U.s. Dollar Vs. Thai Bhat

[JNASHDDS]

Does anyone know if any Agency or Authority is concerned enough to be working on the devaluation of the U.S. Dollar in Thailand? We have lost approx. 17% in the last 18 months, and there doesn't seem to be an end in sight.

Is there someone who we could contact about this? Is there anything that can be done to reverse this trend?

JNASHDDS 05/07/07

[siam-i-am]

Does anyone know if any Agency or Authority is concerned enough to be working on the devaluation of the U.S. Dollar in Thailand? We have lost approx. 17% in the last 18 months, and there doesn't seem to be an end in sight.

Is there someone who we could contact about this? Is there anything that can be done to reverse this trend?

JNASHDDS 05/07/07

Try G.W.Bush c/o whitehouse Washington USA While he's in charge I think its terminal

[eljeque]

Tonight Thursday

34.1 Onshore

30.65 offshore

To say that currencies "should" have one set exchange rate is the same as saying that a product in a store should have one price and be held to that price over time. The price is determined between the customers (buyers) and the owners (sellers) and if a government intervenes and tries to keep the price at one level, buyes and sellers will find ways to get around the government and make exchanges at prices different to the government's price.

If you are concerned that the baht will continue to strengthen, then buy the baht in large quanties now, and do not worry about it. You can also speak to your broker in your country concerning shorting the dollar or going long on the baht. Do not worry about what is happening; simply recognize it, and take the appropriate action.

I wish you the best of luck.

[britmaveric]

Think long term and I wager dollar be back in force.

[mellow1]

I believe its easier paying off the US National Debt when the dollar is kept artificially low.

I guess well both be waiting a while.

[sbk]

This is more appropriate to the business & economy forum, and if you have a look, may find it covered quite extensively there.

/// MOVED///

[sonicdragon]

I believe its easier paying off the US National Debt when the dollar is kept artificially low.

What gave you that idea ?

[LaoPo]

Think long term and I wager dollar be back in force.

Depends how old you are....

LaoPo

[britmaveric]

Suppose if you die in next 6months to year - better to cash it all in now!!

[backflip]

"Does anyone know if any Agency or Authority is concerned enough to be working on the devaluation of the U.S. Dollar in Thailand? We have lost approx. 17% in the last 18 months, and there doesn't seem to be an end in sight. Is there someone who we could contact about this? Is there anything that can be done to reverse this trend?"

A wonderfully naive posting that raises the question about the decline of the US educational system.

[seanwg]

my feeling is the US government wants its currency to weaken substantially more.

it

a) makes imports more expensive (ie all the made in china crap will become more expensive)

makes filling up your gas guzzler more expensive

c) makes the all the xyz credit cards financed by china worth les

d) related to makes oil more expensive stimulating guys and gals experimenting in garages to come up with an alternative...

e) makes american exports cheaper... everything from beer to bullets is cheaper for other countries to buy..

I heard/read that another thing affecting the baht is mainland chineese are moving money via thailand to dump into US $ because of currency buying restriction in mainland china? apparantly buying baht is ok but buying dollars is no good?

Edited July 7, 2007 by seanwg

[LaoPo]

my feeling is the US government wants its currency to weaken substantially more.

it

a) makes imports more expensive (ie all the made in china crap will become more expensive)

makes filling up your gas guzzler more expensive

c) makes the all the xyz credit cards financed by china worth les

d) related to makes oil more expensive stimulating guys and gals experimenting in garages to come up with an alternative...

e) makes american exports cheaper... everything from beer to bullets is cheaper for other countries to buy..

I heard/read that another thing affecting the baht is mainland chinese are moving money via thailand to dump into US $ because of currency buying restriction in mainland china? apparantly buying baht is ok but buying dollars is no good?

China has enormous reserves in US$ and especially also in US bonds. There's no need to transfer $'s via Thailand.

LaoPo

[waldpyk]

1.The debt of the USA is - practically speaking - unrepayable

2.The world over , national treasuries are slowly moving away from the $ ( change the basket )

but slowly , otherwise they would hurt themselves

3 The lifestyle and cars and wars of the USA are reluctandly financed by the lenders

4. The saving quote is one of the lowest , the indeptness one of the highest wordwide

5. Is this situation sustainable ? No way , but when this bubble will burst no one can say

6.Is China moving away from the dollar , yes but slowly and at the same time not wanting the yuan to appreciate

subtantially against the $

7.Do they buy Baht ? Maybe , not impossible and pay with $ , not yuan

Certainly they buy everything in the enery and natural resource sector the world over that's not nailed down

8. Anyway the value of the baht is ultimately mainly a product of two things

a. the yuan-dollar exchange rate ( the relative values)

b. the energy and especially oil price ( higher oil price leads to recession)

me , worried ?

[VegasVic]

1.The debt of the USA is - practically speaking - unrepayable

2.The world over , national treasuries are slowly moving away from the $ ( change the basket )

but slowly , otherwise they would hurt themselves

3 The lifestyle and cars and wars of the USA are reluctandly financed by the lenders

4. The saving quote is one of the lowest , the indeptness one of the highest wordwide

5. Is this situation sustainable ? No way , but when this bubble will burst no one can say

6.Is China moving away from the dollar , yes but slowly and at the same time not wanting the yuan to appreciate

subtantially against the $

7.Do they buy Baht ? Maybe , not impossible and pay with $ , not yuan

Certainly they buy everything in the enery and natural resource sector the world over that's not nailed down

8. Anyway the value of the baht is ultimately mainly a product of two things

a. the yuan-dollar exchange rate ( the relative values)

b. the energy and especially oil price ( higher oil price leads to recession)

me , worried ?

Thats quite a shopping list, but I have to admit that I either partially or wholeheartedly agree with every poiny you made except for perhaps #4. If I am not mistaken the U.S. does have the highest % of homeownership anywhere in the world and the real equity in realestate by U.S. homeowners is well into the trillions of dollars, also over the last 20 years 401K investment plans which have replaced pension and profit sharing plans in most U.S. companies and small busineses, and this is not figured in the U.S. savings rate either, so when I see the "low savings rate in the U.S." being bandied about it has the aura of a false argument! With that said many in the U.S. have been living beyond their means and private sector debt has been escalating at an alarming rate since the early 90's. Your point #1 is right on the mark, the thinking among those in power is that the budget will be balanced in the next couple of years and the next congress will likely pass a balanced budget ammendment, the nearly 6 trillion dollar debt will just be serviced going forward and not paid down(or at least not substantially) and as the U.S. and world economy grows the % of U.S. national debt to GNP will shrink every year. The problem with that scenario is that a recession in the U.S. will cause just the opposite to happen, and of course I left out 800lb gorilla in the room, the U.S. coming crisis with funding social security and medicare. Nearly all the worlds economies are tied together nowadays so as the old saying goes if the U.S. sneezes then Japan, China, India and Europe get a cold and smaller countries like Thailand could get the flu. I know I frequently see posts on this board like "the U.S. is going down for the count", "the dollar will soon be a worthless currency and the U.S. wild become a third world country overnight" ect ect., the problem with this short sightedness is that it is like cutting off your nose to spite your face. The demoractic party in the U.S. is influenced more by the left wing(nuts) than I have seen in my lifetime, and should they reatain the congress and win the White House I would expect a much different trade and foriegn policy out of the U.S. one that would be much more ptotectionist and isloationist, and cancel existing trade policies, raise tarriffs pull out of regional treaty organizations like SEATO and NATO and bring our troops home from Europe, Asia and elsewere around the globe. I can assure you that while many of you might despise the U.S. power in the world and how they employ it, the protectionisim and isolationisim that is proposed by left wing democrats and some far right wing republicans and libertarians (like Pat Buchanan) would be disasterous for Thailand and the rest of the world. The dollar will have some slight ups and downs but will likely stay in this trough area for a while longer and then begin to rise at a very slow pace against the baht and other world currencies, of course a meltdown in the chinese equity markets this fall would certainly hasten the dollars rise. There are no simple answers or solutions to this type of dilema, but free trade will alllow the dialouge to continue and and at the same time will allow many countries around the world (like Thailand) to afford a beter standard of living for their citizens.

[chinthee]

1.The debt of the USA is - practically speaking - unrepayable

2.The world over , national treasuries are slowly moving away from the $ ( change the basket )

but slowly , otherwise they would hurt themselves

3 The lifestyle and cars and wars of the USA are reluctandly financed by the lenders

4. The saving quote is one of the lowest , the indeptness one of the highest wordwide

5. Is this situation sustainable ? No way , but when this bubble will burst no one can say

6.Is China moving away from the dollar , yes but slowly and at the same time not wanting the yuan to appreciate

subtantially against the $

7.Do they buy Baht ? Maybe , not impossible and pay with $ , not yuan

Certainly they buy everything in the enery and natural resource sector the world over that's not nailed down

8. Anyway the value of the baht is ultimately mainly a product of two things

a. the yuan-dollar exchange rate ( the relative values)

b. the energy and especially oil price ( higher oil price leads to recession)

me , worried ?

Thats quite a shopping list, but I have to admit that I either partially or wholeheartedly agree with every poiny you made except for perhaps #4. If I am not mistaken the U.S. does have the highest % of homeownership anywhere in the world and the real equity in realestate by U.S. homeowners is well into the trillions of dollars, also over the last 20 years 401K investment plans which have replaced pension and profit sharing plans in most U.S. companies and small busineses, and this is not figured in the U.S. savings rate either, so when I see the "low savings rate in the U.S." being bandied about it has the aura of a false argument! With that said many in the U.S. have been living beyond their means and private sector debt has been escalating at an alarming rate since the early 90's. Your point #1 is right on the mark, the thinking among those in power is that the budget will be balanced in the next couple of years and the next congress will likely pass a balanced budget ammendment, the nearly 6 trillion dollar debt will just be serviced going forward and not paid down(or at least not substantially) and as the U.S. and world economy grows the % of U.S. national debt to GNP will shrink every year. The problem with that scenario is that a recession in the U.S. will cause just the opposite to happen, and of course I left out 800lb gorilla in the room, the U.S. coming crisis with funding social security and medicare. Nearly all the worlds economies are tied together nowadays so as the old saying goes if the U.S. sneezes then Japan, China, India and Europe get a cold and smaller countries like Thailand could get the flu. I know I frequently see posts on this board like "the U.S. is going down for the count", "the dollar will soon be a worthless currency and the U.S. wild become a third world country overnight" ect ect., the problem with this short sightedness is that it is like cutting off your nose to spite your face. The demoractic party in the U.S. is influenced more by the left wing(nuts) than I have seen in my lifetime, and should they reatain the congress and win the White House I would expect a much different trade and foriegn policy out of the U.S. one that would be much more ptotectionist and isloationist, and cancel existing trade policies, raise tarriffs pull out of regional treaty organizations like SEATO and NATO and bring our troops home from Europe, Asia and elsewere around the globe. I can assure you that while many of you might despise the U.S. power in the world and how they employ it, the protectionisim and isolationisim that is proposed by left wing democrats and some far right wing republicans and libertarians (like Pat Buchanan) would be disasterous for Thailand and the rest of the world. The dollar will have some slight ups and downs but will likely stay in this trough area for a while longer and then begin to rise at a very slow pace against the baht and other world currencies, of course a meltdown in the chinese equity markets this fall would certainly hasten the dollars rise. There are no simple answers or solutions to this type of dilema, but free trade will alllow the dialouge to continue and and at the same time will allow many countries around the world (like Thailand) to afford a beter standard of living for their citizens.

These are both good analyses, though I would argue that since the US has always had a budget deficit, it can continue to sustain one nothwithstanding one political party or another jumping on the balanced budget bandwagon. I guess Clinton has been the only modern president to have a surplus, and he is still looked upon favorably by Wall Street, which may trickle down to Hillary for the presidential run. If she wins, we will see another balanced budget move, pushed more by Bill than her.

Vegas, I don't agree with your general view that the democrats will take the US to an isolationist policy. The nuts in the party, perhaps someone like Edwards would, but Hillary Clinton is likely to win the democratic nomination, and is probably odds-on to be the next President. There is enough experience with Bill at her side to avoid stupid moves. The republicans are just confused. They can't seem to field an acceptable candidate to all factions in their party and will likely continue to blow it. Guiliani is probably strongest and would be a good free trader, but will lose to the Clinton machine. Romney is unelectable. The rest are forgettable.

If the "bubble" does burst, it will be worse than the flu for Thailand, more like acute pneumonia. And the knock-on effects for the rest of the world would be serious. It's laughable to see so much US-bashing by people resentful of their own country's de minimus status in the world, but anyone wishing to kill the goose that laid the golden egg for their own economy is just plain stupid.

I agree the worst problem facing the US economy now is funding social security and medicare. I don't see any solution.

Regarding free trade, and making policy adjustments to compensate for the rise of China and India, yes, continued free trade would be best for Thailand, provided the Thai currency gets under control. Thailand's bigger longer term worries in my view are that it needs to reassess and adjust its core competitive strengths and weaknesses relative to the meteoric rise of China, India, Vietnam to position itself for the next generation. The US has done this and shuttered inefficient uncompetitive industries and moved them offshore. Thailand better wake up to the rapidly changing reality, or will find itself flat-footed, regardless of how strong exports or the SET is now.

[VegasVic]

1.The debt of the USA is - practically speaking - unrepayable

2.The world over , national treasuries are slowly moving away from the $ ( change the basket )

but slowly , otherwise they would hurt themselves

3 The lifestyle and cars and wars of the USA are reluctandly financed by the lenders

4. The saving quote is one of the lowest , the indeptness one of the highest wordwide

5. Is this situation sustainable ? No way , but when this bubble will burst no one can say

6.Is China moving away from the dollar , yes but slowly and at the same time not wanting the yuan to appreciate

subtantially against the $

7.Do they buy Baht ? Maybe , not impossible and pay with $ , not yuan

Certainly they buy everything in the enery and natural resource sector the world over that's not nailed down

8. Anyway the value of the baht is ultimately mainly a product of two things

a. the yuan-dollar exchange rate ( the relative values)

b. the energy and especially oil price ( higher oil price leads to recession)

me , worried ?

Thats quite a shopping list, but I have to admit that I either partially or wholeheartedly agree with every poiny you made except for perhaps #4. If I am not mistaken the U.S. does have the highest % of homeownership anywhere in the world and the real equity in realestate by U.S. homeowners is well into the trillions of dollars, also over the last 20 years 401K investment plans which have replaced pension and profit sharing plans in most U.S. companies and small busineses, and this is not figured in the U.S. savings rate either, so when I see the "low savings rate in the U.S." being bandied about it has the aura of a false argument! With that said many in the U.S. have been living beyond their means and private sector debt has been escalating at an alarming rate since the early 90's. Your point #1 is right on the mark, the thinking among those in power is that the budget will be balanced in the next couple of years and the next congress will likely pass a balanced budget ammendment, the nearly 6 trillion dollar debt will just be serviced going forward and not paid down(or at least not substantially) and as the U.S. and world economy grows the % of U.S. national debt to GNP will shrink every year. The problem with that scenario is that a recession in the U.S. will cause just the opposite to happen, and of course I left out 800lb gorilla in the room, the U.S. coming crisis with funding social security and medicare. Nearly all the worlds economies are tied together nowadays so as the old saying goes if the U.S. sneezes then Japan, China, India and Europe get a cold and smaller countries like Thailand could get the flu. I know I frequently see posts on this board like "the U.S. is going down for the count", "the dollar will soon be a worthless currency and the U.S. wild become a third world country overnight" ect ect., the problem with this short sightedness is that it is like cutting off your nose to spite your face. The demoractic party in the U.S. is influenced more by the left wing(nuts) than I have seen in my lifetime, and should they reatain the congress and win the White House I would expect a much different trade and foriegn policy out of the U.S. one that would be much more ptotectionist and isloationist, and cancel existing trade policies, raise tarriffs pull out of regional treaty organizations like SEATO and NATO and bring our troops home from Europe, Asia and elsewere around the globe. I can assure you that while many of you might despise the U.S. power in the world and how they employ it, the protectionisim and isolationisim that is proposed by left wing democrats and some far right wing republicans and libertarians (like Pat Buchanan) would be disasterous for Thailand and the rest of the world. The dollar will have some slight ups and downs but will likely stay in this trough area for a while longer and then begin to rise at a very slow pace against the baht and other world currencies, of course a meltdown in the chinese equity markets this fall would certainly hasten the dollars rise. There are no simple answers or solutions to this type of dilema, but free trade will alllow the dialouge to continue and and at the same time will allow many countries around the world (like Thailand) to afford a beter standard of living for their citizens.

These are both good analyses, though I would argue that since the US has always had a budget deficit, it can continue to sustain one nothwithstanding one political party or another jumping on the balanced budget bandwagon. I guess Clinton has been the only modern president to have a surplus, and he is still looked upon favorably by Wall Street, which may trickle down to Hillary for the presidential run. If she wins, we will see another balanced budget move, pushed more by Bill than her.

Vegas, I don't agree with your general view that the democrats will take the US to an isolationist policy. The nuts in the party, perhaps someone like Edwards would, but Hillary Clinton is likely to win the democratic nomination, and is probably odds-on to be the next President. There is enough experience with Bill at her side to avoid stupid moves. The republicans are just confused. They can't seem to field an acceptable candidate to all factions in their party and will likely continue to blow it. Guiliani is probably strongest and would be a good free trader, but will lose to the Clinton machine. Romney is unelectable. The rest are forgettable.

If the "bubble" does burst, it will be worse than the flu for Thailand, more like acute pneumonia. And the knock-on effects for the rest of the world would be serious. It's laughable to see so much US-bashing by people resentful of their own country's de minimus status in the world, but anyone wishing to kill the goose that laid the golden egg for their own economy is just plain stupid.

I agree the worst problem facing the US economy now is funding social security and medicare. I don't see any solution.

Regarding free trade, and making policy adjustments to compensate for the rise of China and India, yes, continued free trade would be best for Thailand, provided the Thai currency gets under control. Thailand's bigger longer term worries in my view are that it needs to reassess and adjust its core competitive strengths and weaknesses relative to the meteoric rise of China, India, Vietnam to position itself for the next generation. The US has done this and shuttered inefficient uncompetitive industries and moved them offshore. Thailand better wake up to the rapidly changing reality, or will find itself flat-footed, regardless of how strong exports or the SET is now.

As stated on another thaivisa forum, the U.S. only accounts for about 16% of all Thai exports, however Thailand gets paid in the U.S. dollar for over 70% of its exports so it is certainly in the best interest of Thailand to see this speculative bubble in chinese and Asian equities and currencies begin to deflate and find some longer lasting equilibrium between the baht and the dollar, before things get out of hand and permanent damage is done to the Thai economy. While I know that many of you don't want to hear about anything to do with the upcoming U.S. elections the fact is that these elctions will be the one event that will have a direct impact on many of the issues dicussed on thaivisa including trade, currency valuation, and political stability in the world. I have to take exception to some of chinthees post, in that Mr. Clinton never really had an actual budget surpus, it was just creative accounting (kind of like Enron and Worldcom and a few others in that era), if you look at the last term of Mr. Clinton you will see that the U.S. national debt went up by nearly 500 billion dollars. Also I think that Mrs. Clinton has issued so many IOU's to the far left wing of her party that she were elcteted( perhaps a bit of wishful thinking on your part chinthee) she would be forced to sign into legislation many protectionist trade policies that even Mr. Clinton would disagree with. As for the limosuine liberals on Wall Street yes they and their associates in crime the hegde fund boys in Conneticut most definately have Mrs. Clinton in their back pocket (as they owned her husbund while he was president) , but all that means is that if elected Mrs. Clinton will veto any meaningful legislation to curb the excesses of the hedge fund industry.

[Carmine6]

If a single post gets big enough would it overflow the current page and crash the server?

[VegasVic]

If a single post gets big enough would it overflow the current page and crash the server?

Shhhhh!

[chinthee]

Hey Vegas, no wishful thinking by me. I don't want the iron madame elected. I can't stand her.

[PeaceBlondie]

If the country of Thailand, which amounted to 1% of the world's population, could trigger the collapse of Asian currencies in 1997, what would a 50% collapse of the US$ do to the world's economy? Rather than a pebble dropped in a pond, a sinking USA would be like a 500 pound stone dropped from 25,000 feet. The collapse of the Soviet empire around 1990 did only limited damage outside its own borders, even though Russian bonds defaulted, as I recall. Look at the historical collapse of the Nikei index and the Tokyo real estate market: the Japanese economy was robust enough to carry on and survive, regaining most of its levels except the most absurd part of its bubbles.

Thailand would be affected by a 50% collapse of the US$, but that collapse is extremely unlikely. One of the Clinton years had such a large surplus that I think it even covered the false accounting of Social Security funds. However, the comptroller general of the US govt. says all the numbers are grossly rigged, and the real deficits are far, far larger. Such as 50 trillion dollar national debt using proper accounting procedures.

I don't know, but I suspect Thailand is a very, very small player in world economics.

[VegasVic]

Hey Vegas, no wishful thinking by me. I don't want the iron madame elected. I can't stand her.

Thats good to hear and by the way Rudy might very well be on the winning ticket, but he will be the V.P. to Fred Thompson! Now to officially stay on topic I would like to add that it was a bit disconcerting to see the BOT recently throw in the towel as far as the baht is concerned, even though I realize that it is beyond their control they could certainly fight the good fight as it were instead of giving currnecy speculators the green light to bid up the baht, it will be intersting to see how the rest of the summer will play out but one thing is for certain the in country exchange rate will not be favoring the U.S. dollar.

[chinthee]

Hey Vegas, no wishful thinking by me. I don't want the iron madame elected. I can't stand her.

Thats good to hear and by the way Rudy might very well be on the winning ticket, but he will be the V.P. to Fred Thompson! Now to officially stay on topic I would like to add that it was a bit disconcerting to see the BOT recently throw in the towel as far as the baht is concerned, even though I realize that it is beyond their control they could certainly fight the good fight as it were instead of giving currnecy speculators the green light to bid up the baht, it will be intersting to see how the rest of the summer will play out but one thing is for certain the in country exchange rate will not be favoring the U.S. dollar.

I like Rudi. Thompson to me is a Reagan wanna-be. The BOT can't defend it, no choice, no power.

Edited July 8, 2007 by chinthee

[VegasVic]

If the country of Thailand, which amounted to 1% of the world's population, could trigger the collapse of Asian currencies in 1997, what would a 50% collapse of the US$ do to the world's economy? Rather than a pebble dropped in a pond, a sinking USA would be like a 500 pound stone dropped from 25,000 feet. The collapse of the Soviet empire around 1990 did only limited damage outside its own borders, even though Russian bonds defaulted, as I recall. Look at the historical collapse of the Nikei index and the Tokyo real estate market: the Japanese economy was robust enough to carry on and survive, regaining most of its levels except the most absurd part of its bubbles.

Thailand would be affected by a 50% collapse of the US$, but that collapse is extremely unlikely. One of the Clinton years had such a large surplus that I think it even covered the false accounting of Social Security funds. However, the comptroller general of the US govt. says all the numbers are grossly rigged, and the real deficits are far, far larger. Such as 50 trillion dollar national debt using proper accounting procedures.

I don't know, but I suspect Thailand is a very, very small player in world economics.

PeaceBlondie, You are correct on all fronts and indeed the shenanigans that go on in the U.S. congress and their creative accounting when it comes to the budget is sinful at best (hence the U.S. congress enjoys a 18% approval rating from the U.S. public, even lower than G.Bush), however the national debt is a fairly straightforward figure tracked by many entities outside of government. At this time the total U.S. national debt is approaching 8.9 trillion dollars however the U.S. government owns about 52% of that (mostly the S.S. trust fund) so the actual debt held outside of the government at this time is about 4.3 trillion and three years from now by the time the budget is balanced(?) it will be around 5 trillion dollars (sorry about the typo on my previous post of 6 trillion). It really doesn't matter what the actual number of the national debt is though (except for the annual interest being owed ) because the U.S. never intends on paying it back. Thailand while a small player in the world economic situation, find themselves currently in a wierd sort of symbiotic relationship with China, Japan. For instance if the chinese market were to have a major correction and the SET followed along with the baht, then some of the big players who got caught off guard with highly leveraged yen carry trades invested in those sectors could cause a yen carry trade crisis like in 1998, Thailand would be punished far more than other small nations in the region from the fallout because of a disproportionate foriegn investment (speculation) in their markets and currency. Hopefully there will be a gradual release of air from Shanghai and the SET and the yen carry trade crisis can be avoided, and the baht can gravitate back to a valuation that will encourage real long term investment in the country and its infrastructure by the Jappanese, Chinese,Europeans, and Americans.

[Carmine6]

Some stats to back up some of the very well made points above. Note that people don't tend to pay taxes when they don't have to, so folks doubting the strength of the US economy or unemployment stats should reconsider.

The deficit is narrowing, and with some real leadership it could turn back into a surplus. But unfortunately Clinton's surplus had nothing to do with any great cost cutting measures by that administration. So to think it's easy to just get back to that position isn't reasonable. It was the sharp increase in tax receipts from capital gains from the dot com bubble, and many of the high tech salaries. No shocker that the pricier jobs outsourced since then were tech jobs. Where I used to work, those in the technology consulting groups who were not laid off were given double digit pay decreases, but were allowed to stay.

Clinton slightly slowed, but did not stop the increase in government spending. Mainly he cut defense spending. Tax receipts now are actually far higher than ever, but the expeditures have more than matched pace. See graphs attached - average monthly figures so be careful about conclusions.

Contrary to popular opinion, the current deficit is not due to the "tax cuts for the rich" or the war in Iraq. It's that "Mandatory Spending" has grown far faster than inflation. This includes Medicare, Medicaid, Disability, Social Security, Etc. Excluding Social Security which still has a surplus, these program expeditures have grown 59% since 2000, averaging 7.8% annual growth. (With Social Security, 6.7%.) Even net of offsetting payroll tax receipts, they accounted for 33% of the government's expenditures in 2006. Interest on the debt is about 15%-16% of expenditures. Defense was 19.6% and Social Security was 20.4%. That's almost 90% of the expenditures and only defense in controllable. The others are on autopilot barring legislative changes.

Note that when I pulled out the defense budget increase - set it to 2000 levels which was Clinton's last budget and grew it at 3%, it does not balance the budget. The dot com burst and 9/11 had a very serious impact on the economy and tax receipts. The effect continued until the May 2003 tax rate cuts. Tax receipts increase rather than decrease after that so that 2006 tax receipts were 35% higher than 2003, and 18% higher than in even the dot com juiced 2000 receipts. Lots of economists (and politicians) were just flat out wrong.

I am worried that the Congress is doing too much to find a problem to fix, or a villian in China. But when it does, I think everyone will get the stronger dollar they want as money goes back home.

Data Source - a dept of the US Treasury

US_Receipts_and_Outlays.pdf

Receipts_vs_NASDAQ.pdf

[PeaceBlondie]

Thailand could be affected by the US economy, in many ways. If real estate prices fall, consumers may buy less foreign goods. If the annual deficits and the total national debt (which in reality are far higher, because of very creative accounting) cause international investors to stop buying new treasury bonds, the dollar will tumble. So said the US comptroller general to the London School of Economics: that if China merely decreased its appetite for new treasury bonds, the federal debt would be in big trouble.

I can afford a baht rate of 30 to the dollar, and in one more year I can work all I want to in Thailand without losing my Social Security pension (because I still won't earn 33,000 baht per month then). I doubt that rice farmers, rubber growers, or other export businesses that denominate their sales in dollars can afford rates below 30.

[qualtrough]

Reading some of the posts here one would think that the US under Bill Clinton suffered terribly, while the chimp has been doing a great job. Mind boggling!

[Carmine6]

Reading some of the posts here one would think that the US under Bill Clinton suffered terribly, while the chimp has been doing a great job. Mind boggling!

No, hasn't been the point as the economy was good under Clinton. The point is that the reverse isn't the case.

[PeaceBlondie]

A discussion about the US economy, especially in relation to Thailand, should not focus on whether the man in the White House is a New Englander from Texas or an Arky. Congress legislates, the Federal Reserve Board does its thing, Dr. Tarisa does her thing, etc., but the invisible hand of the market keeps doing its thing.

[sonicdragon]

A discussion about the US economy, especially in relation to Thailand, should not focus on whether the man in the White House is a New Englander from Texas or an Arky. Congress legislates, the Federal Reserve Board does its thing, Dr. Tarisa does her thing, etc., but the invisible hand of the market keeps doing its thing.

We can always hope for Ron Paul to be elected

[solo siam]

If the country of Thailand, which amounted to 1% of the world's population, could trigger the collapse of Asian currencies in 1997, what would a 50% collapse of the US$ do to the world's economy? Rather than a pebble dropped in a pond, a sinking USA would be like a 500 pound stone dropped from 25,000 feet. The collapse of the Soviet empire around 1990 did only limited damage outside its own borders, even though Russian bonds defaulted, as I recall. Look at the historical collapse of the Nikei index and the Tokyo real estate market: the Japanese economy was robust enough to carry on and survive, regaining most of its levels except the most absurd part of its bubbles.

Thailand would be affected by a 50% collapse of the US$, but that collapse is extremely unlikely. One of the Clinton years had such a large surplus that I think it even covered the false accounting of Social Security funds. However, the comptroller general of the US govt. says all the numbers are grossly rigged, and the real deficits are far, far larger. Such as 50 trillion dollar national debt using proper accounting procedures.

I don't know, but I suspect Thailand is a very, very small player in world economics.

It's already collapsed by 20%, The US currency - I can't feel any shockwaves. Personally I think the US Dollar was way too strong previously, a correction was due. 35 baht to teh dollar and 2 dollars to 1 pound sterling seems about right.