Where's The Us$ Heading To ?

[Jai Dee]

Thai currency strongest in 6 months

The Kasikorn Bank reports that the baht currency appreciates most in six months at 33.31-33.30 baht a USD due to the depreciation of the greenback.

Other factors contributing to the strongest baht include a decrease in investor confidence and a higher unemployment rate in the United States. Not only the baht, but other currencies in the region are also affected by the economic situation in the U.S.

The baht in the offshore markets is traded at 29.70 per USD while the Singaporean dollar is strongest in 10 years at 1.43 per USD. The Philippine peso appreciates at the highest point in eight years or 40.82 per USD.

Source: Thai National News Bureau Public Relations Department - 08 January 2008

[LaoPo]

Where's the US$ heading to ?

Some excerpts from the link below:

* Even after the dollar lost 34 percent since 2001, the biggest investors and most accurate forecasters say it will weaken further as home sales fall and the Federal Reserve cuts interest rates. The dollar plummeted to its lowest ever last week against the euro, Canadian dollar, Chinese yuan and the cheapest in 26 years against the British pound.

* ``We've told all of our clients that if you only had one idea, one investment, it would be to buy an investment in a non- dollar currency,'' said Gross, the chief investment officer of Pacific Investment Management Co. in Newport Beach, California, and manager of the world's biggest bond fund.

* BNP Paribas chief currency strategist Hans-Guenter Redeker, the most accurate foreign-exchange forecaster last quarter in a Bloomberg survey, said the dollar may drop to $1.50 per euro by year-end.

* The dollar will rise to $1.43 per euro this year and $1.35 by the end of 2008, according to the median estimate in the survey.

* Buffett, whom Forbes in April ranked as the world's third- richest person behind Bill Gates and Carlos Slim, told reporters in South Korea last month that he is bearish on the U.S. currency.

``We still are negative on the dollar relative to most major currencies, so we bought stocks in companies that earn their money in other currencies,'' Buffett said Oct. 25.

* `Moving to Asia'

Jim Rogers, a former partner of investor George Soros, said last month he's selling his house and all his possessions in the U.S. currency to buy China's yuan.

``The dollar is collapsing,'' Rogers said last week in an interview. ``I'm moving to Asia because moving to Asia now is like moving to New York in 1907 or London in 1807. It's the wave of the future.''

* The five-year, 67 percent drop against the Canadian dollar has made it cheaper for fans from Toronto to drive the 110 miles (177 kilometers) to Orchard Park, New York, to watch the Buffalo Bills play football.

* The dollar's drop also makes American goods cheaper abroad. U.S. exports were a record $138.2 billion in August, government data show. Net exports added 0.93 percentage point to U.S. gross domestic product last quarter, offsetting a 1.05 percentage point drag from housing, government data show.

* Wealthy clients at San Francisco-based Union Bank of California have doubled their deposits in foreign currencies to $60 million the past two months as a hedge against a decline, said Bradley Shairson, head of currency and derivatives at the bank.

* U.S. investors bought $198 billion in foreign securities this year through August, 72 percent more than in the same period last year, Treasury Department data show.

* That's the same strategy as sovereign wealth funds run by the largest exporters and oil producers, including China, Singapore and Qatar, said Stephen Jen, head of currency research at New York-based Morgan Stanley.

The funds may grow to $17.5 trillion by 2017 from $2.5 trillion now and shift more than $500 billion out of the dollar in the next three years in search of better returns, he said.

``We're all thinking about diversifying out of the dollar,'' said Jen, who is based in London. ``It's a very logical thing.''

From Bloomberg:

http://www.bloomberg.com/apps/news?pid=206...id=aUdDmoYyZhdY

WHO KNOWS ?

LaoPo

It's almost 4 months since the OP, and the:

Dollar Falls to Record Low of $1.50 per Euro on Rate Outlook

http://www.bloomberg.com/apps/news?pid=206...&refer=home

LaoPo

[Naam]

Thai Baht onshore cash US$ 50-100 = 31.44, transfers 32.10 (source Naam)

[PeaceBlondie]

March 1, ATM withdrawal, Bangkok Bank, 31.58:1 USD. Source, PB.

[maxcrc]

I am surprised to see such bearish forecasts for gold given the extremely poor fundamentals for currencies and the ongoing attempts for central banks to competitively devalue those currencies.

It is hard to believe that the strength in the gold price experienced over the last six months is merely an illusion....

It is not an illusion because it has happened, but it doesn t mean it will last for long.

Gold prices and $ dollar in the past 3 decades or so have always gone opposite ways.

In the long term I repeat my opinion that gold is not a good investment, in fact for real terms adjustments to inflation, the old peak of the price would be today well over $2000.

Let stocks and other short-term chances to make lots of money (or lose it !) quick apart,let s talk about long term investment: there is nothing comparable to real estates, even if in some cases in some countries there could be a crisis in the short term (like America now) in the long term you almost never lose (unless you decide to buy in Somalia or places like this...).

Gold just fluctuates like currencies do, keeping gold for years with the illusion to become reach it is just an illusion.

Of course it can be a good investment in the middle-term , if you bought it at $350 and sell at $950 it was great, but keep it longer it would experience the same ups and downs like other currencies.

[maxcrc]

Thai Baht onshore cash US$ 50-100 = 31.44, transfers 32.10 (source Naam)

i am curious may i ask you your nationality ?

How is life in Pattayagrad (soon it will be called the Little Moscow or Putingrad). or maybe Pattayakhstan... sounds good.

Edited March 1, 2008 by maxcrc

[maxcrc]

You may think I am fixated but I am convinced that part of today's american economic bad news and dollar's further downfall is related to presidential nomination for Democrats.

I try to explain why:

The fact that the Democrat nomination is still to unsolved and a clear economic/political program is still undecided , that s keeping investors on hold. It seems prices for housing in America are a real bargain right now, many people are ruined but there is still lots of money, the problem this money is still "frozen" "on hold", investors are waiting for the bottom to be reached and nobody wants to move first.

That is carrying a sharp slowdown of the economy of course.

The fact of not having a candidate (and a program) can be a factor to encourage investors to keep on hold.

This campaign for nomination for Democrats is becoming very worn and torn.

My opinion is when the firsts will start to move to invest money again, everybody will follow.

Right now It may be a much better investment to but a real estate -say- in Florida rather than in Thailand (well, depend where you live and what expectations you want for your investment).

I had a look to some prices of houses and it is unbeliavable, for the same place in Hua Hin you would need to pay twice or more.(and the "problem" of the land of course).

Another reason other investors (they ones who need credit) are on hold is they are waiting for the benchmark to be lowered. So, everybody is on hold, economy doesn t go , benchmark is being slashed and dollar goes down.

At the first spark, everything can change. When will it happen ? We don t know exactly but likely sometimes during this year,maybe during the course of the springtime.

Edited March 1, 2008 by maxcrc

[cclub75]

You may think I am fixated but I am convinced that part of today's american economic bad news and dollar's further downfall is related to presidential nomination for Democrats.

Yes, I think you're fixated.

Think about Japan... and you could foresee how long can last a cycle...

You say "a lot of money is waiting". But waiting for what exactly ? For the US and the americans to pay back their debt ? For the americans to become again solvent ?

We have a credit crunch, a solvency crisis, a real estate bubble deflating slowly but surely, and eventually a contamination effect toward the rest of "real economy"...

Those issues won't be solved, by magic, when the Democrat Party will have its candidate !

So I would rephrase : yes we are waiting the bottom. But we are going to wait for a very long time...

[BigSnake]

Down hill fast my friend.

[britmaveric]

Unfortunately Europe is in the same boat as the yanks. Let's not delude ourselves and think this is yanks problem alone because it certainly isnt.

[maxcrc]

You may think I am fixated but I am convinced that part of today's american economic bad news and dollar's further downfall is related to presidential nomination for Democrats.

Yes, I think you're fixated.

Think about Japan... and you could foresee how long can last a cycle...

You say "a lot of money is waiting". But waiting for what exactly ? For the US and the americans to pay back their debt ? For the americans to become again solvent ?

We have a credit crunch, a solvency crisis, a real estate bubble deflating slowly but surely, and eventually a contamination effect toward the rest of "real economy"...

Those issues won't be solved, by magic, when the Democrat Party will have its candidate !

So I would rephrase : yes we are waiting the bottom. But we are going to wait for a very long time...

the euro-dollars cycles have always been almost of exact 8 years for the past decades, always in electoral years (or few months later).

I speak facts, not just impressions:

Highest level of $ vs. euro was 8 years ago in 2000 electoral year after Democrat Govt. (strong dollar policy, Mr. Clinton , Hillary's husband).

Previous lowest level of $ vs. sythetic euro was in 1992 8 years before ,a another electoral year, after Republican Govt (weak dollar policy, the Bush 's father)

Previous highest level of $ vs. ECU was 7 year before in 1985 (few months after elections)

If all these for you are just dreams or fixations, ok, they have been all coincidences for decades... but facts are facts,for me a chain of coincidences makes an evidence.... 8 years ,always electoral years, think about it....

1985-1992-2000-2008

you may argue story doesn t repeat, well, we will see, the debate is interesting, surely it is not a good moment for America (in fact, it is very bad) but I can tell you Europe is not in much better shape, this year it will get worse and prices of properties (although it doesn t resound in the news like in the uSA) are falling already in many places, growth sucks, unemployement is high as always some countries (not all) also have current account deficits even worse than US or budget deficits, some of them like Italya has got twin deficits too...Europe is not in good shape at all and euro is highly overestimated. The bill for the euro will come to the table soon .....

Edited March 1, 2008 by maxcrc

[PCA]

You may think I am fixated but I am convinced that part of today's american economic bad news and dollar's further downfall is related to presidential nomination for Democrats.

Yes, I think you're fixated.

Think about Japan... and you could foresee how long can last a cycle...

You say "a lot of money is waiting". But waiting for what exactly ? For the US and the americans to pay back their debt ? For the americans to become again solvent ?

We have a credit crunch, a solvency crisis, a real estate bubble deflating slowly but surely, and eventually a contamination effect toward the rest of "real economy"...

Those issues won't be solved, by magic, when the Democrat Party will have its candidate !

So I would rephrase : yes we are waiting the bottom. But we are going to wait for a very long time...

the euro-dollars cycles have always been almost of exact 8 years for the past decades, always in electoral years (or few months later).

I speak facts, not just impressions:

Highest level of $ vs. euro was 8 years ago in 2000 electoral year after Democrat Govt. (strong dollar policy, Mr. Clinton , Hillary's husband).

Previous lowest level of $ vs. sythetic euro was in 1992 8 years before ,a another electoral year, after Republican Govt (weak dollar policy, the Bush 's father)

Previous highest level of $ vs. ECU was 7 year before in 1985 (few months after elections)

If all these for you are just dreams or fixations, ok, they have been all coincidences for decades... but facts are facts,for me a chain of coincidences makes an evidence.... 8 years ,always electoral years, think about it....

1985-1992-2000-2008

you may argue story doesn t repeat, well, we will see, the debate is interesting, surely it is not a good moment for America (in fact, it is very bad) but I can tell you Europe is not in much better shape, this year it will get worse and prices of properties (although it doesn t resound in the news like in the uSA) are falling already in many places, growth sucks, unemployement is high as always some countries (not all) also have current account deficits even worse than US or budget deficits, some of them like Italya has got twin deficits too...Europe is not in good shape at all and euro is highly overestimated. The bill for the euro will come to the table soon .....

I like cycles and agree that political issues can have price turning impacts on currencies. Unfortunately I couldnt get your 8 year theory confirmed after curiously looking at Euro, Pound, Swiss Franc and Yen. Nevertheless it will be interesting to watch how things develop as I fully agree that Europe is not in a better position than the US but even keep playing stupid with their fiscal policy not adusting interest rates (yet). I know that Stagflation is the worst economic scenario one could wish for in an economic circle as it can take very long to get out of it. Some say we are there.

[PCA]

You may think I am fixated but I am convinced that part of today's american economic bad news and dollar's further downfall is related to presidential nomination for Democrats.

Yes, I think you're fixated.

Think about Japan... and you could foresee how long can last a cycle...

You say "a lot of money is waiting". But waiting for what exactly ? For the US and the americans to pay back their debt ? For the americans to become again solvent ?

We have a credit crunch, a solvency crisis, a real estate bubble deflating slowly but surely, and eventually a contamination effect toward the rest of "real economy"...

Those issues won't be solved, by magic, when the Democrat Party will have its candidate !

So I would rephrase : yes we are waiting the bottom. But we are going to wait for a very long time...

the euro-dollars cycles have always been almost of exact 8 years for the past decades, always in electoral years (or few months later).

I speak facts, not just impressions:

Highest level of $ vs. euro was 8 years ago in 2000 electoral year after Democrat Govt. (strong dollar policy, Mr. Clinton , Hillary's husband).

Previous lowest level of $ vs. sythetic euro was in 1992 8 years before ,a another electoral year, after Republican Govt (weak dollar policy, the Bush 's father)

Previous highest level of $ vs. ECU was 7 year before in 1985 (few months after elections)

If all these for you are just dreams or fixations, ok, they have been all coincidences for decades... but facts are facts,for me a chain of coincidences makes an evidence.... 8 years ,always electoral years, think about it....

1985-1992-2000-2008

you may argue story doesn t repeat, well, we will see, the debate is interesting, surely it is not a good moment for America (in fact, it is very bad) but I can tell you Europe is not in much better shape, this year it will get worse and prices of properties (although it doesn t resound in the news like in the uSA) are falling already in many places, growth sucks, unemployement is high as always some countries (not all) also have current account deficits even worse than US or budget deficits, some of them like Italya has got twin deficits too...Europe is not in good shape at all and euro is highly overestimated. The bill for the euro will come to the table soon .....

I like cycles and agree that political issues can have price turning impacts on currencies. Unfortunately I couldnt get your 8 year theory confirmed after curiously looking at Euro, Pound, Swiss Franc and Yen. Nevertheless it will be interesting to watch how things develop as I fully agree that Europe is not in a better position than the US but even keep playing stupid with their fiscal policy not adusting interest rates (yet). I know that Stagflation is the worst economic scenario one could wish for in an economic circle as it can take very long to get out of it. Some say we are there.

[VegasVic]

You may think I am fixated but I am convinced that part of today's american economic bad news and dollar's further downfall is related to presidential nomination for Democrats.

Yes, I think you're fixated.

Think about Japan... and you could foresee how long can last a cycle...

You say "a lot of money is waiting". But waiting for what exactly ? For the US and the americans to pay back their debt ? For the americans to become again solvent ?

We have a credit crunch, a solvency crisis, a real estate bubble deflating slowly but surely, and eventually a contamination effect toward the rest of "real economy"...

Those issues won't be solved, by magic, when the Democrat Party will have its candidate !

So I would rephrase : yes we are waiting the bottom. But we are going to wait for a very long time...

the euro-dollars cycles have always been almost of exact 8 years for the past decades, always in electoral years (or few months later).

I speak facts, not just impressions:

Highest level of $ vs. euro was 8 years ago in 2000 electoral year after Democrat Govt. (strong dollar policy, Mr. Clinton , Hillary's husband).

Previous lowest level of $ vs. sythetic euro was in 1992 8 years before ,a another electoral year, after Republican Govt (weak dollar policy, the Bush 's father)

Previous highest level of $ vs. ECU was 7 year before in 1985 (few months after elections)

If all these for you are just dreams or fixations, ok, they have been all coincidences for decades... but facts are facts,for me a chain of coincidences makes an evidence.... 8 years ,always electoral years, think about it....

1985-1992-2000-2008

you may argue story doesn t repeat, well, we will see, the debate is interesting, surely it is not a good moment for America (in fact, it is very bad) but I can tell you Europe is not in much better shape, this year it will get worse and prices of properties (although it doesn t resound in the news like in the uSA) are falling already in many places, growth sucks, unemployement is high as always some countries (not all) also have current account deficits even worse than US or budget deficits, some of them like Italya has got twin deficits too...Europe is not in good shape at all and euro is highly overestimated. The bill for the euro will come to the table soon .....

Max, I have just finished reading many of you past posts and I have to say that it is refreshing to see someone posting here that has both the objectivity and insight that you have. I am not a forex trader and currencies are not my forte, but even I can see the severe overbought situation that is currently happening in the Euro and conversely the severe oversold situation in the dollar. Treasury Sec. Paulson and his predessesor Mr. Snow both had similiar public rhetoric about a strong dollar, but behind the scenes it was obvious that their intent was in the other direction in order to make U.S. exports more attractive. Just as a pendulum swings wildly to one side then back to the other(as you brillantly showed in your 8 year currency cycle), the dollar/Euro is at a tipping point and a reversal is immenent. The longer the E.U. central bankers hold off the eventual rate cuts, the more drastic the swing back will be. While I am aware that many major European banks got saddled with these CDO's and the impact has been severe over there, I was not aware of the delicate situation in the real estate sector in Europe until just last week when I talked to a friend of mine at Goldman Sachs who oversees many of Goldmans European operations, he personally thinks that 6 months from now Europe could potentially be facing a more severe real estate crisis than the U.S. is currently in. Given the reluctance of the central bankers over there to lower interst rates, an extremely overvalued Euro that has already put pressure on both exports and unemployment rates throughout Europe and a slowing worldwide economic engine, Europe is poised on the edge of a very dangerous precipice currently. Goldman has projected the Euro to reach $1.32 by the Q4 of this year, if that does occur then it might mitigate some of the problems that Europe will be facing soon. You also bring up an interesting point that the record level of cash on the sidelines currently may be in part due to the political uncertainty in the U.S., but as the year unfolds and the two tickets are set I think that people will see that there is a clear choice and given the dangerous times we live in, John McCain (who I just saw earlier today here in Sedona) will have a substantial advantage over an untested Barrack Obama, especially if McCain picks a running mate like Gov. Crist of Florida who is wildly popular in Florida and can deliver it for McCain in November. Both the U.S. stock market and the American people prefer a divided government and with the House and Senate in Democratic hands I think Mc Cain is a shoe in for President in November. Have a great weekend Max and keep those insightful posts coming

[LaoPo]

........................ I was not aware of the delicate situation in the real estate sector in Europe until just last week when I talked to a friend of mine at Goldman Sachs who oversees many of Goldmans European operations, he personally thinks that 6 months from now Europe could potentially be facing a more severe real estate crisis than the U.S. is currently in.

Sigh.....

I wonder VV, how many times you have been in Europe and how many countries you really know of, where they are, and what you know about their real estate markets..(YES markets).

Maybe you and your Goldman Sachs friend don't realize it but there is NO European Real Estate market....and it never existed as well.

Although there is the Euro as a currency in most countries, but not all, and a European Union as well as all kinds of other inter connected EU country-cooperations there are many very fragmented real estate markets in all of the various countries of mainland Europe and the UK.

Some countries, like certain parts in the UK and Spain* for instance, are having their own problems in certain (but not all) real estate markets but that is not a European problem; it's a local country problem.

What's even more important, is that EU countries (read: Banks) do NOT have a system where banks grant top mortgages to buyers who can't afford a house in the first place, which was done on such a large scale in the US and thus created the infamous Sub Prime Crisis.

* The real estate problem in Spain is a problem in itself. Spain has a long tradition that young people BUY a house and (almost) never rent. They always bought a house with a mortgage, based upon their income, with a low interest-% so that they were able to pay for their house. However, money became more expensive, faster than their salaries would rise, creating cash- and payment problems.

The main problem was/is that the vast majority of mortgages in Spain is a 1-year mortgage....with the interest fixed for 1 year but with rising interest percentages for the next year.

On top of that the average house price dropped, severely, (20% in 2007) leaving a market, full of people, living in houses they no longer can afford and NO buyers to buy them (out).

On top of all that, 'Spain' kept on building and they built more houses in 2006 and 2007 than France, Italy and Germany combined, mainly created by GREED of the real estate developers, not only building/speculating for their own Spanish clients but merely also for buyers from abroad (read: Northern Europe) but...who staid away, leaving Spain in a mess, which hasn't come to an end yet.

But coming back to your concerns about the expensive €uro and Europe....I'm sure most of Thaivisa members appreciate your concerns about the Old World but why don't you worry a little more about the messy situation in your own country ?

You are a master, talking about <deleted> in other parts of the world; I suggest you pay a little more attention to the problems within your own borders, like some 47 Million Americans without a health insurance (that's 15.6% of the total US population) and 2,319,258 Americans in jail or prison at the start of 2008; that's 1 to every 100 Adult Americans and a World record....costing a staggering $49 billion on corrections in 2007 up from less than $11 billion 20 years earlier..... just to name a few problems....

I sincerely hope your country delivers the world a TOP New Administration in 2009 and that we may see a better one than in the past 8 years.

Have a nice weekend.

LaoPo

Edited March 2, 2008 by LaoPo

[gjones]

Now if I remember correctly Taxin’s government raised the pension income level to qualify for leave to remain in Thailand on a retirement extension to 800,000 Thb in the bank or 65,000Thb a month income.

The reason, I seem to recall for raising the financial level was the strength of the Baht at 45Thb to the USD which the then Thai government thought should be at about 30Thb to the USD.

Correct me if I am wrong, but if I am right this “honest” democratically elected government might reduce the financial level to qualify for retirement extension back to the old level.

Edited March 2, 2008 by gjones

[tijnebijn]

Now if I remember correctly Taxin’s government raised the pension income level to qualify for leave to remain in Thailand on a retirement extension to 800,000 Thb in the bank or 65,000Thb a month income.

The reason, I seem to recall for raising the financial level was the strength of the Baht at 45Thb to the USD which the then Thai government thought should be at about 30Thb to the USD.

Correct me if I am wrong, but if I am right this “honest” democratically elected government might reduce the financial level to qualify for retirement extension back to the old level.

You are right . The same rhetoric came up in my mind also .

Although they could calculate and count some inflation in from the last couple of years , to top it up a bit .

I sincerely think they should bring the requirement back to 600k the year , would be fair enough !

How much was the requirement before the change ?

[Naam]

Highest level of $ vs. euro was 8 years ago in 2000 electoral year after Democrat Govt. (strong dollar policy, Mr. Clinton , Hillary's husband).

incorrect. highest level USD/EUR was thu jan 31st, 2002 @ 2.2762

[VegasVic]

I see that sonic and Nam are correct, lao feels the need to get the last word in even when he isn't involved in the discussion! Since you decided to open the can of worms up, I guess I'll let you have it with both barrels. As I'm sure you know by now BMW laid off 5600 workers in Germany last week (thats strange I heard that they were increasing their work force in the South Carolina plant ) because of the strong Euro. Wait now it gets better, a VW spokesperson told the press that they are looking into moving their production facilities overseas, I'll give you one guess what country they are looking at lao. Lets see now I do believe that VW is the largest carmaker in Europe (of course I could be wrong because as lao knows I have no idea what is going on in Europe ) and if they really relocated their production facilities out of Europe then what kind of impact would that have? I know you are probably thinking OK BMW lays off 5600 and WV threatens to leave Europe, but thats just the auto industry, oh but wait it gets better! Airbus Industries let it be known that for every .10 rise in the Euro vs. the dollar they lose over "one billion Euros", yep thats right, one billion right off the bottom line! I didn't have to look very far to find these facts they were all contained in a reltivly short article(by the AP I think) about how the strong Euro is choking Europe! Imagine what I could have found if I really dug a little? Lao, I know that you have stooped to taking quotes from old posts out of context recently, and totaly misrepresented forecast dates, but this business about a European real estate "market" is a new low even for you! I refered to the potential of a real estate crisis throughout Europe, nowhere in my post did I state or infer that the E.U. had a central real estate "market", as a matter of fact I only used the word "market" once in the entire post, in the final sentence when I referenced the "U.S. stock market". I know that things are getting pretty dicey over there in the chinese equity markets ( I warned you about that many times), and perhaps the situation in Europe is more dire than even I can imagine, but if you continue taking quotes out of context, misrepresenting things that were posted, and puting words in other peoples mouths, then the few left here who still have some degree of respect for you will quickley lose it. So in future posts do yourself a favor, just stick to the facts, what you have been doing lately really smacks of desperation, and its kind of sad to see someone who seems fairly bright stoop to this level. You have a good weekend as well!

[Naam]

like it or not Vic but i have to side with Lao as far as "european real estate" is concerned. your posting gave indeed the impression as if a homogenous market in Europe existed. this is definitely not the case as there are huge big differences such as bubbles in UK, Spain and Ireland and (since years) stagnation in Germany respectively moderate gains in line with inflation in France and Italy.

[highdiver]

putting aside the personal flaming there is a good discussion here.

if we get back to the basics then it is very simple.

the Euro is expensive ... to expensive and it is hurting many Euro countries.

the largest Forex player in the world by far is the FEds so they can easily move a curency up or down. the policy at the moment is to keep it down thus making the USD motre cheap. but why??

stegflation is a concern of policy makers. to fight it the main tools are reducing intrest rates(to encourage investment) and budget increase(to encourage consumption) however those steps lead to inflation and devaluation of the currency.

the dilemas facing decision makers are not trivial. if you solve one problem it will create another.

it seems that the American have decided that growth as induced by the above steps is more important then fiighting inflation.

the same concerns are now surfacing in europe and it will be a tough ride for the europeans as well.

[ray23]

Now if I remember correctly Taxin’s government raised the pension income level to qualify for leave to remain in Thailand on a retirement extension to 800,000 Thb in the bank or 65,000Thb a month income.

The reason, I seem to recall for raising the financial level was the strength of the Baht at 45Thb to the USD which the then Thai government thought should be at about 30Thb to the USD.

Correct me if I am wrong, but if I am right this “honest” democratically elected government might reduce the financial level to qualify for retirement extension back to the old level.

No I seriously doubt that, I believe we are traveling on a one way street

[LaoPo]

Where's the US$ heading to ?

Some excerpts from the link below:

* Even after the dollar lost 34 percent since 2001, the biggest investors and most accurate forecasters say it will weaken further as home sales fall and the Federal Reserve cuts interest rates. The dollar plummeted to its lowest ever last week against the euro, Canadian dollar, Chinese yuan and the cheapest in 26 years against the British pound.

* ``We've told all of our clients that if you only had one idea, one investment, it would be to buy an investment in a non- dollar currency,'' said Gross, the chief investment officer of Pacific Investment Management Co. in Newport Beach, California, and manager of the world's biggest bond fund.

* BNP Paribas chief currency strategist Hans-Guenter Redeker, the most accurate foreign-exchange forecaster last quarter in a Bloomberg survey, said the dollar may drop to $1.50 per euro by year-end.

* The dollar will rise to $1.43 per euro this year and $1.35 by the end of 2008, according to the median estimate in the survey.

* Buffett, whom Forbes in April ranked as the world's third- richest person behind Bill Gates and Carlos Slim, told reporters in South Korea last month that he is bearish on the U.S. currency.

``We still are negative on the dollar relative to most major currencies, so we bought stocks in companies that earn their money in other currencies,'' Buffett said Oct. 25.

* `Moving to Asia'

Jim Rogers, a former partner of investor George Soros, said last month he's selling his house and all his possessions in the U.S. currency to buy China's yuan.

``The dollar is collapsing,'' Rogers said last week in an interview. ``I'm moving to Asia because moving to Asia now is like moving to New York in 1907 or London in 1807. It's the wave of the future.''

* The five-year, 67 percent drop against the Canadian dollar has made it cheaper for fans from Toronto to drive the 110 miles (177 kilometers) to Orchard Park, New York, to watch the Buffalo Bills play football.

* The dollar's drop also makes American goods cheaper abroad. U.S. exports were a record $138.2 billion in August, government data show. Net exports added 0.93 percentage point to U.S. gross domestic product last quarter, offsetting a 1.05 percentage point drag from housing, government data show.

* Wealthy clients at San Francisco-based Union Bank of California have doubled their deposits in foreign currencies to $60 million the past two months as a hedge against a decline, said Bradley Shairson, head of currency and derivatives at the bank.

* U.S. investors bought $198 billion in foreign securities this year through August, 72 percent more than in the same period last year, Treasury Department data show.

* That's the same strategy as sovereign wealth funds run by the largest exporters and oil producers, including China, Singapore and Qatar, said Stephen Jen, head of currency research at New York-based Morgan Stanley.

The funds may grow to $17.5 trillion by 2017 from $2.5 trillion now and shift more than $500 billion out of the dollar in the next three years in search of better returns, he said.

``We're all thinking about diversifying out of the dollar,'' said Jen, who is based in London. ``It's a very logical thing.''

From Bloomberg:

http://www.bloomberg.com/apps/news?pid=206...id=aUdDmoYyZhdY

WHO KNOWS ?

LaoPo

"Where's The Us$ Heading To ?"

It's now almost 4 months since the first post.

It would be interesting to have your comments to the points, mentioned above, and if they were correct or not, or close.

Personally, I don't see many signs in the financial and economic world that the Dollar will rise substantially, versus the Euro in the coming 6-12 months or beyond that period.

It could be that an election in the US of a Democrat, in November, could bring some new power to the Dollar but if it will be substantial...? I doubt it. Normally a Republican would give a boost to the stock markets and thus the economy but this time it's a reverse. Even a Democrat couldn't do worse that Bush...

* What's your view on the Dollar versus the GBP, Japanese Yen and Chinese Yuan, to name the most important currencies ?

* Was Warren Buffett wrong when he said that he was bearish on the Dollar and buying into companies who're making profit in other currencies than the Dollar ?

* Is/was Jim Rogers (see above) wrong when he says/said he's moving to Asia and into the Yuan instead the Dollar ?

A weak Dollar and a strong Euro is bad for the world but I think that the era of the post WWII Dollar, when it was Gold-connected, is gone and won't return on the same scale. The influence of Asia will become larger and larger and there is nobody who can do anything about it.

Asia has more than 60% of the world population and is growing and growing....fast. The centre points of the world will no longer be Washington, London, Brussels, Frankfurt or Zurich.....

The centre points will be in Asia and it will be Asia to determine the power and strenght of the Dollar, not the West (USA, Europe, Australia/NZ)

The centre points, like it or not, will be Moscow, Beijing, Tokyo, New Dehli, some Oil-rich countries and probably Brasilia/Brazil (by than more than 200 Million people).

I'm talking about a period of 20-50 years from now.

If you can't win...join them.

LaoPo

[Naam]

the largest Forex player in the world by far is the FEds so they can easily move a curency up or down. the policy at the moment is to keep it down thus making the USD motre cheap. but why??

in my opinion that is not the case Highdiver. the FED (once in a while and long time ago) played the market in concerted action with the Bank of Japan and the Bundesbank but the results were always only short lived. there are of course ways the FED can influence exchange rates up to a certain extent. these are short term interest rates and switching on the turbocharger of the dollar printing presses. Helicopter-Bernie mentioned that option when he came into power. but he will stop once inflation becomes rampant and unbearable for the average U.S. citizen. he might not be a Paul Volcker who did (in my view) the right thing in the 80s but extreme inflation will cause political pressure. Bernanke is not as independent as the chaps sitting in the European Central Bank who can extend the middle finger towards Sarkozy, Merkel or whoever badmouthes them.

as far as the future of the dollar is concerned one can clearly see contravening statements. the "anals" from multinational financial institutions still insist on a dollar strengthening -albeit with more caveats than before-, the financial giants like Buffet and Rogers see it going down much more.

recently i was personally too much influenced by the "anals" which i read on a daily basis and stopped selling USD vs. EUR forward (which i was doing since years NOT to speculate but to to hedge my HY dollar investment) when the USD/EUR reached 1.4350. that was quite obviously a mistake especially as EUR denominated high yield bonds were hammered much more than others. in other words the right thing to do would have been to get out of dollars completely, park half of the proceeds in cash and invest the other half in EUR denominated HY. but in hindsight we are all wiser

[cclub75]

On the long term, I share your views (Asia will be the place, etc.).

However, I think you "jumped" one step, which is the recession... of the asian economies. And a crash of their stock markets.

They can't escape the global crisis. The idea that Asia would be -at last- immune, the famous "decoupling theory" is empty.

-The dollar will crash. What will do China with it's 1.3 trillion USD reserves ? Start a fire to make a barbecue ?

-Asia, for the moment, is only one word : exports.

-Political ? Nil. Right now, I don't believe they can sustain growth with such inane political and social systems : the list of "systems" is endless in Asia : feudal monarchies from another century, centralized government "communocapitalists", CEO style (Singapore), African style (Philippines), murderous (Burma), African + muslim style (probably the worst combination) with Indonesia, middle east style (Malaysia... very happy to spend the money of oil...).

Only one common idea, one common goal : corruption.

We must repeat that this is not sustainable. It's good to decimate the western industry, and turn the export engine red hot, to make a few asian people (relative to the whole population) tremendously rich, but that's all.

It's impossible to create ideas, move forward, progress, in such shitty and awful political and social environment.

To take the lead, Asia will need to make its own revolution. Real ones. And particularly in their minds (the most difficult to achieve).

Western countries did it in the past. And it was often painful.

Asia will have to follow.

Edited March 2, 2008 by cclub75

[sonicdragon]

The Fed is in a very awkward position. Unlike most other central banks, it has a dual mandate - the Humphrey-Hawkins Act requires it to pursue full employment (read:promote economic growth), while the Federal Reserve Act requires it to pursue price stability (read:to fight inflation), yet it has only one policy instrument with which to do so. It is a well understood concept in economics that sustained "maximum potential" economic growth over the long run is best achieved through promoting an economic environment of low, stable, inflation. Therefore, on the face of it there is no problem with the dual mandates - they are complementary. However, significant problems can appear in the short run when there are shocks to the system- the dual mandates can become antagonistic and choice must be made of one over the other. Unfortunately, in the case of a massive collapsing credit bubble, there is not a great deal that the Fed can do anyway. The seeds were sown a long time ago.

There is strong movement within the US academic and professsional economics fraternity, of which Bernanke is a proponent, to move to a regime of "inflation targeting" and thus be aligned with most other central banks. However there is very strong political opposition to such a move.

[LaoPo]

On the long term, I share your views (Asia will be the place, etc.).

However, I think you "jumped" one step, which is the recession... of the asian economies. And a crash of their stock markets.

They can't escape the global crisis. The idea that Asia would be -at last- immune, the famous "decoupling theory" is empty.

-The dollar will crash. What will do China with it's 1.3 trillion USD reserves ? Start a fire to make a barbecue ?

-Asia, for the moment, is only one word : exports.

-Political ? Nil. Right now, I don't believe they can sustain growth with such inane political and social systems : the list of "systems" is endless in Asia : feudal monarchies from another century, centralized government "communocapitalists", CEO style (Singapore), African style (Philippines), murderous (Burma), African + muslim style (probably the worst combination) with Indonesia, middle east style (Malaysia... very happy to spend the money of oil...).

Only one common idea, one common goal : corruption.

We must repeat that this is not sustainable. It's good to decimate the western industry, and turn the export engine red hot, to make a few asian people (relative to the whole population) tremendously rich, but that's all.

It's impossible to create ideas, move forward, progress, in such shitty and awful political and social environment.

To take the lead, Asia will need to make its own revolution. Real ones. And particularly in their minds (the most difficult to achieve).

Western countries did it in the past. And it was often painful.

Asia will have to follow.

Interesting post !

* I didn't forget about a/the recession and that Asian and/or global stock markets will suffer, big time. It's merely a step in history and markets will recover, sooner or later.

Asia is certainly not able to escape a global downturn. The downturn/recession/depression (God forbid the last) will however not start in Asia but in the west with the US as #1 and accelerator.........wether some posters like it or not. In my opinion it started already.

* It's not about -just- China anymore, with it's staggering Dollar reserves; it's a world problem. Quite some time ago I posted that the man-in-the-street in China will be able to survive a crash 'easier' and 'cheaper' than his western counterparts in Europe, USA, Australia/NZ.

Why ? Because the west-man is already completely addicted to his car/house/job/money etc. on a large scale. The China/Far East-man (for 95%) is still traveling by bike, bus or his own legs; his house (costs) is still a lot cheaper and his food is 10-20 times (if not more) cheaper than western daily food-costs. He didn't forget yet how it is/was to be hungry, suffer and will adapt a lot faster than his western counterpart.

* Feudal/political and social systems of the 'East'; gap between rich and poor.

You are right, it is still a much larger problem than the democratic system(s) in the west. However, it is not necessarily a major problem for growth and 'happiness' in the East.

We shouldn't forget that the Easterner is used to this system; he/she doesn't know any better (yet).

We, as westerners, are always impatient and want to change the Eastern system overnight. We want to tell the East-man that OUR system is far better than theirs....hmmm is it ?

Sure, the East can (and will) learn a lot about our Democratic system and will adapt to that, over time. But it will take time, a long time; another 50 years or so, to have the same democratic systems as we have.

But when I see with my own eyes (in the past 30 years) the enormous changes in (for instance) Thailand and China, the changes are ENORMOUS and POSITIVE.

Not always for the better, like noise, pollution, aggression, greed and disappearing kindness of the people, but 100's of millions of people have a LOT BETTER LIFE than they had 20-30 years ago.

A life WE already had and took for granted since the day we were born....

Don't forget: a few BILLION people in Asia are -still- not able to travel-on-holiday and write on a computer like we do NOW.....

LaoPo

[gjones]

Now if I remember correctly Taxin’s government raised the pension income level to qualify for leave to remain in Thailand on a retirement extension to 800,000 Thb in the bank or 65,000Thb a month income.

The reason, I seem to recall for raising the financial level was the strength of the Baht at 45Thb to the USD which the then Thai government thought should be at about 30Thb to the USD.

Correct me if I am wrong, but if I am right this “honest” democratically elected government might reduce the financial level to qualify for retirement extension back to the old level.

No I seriously doubt that, I believe we are traveling on a one way street

I think we all know that

[maxcrc]

Highest level of $ vs. euro was 8 years ago in 2000 electoral year after Democrat Govt. (strong dollar policy, Mr. Clinton , Hillary's husband).

incorrect. highest level USD/EUR was thu jan 31st, 2002 @ 2.2762

I dont understand. Why everywhere it is given the following

"The minimum value of the euro-dollar exchange rate was 0.825 in October 2000.".

What rate was on jan 31st exactly ?

Maybe there is a difference between daily rate (at the end of teh day) and the max, peak during the section.

Anyway, we can say that dollar fast galopping stops on October 2000, than some ups and downs until 2002 occurred before $ started to fell sharply at the end of that year (and I did well to sell dollars in July 2002).

[LaoPo]

Highest level of $ vs. euro was 8 years ago in 2000 electoral year after Democrat Govt. (strong dollar policy, Mr. Clinton , Hillary's husband).

incorrect. highest level USD/EUR was thu jan 31st, 2002 @ 2.2762

I dont understand. Why everywhere it is given the following

"The minimum value of the euro-dollar exchange rate was 0.825 in October 2000.".

What rate was on jan 31st exactly ?

Maybe there is a difference between daily rate (at the end of teh day) and the max, peak during the section.

Anyway, we can say that dollar fast galopping stops on October 2000, than some ups and downs until 2002 occurred before $ started to fell sharply at the end of that year (and I did well to sell dollars in July 2002).

2000-01-31 January 31, Monday 0.975705 USD

http://www.x-rates.com/cgi-bin/hlookup.cgi

LaoPo