Thai Baht Volatility

[chiang mai]

The Bangkok Post today reported excerpts from a speech given by the Bank of Thailand's governor, Tarisa Watanagase, to the British Chamber of Commerce. In quoted statements she warned, "The Thai economy could face a highly volatile baht that could result from massive outflows from the US market" and, "'The threat of a disorderly unwinding of global financial imbalances remains imminent.'' Tarisa went on to say that, ''The magnitude of the capital flows from the rest of the world to the US economy is not sustainable. It is a matter of time before the flows eventually reverse.''

Okay so there's not a lot that's new in her statements by way of an informed view of the near future but I was struck by the fact that she verbalized her thoughts and that they were reported - it all came across to me as an eleventh hour warning! Now I'm interested to read what views other members have regarding the Thai Baht/Thai economy for the rest of 2007. My personal interest is in respect of Thai Baht/GBP and will welcome any views.

Edited June 12, 2007 by chiang mai

[Irene]

The Bangkok Post today reported excerpts from a speech given by the Bank of Thailand's governor, Tarisa Watanagase, to the British Chamber of Commerce. In quoted statements she warned, "The Thai economy could face a highly volatile baht that could result from massive outflows from the US market" and, "'The threat of a disorderly unwinding of global financial imbalances remains imminent.'' Tarisa went on to say that, ''The magnitude of the capital flows from the rest of the world to the US economy is not sustainable. It is a matter of time before the flows eventually reverse.''

Okay so there's not a lot that's new in her statements by way of an informed view of the near future but I was struck by the fact that she verbalized her thoughts and that they were reported - it all came across to me as an eleventh hour warning! Now I'm interested to read what views other members have regarding the Thai Baht/Thai economy for the rest of 2007. My personal interest is in respect of Thai Baht/GBP and will welcome any views.

Chieng Mai,

I was also mystified by her statements and the intended message. On the surface, she indicated the trend of strong baht could be reversed i.e. weakening of the baht, because the imbalance of the Asians supporting the US deficit is likely to be reversed. I cannot see the scenario of US imports being far less than her exports. The second mystery was "the massive outflows from the US market". Did she mean the US would, for a change, be in a situation of balance of trade surplus which is somewhat unbelievable? Or, did she mean that there would be a big outflow of the US investments that would strengthen the baht further? Then her message was not the weakening of the baht but further strengthening of the baht which is harmful to our export economy. So her speech could mean either of the two extreme messages of good news (baht weakening) or bad news (baht strengthening).

Either she deliberately refrained from being clear on the direction or the newspaper misinterpreted her speech on the "outflows". I love to read others' reactions.

Cheers!

[lannarebirth]

Current LT charts of the GBP against the $USD are similar to prior times when the GBP made 15$-30% corrections against the $USD. There is zero guarantee that is about to happen, but I personally believe it will and have hedged accordingly. If I'm wrong at this point it's B/E at worse. As for the baht I think the GBP vs baht is dependant on $USD vs baht. So, if my hypothesis is correct (and it may not be), I see the GBP weakening against the $USD and the THB, but less so against the THB.

edit: also Commitments Of Traders reports are saying much the same thing:

http://www.freecotcharts.com/charts.htm

The blue line is the "smart money". They are often early, but they are seldom wrong. They may be this time though, who knows?

Edited June 12, 2007 by lannarebirth

[cmsally]

Sorry maybe a stupid question but why do the large traders and the commercial traders always seem to be doing the opposite.

ie the blue and the green lines divergent.

[tijnebijn]

For now the baht seems pretty stable,if you look at the numbers the last couple of months.I should be careful what I say though,cause there are some people on this forum ,who can provide evidence and the most likely scenarios much better then I do!

If the trend goes up I think it will push to 30 or under .If it will decline ,the baht could go back to the 38,almost 40 scenario.Under 30 or above 40 is in near future very unlikeable.I am not an expert ,but like to read a lot about this and my amateur view saw this happen many times before.I hope the baht will go down,so our pockets will be more full....

[lannarebirth]

Sorry maybe a stupid question but why do the large traders and the commercial traders always seem to be doing the opposite.

ie the blue and the green lines divergent.

Here's kind of an explanation Sally.

http://www.traderslog.com/Commitments-of-Traders.htm

One problem with all these kinds of tools is, that many are more widely followed than in years past and at some point the information will be manipulated in a fashion whereby it will no longer work as anticipated.

[cclub75]

I was also mystified by her statements and the intended message. On the surface, she indicated the trend of strong baht could be reversed i.e. weakening of the baht, because the imbalance of the Asians supporting the US deficit is likely to be reversed.

I cannot see the scenario of US imports being far less than her exports. The second mystery was "the massive outflows from the US market". Did she mean the US would, for a change, be in a situation of balance of trade surplus which is somewhat unbelievable? Or, did she mean that there would be a big outflow of the US investments that would strengthen the baht further? Then her message was not the weakening of the baht but further strengthening of the baht which is harmful to our export economy. So her speech could mean either of the two extreme messages of good news (baht weakening) or bad news (baht strengthening).

Either she deliberately refrained from being clear on the direction or the newspaper misinterpreted her speech on the "outflows". I love to read others' reactions.

I think it's pretty clear.

The "massive outflows" from US have nothing to do with a trade surplus... Just the coming collapse of USD !

Review some event of the past weeks : some countries in the middle east are un pegging their currency with USD... We have higher inflation in USA, than expected and officially measured. Plus the perspective of a recession, due to the real estate bubble burst. Plus the fact that USA is the land of debts. A perfect cocktail for a perfect storm.

As for the FED, they are in a dead end. Impossible to increase nor to decrease rates. There is, undoubtedly , a crisis of confidence toward the USD.

USD and therefore all assets in USD could suffer. Investors would be looking to find an exit, and putting their money in other currency. That could triger, as she said, a "disorderly unwinding of global financial imbalances".

Tarisa said that due to the size and nature of the thai economy, any massive outflows from US could totally destabilize THB, and sending its value to the moon.

http://www.bangkokpost.com/Business/12Jun2007_biz34.php

Tarisa warns of baht volatility on outflows

PARISTA YUTHAMANOP

The Thai economy could face a highly volatile baht that could result from massive outflows from the US market, according to Tarisa Watanagase, the Bank of Thailand's governor.

''The magnitude of the capital flows from the rest of the world to the US economy is not sustainable. It is a matter of time before the flows eventually reverse,'' she said.

''The threat of a disorderly unwinding of global financial imbalances remains imminent.''

Addressing a luncheon hosted by the British Chamber of Commerce, Dr Tarisa also said that small and shallow financial markets will make the economy particularly vulnerable to the rapid shift of fund flows.

''The issue here is not only when the correction will take place, but how fast and disruptive,'' she said.

''Such rapid movements of capital flows, if vastly out of line with the underlying economic fundamentals, can have a negative impact on the export or import sectors depending on the direction of exchange-rate movement.''

The central bank forecasts economic growth at 3.8-4.2% this year, mainly driven by exports. It expects accelerated government spending and public investment in mass transit to help support economic expansion this year.

Dr Tarisa said oil was also a major risk to the Thai economy due to its high and volatile prices.

The Monetary Policy Committee (MPC) has lowered its short-term benchmark interest rate since the beginning of the year to 3.5% from 5% to support economic growth as inflation subsided.

''Inflation currently is not a problem as such, even though the oil prices going forward are hard to predict. The inflation has come down from 6% in the second half of last year because we have dealt with it carefully,'' she said.

Dr Tarisa said the central bank was looking to abolish its 30% reserve requirement on short-term capital inflows, but was waiting for ''clarity''.

The measure now has virtually no effect on the market since the central bank allowed investors to fully hedge investments.

''The reserve requirement measure was aimed at providing the private sector time to the adjust to the baht appreciation. To this end, I think we are successful,'' she said.

Dr Tarisa said the central bank expected its relaxation to encourage more domestic investment in securities abroad to help reduce pressure of capital inflows.

''There is not much capital outflow at the moment. It will take time for investors and institutional investors to do their homework,'' she said.''The average dollar-denominated assets held by central banks all over the world is 66%. In our case, it is lower than that,'' Dr Tarisa said.

[tijnebijn]

That makes more sense.But if the dollar collapses this does mean the GBP,Euro and the thai Baht will appreciate a lot,don't they?

So who stays on dollars will be nervous and who stays on GBP or euros it will be more stable or even better?

Or do I got the picture wrong?

[chiang mai]

I understand the part concerning outflows from the US but the question for me is where does that money go. For the time being GBP is quite strong and the forecast is for further strengthening with at least one and possibly two further rate increases on the cards before the end of 2007. Whilst GBP is considered to be overvalued it would seem to be a likely recipient of some USD based funds before the end of 2007 if only because the return is so much better. Beyond 2007 it is hard to imagine what may happen. Given that the foregoing is correct it would seem that GBP will strengthen against the Baht although others may disagree. Secondly, I cannot see the Thai government wanting to allow the Baht to strengthen to much further simply because of the negative effects that would have on imports and tourism. I can therefore only conclude that Tarisa's statements pointed favorably in respect of Baht vs GBP. Anyone?

[lannarebirth]

That makes more sense.But if the dollar collapses this does mean the GBP,Euro and the thai Baht will appreciate a lot,don't they?

So who stays on dollars will be nervous and who stays on GBP or euros it will be more stable or even better?

Or do I got the picture wrong?

I would pay zero attention to what people say and follow instead what they do. Many of the comments central banks make are self serving. From what's been posted here, I have absolutely no idea what message it is, that is trying to be conveyed.

Back to the dollar. Here is a chart Of the $USD Index, which is the value of the USD against a basket of other currencies. it's as ugly a chart as you'll ever see, as it's locked in a downtrend and keeps breaking support after support. BUT, it is now just under a strong resistance point and it's most recent uptrend line which it had broken previously. If, over the course of the next few days it can regain that support it will break out of what's called a bullish falling wedge attern and may run a bit. All speculation on my part of course. here's the chart:

http://stockcharts.com/h-sc/ui?s=$USD...&a=63893762

Here's a close up view:

http://stockcharts.com/h-sc/ui?s=$USD...&a=63893762

I should mention, that if this scenario doesn't happen and it fails here, it could plunge rapidly. Good Luck everyone.

Edited June 12, 2007 by lannarebirth

[VegasVic]

I was also mystified by her statements and the intended message. On the surface, she indicated the trend of strong baht could be reversed i.e. weakening of the baht, because the imbalance of the Asians supporting the US deficit is likely to be reversed.

I cannot see the scenario of US imports being far less than her exports. The second mystery was "the massive outflows from the US market". Did she mean the US would, for a change, be in a situation of balance of trade surplus which is somewhat unbelievable? Or, did she mean that there would be a big outflow of the US investments that would strengthen the baht further? Then her message was not the weakening of the baht but further strengthening of the baht which is harmful to our export economy. So her speech could mean either of the two extreme messages of good news (baht weakening) or bad news (baht strengthening).

Either she deliberately refrained from being clear on the direction or the newspaper misinterpreted her speech on the "outflows". I love to read others' reactions.

I think it's pretty clear.

The "massive outflows" from US have nothing to do with a trade surplus... Just the coming collapse of USD !

Review some event of the past weeks : some countries in the middle east are un pegging their currency with USD... We have higher inflation in USA, than expected and officially measured. Plus the perspective of a recession, due to the real estate bubble burst. Plus the fact that USA is the land of debts. A perfect cocktail for a perfect storm.

As for the FED, they are in a dead end. Impossible to increase nor to decrease rates. There is, undoubtedly , a crisis of confidence toward the USD.

USD and therefore all assets in USD could suffer. Investors would be looking to find an exit, and putting their money in other currency. That could triger, as she said, a "disorderly unwinding of global financial imbalances".

Tarisa said that due to the size and nature of the thai economy, any massive outflows from US could totally destabilize THB, and sending its value to the moon.

http://www.bangkokpost.com/Business/12Jun2007_biz34.php

Tarisa warns of baht volatility on outflows

PARISTA YUTHAMANOP

The Thai economy could face a highly volatile baht that could result from massive outflows from the US market, according to Tarisa Watanagase, the Bank of Thailand's governor.

''The magnitude of the capital flows from the rest of the world to the US economy is not sustainable. It is a matter of time before the flows eventually reverse,'' she said.

''The threat of a disorderly unwinding of global financial imbalances remains imminent.''

Addressing a luncheon hosted by the British Chamber of Commerce, Dr Tarisa also said that small and shallow financial markets will make the economy particularly vulnerable to the rapid shift of fund flows.

''The issue here is not only when the correction will take place, but how fast and disruptive,'' she said.

''Such rapid movements of capital flows, if vastly out of line with the underlying economic fundamentals, can have a negative impact on the export or import sectors depending on the direction of exchange-rate movement.''

The central bank forecasts economic growth at 3.8-4.2% this year, mainly driven by exports. It expects accelerated government spending and public investment in mass transit to help support economic expansion this year.

Dr Tarisa said oil was also a major risk to the Thai economy due to its high and volatile prices.

The Monetary Policy Committee (MPC) has lowered its short-term benchmark interest rate since the beginning of the year to 3.5% from 5% to support economic growth as inflation subsided.

''Inflation currently is not a problem as such, even though the oil prices going forward are hard to predict. The inflation has come down from 6% in the second half of last year because we have dealt with it carefully,'' she said.

Dr Tarisa said the central bank was looking to abolish its 30% reserve requirement on short-term capital inflows, but was waiting for ''clarity''.

The measure now has virtually no effect on the market since the central bank allowed investors to fully hedge investments.

''The reserve requirement measure was aimed at providing the private sector time to the adjust to the baht appreciation. To this end, I think we are successful,'' she said.

Dr Tarisa said the central bank expected its relaxation to encourage more domestic investment in securities abroad to help reduce pressure of capital inflows.

''There is not much capital outflow at the moment. It will take time for investors and institutional investors to do their homework,'' she said.''The average dollar-denominated assets held by central banks all over the world is 66%. In our case, it is lower than that,'' Dr Tarisa said.

Where have you been for the last 4 years Cclub? You seemed to have missed the boat buddy, the U.S. dollar has already colapsed (as you put it), with the support of the U.S. government I might add. The recent survey of major central bankers around the world show that over 80% of them feel that the U.S. dollar will be the most secure and strongest currency over the next 25 years. As far inflation in the U.S. goes you are once again way off the mark, when oil is taken out of the equation there is actually something approaching disinflation in the states right now, and even with oil in the equation inflation is at record low levels while at the same time unemployment is at record lows as well. I am not sure where you are getting your disinformation from(perhaps just wishful thinking on your part?) but the U.S. economy is roaring ahead at record levles on all fronts, with the only exception being existing real estate inventories at eleveted levels in a few select markets like southern California, Vegas and Phoenix and condos in Dade county Florida. I just hope that you are putting your money where your mouth is and shorting the U.S. dollar currently, as a old saying goes "a fool and his money will soon be parted". One final thought to ponder, the U.S. economy is not only the largest economy in the world by a factor of nearly three (over #2 japan) , but it is also the most resilent economy as well (witness the aftermath of 9/11). If you want to bash the U.S.A. there are many ways to do it, but try to have at least some factual information next time you post!

[carnival1200]

The much talked about collapse of the US dollar seems to be very much on the cards.  With plans already in place for the introduction of the AMERO (google it) a weak or 'collapsed dollar' is whats desirable to fit the bill.

(pun intended).  What affect this will have on the Baht i couldnt guess - but would be interested in any views.

[Irene]

The much talked about collapse of the US dollar seems to be very much on the cards. With plans already in place for the introduction of the AMERO (google it) a weak or 'collapsed dollar' is whats desirable to fit the bill.

(pun intended). What affect this will have on the Baht i couldnt guess - but would be interested in any views.

Simple. Stronger baht will result.

Undoubtedly the baht has been under that trend since Jan 07 because of this imbalance of trade and US deficit being supported by Asian investors, so was Euro, Yen and GBP.This trend was expected by Paul Krugman (the economist who predicted the fall-out of the Asian economy in 1997) when he gave a talk in Bangkok a few years ago on this "unnatural" imbalance. Whether or not there will be a collapse of the US economy, he opined that that would depend on the downfall of the US property market which was expected to be the first market to fall. If the slow down of that property market does not come down with a bang, then the soft landing would help the US to readjust its position. US has to coerce China and Japan to strengthen its currency to help the US currency. Now the US property market has come down with soft landing with relatively low effects on the collapse of subprime loans, the dollar collapse may not look that imminent now.

I am therefore scratching my head on the talk of the BOT's governor given at the British Chamber's luncheon gathering that whether she got something that we are not aware of or whether she just gave the old wine in the new bottle.

[Irene]

That makes more sense.But if the dollar collapses this does mean the GBP,Euro and the thai Baht will appreciate a lot,don't they?

So who stays on dollars will be nervous and who stays on GBP or euros it will be more stable or even better?

Or do I got the picture wrong?

You are absolutely correct. If you are a non-US resident, stay away from the US dollar investment because in the long term the US dollar will soften further. The stopping point would be when the "imbalance" of trade between the US and the rest of the world has been corrected (through currency adjustments as some economists believe) and the US deficits have fallen to a respectable level and become less dependent on funds from China, Japan and Europe.

[chiang mai]

One thing to add perhaps is that GBP is overvalued and has been so for a few years. I frequently read of the need for a correction but the comments in this thread seem to suggest a further strengthening is on the cards. Additionally there's an increasing view inside the UK that the UK economy itself is headed for some kind of fall because the cost of real estate is so artificially high (mortgages at ten times salary) and Brits are fast becoming the most over borrowed race on the planet (2 trillion GBP and rising). The cracks are starting to show in the UK and foreclosures, bankruptcies and referrals to debt collection are on the increase - hmmm I think to myself! I guess the answer that is emerging here is that whilst GBP (versus Thai Baht) is a fairly safe bet the medium and longer term may require a different solution.

[lannarebirth]

One thing to add perhaps is that GBP is overvalued and has been so for a few years. I frequently read of the need for a correction but the comments in this thread seem to suggest a further strengthening is on the cards. Additionally there's an increasing view inside the UK that the UK economy itself is headed for some kind of fall because the cost of real estate is so artificially high (mortgages at ten times salary) and Brits are fast becoming the most over borrowed race on the planet (2 trillion GBP and rising). The cracks are starting to show in the UK and foreclosures, bankruptcies and referrals to debt collection are on the increase - hmmm I think to myself! I guess the answer that is emerging here is that whilst GBP (versus Thai Baht) is a fairly safe bet the medium and longer term may require a different solution.

I don't know if the GBP is overvalued or not. I don't know anything at all about the British economy, either now, or what may happen next year. I only know that the GBP vs. the $USD chart is showing marked similarities to a time when it underwent a major correction against the $USD. What that portends for the GBP vs THB I'm not at all certain, but I wouldn't think it would be helpful to GBP holders. As I've said, pure speculation on my part, but I have put my money where my mouth is by shorting GBP futures.

[cmsally]

Holding mostly GBP of course I am hoping for no drop in value.

I know there is a lot of debt in the UK but there are also far more extremely wealthy people than 20yrs ago.

I think you have a more divergent society and it is more a question of can the big guys keep the small guys afloat.

There is an awful lot of wealth in the UK and I believe at present a lot of Soviet etc money is also keeping it charging ahead.

I say no dip in performance for at least the next 2 yrs.

Plus the fact that Tony Blair is close to out and general elections, that will keep many people happy.

[chiang mai]

Holding mostly GBP of course I am hoping for no drop in value.

I know there is a lot of debt in the UK but there are also far more extremely wealthy people than 20yrs ago.

I think you have a more divergent society and it is more a question of can the big guys keep the small guys afloat.

There is an awful lot of wealth in the UK and I believe at present a lot of Soviet etc money is also keeping it charging ahead.

I say no dip in performance for at least the next 2 yrs.

Plus the fact that Tony Blair is close to out and general elections, that will keep many people happy.

I agree with what you say Sally and if you are right I will be very happy from a financial perspective. But I can't help but feel that the party cannot go on forever - trouble is I've been saying that for the past three years. I've just returned from a holiday in the UK and I concur 100% about the amount of wealth there currently and conspicuous consumption abounds, in London at least. But, everything seems to run in cycles and the current UK economic trend cannot be an exception.

[lannarebirth]

Holding mostly GBP of course I am hoping for no drop in value.

I know there is a lot of debt in the UK but there are also far more extremely wealthy people than 20yrs ago.

I think you have a more divergent society and it is more a question of can the big guys keep the small guys afloat.

There is an awful lot of wealth in the UK and I believe at present a lot of Soviet etc money is also keeping it charging ahead.

I say no dip in performance for at least the next 2 yrs.

Plus the fact that Tony Blair is close to out and general elections, that will keep many people happy.

I agree with what you say Sally and if you are right I will be very happy from a financial perspective. But I can't help but feel that the party cannot go on forever - trouble is I've been saying that for the past three years. I've just returned from a holiday in the UK and I concur 100% about the amount of wealth there currently and conspicuous consumption abounds, in London at least. But, everything seems to run in cycles and the current UK economic trend cannot be an exception.

Cycles - Yes, everything runs in cycles, but everything doesn't run in the same cycle. In the US for example, while it's true the dollar declined. the stock markets and housing markets advanced hugely. For most that's a net benefit, as most don't find themselves in the position of expats paying for lifestyle with foreign currency. That's why diversification is so important. That a currency should rise or fall does not necessarily cast a pall over all assets denominated in said currency. Economic slowdwns can sometimes lead to currency appreciation as money moves to bonds.

[backflip]

"The "massive outflows" from US have nothing to do with a trade surplus... Just the coming collapse of USD !"

You are completely wrong. The "massive outflow" refers to the trade imbalance, specifically, the export of US dollars to foreign countries.

"As for the FED, they are in a dead end. Impossible to increase nor to decrease rates."

Your imaginative usage of the English language notwithstanding, another completely wrong statement. The Fed will rate interest rates to curb inflation, and the US stock market indexes will drop in response. If you watch the US stock market, even the hint that the Fed will raise either the prime or overnight rate, causes the market indexes to drop. The Fed can also curb inflation by increasing the required reserves. So, the Fed is not at a "dead end", and the situation requires an "out of box" perspective. On the other hand, you seemed to have bumped your noggin on the inside of the box.

[cclub75]

"The "massive outflows" from US have nothing to do with a trade surplus... Just the coming collapse of USD !"

You are completely wrong. The "massive outflow" refers to the trade imbalance, specifically, the export of US dollars to foreign countries.

Tired... Read the original quotation of the article. Tarisa was speaking about capital inflows, absolutly not trade. It's obvious.

And the "massive outflows" that could occur is again for capital, absolutly not trade ! It means for foreign investors : no more US treasury bonds buying, stocks buying, and other assets in USD on the US soil. AKA : a massive stampede, panic mode, from the USD.

The Thai economy could face a highly volatile baht that could result from massive outflows from the US market, according to Tarisa Watanagase, the Bank of Thailand's governor.

''The magnitude of the capital flows from the rest of the world to the US economy is not sustainable. It is a matter of time before the flows eventually reverse,'' she said.

"As for the FED, they are in a dead end. Impossible to increase nor to decrease rates."

Your imaginative usage of the English language notwithstanding, another completely wrong statement. The Fed will rate interest rates to curb inflation, and the US stock market indexes will drop in response. If you watch the US stock market, even the hint that the Fed will raise either the prime or overnight rate, causes the market indexes to drop. The Fed can also curb inflation by increasing the required reserves. So, the Fed is not at a "dead end", and the situation requires an "out of box" perspective. On the other hand, you seemed to have bumped your noggin on the inside of the box.

Well... a part critizing my english, you should think a bit more. Increase rates is not that simple, in the present configuration. Paul Volcker did it in he beginning of the 80's (interest rates at 19 % in 1981 !). The medecine was bitter, but it worked.

Today, the US, state and individuals, have gazillons of debts. Therefore any increase could create a large recession.

Since many month, we know that inflation is rising. Even if you consider the "shy" mesurements of "CPI". And money supply is like a living dead under a powerfull amphetamines cocktail.

So why Bernanke is talking about it ("concerns about inflation" in the last FED meeting of 9 may)... but not acting ?

Think about it. If you can find a box that suits you...

Edited June 14, 2007 by cclub75

[shochu]

I think it's fair to say - that the U.S, Britain, and some other countries like australia are running huge deficits - and they must pay sooner or later. Japan has even biiger debts - but the difference is the japanese are indebted to themselves (their people) whereas the others are indebted to others (not their people) so any hint of trouble will cause a mass exodus. Who will cause it? Will someone get scared and run? to cut their losses. Or is it a slow boat sinking with everyone on board?

The figures are misleading - as they are only tools to make people think what they want you to think.

The U.S. is bleeding jobs right now and their economy - as I have pointed out before is really in bad shape - it is only the figures (???) that make it seem to be doing okay - such as the profits from overseas operations that are not being taxed and huge amounts of dollars in offshore accounts being used under the radar - hence no more M3 reports.

Don't rely on any market figures because with the REAL MATH - they are all down.

I have heard a rumour - don't know how true it is - that there is another U.S. dollar in the wings - for outside the country marked with red - that will be introduced when there is a substantial currency collapse - so one for the citizens and one for the foreigners.

Any dollar depreciation will benefit the U.S. in lowering the debts and allowing them to compete for goods again - but the problem is - if it is a collpase - then....

I would not be holding too much of any currency right now - I have been buying things that I think will hold value and only keeping enough cash to keep me right for a couple of years - that I can stretch out to a few years. Everything else is invested in REAL things.

[Naam]

:D

[shochu]

Dr. Naam,

A little too hot for ya?

This from the man who can't even afford to get a decent room in a decent hotel with decent air con.

Now that is laughable!!

A man who borrows ideas from other posters!!!

Now that is even more laughable!!!!

[shochu]

I'm sure yur investing prowess is allowing you to live the good life!

[lannarebirth]

Dr. Naam,

A little too hot for ya?

This from the man who can't even afford to get a decent room in a decent hotel with decent air con.

Now that is laughable!!

A man who borrows ideas from other posters!!!

Now that is even more laughable!!!!

Ya know, there isn't much difference between a currency and a freehold land title. Both have value because many people agree they have value. That perception could change. What you may regard as "real" assets is only "real" by current convention.

[Naam]

Dr. Naam,

A little too hot for ya?

not hot but quite amusing

[VegasVic]

Dr. Naam,

A little too hot for ya?

not hot but quite amusing

Quite right Dr. Naam, Shochu is very amusing, that is of course if you find complete ignorance of the facts funny! Shochu, like many of the U.S.A. bashers would have you believe that the U.S. has rising unemployment, high inflation, budget deficeits as far as the eye can see and a currency that no one has confidence in. First of all the unemployment rate in the U.S. is at historical low (4.5%) levels, it is actually approaching full employment (4%) which would not be a good thing for the economy. Secondly, even with the rising energy prices as of late the U.S. inflation rate is also at record low lelels(about 2.5%), a fact that is backed up by the inflation sensitive FED not raising the FED funds rate for quite a while now. Next we have the huge budget deficiet bugaboo, the fact of course is (for those that pay attention) that tax receipts are also at an all time high in the U.S. and despite the war spending and all of congresses wasteful spending, even conservative estimates are showing that the U.S. will have a budget surplus within three years. Now for that decimated U.S. dollar. The U.S. has indeed been running up some large trade deficeits and along with this has also (behind the scenes) let it be known that it had no intention of supporting the dollar, thereby giving the hedge fund industry a green light to short the U.S. dollar, which they have been doing for nearly 5 years now, but the party for the hedge fund (and the artificial element in dollars valuation) boys is coming to a close. The U.S. dollar has hit bottom and is at the begining of a long, slow reversal which the currency markets have just recently been confirming. Of course you don't have to listen to me, lets look at the recent survey of the worlds central bankers and in particular the question as to which currency they thought would be the strongest and safest over the next 25 years, the U.S. Dollar was their choice by a 4 to 1 margin! In summation, the U.S.A. is still the big boy on the block and will be for the forseeable future, so for all those U.S.A. haters out there just get use to it. Now before one of you financial delinquents starts up again about all that U.S. debt that China holds and how China could bring the U.S. to their knees ect. ect. ect. ad nauseum, the simple fact is that the toal ammount of U.S. debt instuments that China currently holds equates to a little more than 1 heavy volume day of trading in New York. In fact the real truth is that if the U.S. were to become isolationist and halt imports from China into the country tomorrow, the Chinese economy would come to a grinding halt! Now, back to the U.S. Open the premier golf tournament in the world.

[Naam]

'VegasVic' date='2007-06-17 03:38:42'

1. Quite right Dr. Naam, Shochu is very amusing, that is of course if you find complete ignorance of the facts funny!

2. In fact the real truth is that if the U.S. were to become isolationist and halt imports from China into the country tomorrow, the Chinese economy would come to a grinding halt!

1. BINGO!

2. not only the chinese economy but dozens of other economies. the result would be a worldwide recession.

[highchol]

vegasvic

so should I hang on to my dollars.....

Edited June 17, 2007 by highchol