When will Thai Baht get back to reality

[simoh1490]

3 hours ago, ELVIS123456 said:

There are two words that stand out as being opposed in what you wrote - sense and you.

 

My point is that the baht is being 'managed' to stay high. 

Others point out that it is the other currencies that are falling.

What was your point?  Something about reserve currencies?

The Swiss is a reserve ?? What is it - half a percent or saomething.

80-90% of reserve is the USD and EURO.

And the Baht is appreciating against both of them - please tell me why IYO - make a point.

 

Every time somebody new comes into these debates on the value of THB they want their own personal presentation of the facts....read the thread, the answers are all there and they are not complicated.

[mommysboy]

I think this is the new norm. It's really about other currencies having weakened to more realistic levels.  I don't see any change soon.

[ELVIS123456]

1 hour ago, simoh1490 said:

Every time somebody new comes into these debates on the value of THB they want their own personal presentation of the facts....read the thread, the answers are all there and they are not complicated.

You call that a point?  This is a point...................(made by someone else)

 

Chinese money is flowing into Thailand and that is inflating the value of the Baht.

 

That seems as good an answer as any - and is probably not going to stop for a while.

Anyone know how much Yuan has been coming into Thailand over the last 3-4 years?

 

[LomSak27]

On ‎5‎/‎8‎/‎2018 at 8:07 PM, NoBrainer said:

Well Pre 1997 it was at around 24 to the USD for a very long time.

 

And that is probably the real value, when all things are considered.

At 24 to USD it makes the prices of goods and services more inline with the rest of the world.

 

The Thai Government kept it at 25 Baht to the dollar for almost 2 decades. this was thought good for the country, for exports and imports, but did not at all reflect real value, the government actively manipulated it to remain at that level.  That all blew up with 1997 a result of  "non performing loans", a problem that still exists in Thailand today.

[sawadee1947]

It sounds a bit remote for me. 

If you buy a property here the value will increase over the years. So if you sell it you will get definitely more than you paid. No matter what is the rate.. 

[morrobay]

8 hours ago, LomSak27 said:

The Thai Government kept it at 25 Baht to the dollar for almost 2 decades. this was thought good for the country, for exports and imports, but did not at all reflect real value, the government actively manipulated it to remain at that level.  That all blew up with 1997 a result of  "non performing loans", a problem that still exists in Thailand today.

So you state that the baht was manipulated pre-97. IE. artificially overvalued. If true, and I would like to know how you knew that, then is the baht today also being kept artificially overvalued? 

[Farang99]

On 5/11/2018 at 8:49 AM, rickjza said:

Mate, you got to get your facts right. Singapore is not a developing country, its classification is DEVELOPED. 

That's exactly what he said.

[simoh1490]

3 hours ago, morrobay said:

So you state that the baht was manipulated pre-97. IE. artificially overvalued. If true, and I would like to know how you knew that, then is the baht today also being kept artificially overvalued? 

THB was hard pegged to USD prior to 1997, there was no manipulation involved in its value because it was hard fixed and appropriate, until the following happened.

 

The '97 crash resulted from onshore companies who borrowed offshore and couldn't sustain those borrowings as the value of THB fell and GDP was driven downwards - it didn't help that the BOT had all their foreign currency reserves tied up in long-dated instruments hence they had no real defences against the offshore attack: https://www.economist.com/node/9432495

 

 

Edited May 13, 2018 by simoh1490

[simoh1490]

12 hours ago, ELVIS123456 said:

You call that a point?  This is a point...................(made by someone else)

 

Chinese money is flowing into Thailand and that is inflating the value of the Baht.

 

That seems as good an answer as any - and is probably not going to stop for a while.

Anyone know how much Yuan has been coming into Thailand over the last 3-4 years?

 

For that theory to hold any value at all, all that Chinese money would have to be entering Thailand as USD otherwise it would have zero impact on the THB/USD exchange rate and guess what, it hasn't! The point is actually moot since THB has remained strong against the majors regardless of whether it was 36 or 29 against USD. 

[morrobay]

Hard pegged to US dollar?     Then that can be any exchange rate the Thai government so chooses initially and be independent of fundamentals, Right? 

 

[simoh1490]

2 minutes ago, morrobay said:

Hard pegged to US dollar?     Then that can be any exchange rate the Thai government so chooses initially and be independent of fundamentals, Right? 

 

No! The fixed peg is calculated and agreed  at the outset in agreement with the IMF and it can't be arbitrarily changed - the hard peg to USD was in place at 20 from the mid 1950's. In about 1972 the peg was revalued by agreement at 25 because the US economy was strengthening significantly.

[simoh1490]

For those people who are actually interested in this subject, it's worth reading about SDR's or Special Drawing Rights, known commonly as XDR. XDR is an alternative and more stable method of holding reserve currencies which de-emphasises the role of USD - BOT holds SDR's under the IMF plans for its future development, a simple explanation can be found here: https://en.wikipedia.org/wiki/Special_drawing_rights

 

And whilst on this subject, BOT's foreign currency reserves are denominated in USD for accounting purposes, in reality, they comprise 24 foreign currencies plus gold and THB, these include, SDR currencies, ASEAN+1 currencies plus currencies of their largest trading partners.

[lannarebirth]

13 hours ago, LomSak27 said:

The Thai Government kept it at 25 Baht to the dollar for almost 2 decades. this was thought good for the country, for exports and imports, but did not at all reflect real value, the government actively manipulated it to remain at that level.  That all blew up with 1997 a result of  "non performing loans", a problem that still exists in Thailand today.

 

That's true, but it must be noted that the majority of those loans were denominated in $USD which is not the case today.

[Brunolem]

17 hours ago, simoh1490 said:

More waffle! 

 

Examples:

 

The USD is NOT the only reserve currency, fact!

 

Hot money is flowing into the region because China has big plans for the region, soooo Thailand is a Chinese proxy, is that what you just said!!!

 

The Baht may appear to move higher....kinda like a David Blaine illusion!

 

The fact is that the USD is the ONLY reserve currency and that there is always one reserve currency at a given time!

Prior to the USD, it was the British Pound.

There are nice graphics with the successive reserve currencies and their duration, that you might want to have a look at.

 

Reserve currency means that most exchanges between countries have to be paid with this currency.

For example, if Germany or Japan or Thailand want to buy oil to Saudi Arabia or Nigeria, the transaction will be in USD.

 

Also, major commodities are priced worldwide using the reserve currency.

That is true for gold, silver, copper and so on.

[Srikcir]

8 minutes ago, Brunolem said:

The fact is that the USD is the ONLY reserve currency

Comparison of foreign reserves between nations is typically expressed in USD.

But the composition of a nation's foreign reserve consists of a number of official IMF designated currencies. There are primarily eight such currencies shown below.

On a worldwide basis the USD constitutes about 65% of all foreign reserves. The USD and euro combined account for 83.5% of the allocated foreign exchange reserves.

http://www.businessinsider.com/dollar-remains-top-reserve-currency-as-central-banks-shun-yuan-2018-1

 

[theguyfromanotherforum]

On 5/9/2018 at 3:25 PM, Franko666 said:

The real rate is the rate you can get on the day, no more no less.

 

 

This. I bash bitcoin a lot, but the fact is it trades at $8000++ today. What I think it should trade at is completely irrelevant. 30 baht for 1 Australian dollar? For what? How does Australia compete with Thailand these days? What does it export? What does it produce? How many Australian prostitutes comparing to Thailand and at what price? Everything matters. You're lucky it's over 20 baht.

[Brunolem]

17 minutes ago, Srikcir said:

Comparison of foreign reserves between nations is typically expressed in USD.

But the composition of a nation's foreign reserve consists of a number of official IMF designated currencies. There are primarily eight such currencies shown below.

On a worldwide basis the USD constitutes about 65% of all foreign reserves. The USD and euro combined account for 83.5% of the allocated foreign exchange reserves.

http://www.businessinsider.com/dollar-remains-top-reserve-currency-as-central-banks-shun-yuan-2018-1

 

Reserves of foreign currencies and reserve currency are two different things...

 

https://www.google.com/search?q=reserve+currency+history&prmd=ivn&source=lnms&sa=X&ved=0ahUKEwi6xYHfgYLbAhXHL48KHRmRDJ4Q_AUIDigA&biw=1024&bih=600&dpr=1#imgrc=Bun8noBpv1XESM:

[simoh1490]

10 hours ago, Brunolem said:

The fact is that the USD is the ONLY reserve currency and that there is always one reserve currency at a given time!

Prior to the USD, it was the British Pound.

There are nice graphics with the successive reserve currencies and their duration, that you might want to have a look at.

 

Reserve currency means that most exchanges between countries have to be paid with this currency.

For example, if Germany or Japan or Thailand want to buy oil to Saudi Arabia or Nigeria, the transaction will be in USD.

 

Also, major commodities are priced worldwide using the reserve currency.

That is true for gold, silver, copper and so on.

The Bretton Woods agreement specified that USD was the reserve currency, that was a long time ago. Today there is, as poster Srikcir has set out, a series of reserve currencies in place, the percentage to which each is used varies based on circumstance. Exports bills were settled entirely in USD, today USD is used only about 60% of the time (in Thailands case). Oil continues to be quoted in USD but transactions for the sale of it are often not in USD. I think you are confusing reserve currencies with the accepted method of quoting which is not the same thing, case in point:

 

as said earlier, Thailand's foreign currency reserves are quoted in USD because that is the accounting standard today, the contents of those reserves, however, contain a whole series of currencies thus some might be forgiven for believing the reserves are held solely in USD, they are not.

 

Finally, SDR's are an attempt to move away from a single reserve currency by combining a series of lesser used reserve currencies into a single unit.

[morrobay]

18 hours ago, theguyfromanotherforum said:

 

This. I bash bitcoin a  How does Australia compete with Thailand these days? What does How many Australian prostitutes comparing to Thailand and at what price? Everything matters. You're lucky it's over 20 baht.

Yes purchasing power parity. For example: companionship with a young lady, 1500 baht/80 Aus$ = 18.75B/Aus$

Edited May 14, 2018 by morrobay

[Justfine]

On 09/05/2018 at 11:09 AM, faraday said:

Yup & I still don't understand why printing more money helps.

 

What is "Quantitative Easing?"

Weaker exchange rate helps exporters.

[Justfine]

18 hours ago, theguyfromanotherforum said:

 

This. I bash bitcoin a lot, but the fact is it trades at $8000++ today. What I think it should trade at is completely irrelevant. 30 baht for 1 Australian dollar? For what? How does Australia compete with Thailand these days? What does it export? What does it produce? How many Australian prostitutes comparing to Thailand and at what price? Everything matters. You're lucky it's over 20 baht.

It's not even close to 30.

[dpcjsr]

All currencies and commodities are being powerfully manipulated today. There is no real market any more. The only thing that is real is what the banks decide is real today. The baht will return to fair value when it is convenient for the bankers to allow that. Market fundamentals have nothing to do with it anymore. 

 

Check out the some of the commoditiy markets, especially gold and silver. There is blatant manipulation in those markets but the agencies in charge of enforcing fair markets have sided with the banks so there is no where to turn to set things straight. 

 

This is the new normal.

 

The next step is cashless societies where the banks have absolute total control. This is the most serious threat to freedom in the history of mankind but because it is not interesting is being ignored by almost everyone. The Thai government has as one of it stated goals to move to a cashless society. At one time I thought this would not be possible but now I see it is already starting to happen. In the future your only resource will be to own real assets and barter for goods. It all sucks for you and me but is heaven on earth for bankers, governments, and corporations. Translated, that means it is a done deal so prepare for it. 

[simoh1490]

30 minutes ago, dpcjsr said:

All currencies and commodities are being powerfully manipulated today. There is no real market any more. The only thing that is real is what the banks decide is real today. The baht will return to fair value when it is convenient for the bankers to allow that. Market fundamentals have nothing to do with it anymore. 

 

Check out the some of the commoditiy markets, especially gold and silver. There is blatant manipulation in those markets but the agencies in charge of enforcing fair markets have sided with the banks so there is no where to turn to set things straight. 

 

This is the new normal.

 

The next step is cashless societies where the banks have absolute total control. This is the most serious threat to freedom in the history of mankind but because it is not interesting is being ignored by almost everyone. The Thai government has as one of it stated goals to move to a cashless society. At one time I thought this would not be possible but now I see it is already starting to happen. In the future your only resource will be to own real assets and barter for goods. It all sucks for you and me but is heaven on earth for bankers, governments, and corporations. Translated, that means it is a done deal so prepare for it. 

Ah, the first conspiracy theory of the day, I thought you'd never get here!

[simoh1490]

2 hours ago, Justfine said:

Weaker exchange rate helps exporters.

Currency strength is a double edged sword, a weak currency may help exporters but it drives up the cost of imports and drives up inflation. What Trump is trying to do is to keep the Dollar weak and then have the importers pare their costs in order to compensate.

[Srikcir]

13 minutes ago, simoh1490 said:

then have the importers pare their costs in order to compensate

Then maybe a triple-edged sword.

To maintain their profit margins American importers will have to reduce their orders (which pressures higher consumer costs due to lower supply of products) and reduce operating costs such as reduction of support facilities and workers.

Reduction of such costs can cascade financial degradation throughout the entire distribution chain that again results in lower revenues at the retail sales point.

[simoh1490]

3 hours ago, Srikcir said:

Then maybe a triple-edged sword.

To maintain their profit margins American importers will have to reduce their orders (which pressures higher consumer costs due to lower supply of products) and reduce operating costs such as reduction of support facilities and workers.

Reduction of such costs can cascade financial degradation throughout the entire distribution chain that again results in lower revenues at the retail sales point.

Yes indeed, any savings in import prices comes at a cost somewhere, staff reductions by the importer and also amongst export company staff are obvious areas - the knock on effects are probably quite complex which if traced, may well show that the cost reduction represented a false economy.

[morrobay]

https://www.bloombergquint.com/markets/2018/05/16/harvard-s-reinhart-says-emerging-markets-worse-than-08-crisis

 

Anyone have any idea about dollar denominated debt for Thailand 

[Brunolem]

3 hours ago, morrobay said:

https://www.bloombergquint.com/markets/2018/05/16/harvard-s-reinhart-says-emerging-markets-worse-than-08-crisis

 

Anyone have any idea about dollar denominated debt for Thailand 

Thailand public debt stands at approximately 42% of GDP...something so-called developed countries can only dream about.

 

I don't know how much of that is held by foreigners...but anyway the recent worries about emerging markets do not concern Thailand, but rather South American and African countries, as well as Turkey and some others.

 

[simoh1490]

4 hours ago, morrobay said:

https://www.bloombergquint.com/markets/2018/05/16/harvard-s-reinhart-says-emerging-markets-worse-than-08-crisis

 

Anyone have any idea about dollar denominated debt for Thailand 

http://www.pdmo.go.th/en/popup_money_data.php?m=money&ts2_id=1

 

About 4% is non-THB:

 

http://www.pdmo.go.th/en/

Edited May 18, 2018 by simoh1490

[Henryford]

1 hour ago, Brunolem said:

Thailand public debt stands at approximately 42% of GDP...something so-called developed countries can only dream about.

 

I don't know how much of that is held by foreigners...but anyway the recent worries about emerging markets do not concern Thailand, but rather South American and African countries, as well as Turkey and some others.

 

That is why the Baht is still strong compared to our Mickey Mouse currencies.