saengd Posted October 25, 2019 Share Posted October 25, 2019 13 minutes ago, Bangkok Barry said: Okay, I'm a simple soul who has never studied economics, but how does this massive reported surplus of S34 billion exist while at the same time the government is planning to borrow 348 billion Baht to cover the fiscal 2019 deficit? (yesterday's report) Barry, I think one is current account surplus in USD resulting from trade, the other is deficit in Baht. The surplus is a savings rather than hard cash, the deficit is the shortfall between budget and actual spend and that is hard cash that must be financed. Link to comment Share on other sites More sharing options...
malibukid Posted October 25, 2019 Share Posted October 25, 2019 5 hours ago, Sticky Wicket said: Oh joy of joys Why don't they put those dollars to good use rather than hoarding them to manipulate the currency! you must be kidding. spend on infrastructure lol. Link to comment Share on other sites More sharing options...
outsider Posted October 25, 2019 Share Posted October 25, 2019 Expats drawing salary in THB, or those paid in THB won't be complaining much, I guess... heheh. Link to comment Share on other sites More sharing options...
Denim Posted October 25, 2019 Share Posted October 25, 2019 6 hours ago, webfact said: The chance of global economy entering recession next year now stands at 26 per cent, and could lead to more capital flowing in to subscribe to Thai bonds. So....how about the banks stop selling bonds ? Is that too simple or is there a reason they must keep selling them ? If Thailand keeps selling bonds the time will come when those with the bonds want to cash them in. Then Thailands economy will look like this . Link to comment Share on other sites More sharing options...
Mavideol Posted October 25, 2019 Share Posted October 25, 2019 5 hours ago, Cadbury said: What will Khun Prayut Chan-o-cha self appointed Chairman of the Economic Management Committee do then? Not wise for him to do anything or he will be shooting himself (& his gang) on the foot... Link to comment Share on other sites More sharing options...
Bangkok Barry Posted October 25, 2019 Share Posted October 25, 2019 16 minutes ago, saengd said: I haven't seen those numbers nor can I relate to them, do you have a link? From ThaiVisa yesterday: And the $34 billion surplus is from the first item of this thread. The surplus this year will reach $34 billion, he said. Link to comment Share on other sites More sharing options...
Mavideol Posted October 25, 2019 Share Posted October 25, 2019 4 hours ago, SteveK said: You of all people should know that any figures in Thailand are 100% fiction. government needs believers like her... all good, nothing to worry about, exports up by the minute, tourists in by millions... Link to comment Share on other sites More sharing options...
Bangkok Barry Posted October 25, 2019 Share Posted October 25, 2019 10 minutes ago, saengd said: Barry, I think one is current account surplus in USD resulting from trade, the other is deficit in Baht. The surplus is a savings rather than hard cash, the deficit is the shortfall between budget and actual spend and that is hard cash that must be financed. I get that. But why do you need to borrow when you have massive savings? Normal people wouldn't do it as it makes no sense. If you fall short then you dig into your savings. Link to comment Share on other sites More sharing options...
Mavideol Posted October 25, 2019 Share Posted October 25, 2019 The US Agricultural Department is calling for a delay on the ban on agro-chemical glyphosate, because it says the ban will disrupt Thailand’s import of soybean, wheat, coffee, apples, grapes and other agricultural produce, could this have anything to do with the baht strengthening.... strong baht they can by more Link to comment Share on other sites More sharing options...
kevinmartyn Posted October 25, 2019 Share Posted October 25, 2019 In my life i have met many SME (subject matter expert). It is NOT bad news for "expats" it is dire news if real for Thailand in general! This will lead to an economic crises across Thailand. Exports will stop. Etc No matter how strong the baht gets it only makes the hole get deeper for Thailand! Expats in general will get by! However the large majority of Thai nationals are poor! And will become even poorer! Link to comment Share on other sites More sharing options...
saengd Posted October 25, 2019 Share Posted October 25, 2019 4 minutes ago, Bangkok Barry said: I get that. But why do you need to borrow when you have massive savings? Normal people wouldn't do it as it makes no sense. If you fall short then you dig into your savings. The surplus is not hard money, it's simply money that has avoided being spent...we said we were going to import 100 and export 100 but we only imported 60 so our savings (or avoidance) is 40. Financing the deficit at times of low interest rates make huge sence because borrowing costs will be very low and these can be carried on the back of newly issued governement bonds. Link to comment Share on other sites More sharing options...
saengd Posted October 25, 2019 Share Posted October 25, 2019 The Baht is strong and getting stronger because: - tourism cash inflows where foreign currency is sold and THB is purchased (making THB stronger) - export bill settlement where exporters are paid in foreign currency (mostly USD) and that is then sold and THB is purchased (making THB stronger) - inbound investment and hot money, foreign currency looking to buy safe bonds and foreign companies investing in Thailand, selling foreign currency and buying THB (making THB stronger). If you want a weaker THB you have to slow or stop those things. Link to comment Share on other sites More sharing options...
Stevemercer Posted October 25, 2019 Share Posted October 25, 2019 The 'analysis' in the OP is just simplistic Government propaganda (e.g. it is everyone else's fault and the Thai government is blameless). Actual GDP growth is closer to 1% if you rule out the massive increase in gold exports. In fact, according to some analysts, Thailand will be in recession next year. Still, this won't affect affect the Baht. As long as the policy of the government and the Bank of Thailand continues to be to strengthen the Baht there will be no change. Link to comment Share on other sites More sharing options...
madmen Posted October 25, 2019 Share Posted October 25, 2019 Yes please keep the baht flying as my condo lower sukhimvit hits the market in a few weeks and convert to oz dollar's as I head back there for a few years. I think expats are in for a world of pain as immigration continue to squeeze and their home currency continues to collapse If all I had was just an oz pension I would race back to oz while I still can and let the social security network that I supported my whole life take care of me A good friend and currency trader says oz dollar's=15 baht within 2 years ! Link to comment Share on other sites More sharing options...
Mikeasq60 Posted October 25, 2019 Share Posted October 25, 2019 I thought Thailand is looking to increase tourism by 20 million next year. That from the Thai tourism ministry. Come on now Thailand Link to comment Share on other sites More sharing options...
Captain 776 Posted October 25, 2019 Share Posted October 25, 2019 Good time to turn BHAT into USD. Link to comment Share on other sites More sharing options...
Russell17au Posted October 25, 2019 Share Posted October 25, 2019 2 minutes ago, saengd said: The surplus is not hard money, it's simply money that has avoided being spent...we said we were going to import 100 and export 100 but we only imported 60 so our savings (or avoidance) is 40. Financing the deficit at times of low interest rates make huge sence because borrowing costs will be very low and these can be carried on the back of newly issued governement bonds. Yes, that works if you are exporting 100 but Thailand is not exporting 100 now and the number that it is exporting is falling continually and companies involved in the export of their products are closing because their products have become too expensive to buy. So your 100 import and your 100 export is no longer equal as the export figures are dropping quicker than the import figures, thus reducing the surplus and changing it to a deficit. Printing new government bonds will not pull you out of the mess that the high value of the money will cause. Loss of industries is a big thing that you are not even looking at, if the businesses close here in Thailand and open in Vietnam then Thailand will never get those industries back because those businesses will not trust Thailand again. It is the same as what happened with the rice sales, Thailand used to be the number 1 seller in the world for rice but because it withheld the rice several years ago to try and force the world price up it fell flat on its face because it only opened the world market up for many other countries to increase there sales of rice on the world market and now Thailand has dropped to number 8 rice seller in the world. Industries will do the same thing, they will move to countries that will treat them better than Thailand so exports will continually drop and they will never be able to pay back the loans and Thailand will remain in deficit for many years. Link to comment Share on other sites More sharing options...
maprao Posted October 25, 2019 Share Posted October 25, 2019 Late 90s 90 baht to the pound on it's way Link to comment Share on other sites More sharing options...
bkk6060 Posted October 25, 2019 Share Posted October 25, 2019 Wow, that all seems very optimistic. I see it going to 26 or 27. Link to comment Share on other sites More sharing options...
friend of siam Posted October 25, 2019 Share Posted October 25, 2019 6 hours ago, keith101 said: As the Thai baht gains more strength exports and tourism will fall even further and dropping the its rate by just 25 basis points will do nothing for the economy . It seems destined for the Aussie dollar to drop below todays rate of 20.6 to into the 19s by next year making it impossible for me at least to continue living here and will probably lead to my divorcing my wife and returning to Aus forever , at least back home a dollar is worth a dollar and wont change . only the prices are roaring up in aussie... Link to comment Share on other sites More sharing options...
tonysilly Posted October 25, 2019 Share Posted October 25, 2019 Stop blaming the U.S and China... Link to comment Share on other sites More sharing options...
EricTh Posted October 25, 2019 Share Posted October 25, 2019 Blame Trump for weakening the dollar and other major world currencies. Link to comment Share on other sites More sharing options...
IsaanAussie Posted October 25, 2019 Share Posted October 25, 2019 Just now, tonysilly said: Stop blaming the U.S and China... Not me mate. Australia had a car industry bigger than Thailand pre free trade agreement. I blame no-one other than the Aussie government that turned a country of advanced manufacturing industries into one that sells nothing but rocks to China and houses to each other. Link to comment Share on other sites More sharing options...
Power of life yoga Posted October 25, 2019 Share Posted October 25, 2019 5 hours ago, keith101 said: Already taken her and hates it and we have been married for nearly 10 yrs and together for over 13 and did not expect the exchange rate to get so bad Where abouts in Australia Keith? so many beautiful spots. what does she hate about Australia other than the cost of living ???????? Link to comment Share on other sites More sharing options...
saengd Posted October 25, 2019 Share Posted October 25, 2019 14 minutes ago, Russell17au said: Yes, that works if you are exporting 100 but Thailand is not exporting 100 now and the number that it is exporting is falling continually and companies involved in the export of their products are closing because their products have become too expensive to buy. So your 100 import and your 100 export is no longer equal as the export figures are dropping quicker than the import figures, thus reducing the surplus and changing it to a deficit. Printing new government bonds will not pull you out of the mess that the high value of the money will cause. Loss of industries is a big thing that you are not even looking at, if the businesses close here in Thailand and open in Vietnam then Thailand will never get those industries back because those businesses will not trust Thailand again. It is the same as what happened with the rice sales, Thailand used to be the number 1 seller in the world for rice but because it withheld the rice several years ago to try and force the world price up it fell flat on its face because it only opened the world market up for many other countries to increase there sales of rice on the world market and now Thailand has dropped to number 8 rice seller in the world. Industries will do the same thing, they will move to countries that will treat them better than Thailand so exports will continually drop and they will never be able to pay back the loans and Thailand will remain in deficit for many years. That's all well and good except Thailand has this huge trade surplus it can burn through before it even gets close to making a loss. So if/when exports shrink, they can shrink quite some way before it really hurts. Also, rice is a water dependent crop, the forecast for drought in Thailand is ugly, it's probably OK that rice sales are down. Bonds: the overseas demand for government bonds is very high, BOT is trying to dampen demand by suspending issues, don't under estimate this. Link to comment Share on other sites More sharing options...
Toadie Posted October 25, 2019 Share Posted October 25, 2019 Guessing FOREX is a mugs game especially in the current environment. There is just way way too much at play. But I got to ask the question, "if it improves favourable does that mean, 1) You don't get divorced. It could be a real opportunity when not much $$ on the table. And 2) How much does it need to appreciate to, i) get a new one, or ii) double up Link to comment Share on other sites More sharing options...
IsaanAussie Posted October 25, 2019 Share Posted October 25, 2019 Just now, saengd said: That's all well and good except Thailand has this huge trade surplus it can burn through before it even gets close to making a loss. So if/when exports shrink, they can shrink quite some way before it really hurts. No doesnt work that way. The surplus is required to pay for imports. Noone buys in baht. USD critical Link to comment Share on other sites More sharing options...
Steve Vincent Posted October 25, 2019 Share Posted October 25, 2019 where do they find these stories as last week they were saying the opposite ! My advice to the ex pats try option 4 ~ move to pastures new ( Laos and Vietnam will see that pension stretch a lot further ) the worlds in recession yet the baht is the strongest of any currency ? It’s just not sustainable anymore living in Thailand. Link to comment Share on other sites More sharing options...
quadperfect Posted October 25, 2019 Share Posted October 25, 2019 It looks like the powers that be are just putting doom and gloom out there so they can devalue there bht with a good excuse to save face But truth told we are all about to be devalued if the us banks keep on needing the feds bail out of 125 billion per day to meet there reserves. Its insane. Were all doomed not just the farmers and exporters. And not just america Link to comment Share on other sites More sharing options...
saengd Posted October 25, 2019 Share Posted October 25, 2019 1 minute ago, IsaanAussie said: No doesnt work that way. The surplus is required to pay for imports. Noone buys in baht. USD critical Balance of trade assumes imports and exports are evenly matched, that's the objective in a balanced economy. In Thailands case the exports oustrip imports so imports are still paid for plus there's a huge balance left over. Thailand's export bills are now settled, 60% of the time, in USD, the rest is via currency swaps, payment for exports in THB is increasing. The more currency swaps come into play, the lower is the need to sell foriegn currency and buy baht and the upward pressure on THB is reduced. Link to comment Share on other sites More sharing options...
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