Where Have All The Yankees Gone?

[Jingthing]

I recently retired to Thailand. I expected currency risk and all kinds of change. But I didn't expect a baht under 20 to the dollar. According to this clip, Thai business leaders are preparing for just that within the next few years. They are talking about specifically the US dollar because of the massive US deficits, meaning those from other western countries have less to worry about.

So, Yankees, would such a bad rate (bad from our perspective) persuade you to leave Thailand?

I just noticed today there are countries where the dollar is still as strong as ever, Mexico, Philippines, Argentina. So for many of us, at 20 to the dollar certainly, Thailand would just not be as attractive. Lets not kid ourselves, bang for the buck is a big factor in why many people move here. I happen to love the country as well, but not so sure I love it so much that I would suffer a dramatically lower quality of life to stay.

The linked article also provides some good info on why the Thai baht is difficult to stop from getting stronger, compared to the yen and yuan.

http://www.nationmultimedia.com/2007/01/31...ss_30025540.php

So what would happen to the Thai export machinery if the dollar depreciated 50 to 70 per cent to Bt18-19 per dollar?

Kan Trakulhoon, president of Siam Cement Group, one of the country's largest industrial conglomerates, told a panel discussion held by the Federation of Thai Industries that there is a possibility the dollar will plummet that far down in the next four or five years.

The reason is that the US twin deficits keep worsening and there is no end in sight so other currencies will go up as the dollar continues to fall.

Edited January 30, 2007 by Jingthing

[skipvice]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

[Jingthing]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

How can you be so confident? If you follow the article, international money will continue to flow to the baht to get a good return, and there doesn't seem to be anything the Thai government can (or is willing) to do about it.

But, fine, come on down. Want to buy a nice condo?

Edited January 30, 2007 by Jingthing

[Jet Gorgon]

Yes, I think it would scare away US tourists and long-termers. But, also agreed, I doubt the baht will appreciate that much against the greenback. Bad for tourism, exports, too. Maybe better if they shifted some of the US$-denominated debt into other currencies. If it does appreciate, count on the big boys like Soros to do a little currency dabbling.

[skipvice]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

How can you be so confident? If you follow the article, international money will continue to flow to the baht to get a good return, and there doesn't seem to be anything the Thai government can (or is willing) to do about it.

But, fine, come on down. Want to buy a nice condo?

already own a home,have a thai wife and life has been good to me,do not need a lot of money to be happy.

[brahmburgers]

I wouldn't be surprised if the baht went weakened and swung the other direction. The current strengthening could be mostly due to speculative activity by pseudo gamblers who enjoy this type of game of buying and selling currency on paper [no real money changes hands] - with small % of gains amplified by large volume of transactions.

Thailand is (or will be) suffering the types of conditions that usually drive currencies to weaken, such as......

1. military control of gov't. By the way, the junta could easily extend its control for far beyond the Sept 07 'deadline' it set earlier. There are a hundred excuses it could use for doing that.

2. Thailand's main source of outside revenue; tourism and long-term resident foreigners, is slowly lessening - due in no small part to unfair and restrictive visa rules. The airport imbroglio doesn't help either.

3. general impoverishment of populace and widening rich-poor gap.

[midas]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

this misplaced confidence by Americans never ceases to amaze me ! many of them are completely oblivious

to the financial mess their country is in ???

[STEELINOX]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

this misplaced confidence by Americans never ceases to amaze me ! many of them are completely oblivious

to the financial mess their country is in ???

I know we have serious problems here too in the US. I am even thinking about buying Iraq currency - sheesh!

Bernanke should kick it up a click or two this year but that probabaly wont happen. We shall see...

Thanks,

Randy

[thai_narak]

They won't allow the baht to appreciate to 20/1 without pulling other asian currencies with. If the baht appreciates alone, Thai exports will suffer.

[Ulysses G.]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

this misplaced confidence by Americans never ceases to amaze me ! many of them are completely oblivious

to the financial mess their country is in ???

That might be because the US is doing so much better than Europe!

[calibanjr.]

Lets just say that when a Thai authority says that the sky is blue, I have to go outside repeatedly to make sure and wait for the new color to come. These guys are pure comic relief. If you are going to plan your life using information from them about what will happen in the future, what they are doing in the future, or even what they THINK they are doing now, you're in for a long one.

[steveromagnino]

I wouldn't be surprised if the baht went weakened and swung the other direction. The current strengthening could be mostly due to speculative activity by pseudo gamblers who enjoy this type of game of buying and selling currency on paper [no real money changes hands] - with small % of gains amplified by large volume of transactions.

Thailand is (or will be) suffering the types of conditions that usually drive currencies to weaken, such as......

1. military control of gov't. By the way, the junta could easily extend its control for far beyond the Sept 07 'deadline' it set earlier. There are a hundred excuses it could use for doing that.

2. Thailand's main source of outside revenue; tourism and long-term resident foreigners, is slowly lessening - due in no small part to unfair and restrictive visa rules. The airport imbroglio doesn't help either.

3. general impoverishment of populace and widening rich-poor gap.

1. baht weakening or strengthening is dependent on US dollar and fiscal policy; as long as your economy continues to do what it is doing, then you are going to weaken against not just the baht but a fair few other currencies as well; 'current strengthening' as you put it is based on the Thai baht being held low as possible despite some speculation; and the USD being propped by by all the Asian economies who love buying US debt, the world cannot afford the USD to drop like a stone as the NZD did a year ago

2. Thailand's main source of outside revenue...tourism and long-term foreigners???? Please. Get over yourself, and do some research. BTW, you might also like to do some research on where high spending tourists come from...hint...not USA for the most part.

3. Widening rich-poor gap; USA has a VERY similar wealth distribution pattern to Thailand using Lorenz curve type analysis; seems to have worked just fine in the past; what possible relevance does this have other than issues of civil unrest (which is indeed relevant) and diminishing competitiveness due to lack of education? And civil unrest, bombs, corruption military govt and so on; well you are quite right - they all influence investor confidence, I guess one could say often a lack of democracy can drive a currency down. Singapore seems to do ok though without a functioning democracy.

[Robski]

No offence to all you good Americans, but the power of the dollar will continue to decline against all currencies, that it can't hold it's own against a second world country is a good indicator.

US political and financial hegemony is floundering, it is not in the worlds interest for the US economy to crash, but reliance on the dollar for trade in goods and services, especially oil and gas, is on it's way out.

Edited January 31, 2007 by Robski

[johnnyk]

Currencies are cyclical. This time its the greenback's turn in the trough.

[Gary A]

I lived in Thailand when the exchange rate was 25 baht to the dollar. I based my retirement on that exchange rate so I think I am safe. I must admit that I did get used to a 40 to 1 exchange rate but did not expect that to last forever. Unless the Thai government stabilizes the government, I look for the baht to crash big time. I certainly don't want to have a lot of baht in the Thai bank with things the way they are.

[Mighty Mouse]

If you Yanks honestly believe that the Greenback will sink that low, you might want to consider buying physical gold as a hedge.

When the worlds reserve currency is in trouble, gold will glitter.

The Feds are doing their best to inflate the US economy by letting their printing presses run non-stop and flooding the market with $$$'s. Inflation is far better for the economy than deflation.

So far it is working, with your housing market holding up quite well. (sinking slowly is better than a crash)

However, how far off is the next recession? By the end of this year? Early next year? That's when you'll see the Greenback dive.

[jumnien]

Yes, I agree with what has been said. I came here when the baht was 25/$ and found it a remarkably inexpensive country to live in. At 35/$ it is still inexpensive. I will not be moving to another cheap country - I love Thailand!

[midas]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

this misplaced confidence by Americans never ceases to amaze me ! many of them are completely oblivious

to the financial mess their country is in ???

That might be because the US is doing so much better than Europe!

So what ? ! USA and Europe are both heading for trouble ! in both of these continents you have a drastic fall in the standard

of education, workers still demanding all their "social " benefits and skyhigh debts while in places like China and India

they have a work ethic which is incomprehensible to most Europeans and Americans. it's only a matter of time

[calibanjr.]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

this misplaced confidence by Americans never ceases to amaze me ! many of them are completely oblivious

to the financial mess their country is in ???

That might be because the US is doing so much better than Europe!

So what ? ! USA and Europe are both heading for trouble ! in both of these continents you have a drastic fall in the standard

of education, workers still demanding all their "social " benefits and skyhigh debts while in places like China and India

they have a work ethic which is incomprehensible to most Europeans and Americans. it's only a matter of time

Wow, a truly novel and unprecedented take! Mr. Midas, "Matlock" is on in the common room.

Edited January 31, 2007 by calibanjr.

[midas]

Wow, a truly novel and unprecedented take! Mr. Midas, "Matlock" is on in the common room.

I don't profess to have come up with this on my own

it is only based on a lot of research I have undertaken on this topic - the best and most succinct

summary is by Clyde Prestowitz - Ex-Reagan administration trade official. In his critique regarding the

outlook for the U.S.he

" describes the USA's economic decline under globalisation. While China and India focus on

trade and industrial policies and turn out competent workers who put in long hours at a fraction of

fAmerican wages, the U.S., Preston argues, struggles with crushing trade and budget

deficits, a zero savings rate, failing schools, dwindling investments in scientific training

and research, a collapsing dollar and a debt-dependent economy that will face

an "economic 9/11" once foreign creditors bail out.

[Jingthing]

Well, yes, foreign creditors could pretty much ruin the dollar overnight if they bailed out en masse. But they aren't likely to do that, because they would be hurting themselves. I think the consensus is a continued weakening dollar, but more gradual. Of course, big world events could speed this up. It is important to keep in mind that the US deliberately does have a weak dollar economic policy to reduce the deficit, as that is the only politically expedient way of reducing the deficit. Americans don't seem to have a stomach for taxing the rich at a high enough rate to make much of a dent in the deficit.

Baby boomer Americans (over 60 million people) are now becoming retirement age and with the entitlements they expect, this is a massive economic atomic bomb soon to hit the American, and world economy. The money isn't there to pay for this.

I am not one to blame George Bush for all the problems in the world or America, but he certainly contributed greatly to this problem with his profligate spending on a rathole of a war in Iraq.

I did assume the baht could go to 30 or even 25 from over 40, but 18? Ughhhh.

The Philippine Peso is still over 50! Mabuhay amigos ...

Edited January 31, 2007 by Jingthing

[TRIPxCORE]

I for one,still plan on retire in thailand. the baht to usd will not scare me off. 20 bht to the dollar, its not going to happen.

this misplaced confidence by Americans never ceases to amaze me ! many of them are completely oblivious

to the financial mess their country is in ???

You got that right.

I wouldn't be surprised if the baht went weakened and swung the other direction. The current strengthening could be mostly due to speculative activity by pseudo gamblers who enjoy this type of game of buying and selling currency on paper [no real money changes hands] - with small % of gains amplified by large volume of transactions.

Thailand is (or will be) suffering the types of conditions that usually drive currencies to weaken, such as......

1. military control of gov't. By the way, the junta could easily extend its control for far beyond the Sept 07 'deadline' it set earlier. There are a hundred excuses it could use for doing that.

2. Thailand's main source of outside revenue; tourism and long-term resident foreigners, is slowly lessening - due in no small part to unfair and restrictive visa rules. The airport imbroglio doesn't help either.

3. general impoverishment of populace and widening rich-poor gap.

1. baht weakening or strengthening is dependent on US dollar and fiscal policy; as long as your economy continues to do what it is doing, then you are going to weaken against not just the baht but a fair few other currencies as well; 'current strengthening' as you put it is based on the Thai baht being held low as possible despite some speculation; and the USD being propped by by all the Asian economies who love buying US debt, the world cannot afford the USD to drop like a stone as the NZD did a year ago

Hey look everyone, this guy knows what he is talking about. One of the few I might add.

No offence to all you good Americans, but the power of the dollar will continue to decline against all currencies, that it can't hold it's own against a second world country is a good indicator.

US political and financial hegemony is floundering, it is not in the worlds interest for the US economy to crash, but reliance on the dollar for trade in goods and services, especially oil and gas, is on it's way out.

This is correct sir. As an American myself, no offence taken.

[midas]

I am not one to blame George Bush for all the problems in the world or America, but he certainly contributed greatly to this problem with his profligate spending on a rathole of a war in Iraq.

Jingthing you said it ! It was so sad to see a recent documentary on some of the schools

in the USA and how they haven't got any money - and still so many victims of hurricane

Katrina who are living like refugees and yet there is all at money going up in smoke in Iraq

[Mai Krap]

At 19 or 20 Baht to the Dollar I would be on the street selling Som Tam!

[Jingthing]

At 19 or 20 Baht to the Dollar I would be on the street selling Som Tam!

It is hard for Americans to imagine, but in this scenario, Thailand would have the HARD currency, and some Americans would have to come over to countries like Thailand to earn hard currency to send back to their families back in weak dollar America. So we would have a new kind of American expat. You know, we really do make excellent maids and nannies!

To those who say the exchange doesn't matter to you, consider if the baht and dollar were 1 to 1. A bottle of iced tea, 20 dollars, khrap. So it does matter, its just that different people have different resistance points based on their circumstances. For me, anything under 25 is starting to look very bad.

Edited January 31, 2007 by Jingthing

[LaoPo]

At 19 or 20 Baht to the Dollar I would be on the street selling Som Tam!

To whom ?....Thai ? The expats will be gone by then.

LaoPo

[jbsears]

Its not the American dollar to blame for the exchange (on the most part) it is the Thai Baht strengthening. The Euro has taken a dive to the Baht too. Used to get paid in Euro and had to stop when it dove below 50 and didn't return. Now its at around 44.

[rak sa_ngop]

The airport imbroglio doesn't help either.

My electronic Concise Oxford Dictionary defines 'imbroglio' as (archaic) a confused heap.

Do you have the right word here? (sarc.)

[Jimjim]

Well, yes, foreign creditors could pretty much ruin the dollar overnight if they bailed out en masse. But they aren't likely to do that, because they would be hurting themselves. I think the consensus is a continued weakening dollar, but more gradual. Of course, big world events could speed this up. It is important to keep in mind that the US deliberately does have a weak dollar economic policy to reduce the deficit, as that is the only politically expedient way of reducing the deficit. Americans don't seem to have a stomach for taxing the rich at a high enough rate to make much of a dent in the deficit.

Baby boomer Americans (over 60 million people) are now becoming retirement age and with the entitlements they expect, this is a massive economic atomic bomb soon to hit the American, and world economy. The money isn't there to pay for this.

I am not one to blame George Bush for all the problems in the world or America, but he certainly contributed greatly to this problem with his profligate spending on a rathole of a war in Iraq.

I did assume the baht could go to 30 or even 25 from over 40, but 18? Ughhhh.

The Philippine Peso is still over 50! Mabuhay amigos ...

Did you actually read the article that made you start this thread? It said there is a possibility it could get that low. Possibility is a very big word. Not a sure thing. Don't get all financial armageddon on the baht/dollar rate yet.

[jumnien]

It's amusing to watch the "henny, penny, the sky is falling" attitude at the visitudes of everyday life on the planet and in the kingdom. What happened to the days when students were taught not to believe everything you read in the paper. Now, the wise don't believe everything they find on the internet, the fools do.

I remember a few years back when Purachai forced establishments in the sex trade and alcohol procurement arena to close at midnight instead of 2am. Many predicted that there would be a mass exodus of farang clogging Don Muang desperately trying to get to Venezuela or Brazil. Thus, was predicted, housing prices would tumble, rents dive, etc. If only we could buy or rent property at the prices of that year!

Exchange rates will have little effect on the number of foreigners living here!