Baht Rises To Strongest Level In Decade

[esbobes]

Perhaps Thailand should recruit George Shrub for PM, this would surely have the desired effect, of weakening the currency ?

No worries. In 1.5 years there will be a new president and the dollar will be back above 40 baht and 1.60 GBP and the Euro back where it belongs at 1.25 to the USD.

In 5 years 1 baht = 1 dollar

America shall have Jeb Bush as Preident

[cdnvic]

Perhaps Thailand should recruit George Shrub for PM, this would surely have the desired effect, of weakening the currency ?

No worries. In 1.5 years there will be a new president and the dollar will be back above 40 baht and 1.60 GBP and the Euro back where it belongs at 1.25 to the USD.

In 5 years 1 baht = 1 dollar

America shall have Jeb Bush as Preident

Let us know when you wake up. We'll pour you a coffee and discuss Thailand.

[thaimate]

why dont you brits use the nationwide ? used my visa flex card yesterday to take out 20000 bht got a rate of 69.22 to the pound,always a good rate and no fees.

[astral]

I have deleted the critiques on the US economy.

Let us keep this discussion to the Thai Baht.

Further infractions will earn the poster a 5 day holiday

[geriatrickid]

If the valuation trend continues, look for Thai industrial exports (electronics, auto accessories etc.) to get blown out of the US market as the Chinese cost advantage widens. Not good. When Vietnam and China grabbed the garment export segment away from Thailand, it hurt. (And US consumers suffered in the long run because the Thai made goods were of better quality.) I doubt it will hurt the tourist sector because the security fears of Americans was already acting to keep them away.

A similar situation has taken place in Canada where a combination of a decade of balanced budgets and oil revenues transformed the CAD$ from a 60cent weakling to trading at around 92 cents. The result has knocked a massive hole in tourist revenues and damaged industrial exports to the USA. (Yea I know, Canada is the US' biggest trading partner and its largest oil supplier so it's a different scenario, but it does provide an indication of what could be in store for Thailand.) However, there is an upside since Thailand pays for its oil imports in US$.

As for a US$ collapse anytime soon, I doubt it. The Chinese can't afford to let the US economy collapse. They have too much at stake. They'll keep buying US debt. The net effect though does make Thailand's minister of finance look like a prudent and responsible fellow.

Edited July 4, 2007 by geriatrickid

[VegasVic]

If the valuation trend continues, look for Thai industrial exports (electronics, auto accessories etc.) to get blown out of the US market as the Chinese cost advantage widens. Not good. When Vietnam and China grabbed the garment export segment away from Thailand, it hurt. (And US consumers suffered in the long run because the Thai made goods were of better quality.) I doubt it will hurt the tourist sector because the security fears of Americans was already acting to keep them away.

A similar situation has taken place in Canada where a combination of a decade of balanced budgets and oil revenues transformed the CAD$ from a 60cent weakling to trading at around 92 cents. The result has knocked a massive hole in tourist revenues and damaged industrial exports to the USA. (Yea I know, Canada is the US' biggest trading partner and its largest oil supplier so it's a different scenario, but it does provide an indication of what could be in store for Thailand.) However, there is an upside since Thailand pays for its oil imports in US$.

As for a US$ collapse anytime soon, I doubt it. The Chinese can't afford to let the US economy collapse. They have too much at stake. They'll keep buying US debt. The net effect though does make Thailand's minister of finance look like a prudent and responsible fellow.

Outstanding post and right on topic! I am now in the camp that thinks the Thai baht will continue to remain strong, at least as long as the cheap (low interest rate) money from Japan keeps fueling the chinese and asian rim markets(via the hedge funds) or until the chinese market colapses, whichever comes first. The whipsaw effect on the thai baht in the other direction will be something to behold, and will certainly be very helpful to Thai tourisim and the Thai economy as a whole. I hope this post is binine enough to not get censored or deleted.

[ThaiGoon]

If the valuation trend continues, look for Thai industrial exports (electronics, auto accessories etc.) to get blown out of the US market as the Chinese cost advantage widens.

Yuan has been appreciating against US dollars as well. In fact, it's now the strongest against US dolllars in its history. Wages in China also have been steadily increasing due to very high inflation rate there.

Edited July 4, 2007 by ThaiGoon

[sting0001]

1 $ = 35 bht ? What is the problem? Or for who is it a problem?

If it touch a bunch of bar bees, there is no problem, assuming they still can go to Cambodia and still think they are the King of the mountain.

Btw us , 1500 us$ can not provide a normal life in NYC or LA or Frisco, so why should it be providing one here ? I do believe those people should go back home, work a bit more and strenghten their financial condition before to be allowed to be back here

Regards

P.S. That is irony, no insult intended, I just try to raise a point regarding to some flamiing post made 2 or 3 years ago by those people (early retired) directed against the so called scumbags of that time(30 visa holders).

[VegasVic]

Maybe it's just me, but I'm getting sick with these discussions about the US economy, US house prices, the FED, Apple stocks, the White House and so much more which has NOTHING to do with:

this topic, since it's called:

Baht Rises To Strongest Level In Decade

I'm quite sure there are lots of forums in the US where these discussions could take place.

But...I know: who am I, right?

LaoPo

Yes indeed, who are you? I guess you have enough clout to have your friend astral censor this forum, so I guess that is who you are. By the way if you think that events in China and the U.S. do not directly effect the Thai baht then you exist in a very small universe my friend!

[Mrkisskissbangbang]

Baht Rises To Strongest Level In Decade

Not according to the BBC website Currency Exchange it hasn't. Neither against the GBP nor the USD. I don't know where these cowboys get therir info.

[Carmine6]

Baht Rises To Strongest Level In Decade

Not according to the BBC website Currency Exchange it hasn't. Neither against the GBP nor the USD. I don't know where these cowboys get therir info.

I don't know what you're looking at, but per oanda.com, the 34.38/$ is the strongest relative to the dollar since 9/10/1997. So the articles' claim of "...its strongest level in almost a decade..." would be correct.

[TAWP]

1 $ = 35 bht ? What is the problem? Or for who is it a problem?

If it touch a bunch of bar bees, there is no problem, assuming they still can go to Cambodia and still think they are the King of the mountain.

Perhaps you are only trying to be a tosser, bu the fact of the matter is that a lot of export is done in usdollar. As it stands now the profit margin for my wifes familys company is cut some 25%. That is going into a netloss on some items...

[ludosiam]

1 $ = 35 bht ? What is the problem? Or for who is it a problem? If it touch a bunch of bar bees, there is no problem, assuming they still can go to Cambodia and still think they are the King of the mountain.

Agree that if it hurts some bees there will be not much of a fuzz here. But in my opinion (built from news clippings mostly) the tourism sector and exporters are getting into trouble while oversea investors are raking in profits at the moment. (set +800 yesterday, fueled by foreign investment). There is no doubt that investors doing a good job making money, using the right strategies and will jump off the train as soon as it slows down. It is a fact that exports are up every month right now, but I am pretty sure the revenue isn't which results in much lower tax revenue for the country. So in my opinion, the strong Baht will hurt Thailand pretty much in the long term while investors will move on to the next party, as it has happened in 1997.

[LaoPo]

Maybe it's just me, but I'm getting sick with these discussions about the US economy, US house prices, the FED, Apple stocks, the White House and so much more which has NOTHING to do with:

this topic, since it's called:

Baht Rises To Strongest Level In Decade

I'm quite sure there are lots of forums in the US where these discussions could take place.

But...I know: who am I, right?

LaoPo

Yes indeed, who are you? I guess you have enough clout to have your friend astral censor this forum, so I guess that is who you are. By the way if you think that events in China and the U.S. do not directly effect the Thai baht then you exist in a very small universe my friend!

I answered you already in another topic.

Please refrain from personal attacks on my person, will you please ?

BTW: I had NOTHING to do with any removal of any post, whatsoever; I DID NOT have contact with any Moderator NOR sent a report to whomever!

If you have problems with a Moderator I kindly but strongly suggest you address yourself with a complaint to them.

Try, just try, to be a Gentleman, ok?

LaoPo

[A_Traveller]

All Asian currencies are strong and th dollar is not. But the baht is nowhere near as strong as other currencies in Asia largely due to the protectionist policies of the current govt and the political limbo the country is in.

I doubt too if the inflow of foreign money is anywhere near as good as the banker claims.

It is not so much the inflow of foreign money. Thai exporters selling in USD immediately convert to Thai Baht in anticipation that the Thai Baht is stronger tomorrow.

Now that is an interesting take in this 10th anniversary week.

Regards

From Bangkok Post

Bank of Thailand deputy governor Atchana Waiquamdee ... “The baht has strengthened in the same direction with other currencies. It is neither stronger nor weaker than other currencies. Because of this, the central bank sees no need to intervene in its movement. What it has done is to closely monitor it.

“Still, it is likely the baht has appreciated because exporters rush to sell the dollar upon concerns they will suffer losses if the baht continues to rise,” she said....

Regards

[Jai Dee]

Thai Chamber of Commerce executive confident baht appreciation will not affect export to India

Deputy Chairman of the Thai Chamber of Commerce Somkiat Anurat (สมเกียรติ อนุราษฎร์) says the ongoing appreciation of the baht will not affect Thailand’s export to India. In the meantime, Indian investors say they are not concerned over the country’s political situation.

Mr Somkiat adds that India has an atmosphere suitable for investments, especially in the real estate, processed food, and automobile parts sectors. He also voices support for the government’s project to expand the Thai-Indian Free Trade Agreement (FTA) which he expects to help increase the trade value between the two countries. However, Mr Somkiat says although the strengthening of the baht might not much affect Thailand’s export to India, investors are suggested to closely monitor the baht situation.

Mr Somkiat says further that he has warned Thai investments to be well prepared before investing in India to avoid being taken advantage of by their Indian counterparts.

Source: Thai National News Bureau Public Relations Department - 04 July 2007

[johnwills]

Looking at the BBC Market data page the current exchange against the Baht is 69.08 - Kasikorn bank are showing a TT rate of 68.71. Does this mean the offshore rate is currently stronger than the onshore rate? And isn't this unusual?

[VegasVic]

Maybe it's just me, but I'm getting sick with these discussions about the US economy, US house prices, the FED, Apple stocks, the White House and so much more which has NOTHING to do with:

this topic, since it's called:

Baht Rises To Strongest Level In Decade

I'm quite sure there are lots of forums in the US where these discussions could take place.

But...I know: who am I, right?

LaoPo

Yes indeed, who are you? I guess you have enough clout to have your friend astral censor this forum, so I guess that is who you are. By the way if you think that events in China and the U.S. do not directly effect the Thai baht then you exist in a very small universe my friend!

I answered you already in another topic.

Please refrain from personal attacks on my person, will you please ?

BTW: I had NOTHING to do with any removal of any post, whatsoever; I DID NOT have contact with any Moderator NOR sent a report to whomever!

If you have problems with a Moderator I kindly but strongly suggest you address yourself with a complaint to them.

Try, just try, to be a Gentleman, ok?

LaoPo

I, sir, have already responded to you on that other forum. You are the one who was apparently offended by some of the content of one of my deleted posts and you made a post as to insinuate that these posts were off topic, when in fact the political tug of war and the reasons behind currency valuations between the U.S. and China is of direct and long lasting influence on the Thai economy and the valuation of the baht. You do appear to have been overly sensitive to my inference that it was your post or your potential contact with the moderator that led to this cesorship. I have never made nor would I make any direct personal attack on your person as you put it. You generally post very insightful articles and commentary on the Thai economy, however I feel that when it comes to the chinese stock markets you may be a little too close to the fire to see what is burning, so we will have to agree to disagree on this subject. Hopefully this will close this issue, have a good day sir!

[Mr_Pedantic]

The UK pound looks as if it will become stronger from Thursday.

http://news.independent.co.uk/business/news/article2730486.ece

Wiley Coyote

That's unusual ??!! when I was in the U.S. in May 1981 the GB pound was at it's lowest for many years a measily 1GB pound = $1 totally spoilt my Hawaiian holiday.

[Mr_Pedantic]

Looking at the BBC Market data page the current exchange against the Baht is 69.08 - Kasikorn bank are showing a TT rate of 68.71. Does this mean the offshore rate is currently stronger than the onshore rate? And isn't this unusual?

Whenever I see a scare mongering post about the strong Thai baht I always check the Thai banks for their latest rates as these are the one's that will be posted up in the Thai banks the next day. Money that is arriving in Thailand will use these local rates and not the rates of xe.com. Only exporters or Thai nationals leaving the country should worry about a strong baht, not expats inside Thailand.

I feel that message board information regarding exchange rates should be based on the Thai bank exchange rates not international information but then how would they attract 1000 viewers to this site.

[LaoPo]

I, sir, have already responded to you on that other forum. You are the one who was apparently offended by some of the content of one of my deleted posts and you made a post as to insinuate that these posts were off topic, when in fact the political tug of war and the reasons behind currency valuations between the U.S. and China is of direct and long lasting influence on the Thai economy and the valuation of the baht. You do appear to have been overly sensitive to my inference that it was your post or your potential contact with the moderator that led to this cesorship. I have never made nor would I make any direct personal attack on your person as you put it. You generally post very insightful articles and commentary on the Thai economy, however I feel that when it comes to the chinese stock markets you may be a little too close to the fire to see what is burning, so we will have to agree to disagree on this subject. Hopefully this will close this issue, have a good day sir!

"I guess you have enough clout to have your friend astral censor this forum, so I guess that is who you are." Your words in a previous message.

That's a personal insinuation and attack on me. Period.

But, I say it once more: I DID NOT CONTACT ANY of the MODERATORS.

If you have a problem with the so-called 'censorship' by the Mods, don't call on me but contact Administration or Moderators by means of a PM [Personal Message].

LaoPo

[philliphn]

Maybe it's just me, but I'm getting sick with these discussions about the US economy, US house prices, the FED, Apple stocks, the White House and so much more which has NOTHING to do with:

this topic, since it's called:

Baht Rises To Strongest Level In Decade

I'm quite sure there are lots of forums in the US where these discussions could take place.

But...I know: who am I, right?

LaoPo

Yes indeed, who are you? I guess you have enough clout to have your friend astral censor this forum, so I guess that is who you are. By the way if you think that events in China and the U.S. do not directly effect the Thai baht then you exist in a very small universe my friend!

I answered you already in another topic.

Please refrain from personal attacks on my person, will you please ?

BTW: I had NOTHING to do with any removal of any post, whatsoever; I DID NOT have contact with any Moderator NOR sent a report to whomever!

If you have problems with a Moderator I kindly but strongly suggest you address yourself with a complaint to them.

Try, just try, to be a Gentleman, ok?

LaoPo

I, sir, have already responded to you on that other forum. You are the one who was apparently offended by some of the content of one of my deleted posts and you made a post as to insinuate that these posts were off topic, when in fact the political tug of war and the reasons behind currency valuations between the U.S. and China is of direct and long lasting influence on the Thai economy and the valuation of the baht. You do appear to have been overly sensitive to my inference that it was your post or your potential contact with the moderator that led to this cesorship. I have never made nor would I make any direct personal attack on your person as you put it. You generally post very insightful articles and commentary on the Thai economy, however I feel that when it comes to the chinese stock markets you may be a little too close to the fire to see what is burning, so we will have to agree to disagree on this subject. Hopefully this will close this issue, have a good day sir!

I for one am greatly interested in the value of the Baht against the USA Dollar.

I am interested in all that may effect this valuation.

Why do I have this interest? I will retire in Thailand in 3 years. My income will be a USA pension. Plus USA savings.

Others TV members may not have this preoccupation as their income is Euro or other currency based.

[raslin]

Its almost like we can't wait to see the @rse fall out of the US economy... Almost...

I love it when there are 2 dollars to the pound, makes conversion easier and it reminds me of when I were a lad up in't north!

them were some grand days...

Loz

And, of course, a dollar was 5 bob!!!!!!!

[ray23]

The Customs Department reveals that the rising baht value is causing the department to lose a billion baht each month, thereby forcing the agency to adjust downward its revenue target for next year.

Customs Department Director-general Chavalit Sethamaeteekul reveals the recent increase in the baht, which recently hit a 10 year record high, has impacted the income the department gains from its import duty taxation.

He says the baht value has increased by about 10% since the beginning of the year, bringing the exchange rate to about 34 baht against the greenback. Previously, the baht was fixed at 39-40 baht against the U.S. dollar.

Chavalit says the ASEAN Free Trade Agreement (AFTA), which posts a lower tariff rate, will cause the department to lose about one billion baht of its revenue in the second half of this year.

However, Chavalit says the department's income during the nine months of its last fiscal year shows an extra revenue of about one billion baht. He says the department should gain about 88 billion baht in income this year.

As for the next fiscal year, the director-general says the department's expected revenue should be fixed at about 87 billion, following the implementation of lower tariff rates according to the AFTA agreement. He says, however, that the change will positively support business entrepreneurs. Malaysia, Singapore, and Japan are following the new agreement already.

Concerning support for entrepreneurs, the director-general says the Custom Department is continuing to develop tools to support a more efficient taxation data recording system.

[ray23]

But the BOT says there is no problem guess they didn't like what happened the last time they tried to control it:

Japanese start looking elsewhere

Higher costs, strong baht taking their toll

UMESH PANDEY

Japanese investors, the country's largest single group of investors, are looking at other destinations in the region as Thailand becomes less competitive amid rising costs and an appreciating currency, the Japan External Trade Organisation (Jetro) said yesterday.

''When we asked companies what their future plans were, a majority of the companies responded by saying that they would maintain their position as they were applying a wait-and-see approach,'' Jetro president Yoichi Kato said.

''Japanese companies are now looking for investment destinations such as Vietnam, China and India rather than focusing just on Thailand,'' he said in a clear reference to the shifting trend of companies to consider other countries due to the various negative factors affecting Thailand.

In a veiled reference to the ongoing political drift and strengthening Thai currency, Mr Kato said the stronger baht was taking a toll on Japanese companies that have used Thailand as a manufacturing hub.

''If there was a government through elections as has been promised by the incumbent government, it would send a positive signal to the investment community, as has been evidenced by the sharp increase in the capital markets over the past few days after the government reaffirmed that elections would be held by this year-end,'' he said.

''Japanese companies would like to see the currency hover around 37.25 baht to a dollar although they have budgeted 35.85 in their books,'' Mr Kato said, adding that with the currency at 34.50 to a dollar the companies were under constant strain.

''If it continues this way then companies would need to move to the value-added segment to make higher returns rather than rely on lower cost as a tool to remain competitive,'' he said.

The twice-yearly Jetro survey, conducted from April 27 to May 23, found that the baht's appreciation was the top concern for Japanese companies in Thailand, followed by political instability, economic policies and increasing labour costs.

The survey showed that 64% of respondents thought currency was the key concern, followed by 44% who cited political stability, 43% current economic policies and 40% rising labour costs.

Japanese investors, who account for close to 50% of foreign direct investment (FDI) into the country, have remained sceptical about the country's policies. Changes to the Foreign Business Act spooked many companies that have invested in the country over the past few decades.

Mr Kato said that Jetro's survey of 351 Japanese companies in Thailand showed for the first time in nine years that investment sentiment here had declined.

''This is the first time we are witnessing such a trend,'' he said, adding that close to 58% of respondents said they would maintain their positions and only 17% would expand.

Mr Kato added that most investors were concerned about the foreign exchange fluctuation, while they also feared excessive competition, the continued rise in raw material prices and political instability.

All these factors, he said, had helped countries such as Vietnam, India and China become more attractive destinations for Japanese investment.

[geriatrickid]

Ray,

Very valid points, However, any Japanese run is subject to market realities, hence the statement of " they were applying a wait-and-see approach''. Please consider;

1. While the increased baht does cause a headache for on location manufacturers, it does increase the buying power of Thai consumers. They can afford to purchase more expensive or additonal imports, from which Japan benefits.

2. The Japanese built automobile plants in the USA and Canada, countries where auto workers were accused of laziness, high wages and incompetence (sound familiar?). The same comments were made about the US and CAD $. Today, the Honda plant in Canada is one of itsmost efficient and profitable plants. 80% of Honda & Acura products sold in North America are built in North America. This is what will happen in Thailand (Hopefully).

3. The Japanese cannot just strip their facilities and move them elsewhere. It is not cost effective.

4. References to elections or stability are illogical and will not be a factor. Neither Vietnam nor China has elections. Anti Japan protests occur in China. When is the last time the Thai people took to the streets demanding Japan be bombed and its assets nationalized? That's true stability for the Japanese.

India's bureaucracy, petty rules and protectionism are an impediment to any large scale foreign manufacturing investment and make Thailand seem like a free zone.

Companies in the EU and North America (excl. mexico) are under great pressure to engage in ethical manufacturing practices, i.e. no slave factories. Whatever Thailand's faults, it is not built upon slavery. More importantly, the risk of corporate piracy, is far less in Thailand than in China. Thailand has never been accused of copying manufacturing plants and then setting them up elsewhere in the country. No foreign manufacturer in Thailand has ever lost its workforce to a competing company operated by its military. That's stability.

The concerns voiced are legitimate and must be taken seriously, but they must also be placed in the proper context. Time will tell.

Edited July 5, 2007 by geriatrickid

[Jai Dee]

I, sir, have already responded to you on that other forum. You are the one who was apparently offended by some of the content of one of my deleted posts and you made a post as to insinuate that these posts were off topic, when in fact the political tug of war and the reasons behind currency valuations between the U.S. and China is of direct and long lasting influence on the Thai economy and the valuation of the baht. You do appear to have been overly sensitive to my inference that it was your post or your potential contact with the moderator that led to this cesorship. I have never made nor would I make any direct personal attack on your person as you put it. You generally post very insightful articles and commentary on the Thai economy, however I feel that when it comes to the chinese stock markets you may be a little too close to the fire to see what is burning, so we will have to agree to disagree on this subject. Hopefully this will close this issue, have a good day sir!

"I guess you have enough clout to have your friend astral censor this forum, so I guess that is who you are." Your words in a previous message.

That's a personal insinuation and attack on me. Period.

But, I say it once more: I DID NOT CONTACT ANY of the MODERATORS.

If you have a problem with the so-called 'censorship' by the Mods, don't call on me but contact Administration or Moderators by means of a PM [Personal Message].

LaoPo

Gentlemen, please take this line of discussion out of the forum.

Continued discussion will result in suspension of your ThaiVisa account.

[RedQualia]

I wonder what role currency speculation plays here?

The "carry-trade" strategy of borrowing in Japan (at very low rates) and investing the borrowed money elsewhere has been a very successful strategy for quite some time.

T-bill rates:

Japan: 0.475%

Thailand (28 d): 2.95-3.04%

USA: 5.25% (Fed target rate)

The chart below shows how the exchange rates of YEN/THB, YEN/USD and THB/USD have moved since July 2, 2004 which is set as the base date. All exchange rates are scaled to equal 1.0 at the base date. More YEN per THB, for instance, means that the YEN has decreased in value compared to the Thai baht (THB). So the chart shows that the THB has gained more relative to the YEN compared to USD (YEN has fallen in value relative to both THB and USD). It follows that the THB has strengthened relative to USD.

The carry trade between Japan and USD is pretty notorious (borrowing in Japan, investing the borrowed money in USD). But someone that has instead borrowed in Japan and invested in Thai T-bills have made an even better deal: benefiting from the interest differential and the Thai baht being much stronger than the USD. Also, as an Asian currency, I am guessing that the THB is more correlated to the YEN than the USD, making the THB-YEN play less risky than the YEN-USD trade if things go wrong.

Not to bash financial markets, just trying to understand what could be going on. The effect of such trading is a continued weakening of the YEN and strengthening of the THB. Now, if folks need to close their positions in a hurry, this could lead to a sharp drop in the THB and increase in the YEN when THB are exchanged to YEN and loans are repaid. Higher interest rates in Japan could trigger this.

Thanks for the info. It prompts another thought...

Currencies can be a bit like commodities. Well, I suppose they are commodities, though carved out into something in their own right.

There have been "runs" on commodities in the recent past that have effected the values of those commodities. Investors come to think that say, copper, is a hot think to buy. So they buy. Then they overbuy. And by virtue of their overbuying, they, themselves, drive the price up further.

Copper isn't the only commodity to experience this. Many have, in addition to gold, which is currently heading to pretty high territory. Is it that the value of gold has increased, relative to the dollar? To some degree, absolutely. At the same time, however, I read recently that some sellers do not have enough gold to keep up with the demand. And that in itself, can feed to higher costs.

The point? Only that I get something of a feeling that this may be happening with the Thai baht. Investors have come to value the baht, for whatever reason. It looks very much as if they're pouring money into the country in any way they can. Perhaps they've reached a point beyond the rational. If so, then maybe there's a bit of hope that the trend will abate somewhat in the near future.

[RedQualia]

Yes, can someone PLEASE explain why on the Foreign Exchange Market the Baht is trading at 31.7 to the US Dollar??

That is the rate that credit cards use. For instance, even though this article says the rate is 34, if I charge something on my US credit card, it is converted at 31.7 (then, there is an additional 3% conversion charge). I believe the same happens if I withdraw money from my US account at an ATM here.

It's freaking killing me!

Currency traders outside Thailand (banks, cc companies, oanda, et al) are generally much more greedy than those in Thailand. Don't use your out of country credit card in Thailand if you can avoid it. You'll get the crappy offshore exchange rate, as well as a fee from the cc company for the conversion of your money at the crappy rate. And always direct foreign banks to send dollars or whatever to Thailand, and let the banks in muang tai do the conversion. The difference are often around two baht per dollar (for me).

Re: Decline of the dollar: articles abound on the internet actually promoting this as a good idea. The economics department of Yale University is lobbying for it. Rumor has it that it's a deliberate action on the part of the Bush administration, Yale being a university that decided to give this C student a degree.

I defy any non-fabulously wealthy American to find one thing this man has done that's been in their best interest...

Yes, I agree. I, being a Landlord have observed that Bush policies have given too many people loans to buy their own homes. Thus, my rental business has suffered. The good and marginally good renters have bought and moved into their own homes leaving me with vacancies. The loser tenants are now moving up on the rental quality unit. As the losers move into higher quality units and neighborhoods, they degrade both. Yes, Bush has given too many people a shot at the American dream of owning their own homes, but at great cost to many landlords, properties, and neighborhoods. Otis

Your post remains, so I guess I'll reply. Those of you disinclined to read about things Bush related, please pass this post by. To any moderators who may be inclined to auto-delete this post, I ask the courtesy that you read it all first.

First, an observation: As a landlord who sounds as if he has multiple properties, you sound as if you could be in the "fabulously wealthy" class to which I referred...

The dollar declines relative to virtually all other currencies (all that I know of anyway) as a result of the willful actions of the Fed (led by the Bush administration). That is, it's by design. A motivating factor is to increase the value of the yuan and break the forever lowest prices of Chinese goods in the USA. A perhaps desirable goal, and it appears to be having some effect in that regard. It may be effecting other currencies negatively, however (including the Thai Baht).

Your comments regarding housing make no sense to me. The extremely low interest rates were engineered by Greenspan, leading to crazy lending practices (no interest adjustable rate loans for example), and a run on housing (the "housing bubble") that drove up the cost of housing in the same way as the Danish "Tulip" craze (housing is just another commodity in which to invest, after all). The adjustable rate mortages are triggering to higher rates now, and foreclosures are increasing drastically. There are so many that they're no longer simply foreclosing and selling the houses. Instead, they resort to auctioning hundreds of houses at a time. This impacts the US economy negatively in that the ordinary sale of houses is down, big time. Existing-home sales are down 22% in May and mortgage applications down 18%. Florida home sales are down 34%, Arizona down 38%, and California down 37%.

The junk mortgages are bundled and sold to banks and Wall street, where they are resold as much as ten times over, with (hypothetical) value multiplied ten times over as well (most assetts on Wall Street now appear to be overvalued by at least one order of magnitude). Several large lenders have folded at this point, and others have contracted to a fraction of their original sizes.

A bit more than a week ago, the stock market dropped 185 points on learning that Bear Stearns (owner of a bunch of those overvalued junk mortgage packages) was trying to raise $3.2 billion to save two hedge funds. They were only able to come up with $1.6 billion, so were only able to save one of their funds.

So, I'll give you the benefit of the doubt with regard to Bush somehow or other allowing more people to buy their own homes. I mean, if you want to credit Bush with that, then OK. By the same token, then, Bush has boosted the foreclosure rate to astronomical highs, thereby causing several large mortgage companies to belly up, in turn causing massive shockwaves in the US stock market, causing ever more economists (as well as the International Monatary Fund, The Bank of International Settlements, and the United Nations) to warn of another possible "Great Depression." Mind you, the last "Great Depression" was pretty much worldwide, so those of you inclined to gloat over the value of the British Pound (yes I'm jealous) should pay attention as well.

The value of the dollar is also down simply because the current administration prints more dollars. Dollars have no gold backing, nor anything that backs up their value. The amount dollars are worth is completely arbitrary, subject to the whims of the Federal Reserve. (The number of available dollars contracted under Clinton.)

And all of that has an effect on not only the Thai baht, but all world currencies that have traditionally been pegged to the dollar. It is why Kuwait recently allowed their currency to float for the first time. Kuwait's currency rose, of course, while the dollar lost still more value.

It should also be a matter of extreme concern to US expats. The dollar has little room in which to rise, and a great deal of room in which to fall. Were I living in Thailand, I would move as much money as possible to one or more Thai banks. Indeed, though I currently live in the USA, I have kept as much money in Thai banks as possible (I have a life there as well as in the USA). US expats might also buy Euros, and/or British Pounds. Anything but dollars.

One can hope that Japan initiates a correction in Thailand, as previous posts suggest may somehow be possible. Personally, I worry...

My apologies again to those of you who are tired of hearing about the US economy. It's a large slug of the world's total economy, however. It would be prudent to keep what happens here in mind as you choose where to keep whatever wealth you may have.

Edited July 5, 2007 by RedQualia

[jumnien]

I decided to move to Thailand based on my experience of loving Thailand and Thai people. The fact that the baht was at 25/$ had little to do with it. Today as the dollar has strengthened to 34/$ I am just as happy to live in Thailand. I watch the rates, but I don't obsess on them. Will the baht ever recover to where it was when I moved here? Time will tell... A falling baht and the hordes of farang who chase cheap places to live regardless of whether they like them or not is not an ideal situation for the long term.