World-beating currency gives Thailand major economic headache

[Nong Khai Man]

40 minutes ago, Thongkorn said:

Its called Currency manipulation ,

But We already KNOW That......

[Selatan]

1 hour ago, Isaan sailor said:

In your gut, you know it’s the hot money inflows at Bank of Thailand.  We know China’s overextended with Belt & Road, a military buildup, trade wars and now a currency problem.  Hot money has to come from somewhere.  It’s not coming from USA, Europe, or Japan.  And China now desperate to open banks up to partial foreign ownership.  

When China goes down, it will take it’s bi-lateral trade partners down with it.  You reap what you sow, Thailand.

Not that I believe that China would grow forever, but so-called expert predictions about China had not materialised for the past few decades. I wonder why. Why is China so difficult to be understood that outsiders were often very wrong about them?

[madmen]

Couldn't be happier heading to oz for a year paid in THB rent money. 5 litre fruit juice free cask wine a whopping 250 baht ! aged cheddar 1kg block the same ..unfortunately a lap dance no touchy 1k

[hotchilli]

8 hours ago, ChrisY1 said:

Sphincters must be twitching in the finance department....devalue it and risk a crash....keep it high and risk falling business.

But never fear, Thailand has the Prayuth the Great to solve all such simple economic woes with a wave of the hand...!

I'll go get another beer then ...

[Cake Monster]

8 hours ago, RichardColeman said:

Problem is that the farang word 'stimulus' translates into Thai as 'buy more tanks'

And Boats 

Only today the Government announced it is buying a Naval Ship from China with a price tag of 6.5 Billion Baht.

[Hackney35]

I hope this pain trade starts reversing soon or it’ll be cheaper for me to move back to ldn ????

[taken]

Just a beginning. Worst yet to come. 

[madmen]

8 minutes ago, Hackney35 said:

I hope this pain trade starts reversing soon or it’ll be cheaper for me to move back to ldn ????

it took years to get where it is and will take many to reverse if ever

[NCC1701A]

5 hours ago, BobinBKK said:

Their isn't anything in this country worth a plug nickel and nothing of value to offer the rest of the world.

yeah. why even have Thailand? lets get rid of it. 

[NCC1701A]

3 minutes ago, taken said:

Just a beginning. Worst yet to come. 

is this a open ended "worst" or will things get better later?

[Isaan sailor]

9 hours ago, Fex Bluse said:

The Thai elites are 

 

1. allowing hot Chinese illicit capital outflows into the Thai economy and

2. probably forcing the Thai central bank to hold a peg until their money is out -- just like they did in 1997/98

 

See below at 14:45

 

 

Thanks, Fex Bluse.  You found the smoking gun—hot money inflows at BoT from Communist China.  So tired of the Baht apologists on T.V.  Take that, Bristol Child.

“The truth shall set you free.”

[Eric Loh]

1 hour ago, the guest said:

I feel another 1997 coming on !

Unlikely for 3 reasons - then the Baht was pegged (since floated), massive USD borrowing offshore (now more Baht borrowing and small foreign reserves to fight off Soros (massive foreign reserves to thwart currency speculators). 

[ThomasThBKK]

We always talk about the negatives of a rising baht, and yes, i would prefer it more stable either.

 

But imagine you live in a country where the opposite happens and you own investments there, real estate, your family earns local currency etc.

Argentina, Turkey, Venezuela, Zimbabwe and co are killed by hyper inflation - do you prefer that scenerio?

[marko kok prong]

The pound is <deleted>,but i moving more over here,as once Boris leaves with no deal i see it around 30 to baht a lot of people are shorting it now,of course it means sitting on it for a few years,i am going dollars too

[Bangkok Barry]

9 hours ago, Teee said:

No disrespect to all you old expats...why would you want to live Bkk?

 

It might not have occurred to you, but there are many tens of thousands of expats who don't live in Bangkok, me included (I used to, hence my tag). And because I bought my (okay, her) house for 600,000 when the Baht was in the pits and then spent double that with six months work by six workers to bring it up to civilised standards I can now live on less that 20,000 a month. That includes aircon, IPTV, fast and efficient internet even out in a village, a mix of Thai and western food, running a pickup, going out for dinner once a week. And the house is probably worth around 3.5 million now. Translating the currency, that is nearly 90,000 sterling for a house that originally cost me one tenth that.

[onera1961]

Don't you think that the unlimited supply of very low paid workers from Myanmar, Laos and Cambodia has a more detrimental effect on Thai lower rung prospects? 

No, the don't have detrimental effects on foreign currency reserve because they don't bring foreign currency to Thailand. I would say they take foreign currency out of the country and reduce the baht strength. And without the low skilled labors from neighboring countries, development is not possible in Thialand.

Sent from my JKM-LX2 using Thailand Forum - Thaivisa mobile app

[Fred white]

10 hours ago, Cadbury said:

For expats and exporters who were hoping it might fall sometime soon. From Bloomberg. 

"......strategists say the currency isn’t likely to lose its newfound status as a haven anytime soon, thanks to Thailand’s rising current-account surplus and record foreign reserves".

“’Thai baht remains a safe haven as we haven’t had significant impact from the worsening trade war like other emerging markets,” said Jitipol Bangkok-based chief strategist at Krung Thai Bank Pcl. The third most-accurate forecaster for the currency last quarter predicts the baht will rise to 30.25 per dollar by the end of the year",

The baht is a double edged sword. Great for the military and the rich elite who get their money out and store it offshore and watch it grow but a disaster for exports and the economy. 

 

https://www.bloomberg.com/news/articles/2019-08-06/thai-baht-s-haven-status-in-full-view-as-turmoil-rocks-markets

 

This morning in Pattaya the money changers was showing 30.5 to the dollar

[Isaan sailor]

1 hour ago, ThomasThBKK said:

We always talk about the negatives of a rising baht, and yes, i would prefer it more stable either.

 

But imagine you live in a country where the opposite happens and you own investments there, real estate, your family earns local currency etc.

Argentina, Turkey, Venezuela, Zimbabwe and co are killed by hyper inflation - do you prefer that scenerio?

Agreed. But for expats with major assets in the home country—it’s good for a rising currency.  And if they continue this horse manure hot money at BoT—the ones with money left will be outta here.

[jvs]

This may be a little long but very interesting to read.

A change in reserve currency.

https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf

[CPH]

Thai Central Bank needs to lower interest rates and indicate they will lower interest rates further if needed. That will bring out all the speculative money in Thai Baht.

[Curmudgeon1]

11 hours ago, Cadbury said:

Weakest economic expansion since 2014 eh!

Which just happens to be the year of the Prayut Chan-o-cha coup. That tells the story in itself.

 

You expected something different from an interim non elected government? The purpose was to maintain order until a new constitution was created and elections could occur while focusing on domestic order. I suggest they succeeded.

[Isaan sailor]

1 hour ago, Fred white said:

This morning in Pattaya the money changers was showing 30.5 to the dollar

Shoulda jumped @ 30.50.  China hot money took it down even more...:-(

[soalbundy]

Just read that the ECB has lowered its interest rate to -0.5% I can only imagine what the Baht to Euro exchange rate will be tomorrow.

[righand3256]

The Thai elites are 
 
1. allowing hot Chinese illicit capital outflows into the Thai economy and
2. probably forcing the Thai central bank to hold a peg until their money is out -- just like they did in 1997/98
 
See below at 14:45
 
[/url]  

I like when there are fellow human beings that see what is actually going on and can make intelligent fact based statements with actual proof from people who are experts in the field.


Sent from my iPhone using Thailand Forum - Thaivisa mobile app

[Nyezhov]

11 hours ago, soalbundy said:

Actually there are hedge funds who even now recommend dumping American stocks and buy Chinese stocks in a big way.

Well I wouldnt be investing in one of those funds LOL

[RobbyXNorway]

3 hours ago, madmen said:

it took years to get where it is and will take many to reverse if ever

That is incorrect. With todays markets and technologies a country's financials can get slaughtered litteraly overnight. Look at Turkey lately.

 

If politicial sentiment from the USA, EU or China towards a country turns 180 degrees, the global financial actors immediately jumps in like sharks when there is blood in the water.

 

Also, dont be too high on the euro-horse. There are lots of cracks in the euro-foundation. Particularly Italy. Once the global downturn hits, it will affect EVERYONE. It's mostly a matter of who gets hit the worst and who are able to mitigate and repair the best.

 

As for the US economy, I found this article interesting. The info has been out there for quite some time, but its interesting to see it in more mainstream media; https://www.rt.com/business/468658-us-debt-report-economy/

2000 % debt (or liabilities rather).

 

I do wish that countries for the future drop the "debt to GDP" calucations and instead focus on "debt to state income", as its the actual state income that must be used to service said debt. But it probably dont stand a snowball's chance in hell to happen. Many western countries have been busy the last decades in bloating the GDP figures as much as possible to make everything look peachy.

[djayz]

14 hours ago, ChrisY1 said:

Sphincters must be twitching in the finance department....devalue it and risk a crash....keep it high and risk falling business.

But never fear, Thailand has the Prayuth the Great to solve all such simple economic woes with a wave of the hand...!

... and an order. Don't forget the orders. 

????

[baboon]

3 hours ago, Curmudgeon1 said:

You expected something different from an interim non elected government? The purpose was to maintain order until a new constitution was created and elections could occur while focusing on domestic order. I suggest they succeeded.

A what? Interim non elected government? An army chief barging in with his mates and staging a coup is not an interim non elected government. Especially not when they rammed down their constitution down the people's throats, ignored it at will and rigged the election. 

Go away with your revisionist history. Many of us were here at the time and know exactly what went on.

[Teee]

6 hours ago, Bangkok Barry said:

 

It might not have occurred to you, but there are many tens of thousands of expats who don't live in Bangkok, me included (I used to, hence my tag). And because I bought my (okay, her) house for 600,000 when the Baht was in the pits and then spent double that with six months work by six workers to bring it up to civilised standards I can now live on less that 20,000 a month. That includes aircon, IPTV, fast and efficient internet even out in a village, a mix of Thai and western food, running a pickup, going out for dinner once a week. And the house is probably worth around 3.5 million now. Translating the currency, that is nearly 90,000 sterling for a house that originally cost me one tenth that.

 Nice house...well done. But you dont live there but your thai wife does....good luck trying to sell it and taking the money.

I lived in Bkk because i was living with my fillipino gf...but hate Bkk...and too expensive.

 

[Chazar]

19 hours ago, ChrisY1 said:

Thailand has the Prayuth the Great to solve all such simple economic woes with a wave of the hand...!

INCORRECT,  he  will "order" it.