Are Farrangs Going To Be Hit From Both Sides Financially?

[ray23]

First guys let me say thanks good toughtful answers.

Yes I can make it on 25 to one, not because I planned on that but because I built a good buffer in for inflation over the years.

There is no way I would have the level of lifestyle I would have here as compared to California, even at 25 to one. So I'm not going anywhere I have a auromatic cola of 3% per year. Really isn't keeping up at the moment but certainly helps. I'm drawing Social Security yet so when that kicks in that will also be a help. None of this had anything to do with financial knowledge just being careful.

I to beleive that the dollar will eventually turn around and more then liley within my lifetime.

Here is where I differ with many, yes there were years of 25, before the 44. However that being said, the Thailand cost of living is really geared to to 40 not 25. How much would you have had to have in the bank to qaulify for a marriage visa in 1997. Five years ago it was 200K or 20 K a month, now double that. That was adjusted to 40 not 25, will they reduce it I doubt it very much.

What would your monthly expences be in 1997 are they the same as that today, I don't think so.

So will 25 provide the same lifestyle now as it did in 1997?

If so I think the bonus money would be a valid statement, but if things are now geared to 40 I don't agree.

[JimsKnight]

First guys let me say thanks good toughtful answers.

Yes I can make it on 25 to one, not because I planned on that but because I built a good buffer in for inflation over the years.

There is no way I would have the level of lifestyle I would have here as compared to California, even at 25 to one. So I'm not going anywhere I have a auromatic cola of 3% per year. Really isn't keeping up at the moment but certainly helps. I'm drawing Social Security yet so when that kicks in that will also be a help. None of this had anything to do with financial knowledge just being careful.

I to beleive that the dollar will eventually turn around and more then liley within my lifetime.

Here is where I differ with many, yes there were years of 25, before the 44. However that being said, the Thailand cost of living is really geared to to 40 not 25. How much would you have had to have in the bank to qaulify for a marriage visa in 1997. Five years ago it was 200K or 20 K a month, now double that. That was adjusted to 40 not 25, will they reduce it I doubt it very much.

What would your monthly expences be in 1997 are they the same as that today, I don't think so.

So will 25 provide the same lifestyle now as it did in 1997?

If so I think the bonus money would be a valid statement, but if things are now geared to 40 I don't agree.

That's what I agree on.

Harping on about 25 to the dollar etc is all well and good but 'back in the day' when it was at that level you get a whole lot more with 25 baht than you can now!!

Try getting the same nowadays for that amount and it's a different story.

I don't think the dollar will sink to 25, it will take a few more knocks and then rally, same with the pound sterling.

This is just a 'gut feeling' so don't shoot me down if there's a crash or anything guys, okay Naam

[BlackJack]

This may sound a bit rude but relying on a currency remaining the same over years is foolish. Currency is the number one risk investment.

Diversification is the only way to go

If you wanted a good return on the baht then you may have invested in Thailand and got Thai baht in return

ie a unit to rent out?

also there has been some funds around the world paying up to 100% so losing a few bahts on the dollar doesnt matter

If you had of hedged in gold you would have been laughing (not Thai gold)

theres still time

diversify

[Jingthing]

This may sound a bit rude but relying on a currency remaining the same over years is foolish. Currency is the number one risk investment.

Diversification is the only way to go

If you wanted a good return on the baht then you may have invested in Thailand and got Thai baht in return

ie a unit to rent out?

also there has been some funds around the world paying up to 100% so losing a few bahts on the dollar doesnt matter

If you had of hedged in gold you would have been laughing (not Thai gold)

theres still time

diversify

I would agree. That is why I feel OK as I have Thai baht currency and assets as well as dollar assets, Euro assets, Yuan assets, etc. Another reason to buy a home here, you have that expense locked in with the local currency.

[henryalleman]

Maybe this is so for the Yanks,

but as an EU Retiree citizen with a pension from his homeland, the cost of living becomes cheaper in Thailand. In 2002 the Thai bath against EURO was arround 40 now it is 48,65 in other words more than 20% more cheaper.

Are Farrangs going to be hit from both sides Financially

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We are seeing the value of our currencies effected no more so then the dollar. So our buying power is reduced in the case of the dollar already very heavily. It would appear that GBP has felt the hit and how much longer before the Euro. At the same time costs are going up for everyday items in Thailand, farmers are already being hit with costs as much 15% to 20% in essential supplies. That has to be passed on to the retailer and eventually the consumer

Thailand has already become a much more expensive place to be for dollar holders. I don't believe we will be alone in that and if this happens 25 to 1 is very possible. I know long term residents that will not qailify to keep thier visas at that rate. I consider a five year resident to be long term. Some Social Security recepients would be hard pressed to come up with the 40 K a month. For single guys in that income bracket forget it.

I will survive 25 t0 1, but it is sure as heck going to have real hit on what I can do and not do.

An article today in the Bangkok Post says the PPP is considering abolishing to he 30% rule, along with this little beauty. Is this good for Thailand I don't know, don't think so. But, Will it be good for the Thai stock market you bet, note who wrote it. As an American can't really say much I just watched my country do exactly the same thing in short term thinking.

Yep lets lower the interest rates so everyone can borrow more at a cheaper rate, obtaining monies with little thought to pay back. Yep really hard for an American to say much about this.

Who are going to get those loans the average citizen, going be much harder to qaulify for or will it be speculators borrowing to invest. I think we know the answer to that one. Now there is an intersting business group bullet proof, you lose don't worry all the tax payers will get the bill. No need to follow sound business fundementals.

So here we are a expats right between two countries. Tough times ahead I'm afraid.

ECONOMY / EXCHANGE RATES

Supavud: Let the baht rise and rates fall

Parista Yuthamanop

The government should allow the baht to appreciate freely to enable local interest rates to decrease and spur the domestic economy, said Supavud Saicheua, a managing director for Phatra Securities.

The dollar is likely to keep depreciating because the US Federal Reserve could reduce its interest rate from 3.5% to as low as 1% to head off a steep fall in US asset prices. The estimate was based on a forecast by Merrill Lynch, with which Phatra is allied.

Asian economies could see inflation risk worsen in light of the declining dollar, said Supavud.

"The depreciating dollar will push oil prices up. And the inflationary pressure will become more difficult to handle," Dr Supavud said at an economic conference yesterday at the Stock Exchange of Thailand.

By keeping the baht weak to support exports, the trade-off for the Thai economy was higher energy and oil prices in local currency terms, he said.

Additionally, the Bank of Thailand is expected to face greater pressure to cut its benchmark one-day repurchase interest rate from 3.25% to narrow its gap with the US interest rate.

The baht's appreciation would benefit imports for private investment, which would help offset a decline in exports. Private investment grew by only 3% in 2007, compared with a potential for 10% year-on-year, he said.

"We expect the Bank of Thailand to cut interest rates, but the question is how inflation will be handled," Dr Supavud said.

He said the government should allow the baht to outperform the Chinese yuan which is widely expected to strengthen by 7%, but it should have an assistance programme for labour in sensitive sectors such as textiles and furniture.

"Asian currencies should be allowed to strengthen across the board. It should be acceptable, if the baht strengthened by 10-15%," he said.

The strengthening baht would also support Asian economies' import demand for infrastructure building, he said.

"Almost all Asian economies need additional infrastructure investment. The currently high liquidity should be considered an opportunity to develop their own economic potential. They should let their currencies appreciate naturally in light of inflationary pressure," he said.

Dr Supavud said Asian economies altogether were subject to high inflation risk as they consumed relatively high amounts of imported energy.

Energy demand worldwide has been driven by the region because of rising population wealth and rapid growth in heavy industry, while demand from the US, Europe and Japan is declining as they use more nuclear power and their populations continue to age.

Many analysts were expecting the Fed to reduce its interest rate by another 50 basis points at its two-day meeting (the announcement was scheduled for 2:15 am today, Thailand time). An aggressive rate stance could help jolt the stock market but could build inflationary pressure in the US economy going forward.

"The Fed pumps liquidity into the financial market in the short term, but it risks credibility with higher inflation in the longer term. [Asian economies] should not tie their currencies with the dollar," Dr Supavud said.

He added that the Bank of Thailand should lift the 30% reserve requirement on capital inflows so that the baht would be driven by market mechanisms.

"The baht is expected to strengthen. But the one-way bet for baht appreciation will dissipate, after it rises to a certain extent," he said.

[Marvo]

but as an EU Retiree citizen with a pension from his homeland, the cost of living becomes cheaper in Thailand. In 2002 the Thai bath against EURO was arround 40 now it is 48,65 in other words more than 20% more cheaper.

...and as a UK citizen who made the decision to make a move to Thailand in Nov 2007 when £1 got me 70.4 bt.... now I'm down to 63.4 bt. That's 10% in 12 weeks. That's a big hit to take so early on in the operation but, I agree that anyone who plans a long term future based on a currency at it's most attractive is asking for it. It's sure brought me back to earth.