Baht Hits New 10-year High Against Dollar

[scratt]

The true Baht to $$ value is actually 29 point something...

The 33 rate is totally made up by the BOT to bring money into the country with an attractive exchange rate, and sting you on the way out by raking it all back, and taxing people who make money here by an extra 10% if they ever try to repatriate.

[lapamita]

THE Thaibaht was for a long time undervalued compae to the USD in purchasingpower.

The problem is not a strong THB, the problem is the weak USD due to imbalances,bankingproblems and depts and at the same time over 30 years a falling industrialproduktion in the US. ( from 70% to 20% from 70s to the early 2000) and today the BIP is most time services in the banking.

and there is the problem a ticking bomb tick,,,,tick,,,,tick....BUM !!! only JPM have 80 TRILLION USD outstanding.

THE Philippine peso goes from 56 to 40 within 1 year +30%,, the THB is against it very weak.

even other currencies like Singapore $ strenght from 1,55 to the usd to 1,43 or MYR,and and and.,,,

THE OFFSHORE PRICING OF THE THB IS NOT INTRESTING and the ONSHORE price of 33,20 , i see it further increasing to about 30-31,00 within 2008.

when the DERIVATE BOMB in the USA makes BUM !!! its time to inest in the USD,,,, but until now,, its only ticking....................

Thaiexportscould be more easy ,if thaicompanys looking for COSTCONTROL, SUBSTAINABILITY AND UPGRADING PLANTS AND QUALITY and looking for other markets than china and US to diversify.

[Seneque]

A friend of mine told me there is not a single thai playing on the golf courses of Chiangmai anymore ... and THEY tell you the economy is strong and kicking ...

Not all Thai exporters do have a strong import content in their product... (these are still doing well (car assembly)) but products manufactured here with a Thai base are in trouble (see textile, see food,....)

The Thai debt has never been repaid (contrarily to what THEY tell you), The personal debt has never been as high as it is now (subprimes have been a long lasting way of life here)... the currency is obviously manipulated and all this will have a cost. Wait and see. Thailand (and believe me I wish this country well) benefits from the location (south-east Asia) but THEY are doing nothing to improve the state of things ... they are politically and financially bankrupt. (a little USA)

For those talking about the Phillipines, the Peso and the Baht were at the same level after the devaluation ... look at the difference now (41 to 33 to the USD... there is some competitive margin there)

Seize the day !

[lapamita]

at the devaluation in 1998??

yes

but than you have to figur in that the CPI of teh philippines is double in minimum than thailand.

as well bankintrestrates ( until end of2006 14% for 5yr and 10% for shortterm,now average 5-7%)

so when you figure this facts in THE PESO IS EVEN MUCH MORE STRONGER !!!!

than like i compare only 1 year.

THE Peso is at this time,, overvalued compare to the THB,and fairly valued against the USD.

sorry, but cant follow your econommic view about thailand and the loanpayback....international loans fom the IMF was already paied in 2005,,and USD loans was converted to local loans , the foreign depts are extrmly low compare to local depts what are very high.

[PeaceBlondie]

Is this fuzzy thinking? Have I got something wrong? Does every cloud have a silver lining? Is the cup 1/2 full?

Actually... half full after about 9 years...

Expect the purchasing power of your us $ ss payments and pension to fall by 10-20% per year for the next 2-3 years. good luck.

Exactly... here is a very recent graphical form... showing what your gov't doesn't want you to understand...

... as they inflate away your (soon to be worthless) fiat junk.

gregy, I'll grant you that the official govt. rate of inflation is minimized, but I doubt it's that much. The COLA for SS was 2.3%, and inflation was more like 5%. However, I've found in the past that those who claim inflation has been understated far more than that for decades, are talking shit. If you could buy a Ford Mustang for $900 in 1965, or buy a beachfront 3 bedroom house in Miami for $25,000 in 1975, then inflation has been 10% or 15% since those years. But not really, not even 10%, or else a 1.55 ounce Hershey bar would now cost $11 in the USA.

[fishhooks]

So who has got a REAL answer in between all of the BLURB!?

[distortedlink]

The rise & fall of the exchange and interest rates is always going to be inevitable.

As I have said many times on the forums, those who are considering living long term in Thailand should have a minimum of at least 3 times the amount of visa stake funds required by Thai Immigration in order to carry them through when the exchange rate falls and we get less bahts for our home country currencies.

This is the same scenario as taking out a mortgage/bank loan accessing paying back interest on the present rates without taking into consideration that exchange & interest rates can fluctuate.

For those who are living or considering living in Thailand on exact money needed for the present without preparing themselves for their financial well being in the long-term future, should re-assess and think again.

YOU KNOW IT MAKES SENSE

Could this be the beginning of another worldwide recession?

Edited January 15, 2008 by distortedlink

[bangkokbanks]

That s true. But there are MANY thai exporters who still export in US$.

Actually, in some sectors most of them still quote in $ and for them it is a very big problem.

Well, my self I am in the same situation because I have more customers in the Americas than in Europe.

So, if you keep the prices your profit will go almost to nothing.

If you rise the price accordingly, your customers will need new pricelists every month or so and they will not be happy (some of them understand other don t want to understand).

If you change your pricelist in euros your american customers will ask for a conversion and than say"wow ! thats much more than last time." But you can say "Now ,it is the same price (in euros or bahts) as you can see... Exchange rate has changed".

It is not easy, but it is not just a problem of the Baht ,it is a problem of a weak dollar worldwide.

Check the exchange rate $ with philippines peso (and this is not any asian tiger !!) from 57 to about 41 now.

Brazilan real ? From almost 4 to 1.8 !! Chilean peso ? From over 750 to 495 !

South African rand ? even worse.

UK pound is already declining , Canadian dollar last fall highest peak will not probably been overtaken, but euro has still some weeks or few months to possibly rise and than will start to go down.

But asian currencies may still carry the weight of a further appreciation driven by Chinese RNB appreciation.

RNB (yuan) appreciation is under way and will follow I think until the Olympic Games, inflation in China is raising dangerously and yuan needs to strenghten to avoid a dangerous double digit inflation.

I hope after Songkran thai baht will start to slow too.

US $ will soon recover against the euro (slowly anyway)but still not now...if benchmark will be cut there is still room for a depreciation.

US $ policy for me is wrong because it is true that US $ exports are more competetive but think about the cost of IMPORTS (including OIL) ...if you import more than what you export, the cheaper the currencies and huger and huger the deficit...this is mathematics...

and moreover higher oil prices fuel inflation...and slow economy + risk of inflation is a real BAD thing because if you cut the rate inflation will go even higher but if you don t do that a recession is just outside the doors.

May I say this US administration really suck ?? With Clinton USA has at the same time: strong dollar, incredible budget SURPLUS, moderate cuurent account deficit (under control) , big economic growth,

low unemployment ....

now they have been using the opposite receipt for years with disastrous results and they still follow that way.

Sir,

Thank you for explaination. First I want to say after reading this complete thread on the topic; I do not understand why others have to be impolite. Anynimity I guess brings out the rudness. I must agree with much of what you say above. The complexities of economics have for me always been subjective and confusing. When you mix politcial economics into the thinking it becomes very hard to grasp. I ask your opinion based on what you state above: If you had $50,000 dollars sitting in an account in America and you lived here and needed to transfer X amount per month to subliment your income - would you sir, go ahead and transfer the whole sum now? or instead would you consider a CD (certificate of deposit) short term 5 months at a time at the rate of 4.5% on that money and keep the money in the States instead?

There are several scenarios playing out, please comment. The baht is strong because the dollar is weak. It is unlikely that we will see the baht back in the 40s again, am I right? But it may with a strengthening dollar remain in the 30s to mid 30s, is that assumption a safe bet?

After the elections in America, we could see the dollar begin to rise again. Economist there think we may be escaping (barely) a ressession and that by the end of 08 we may see the economy begin to improve.

Playing into that, even Alan Greenspan interviewed recently made the comment that the bubble with burst in China but he did not know when, he aslo stated he did not know why it did not already burst. That said, he mentioned, when it (China's) does burst we will then see how strong and resilent their economy is. In his opinion we do not know what will happen there.

Further more, upon interviewing my 89 year old Grandfather about the current situation. Someone that still works everyday and owns a lot of businesses - told me. I have seen this kind of situation over and over in my life, his advice - hold on to what you have it will come around again. The world markets will also come down. He seemed not to have worry or much concern unless you happen to be in terrible debt otherwise hold on. But I reminded him that in Asia things are different than they were, and that the economy here is strong and less dependant on the US. He seemed to think I was too eager to react and told me to be patient, that now is not the time to buy over here or to invest - just wait was the comment.

In your opinion, is the old boy right? I would really appreciate your comments and value your opinion.

Thanks

[jbowman1993]

I think enjoy not having any money, so I don't have all of these concerns that you guys have. lol Any money we have between my wife and I, we buy land with it. Its the one thing that they are not making any more of...

[Naam]

and there is the problem a ticking bomb tick,,,,tick,,,,tick....BUM !!! only JPM have 80 TRILLION USD outstanding.

this substance... do you smoke it, chew it, swallow it or do you inject it? and how much is it per serving? a godzillion?

[tracer5050]

Well today at Ratchada at bangkok bank the rate was 29.8 to the dollar. I am glad the last time i put money here I put enouth for a while . It seems to keep going south for the US dollar.

[Naam]

Well today at Ratchada at bangkok bank the rate was 29.8 to the dollar. I am glad the last time i put money here I put enouth for a while . It seems to keep going south for the US dollar.

my wife always says "boozing destroys the gray cells".

[george]

Update:

Baht likely to strengthen further in 1st half of 2008: KRC

BANGKOK: -- The Thai baht is likely to further strengthen to touch 33 and 32.50 to the US dollar in the first half of this year and gradually weaken in the second half if the US economy recovers and the local political direction is clearer, according to Kasikorn Research Center (KRC).

The leading think tank reported the baht value returned to draw public attention early this year since it continued to appreciate and reach a 10-year high at 33.12 to the dollar on January 14.

The baht had strengthened in the same direction with other currencies amid the weakening of the US dollar upon concerns over the economic slowdown and the expected interest rate cut by the Federal Reserve to the baht is likely to further strengthen in the first half of this year due to the weakening of the greenback, heavy selling of the dollar by exporters, and appreciation of other currencies in the region.

Should the baht continue to gain its strength from early this year, it believed, the currency would appreciate to touch 33 and 32.50 to the dollar in the first half of the year.

However, KRC said the baht might begin to weaken in the second half of the year if the US economy recovered, which could make the dollar bounce back.

At the same time, the political situation and economic stimulus package, expected to become clear in the second half of the year, might help restore private-sector confidence. It could help boost the stability of the baht.

However, what should be monitored most closely is the new government's position towards the 30 per cent reserve requirement issued by the Bank of Thailand to help curb the volatility of the baht.

KRC said the government's decision on the matter would have an impact on the international fund flow and the currency exchange rate.

--TNA 2008-01-15

[cclub75]

Well today at Ratchada at bangkok bank the rate was 29.8 to the dollar. I am glad the last time i put money here I put enouth for a while . It seems to keep going south for the US dollar.

Very unlikely... I believe you are talking about the off shore rate. But Bangkok Bank uses on shore rates.

This morning : the bank sells at 33,23 and buys at 33,03...

http://www.bangkokbank.com/Bangkok+Bank/Pe...tes/default.htm

Unless, they decided to display the rates that we will have.... in a few months from now.

Edited January 15, 2008 by cclub75

[cclub75]

After the elections in America, we could see the dollar begin to rise again.

I apologize to focus only on one sentence of your long message... But it's rather striking.

I can't understand how people can buy this kind of inference : elections = everything will be better...

In Thailand, they tried the same trick... with the results that we know...

So, okay elections in november 2008... fair enough. And what ?

Are elections going to reduce the US debt ? The debt of households ? Slowdown the tsunami of foreclosures ? Increase by magic the price of real estate accross all the USA ? Give a dope fix to all americans so they feel super extra happy and will en masse buy more and more ? Increase all wages ?

I'm sorry : but it makes absolutly no sense.

Even if I agree that politics and economy are closely linked... here we are talking about large economic cycles... for which politics, and furthermore just elections can't have (at that point) a lot of influence...

It's check bill time. November 2008 can't stop the process.

To end this very optimistic message, I just want to quote a sentence of Bloomberg this morning, that shows... that the times are indeed very special.

"Citigroup Inc. posted the biggest loss in the U.S. bank's 196-year history as surging defaults on home loans forced it to write down the value of subprime-mortgage investments by $18 billion." (source)

But again, we should remember the official motto : "everything is fine". Right ?

Edited January 15, 2008 by cclub75

[cclub75]

Sales at U.S. retailers unexpectedly fell in December, capping the weakest year since 2002.

Sales dropped 0.4 percent, the first decline since June, following a revised 1 percent gain in November, the Commerce Department said today in Washington. Purchases excluding automobiles also decreased 0.4 percent.

This news is a perfect ticket for... a cut by the FED end of january. I mean we knew it already... it's just another confirmation.

Miss Tarisa and the BOT are going to have several other sleepless nights. Poor Tarisa.

[lopburi3]

Is this fuzzy thinking? Have I got something wrong? Does every cloud have a silver lining? Is the cup 1/2 full?

Actually... half full after about 9 years...

Expect the purchasing power of your us $ ss payments and pension to fall by 10-20% per year for the next 2-3 years. good luck.

Exactly... here is a very recent graphical form... showing what your gov't doesn't want you to understand...

... as they inflate away your (soon to be worthless) fiat junk.

gregy, I'll grant you that the official govt. rate of inflation is minimized, but I doubt it's that much. The COLA for SS was 2.3%, and inflation was more like 5%. However, I've found in the past that those who claim inflation has been understated far more than that for decades, are talking shit. If you could buy a Ford Mustang for $900 in 1965, or buy a beachfront 3 bedroom house in Miami for $25,000 in 1975, then inflation has been 10% or 15% since those years. But not really, not even 10%, or else a 1.55 ounce Hershey bar would now cost $11 in the USA.

I really do not believe anyone bought a new Mustang for $900; ever. In 1965 I paid $3,500 for mine. It was a convertible and automatic so not the cheapest but no way could you obtain for anything near $900.

[ray23]

"Further more, upon interviewing my 89 year old Grandfather about the current situation. Someone that still works everyday and owns a lot of businesses - told me. I have seen this kind of situation over and over in my life, his advice - hold on to what you have it will come around again. The world markets will also come down. He seemed not to have worry or much concern unless you happen to be in terrible debt otherwise hold on. But I reminded him that in Asia things are different than they were, and that the economy here is strong and less dependant on the US. He seemed to think I was too eager to react and told me to be patient, that now is not the time to buy over here or to invest "

Yep I think Grand Pa is right. This isn't the first recession that America has been in and recovered from.

They even recovered from a depression and while I'm thinking about does anyone think America was alone in that. It was world wide event. What is hppening at the moment is global problem it may take longer to effect some countries then ohers but eventually it will effect all.

I was speaking to a friend the other day he is paid in Euros, totaly convienced that it will never go down and only get stronger. I don't see it that way, but I'm far from being sharp at this. Any thougths please?

I know it easy to blame America for all this but the fact is it wasn't just the U.S. involved in the greed game. Anybody checked the rates on the GBP, lately I'm sure some finance guy in the states held a gun to his counter parts head in Britan to take on sub prime loans. By the way I'm not gloating this is a mess for all of us and not a good one. What happened with Spain was that a part of the sub prime mess I don't know?

Anyone notice when the Peso started it's rise maybe I'm wrong but it seems to me that it was about the same time Thailand placed it' controls. So are we seeing real growth there or just speculation doing it's norm?

There are still groups out there driving things up and in the end the people of the Phillippines pay the price. The P.I. has for years had it's income driven by out of country workers sending money home. The BBC did a special on it this morning those workers are now having to cut back on thier living expenses and working as many hours and jobs as they can, just to provide at the same level they were, for thier families at home

I understand the account surplus here makes Thailand look good. But what happens when they actually start spending that money. They have kept the purse string tight for the last year. Eventually they have to start spending? The new governmet has a difficult road ahead no matter who it is.

Yes as a dollar payee my usable income has been reduced drastically over the past two years. Between the currency exchange and inflation. I assume that it will be reduced even further and I have perpared myself for that. The answer cut spending same here as anywhere else.

Yes you get the onshore rate when you use an ATM here.

44 to One try October of 1993, I think that was the year I came here old age gets you all the time

Do Politics effect the economy why do you tihnk George senior didnt get reelected he was a popular President, he just scouldn't get the problem with the economy at that time. Along come the Clinton years and things get better, George Jr show up and look where we are today. So that leads me to believe that politics do effect economies.

Now folks that is just my humble opinnion, you can take that and a dollar and maybe get a cup of coffee depending on the rate of exchange is that day

Edited January 15, 2008 by ray23

[Old Man River]

Miss Tarisa and the BOT are going to have several other sleepless nights. Poor Tarisa.

If you were the Governor of the BOT, what would you do to stem the appreciation of the THB, or instead do nothing?

[ray23]

What about the German's and the Euro. Unless I have read this wrong it seems to me they are concerned about the strength of the Euro and weakness of the dollar. Concerned about slow growth in America, could it be the export there as well. Seems to be a song sung everywhere these days. A global problem I do believe

"German economy grows by 2.5%, but sentiment declines

By Geir Moulson Bloomberg News, The Associated PressPublished: January 15, 2008

BERLIN: The German economy grew by a solid 2.5 percent last year, helped by strong exports, but a downbeat survey of investor confidence pointed to clouds on the horizon for Europe's biggest economy.

The preliminary 2007 growth figure, released Tuesday by the Federal Statistics Office, compared with the previous year's increase of 2.9 percent in gross domestic product - Germany's best performance since 2000.

The Federal Statistics Office also said that Germany balanced its budget last year, eliminating a budget deficit that ran at 1.6 percent in 2006 and in previous years breached a European Union-mandated limit of 3 percent of GDP.

But a survey of investor confidence Tuesday underlined expectations of a bumpier ride in 2008. The ZEW institute said its monthly survey dropped to minus 41.6 points from minus 37.2 in December - worse than the minus 40 economists had forecast.

"The largest risk for the development of the German economy is the danger of a recession in the United States following the financial market crisis," ZEW said in a statement. "Together with a strong euro it might undermine exports."

Today in Business with Reuters

Citigroup and Merrill Lynch take drastic steps over subprime fallout

EMI Group restructuring to cut £200 million in costs

Global equities sink before U.S. bank earnings; dollar weak

The growth estimate for 2007 was in line with economists' forecasts, and was slightly better than the government's prediction of 2.4 percent.

The statistics office said German exports, a traditional strong point, grew by 8.3 percent last year and accounted for more than half of the growth in GDP.

The export growth translated into GDP growth of 1.4 percent.

Domestic stimuli - above all companies' investment in equipment - grew by 8.4 percent, contributing another percentage point to GDP, the office said.

Growth expectations last year initially were clouded by the government's move to raise the value-added tax from 16 percent to 19 percent on Jan. 1, 2007 - a decision that was aimed at keeping the budget deficit in check.

The economy emerged unscathed and the government managed to balance its budget for the first time since 2000, when it was helped by revenue from the auction of new-generation mobile phone licenses.

Still, private consumption declined by 0.3 percent last year, the Federal Statistics Office said.

"Net exports continued to be a reliable and the most important growth contributor last year," said Alexander Koch, vice president and economist with UniCredit Markets & Investment Banking.

"The German export sector benefited disproportionately from strong global demand and defended its title as world champion in merchandise exports for the fifth consecutive year, ahead of China," he noted.

Economy Minister Michael Glos has said that he plans to reduce the government's 2008 growth forecast of 2 percent, although he has not specified a new figure.

On Tuesday, he described the 2007 figures as "a solid basis for the continuation of the upswing this year."

Fourth-quarter growth figures will not be released until next month, but the statistics office tentatively estimated growth at 0.25 percent - down from a third-quarter figure of 0.7 percent.

"The recent downward trend in business expectations clearly points to soft growth dynamic also at the beginning of 2008," Koch said.

"However, we still rate the chances for an abrupt end to the economic upswing as very low," he added. "We maintain our forecast of another year of respectable growth for 2008."

Holger Schmieding, Bank of America's chief European economist, predicted "a soft start and a stronger finish" for the economy in 2008.

In the early part of the year, he said, high oil and food prices likely will dampen consumer spending, while "global uncertainties, much slower growth in the U.S. and the U.K. and the strong euro will dampen export growth and the readiness to invest at home."

He also pointed to a potential risk from possible government moves to expand minimum wages to new sectors, cautioning that "investment could lose momentum and the pace of job creation could slow down seriously."

Back to topHome > Business with Reuters"

[Heng]

So there will be a shakeout. After a decade of inflated forex profits for exporters, we'll just see who has been diversifying and who has been overextending themselves.

[gregybn]

gregy, I'll grant you that the official govt. rate of inflation is minimized,

dam_n right... the understatement of the decade?

but I doubt it's that much.

Wanna bet?

The COLA for SS was 2.3%, and inflation was more like 5%.

Here are some scary money supply growth numbers for you for 2007:

Brazil M3 +17.0%

Canada M3 +12.9%

China M2 +18.5%

Euro zone M3 +12.3%

Hong Kong M3 +31.5%

India M3 +21.5%

U.S. M3 +15.8%

I don't make this stuff up... the numbers are there if you look around (... other than the NYT and WSJ etc.)

COLA at 2.3% is a freaking joke mate!

Just who is telling you inflation is/has been = 5%???

Have you also bought a "real" Rolex from them?

I just found another item that compares a few more countries...

Contrary to the common belief that inflation is an increase in the Consumer Price Index (CPI), the classical definition of

inflation is an increase in the money supply, which results in price increases.

Money supply has increased by:

a. 42% in Russia

b. 21% in India

c. 18% in China

d. 12% in UK

e. 8% in Canada (... a bit lower from the above, but still significant)

Although the US Federal Reserve discontinued reporting M3 in March 2006, several sources have

reconstructed the data and determined that the US money supply is now growing at an unprecedented

annualized rate of 16%.

Be careful what you want to believe...

And be careful of Rolex salesmen... they'll tell you anything you want to hear (or deny)

Edited January 15, 2008 by gregybn

[Tinkelbell]

Is this fuzzy thinking? Have I got something wrong? Does every cloud have a silver lining? Is the cup 1/2 full?

Actually... half full after about 9 years...

Expect the purchasing power of your us $ ss payments and pension to fall by 10-20% per year for the next 2-3 years. good luck.

Exactly... here is a very recent graphical form... showing what your gov't doesn't want you to understand...

... as they inflate away your (soon to be worthless) fiat junk.

gregy, I'll grant you that the official govt. rate of inflation is minimized, but I doubt it's that much. The COLA for SS was 2.3%, and inflation was more like 5%. However, I've found in the past that those who claim inflation has been understated far more than that for decades, are talking shit. If you could buy a Ford Mustang for $900 in 1965, or buy a beachfront 3 bedroom house in Miami for $25,000 in 1975, then inflation has been 10% or 15% since those years. But not really, not even 10%, or else a 1.55 ounce Hershey bar would now cost $11 in the USA.

I really do not believe anyone bought a new Mustang for $900; ever. In 1965 I paid $3,500 for mine. It was a convertible and automatic so not the cheapest but no way could you obtain for anything near $900.

I also like to add my two cents.

In 1975, we went shopping for a house in Miami, FL. After looking at different areas: Miami Beach, Miami Lakes, Hialeah, Opa-Loka....etc. We ended up bought a house in North Miami Beach ( behind 163rd. Shopping Mall) for under $50,000. Actually our first choice is living around waterfront in Miami Beach, but couldn't find a decent ones under $80,000 even we don't mind living in a duplex.

Even those days, property taxes in Miami Beach already higher than other areas.

[ray23]

Gentlemen I don't believe it is if this is going to happen, but when. That time looks very close. When these interest rates go into effect I have serious doubt that Thailand will be able to support the dollar at the levels required. So back to 25 might just be a possibility. Personally I think that will be devestating to us and Thailand.

The U.S. is not going to avoid a recession, it's already begun

"U.S. Recession a Bigger Risk Than China, Malkiel Says (Update1)

By Allen Wan

Jan. 15 (Bloomberg) -- A U.S. recession poses a bigger threat to the global economy than a slowdown in China, according to Burton Malkiel, the Princeton University economics professor who wrote ``A Random Walk Down Wall Street.''

``The U.S. is more important to the world,'' Malkiel, 75, said during an interview. ``The U.S. is slowing down dramatically and we're going to see little or no growth in the first half of 2008. I'm not worried about a slowdown in China because growth there will still be larger than anywhere else in the world.''

Stocks in the U.S. have fallen three straight weeks and posted their worst start to a year since 1991, amid concern the economy will contract. Goldman Sachs Group Inc. joined Morgan Stanley and Merrill Lynch & Co. last week in estimating that the nation may already be in a recession.

Malkiel predicted the Federal Reserve will reduce interest rates to as low as 3 percent this year, from 4.25 percent now. ``I anticipate lots of lowering in the first half,'' he said. Malkiel was a member of President Gerald R. Ford's Council of Economic Advisors when former Fed Chairman Alan Greenspan led the group.

Trading in futures contracts gives 100 percent odds that policy makers will shift the target rate for overnight loans between banks to either 3.75 percent or 3.50 percent this month.

11.5% Growth

China expanded at an 11.5 percent rate during the third quarter, the fastest among the world's 10 largest economies. The nation will expand 10 percent this year, Goldman predicted last week. Last year, China contributed 17 percent to global growth, the same as the U.S.

Malkiel said he is confident China will be able to slow growth to a ``sustainable pace'' of 7 percent to 8 percent.

He recommends that investors buy stocks of U.S. companies that have business ties to China. Malkiel also favors the SPDR S&P China ETF and iShares FTSX/Xinhua China 25 Index Fund.

``A Random Walk Down Wall Street,'' first published in 1973 and now in its ninth edition, argued that asset prices fluctuate randomly and investors can't consistently beat the market.

Stocks in China are in a ``bubble'' and will tumble once the government allows funds to flow more freely, Malkiel said.

China Life Insurance Co. illustrates the point, he added. The nation's largest life insurer trades for 46.6 times estimated earnings in Shanghai, 25.9 times in Hong Kong and 30 in New York, according to Bloomberg data.

`Restricting Arbitrage'

``It's just nuts,'' he said. ``China has been artificially restricting arbitrage.'' Malkiel expects ``these valuation discrepancies to disappear eventually as China liberalizes its currency. When that will occur, I don't know.''

The CSI 300 Index, which tracks A shares listed on China's two exchanges, has gained 6.7 percent this year after jumping 162 percent in 2007 and 121 percent in 2006. The shares are trading at ``bubble valuations,'' Malkiel said, referring to the yuan- denominated equities restricted mostly to local investors.

Malkiel declined to predict when the Chinese stock market ``bubble'' might burst, repeating his argument that it's impossible to predict future share prices.

``Over time, China will allow its citizens to invest in Hong Kong and overseas,'' said Malkiel, whose newest book, ``From Wall Street to the Great Wall,'' was published last month. ``Valuations of these Chinese stocks will then have to normalize.''

In October, China's securities regulator said it was studying a plan to allow arbitrage in shares of companies traded on domestic and Hong Kong exchanges. The regulator is seeking to end price discrepancies.

Last month, Hong Kong submitted a proposal to the Chinese cabinet for mainland individuals to buy shares directly on the city's stock market, paving the way for a pilot program that has been plagued by repeated delays.

To contact the reporter on this story: Allen Wan in New York at [email protected]

Last Updated: January 15, 2008 10:07 EST "

[Squint]

Pardon?

The internal rate is as above, however the international quoted mid-rate is 29.8232 THB to 1 USD

Regards

Works both ways on the exchange.....

just got dosh from Aus: Au$2900 converted by BankTransfer (ITT) into: 84,699 Baht in my Bangkok Bank a/c....

i.e. 29.20 baht to the Au$....... have not seen 29.8 to 30.50 for months....sigh..... good for you.

But according to the 'offshore rate' at Xe.com , those Au$ are only worth : 77,552.53 THB @ 26.7423

which would lose me nearly 30,000 Baht....... on a 300,000 baht monthly retainer....... nearly 10% in the ether....each month?

go figure?

regz to all.

Xe.com has always been inacurate, if you want to know the current rates just check the BKK Bank online.

I may be wrong but there seems to be an annual fluctuation in the Baht. I've noticed over the last five years that the Baht gains against other currencies around high season time and drops again around May. Is this to make more money from tourism by giving the tourists less Baht for their currencies and make things more expensive for them?

[Seneque]

I may be wrong but there seems to be an annual fluctuation in the Baht. I've noticed over the last five years that the Baht gains against other currencies around high season time and drops again around May. Is this to make more money from tourism by giving the tourists less Baht for their currencies and make things more expensive for them?

This is correct ...

the offshore rate is a creation from the Thai banks, in order for them to rip off tourists (perhaps) who use their (foreign) credit cards in this country but a sure way to make huge profits (therefore high season, more profits)

Exemple : when you buy a product at baht 1000 you are charged 1000 / 29 = 34.50 dollar. The bank will pay the shop baht 1000 but will recover 34.50 x 33 = 1138.50 ... , how about that.

When you TT money from overseas to Thailand the rate is onshore at all banks (except those who might try to s...w you)

As for the strengthening of the Thai baht, only time will tell ... as i do not know anyone who ever could predict anything regarding currencies (to look back is one thing, but to predict is another ...) The US has always showed resilience in any situation and my feeling is that the 'subprime' situation is used as a 'scapegoat' to let bank get rid of their accumulated mismanagement (then showing losses without shame) for all these years ... How many of them tried to entice you into borrowing to invest in various stocks, bonds, funds, etc... the markets are now going down, the loans can't be repaid, the banks loose ... (or that is what they will tell you)

The whole thing is a big boy game and if you are not a big player (governments, large corporation, etc..) there is no way to predict/control the situation

To come back to the Thai situation, Thailand is not a sophisticated export country (except for a little computer technology) and a strong baht is definitely not helping their quality of export (mainly manpower made), plus the individual debt is at a record high. Once they realise it and blame it on whoever, expect another devaluation ...

Anyway, these are just thoughts ... Thank you for reading !

[Naam]

the offshore rate is a creation from the Thai banks, in order for them to rip off tourists (perhaps) who use their (foreign) credit cards in this country but a sure way to make huge profits (therefore high season, more profits)

a real good one! next joke please... but wait a few minutes till i finished laughing and can start anew

[lapamita]

and there is the problem a ticking bomb tick,,,,tick,,,,tick....BUM !!! only JPM have 80 TRILLION USD outstanding.

this substance... do you smoke it, chew it, swallow it or do you inject it? and how much is it per serving? a godzillion?

SORRY I AM NOT UNDER DRUGS,, but maybe you read more and understand it.

only in Q2 JPM iINCREASED THE OUTSTANDING DERIVATE POSITION FROM 70 TRILLION TO OVER 80 TRILLION USD OR PER AVERAGE TRADINGDAY !!!! 150 BILLION OVER A CONSEQUENT PERIOD OF 66 TRADINGDAYS. ( most was done on SCIF auctions in cfds)

JPM is the biggest derivate holder in the world, is co-owner of the Privat Federal reservebank>!!

every savingdollar at JPM is 200 times involved in derivate buissenes

here are some numbers of total derivate

Consider the import of the data from the BIS' own website - - Review Table 19 at www.bis.org. Follow the path: Statistics>Derivatives>Table19. Note that as of December, 2006 there were:

• $6.475 trillion commodities contracts (excluding gold) outstanding

• $40.239 trillion foreign exchange contracts outstanding

• $291.115 trillion interest rate market contracts outstanding

But consider the stunning increases in OTC Derivatives in just the six months between December, 2006 and June, 2007. As of June, 2007 there were:

• $7.141 trillion in commodities contracts (excluding gold), an approx. $666 billion (10%) increase in only six months

• $48.620 trillion in foreign exchange contracts, a $8.31 trillion (approx. 20%) increase in only 6 months.

• $346.937 trillion in interest rate market contracts, a $55.822 trillion (approx. 19%) increase in only 6 months

Consider the import of the data from the BIS' own website - - Review Table 19 at www.bis.org. Follow the path: Statistics>Derivatives>Table19. Note that as of December, 2006 there were:

• $6.475 trillion commodities contracts (excluding gold) outstanding

• $40.239 trillion foreign exchange contracts outstanding

• $291.115 trillion interest rate market contracts outstanding

But consider the stunning increases in OTC Derivatives in just the six months between December, 2006 and June, 2007. As of June, 2007 there were:

• $7.141 trillion in commodities contracts (excluding gold), an approx. $666 billion (10%) increase in only six months

• $48.620 trillion in foreign exchange contracts, a $8.31 trillion (approx. 20%) increase in only 6 months.

• $346.937 trillion in interest rate market contracts, a $55.822 trillion (approx. 19%) increase in only 6 months

Consider the import of the data from the BIS' own website - - Review Table 19 at www.bis.org. Follow the path: Statistics>Derivatives>Table19. Note that as of December, 2006 there were:

• $6.475 trillion commodities contracts (excluding gold) outstanding

• $40.239 trillion foreign exchange contracts outstanding

• $291.115 trillion interest rate market contracts outstanding

But consider the stunning increases in OTC Derivatives in just the six months between December, 2006 and June, 2007. As of June, 2007 there were:

• $7.141 trillion in commodities contracts (excluding gold), an approx. $666 billion (10%) increase in only six months

• $48.620 trillion in foreign exchange contracts, a $8.31 trillion (approx. 20%) increase in only 6 months.

• $346.937 trillion in interest rate market contracts, a $55.822 trillion (approx. 19%) increase in only 6 months

(source: www.bis.org. Path: statistics>derivatives>Table19)

What is also obvious from a comparison invited by Table 19 - - comparing June, 2005 figures with June, 2007 figures - - is the increasing systemic threat this interventional regime imposes. Note also the dramatic jump in most categories of derivatives from June, 2005 to June, 2007

sorry, but if youy want the correct number for JPM just goole or bet go to the webside of the FED,,, i dont find the latest official table from the def ( before i download it,) if you really want to know just send me a BM and i email it to you the next days................ but you see above TOTAL NATIONAL DERIVATE stood at more than 400 TRILLION USD and JPM have a marketshare of over 20% ( TOTAL DERIVATES WORLDWIDESTOOD AT END OF JUNE 2007 at 516 trillion 467 billion 516,467 TRILLION USD

TICK...........TICK............TICK.............BUM!!!!!!!!!!!!!!

[Seneque]

the offshore rate is a creation from the Thai banks, in order for them to rip off tourists (perhaps) who use their (foreign) credit cards in this country but a sure way to make huge profits (therefore high season, more profits)

a real good one! next joke please... but wait a few minutes till i finished laughing and can start anew

To laugh at these things is the luxury of being naive ... The BOT and thai banks have always work hand in hand for the good of .... making things look good !!!

now you can laugh again, and it is close to apetizer time, so : cheers ...

[bubba]

I may be wrong but there seems to be an annual fluctuation in the Baht. I've noticed over the last five years that the Baht gains against other currencies around high season time and drops again around May. Is this to make more money from tourism by giving the tourists less Baht for their currencies and make things more expensive for them?

This is correct ...

the offshore rate is a creation from the Thai banks, in order for them to rip off tourists (perhaps) who use their (foreign) credit cards in this country but a sure way to make huge profits (therefore high season, more profits)

To come back to the Thai situation, Thailand is not a sophisticated export country (except for a little computer technology) and a strong baht is definitely not helping their quality of export (mainly manpower made), plus the individual debt is at a record high. Once they realise it and blame it on whoever, expect another devaluation ...

Sorry, but I couldn't help but take a pause to chuckle at both of these uninformed and simplistic opinions. I don't suppose that last year's foreign exchange restrictions had anything to do with the wide gap between offshore and onshore baht rates, rather than a secret conspiracy on behalf of BoT and the tourism trade to "rip off" foreign tourists?

And a devaluation of the baht??? Good one.....