When The Baht Comes Falling Down

[Shah Jahan]

We all know that the high value of the baht is fueled by outside investors/manipulators playing the currentcy in order to dump and make large profit. the question i have for you is when do you beleive the baht will crash

crash meaning 40+ or perhaps 50+ to the dollar.

Edited January 29, 2007 by Shah Jahan

[lannarebirth]

It might "crash", but maybe that crash only takes it back to here from a much higher valuation. The nature of currency swings is, it always goes too far. How far? Who knows?

Edited January 29, 2007 by lannarebirth

[britmaveric]

Hard to say since there are two currency rates going - I'd think if a sudden crash occurred they'd set the in country rate higher than outside rate.

[Jingthing]

Why would it crash?

The strength is mostly cause by a combination of a weakening dollar and a strengthening yuan.

Both of those are very long term trends.

More likely, it will be 25 to the dollar. I wish it weren't so, but what could stop that might be tragic events that would be even worse.

[britmaveric]

Why would it crash?

The strength is mostly cause by a combination of a weakening dollar and a strengthening yuan.

Both of those are very long term trends.

More likely, it will be 25 to the dollar. I wish it weren't so, but what could stop that might be tragic events that would be even worse.

Not really since all major currencies were affected by the baht.

[PeaceBlondie]

Honestly, I just voted for next month because it's January 29, and my dollar pension money will be deposited soon. I would have voted in favor of February 1. Forty to one would be about right.

The opening post assumes that 'we all know' the baht's strength is due to speculators. I've been told that most currency markets are over 90% controlled by speculators, not by people who actually use the currency in another business. The tail wags the dog.

[farangsay]

I would really like to believe you have

some expertise in this area and that

my Euro might be getting a better rate

in the near future but the sad fact that

you cannot even spell the word "currency"

makes me doubt all this.

Edited January 29, 2007 by farangsay

[Shah Jahan]

I would really like to believe you have

some expertise in this area and that

my Euro might be getting a better rate

in the near future but the sad fact that

you cannot even spell the word "currency"

makes me doubt all this.

liten homer i now how 2 spel currnetsy

bt lets not mak tis a fllam wer

and focuus on the matr at han

[DFCarlson]

Too many factors to consider...

What will the speculators do...

Whaere will the dollar and the yuan go...

What will Tarisa et al do...?!

Actually I think the most likely is a peg to the dollar at somewhere between 36 and 38

Plan for the worst and hope for the best - I haven't seen any convincing arguments for any of the conclusions floating around.

Can anyone put forth a logical argument for the baht's weakening or strengthening?

Edited January 29, 2007 by DFCarlson

[papakapbaan]

Why would it crash?

The strength is mostly cause by a combination of a weakening dollar and a strengthening yuan.

Both of those are very long term trends.

More likely, it will be 25 to the dollar. I wish it weren't so, but what could stop that might be tragic events that would be even worse.

Yes, for the long term trends: maybe.

It seems like many "specialists" who post here consider buying (more) Baht - not selling (with the above long term trends in mind)

But meanwhile: we do not need tragic events to cause a Baht devaluation.

(Might no be technically correct to speak about devalutaion, OK. Same in my view)

And sadly we all know why the possibility of tragic events is mentioned here...

But what about more silly measures from the BOT/Ministry of Finance/Thai government??

So: is it safe to keep important amounts of Baht in Thailand these days?

And, BTW... YES, (verifed today) money changers outside Thailand (at least 1 country of the West...) offer rates for Thai notes that should allow a "traveller" to make nice profits when the foreign currency received is brought into Thailand and exchanged again for THB.

Due to the -much discussed here- differential between off and onshore rates.

(All "cash in suitcase", no bank transfers involved; anyway transfers of important amounts from Thailand are not really possible, as already mentioned here)

No?

So: If one believes a devalution is possible (be it or not, technically, a governmental intervention) and one is living in Thailand with savings in Thai Baht, it really makes sense to buy foreign currency outside Thailand ASAP.

(Differential now + possible depreciation soon)

No?

Or will the Baht value keep increasing off and onshore with little chance for this government to cause any serious "devaluation"/depreciation?

[nikster]

Why would it crash?

The strength is mostly cause by a combination of a weakening dollar and a strengthening yuan.

Both of those are very long term trends.

More likely, it will be 25 to the dollar. I wish it weren't so, but what could stop that might be tragic events that would be even worse.

If you want to bet on Yuan rising, get out of Baht and buy some other Asian currency like JPY

Or if you are more conservative go to EUR - will be better than USD but of course Yuan is also rising against EUR.

THB is o.k. but you never know what this current government will do, so there's a risk involved.

[nikster]

We all know that the high value of the baht is fueled by outside investors/manipulators playing the currentcy in order to dump and make large profit. the question i have for you is when do you beleive the baht will crash

crash meaning 40+ or perhaps 50+ to the dollar.

Dream on. I have lots of USD so I would want nothing more than that. But it's not going to happen. Here's why:

http://en.wikipedia.org/wiki/Renminbi#Exchange_rate

THB is part of a basket of currencies that the Chinese Yuan is pegged against. So the THB will come crashing down when either

1) The Yuan goes down

or

2) China changes its forex policy

Don't count on it any time soon. It has nothing to do with speculators or with the "Thai Economy".

[chiang mai]

We all know that the high value of the baht is fueled by outside investors/manipulators playing the currentcy in order to dump and make large profit. the question i have for you is when do you beleive the baht will crash

crash meaning 40+ or perhaps 50+ to the dollar.

It's an interesting poll but I'm pretty confident that the long term direction, possibly even the short to medium term direction is in the other direction. With the USD in decline and the Thai fundamentals remaining strong I wouldn't want too many people to get excited that the good old days will ever return any time sson.

[Naam]

We all know...

...nothing Your Imperial Majesty, Sha Jahan. some of us are aware that we know nothing, others are not. and i wonder why those who claim that they are knowledgeable and can predict currency movements are living in Thailand and not on their own island in the caribic or south pacific being busy to select the interior of the latest model Learjet they ordered or thinking about refurbishing their 96' yacht with golden bathroom fixtures and upgrade the two 5.000 horsepower diesels with turbochargers.

[Gaudente]

We all know...

...nothing Your Imperial Majesty, Sha Jahan. some of us are aware that we know nothing, others are not. and i wonder why those who claim that they are knowledgeable and can predict currency movements are living in Thailand and not on their own island in the caribic or south pacific being busy to select the interior of the latest model Learjet they ordered or thinking about refurbishing their 96' yacht with golden bathroom fixtures and upgrade the two 5.000 horsepower diesels with turbochargers.

it's true, forecasting is a tough thing, expecially because it regards the future.

It's true we know little or nothing, but we can still try to use that little we know to work out a few things.

It is a fact that Thai government issued laws that will severely hurt the economy in the future. Forcing farang owned companies to sell their quotes above 49% will delete foreign investment and start disinvestment. Enforcing land property laws that ban the farang out will surely hit the real estate market, therefore real estate developers and construction materials manufacturers. Probably also the bank sector will suffer a non performing loans increase. Visa restrictions will hit the real estate market and tourism revenue as well. Meanwhile the baht moves in the wrong direction, causing big losses to export industry.

Because of all this, I think the baht will reverse its really unlogical uptrend soon, so I voted the 6 months option.

[wca01]

Thailand had a trade surplus of 2 Billion Baht per end of last week. This surplus will shrink in the future and the Baht will drop. In one year the currency will be approx. 38 - 39 to the US-$

WCA

[PhilHarries]

I don't think it will "crash" as such, or certainly not to the extent it did in '97. Not unless there is some major political unrest leading to a counter coup or such but it's unlikely. We hope.

I think the rise in the value is more a sign of a weakening dollar and as oil is priced in dollars that can be seen as a good thing although it will hit exports.

[Shah Jahan]

Interesting, bout %70 voted that it will come down in the next month or 6 months...

Thailand had a trade surplus of 2 Billion Baht per end of last week. This surplus will shrink in the future and the Baht will drop. In one year the currency will be approx. 38 - 39 to the US-$

WCA

This seems to be a realistic poisition for the baht. where it is now is unatural for the economy. I spent time in Argentina both before and after the crash of the Peso...the peso crashed because it was pegged againt the dollar (ie...unaturally inflated high) - soon natural market forces cause it to deflate

I don't think it will "crash" as such, or certainly not to the extent it did in '97. Not unless there is some major political unrest leading to a counter coup or such but it's unlikely. We hope.

I think the rise in the value is more a sign of a weakening dollar and as oil is priced in dollars that can be seen as a good thing although it will hit exports.

Yes the dollar is very weak right now and we can expect it to be so as long as Mrs. Bush is still in office. Around November 2008 we can expect the dollar to signiifacntly strengthen, and consequently the Baht will weaken

all in all, even though the baht may strength more in the short run, i would predict that by November 2007 we can see more realistic exchange rates

just my 2 cents.

angry drunks may now flame

Edited January 31, 2007 by Shah Jahan

[backflip]

Unlike you, sober as a judge. As the baht is also strenghtening againt the euro and yen, your comment is as humerous as it is uninformed.

[Shah Jahan]

Unlike you, sober as a judge. As the baht is also strenghtening againt the euro and yen, your comment is as humerous as it is uninformed.

i do agree with you backflip in some regards, however we must know that

time time time is the only judge that can be considered truly informed (time is usally more humerous than most humans can hope to achieve)