastic bottles from the 7/11 bins !

[Brunolem]

1 hour ago, Stevemercer said:

I think Thailand has massive structural problems with too many public servants, unfunded pension schemes, public health costs spiraling out of control, and (biggest of all) an aging and declining population.

 

However, the funding crunch is still probably 5 - 10 years ago and so there is no need to worry about the problems now.

Small potatoes compared to the West!

Many underpaid public servants in Thailand, while they are overpaid in the West where they often make more than private sector workers.

The same goes for the pensions...in Thailand they provide a minimum pension of 700 baht...per month!

In Europe it is more like 700 euros!

Unfunded pensions in the West amount to trillions (with a t) of dollars...and Westerners are much less susceptible to accept large cuts in their pensions than the more docile Thais.

As for the aging population, it is a worlwide issue (minus Africa) but once again the West (+ Japan) is well in the front...the EU will soon have to cope with 50 million octogenarians!

 

 

[Hardie]

When oil prices rise, the dollar drops. What happens after that...

[khunPer]

On 3/5/2018 at 10:33 AM, WinterGael said:

All major currencies seem to be falling against the Baht.

The Thai baht used to follow the USD, but it seems like it lately became stronger than the USD. I can see what my European currency, locked to Euro, gives me: The USD has dropped ca. 15%, i.e. I pay less DKK (Danish kroner) for an USD, whilst THB has only dropped ca. 4% only, so I get almost the same Thai baht for my money, well slightly more. The USD has fallen against the Euro, whilst the THB held a fairly stable exchange rate over the past year; however ca. 14% down from when it peaked around 2014, and back in 2008-2009 it was an extremely good exchange rate for my money, about 35% better than today.

 

Thai baht exchange rate has been up and down over the years, so if one is very dependent on currency exchange rates, it might be worth to place some of the savings inside Thailand to avoid currency fluctuation; some SET stocks pays good dividends.

[gamini]

9 hours ago, MaeJoMTB said:

A banana republic, crop prices at all time low, big companies fleeing and the people up to their eyes in debt ........ strong.

Not in any reality I live in.

Is that the UK after Brexit you are referring to ?

[Skeptic7]

9 hours ago, theguyfromanotherforum said:

It's not going to rise. Your countries are not competitive enough, can't import slave labour from Cambodia and don't have an advanced sex industry.

 

OP will see 15 baht to a dollar in the next 5 years....and why not? Canadian economy has nothing going for it except immigration and some natural resources. Alberta oil is profitable at 70 bucks a barrel, so at today's exchange rates that's $82 Canadian dollars. Why wouldn't canada keep its toilet currency low??

 

To make the matters worse, even a Thai peasant will be able to afford Vancouver and Toronto real estate, not to mention people from really rich countries. The dollar devaluation will send Canadian real estate prices through the stratosphere.

 

Thank God I never sold in Toronto. I'll be a millionaire soon, but not in Thailand at 1:15 baht to Canadian dollar.

 

I am not being sarcastic.

Not to mention "home grown" slave labor! Aside from the imported kind. Labor costs near nothing here so businesses flourish and economy thrives off of said slave labor.

[swissie]

5 hours ago, Brunolem said:

At first sight, it doesn't...but then you realize that everything is artificial in the West (+ Japan and China), a house of cards built on a giant mountain of debt!

 

When gravity is going to reassert itself, prudent countries such as Thailand will emerge almost intact while the actual top dogs will nurse a massive hangover for decades, if not longer...

 

The collossal retirement pension problem in the West is enough to sink their economies, and yet they still have many more massive problems to deal with...nothing like that in Thailand...

 

 

 

Quote: "a house of cards built on a giant mountain of debt!"

Indeed!

 I wonder what is going to happen when "real interest" (2-3 % over inflation) will someday have to be paid on this mountain of debt = no more "fee money". It sends cold shivers down my spine.

Maybe I should drink more beer and think less.
Cheers

 

[blazes]

8 hours ago, theguyfromanotherforum said:

 

What real estate situation? It's one of the cheapest in the world.

This is correct only if you come from Nakhon Nowhere, Saskatchewean....

[Thaidream]

One of the reasons the Baht is strong is the uge amount of construction going on in Thailand much of it backed by foreign money.  In addition, the Thai Government is buying military equipment and with a stronger Baht- this equipment costs less in dollar terms.

 

Amazingly enough- Thai Exports are still high; tourism strong and investment money still coming in. The Bank of Thailand can still impose capital controls and force investment money to remain longer before repatriation. In addition-  Trump's trade war will make the dollar stronger at some point.

 

People have been predicting the massive decline of the Pound; US Dollar and Canadian Dollar for eons- Never going to happen as these economies have huge assets and Worldwide business.

[Jingjock]

On ‎3‎/‎5‎/‎2018 at 10:58 PM, theguyfromanotherforum said:

Simple. Get an English teaching job.

Not that easy now, you need good qualifications, uni degree, or some good teaching background to qualify

[simoh1490]

My view is that the construction surge is a consequence of a booming economy rather than its cause, although there must be a fair amount of black money in the system. Regardless of whose money it is and where it came from, it's still foreign currency that is changed into Baht.

 

The problem with thinking that the mega-economies of the West aren't going to decline is that it ignores the issue of debt. It's all well and good to be a world player with a robust economy but if you owe 105% of your GDP as debt, and you keep borrowing every year, it doesn't really matter how good trade is and this is exactly why countries such as Thailand are attracting capital inflows.

 

 

[theguyfromanotherforum]

32 minutes ago, Jingjock said:

Not that easy now, you need good qualifications, uni degree, or some good teaching background to qualify

 

You need a University degree which they give out like candies in the West.

[peperobi]

The false pieces of information about the Thai economy (increasing) make the Baht strong, I suppose that very soon will be to end. The next Thai economy crisis is programmed...

[simoh1490]

And don't forget the amulets, they help too!

[Farang99]

21 hours ago, ExpatOilWorker said:

There is light at the end of the tunnel:

 

https://www.bloomberg.com/news/articles/2018-03-06/asia-s-biggest-currency-run-in-two-decades-may-be-about-to-end

No mention of the baht, however.

[mstevens]

Money is pouring in to Thailand from abroad and the prognosis for the Thai economy in the medium term is good, especially with so much money being spent on infrastructure (and then the subsequent benefits that infrastructure brings to an economy).

 

Just look at the skyline of Bangkok now compared with 20 years ago - at night it looks like a modern Asian metropolis (and it did NOT look like that in the late '90s).  Compare it with many major cities in the West over that time which look largely the same as they did 20 odd years ago.

 

I imagine that the baht is going to continue to increase in value against Western currencies.  It will be a slow increase, almost imperceptible at times, but I would not be surprised to see the baht at around 25 to the US dollar in the not too distant future.  When?  5 years time?  Maybe but probably not?  10 years time?  Quite possibly.

 

Expect the Thai economy to continue to to grow faster than the West.  I see the Thai baht continuing to increase in value against most major currencies.  If you're living in Thailand using money you earned / invested in the West then you might need to adjust your budget.

[Brunolem]

10 hours ago, swissie said:

Quote: "a house of cards built on a giant mountain of debt!"

Indeed!

 I wonder what is going to happen when "real interest" (2-3 % over inflation) will someday have to be paid on this mountain of debt = no more "fee money". It sends cold shivers down my spine.

Maybe I should drink more beer and think less.
Cheers

 

There are many possible scenarios, none of them good.

Contrary to many who expect a sudden collapse, I think we are in for a Roman style decay, albeit much faster.

If fact, the decay already started long ago, but things have accelerated exponentially since we hit the wall 10 years ago.

The next decade should be "interesting" for those who enjoy roller coaster rides with wheels going off the rails...

[Brunolem]

4 hours ago, Thaidream said:

 

People have been predicting the massive decline of the Pound; US Dollar and Canadian Dollar for eons- Never going to happen as these economies have huge assets and Worldwide business.

No need for predictions, and collapse may be more appropriate than decline...

Assets are nice but don't forget liabilities...as of today, the US, among others, has a strongly negative balance sheet...

[ExpatOilWorker]

19 minutes ago, mstevens said:

Money is pouring in to Thailand from abroad and the prognosis for the Thai economy in the medium term is good, especially with so much money being spent on infrastructure (and then the subsequent benefits that infrastructure brings to an economy).

 

Just look at the skyline of Bangkok now compared with 20 years ago - at night it looks like a modern Asian metropolis (and it did NOT look like that in the late '90s).  Compare it with many major cities in the West over that time which look largely the same as they did 20 odd years ago.

 

I imagine that the baht is going to continue to increase in value against Western currencies.  It will be a slow increase, almost imperceptible at times, but I would not be surprised to see the baht at around 25 to the US dollar in the not too distant future.  When?  5 years time?  Maybe but probably not?  10 years time?  Quite possibly.

 

Expect the Thai economy to continue to to grow faster than the West.  I see the Thai baht continuing to increase in value against most major currencies.  If you're living in Thailand using money you earned / invested in the West then you might need to adjust your budget.

 

5 minutes ago, Brunolem said:

There are many possible scenarios, none of them good.

Contrary to many who expect a sudden collapse, I think we are in for a Roman style decay, albeit much faster.

If fact, the decay already started long ago, but things have accelerated exponentially since we hit the wall 10 years ago.

The next decade should be "interesting" for those who enjoy roller coaster rides with wheels going off the rails...

It is quiet possible that Asia will stay in the fast lane of growth for another decade and slowly over take the west as the Worlds dominant economies. The problem is, most if not all Asia economies still rely on exports to drive this growth engine. None of them, not even Japan, have managed to get anywhere near the western model of a consumer driven economy.

It has been 20 years (30 in the case of China), since the last Asian financial crises. Somehow it is hard to imagine they can continue without a correction for much longer, but so far there are no dead canary on the dark wet floor in the cold mine.

Go Thailand!

[Brunolem]

23 minutes ago, mstevens said:

 

Expect the Thai economy to continue to to grow faster than the West.  I see the Thai baht continuing to increase in value against most major currencies.  If you're living in Thailand using money you earned / invested in the West then you might need to adjust your budget.

That will be easy since Western economies haven't had real growth for many years (if you borrow 10 dollars to grow your wealth by 2 or 3 dollars, are you really growing?).

 

The Thai baht may well keep on rising, and the West will be happy to help...and in a few years, it could be cheaper to live in the West than in Thailand.

Actually, a country like Portugal is now on par with Thailand, and many retirees are flocking there (no income tax for retirees and other goodies offered by the local authorities, and no currency exchange cost and risk).

[blazes]

We all peer into the future and confidently predict that the Thai baht can only get stronger.

 

What never gets discussed is the possibility that the impoverished working class will one day rise up and throw off the chains of the low wage economy.  Then all bets will be off.

 

Hard to discern this event in the mists of time, I agree, but history is full of examples of people rising up against economic hardship.  Most recently we have Tienamen Square, which was less about the usual protests of the young than about the fact of inflation....

[Brunolem]

23 minutes ago, ExpatOilWorker said:

 

It is quiet possible that Asia will stay in the fast lane of growth for another decade and slowly over take the west as the Worlds dominant economies. The problem is, most if not all Asia economies still rely on exports to drive this growth engine. None of them, not even Japan, have managed to get anywhere near the western model of a consumer driven economy.

It has been 20 years (30 in the case of China), since the last Asian financial crises. Somehow it is hard to imagine they can continue without a correction for much longer, but so far there are no dead canary on the dark wet floor in the cold mine.

Go Thailand!

The real killer for the West is entitlements! (Socialism if you prefer).

 

The problem is that the coffers are empty (more than empty in fact...negative in the trillions of dollars).

Most of Asia is free of this entitlement burden.

So when the major global economic and financial crisis will hit, while the Asians will hide into their shells (villages, farms, families...), the whole social model in the West will collapse and that won't be pretty...

 

In other words, Asians (except Japan) are in a much better position to take the hit than Westerners who are totally unprepared, and unaware, for what's to come.

Edited March 7, 2018 by Brunolem

[blazes]

17 minutes ago, Brunolem said:

The real killer for the West is entitlements! (Socialism if you prefer).

 

The problem is that the coffers are empty (more than empty in fact...negative in the trillions of dollars).

Most of Asia is free of this entitlement burden.

So when the major global economic and financial crisis will hit, while the Asians will hide into their shells (villages, farms, families...), the whole social model in the West will collapse and that won't be pretty...

 

In other words, Asians (except Japan) are in a much better position to take the hit than Westerners who are totally unprepared, and unaware, for what's to come.

 

Actually, it would be bad all round, but the contagion is probably likely to start in Asia, more particularly China, where the mountain of debt can not be ignored for much longer.  China, with its centralised government and power to print money, can pretend that its system is clean and transparent.  But the snowflake that begins the avalanche is not too far away (I am guessing).