Thai Baht Against The Gbp

[mommysboy]

USD collapsing against the THB, 3% down in just a couple of days,

in the last hours of today Friday THB up against dollar,euro,pound,yen and all would currencies.

I think what Thai govt. is seeking is probably a humiliation of the other currencies against the "superior" and "almight" THB, when exports are tumbling and leaving companies on the verge of bankrupcy and hundreds of thousands of people at risk of losing their jobs.

Very smart.

USD buying rate at SCB 34.85 , Euro also close down at 47.56 (47.70 at 2pm), Yen close down too.

THB is higher now compared to USD than it was on the begin of December.Is still Somebody talking about an "orderly" devaulation ? :-) ;-)

What I see is a revaluation, not a devaluation.

What determines the strength of a currency?

The THB interest rate is higher than the USD or GBP, Thailand have a trading surplus and large foreign currency reserves, the Thai banking system is untouched compared to the wreck in the UK and US, there are no moves here to debase the currency using the nasty weapon called quantitative easing.

So a lot of positives for the Baht. And the negatives?

A fall in exports and tourism. But hey! How much does that compare to the incredible losses in asset values in the US and UK? Or the massive job losses? And the huge debts being created for the future tax payers to carry.

As the manufacturing industries have been moved out of the Western countries there will still be a demand for manufactured goods from Asia. Maybe tourism will move upmarket to those who can afford to have a holiday in Asia? After all, compared to the resorts in the West, the Thais have a lot to offer and are still cheap. Maybe the trend will be away from a dirt cheap tropical holiday to a value for money luxury holiday in paradise without the hoi-palloi budget holiday makers?

IMO there is now going to be a shift in wealth and standard of living from the West to the East. Surely this is logical? In the end the debtors have to pay up and the lenders will have the power. And somehow it doesn't seem quite fair that somebody can come across to Thailand on a small pension and live up the life that the locals can only dream about. Particularly when the locals are producing the goods that are exported to the West so that the West can enjoy their standard of living.

This is now globalisation in a big way, and it means that the factory worker in the UK on 23,000 Quid/year plus huge benefits is competing with the Thai worker on 1,000 Quid/year with no benefits. This is a massive imbalance on the global scale and I am convinced that this difference cannot be maintained in the future. The manufacturing industry in the West is becoming increasingly inviable. Bailouts and more bailouts, but even then, the products will be too expensive compared to the East. Just look at the labour costs.

The West, particularly the UK and US, have embarked on a process of devaluing their currencies with "QE" to stimulate their own economies. Why should Asia follow? Or, indeed, how can they do it? By printing Baht? Why should they do it? With the current reserves they should stimulate the domestic markets and move away from reliance on the foreign markets. There is no need to print money here.

I think there is going to be a painful shift in economic strength from the West to the East. And it will have a big effect on a lot of foreigners living here. The big party of the last fifteen years might well be coming to an end.

Doubtless there will be a lot of knee jerk reactions, but just think about it for a few minutes. Is your reaction based on a selfish "NO, they can't do this to me, I won't accept it" or can you offer an alternative based on reasoning, which I would be interested in hearing.

A very powerful opening paragraph and then it fizzled out. Indeed though it must be about fundamentals, the big difference IMHO is time lag.

I certainly agree about the basic point of competitiveness and gross inequality. But, and it is a big but, The West tends to specialise in high tech areas, has superior innovative skills, and is generally more advanced in the savvy ways of business.

You rather skipped over the downside for Thailand: 'a fall in exports and tourism'. Considering the rest of your piece is based on hyperbole couldn't you have gone a little more emphatic on this too, after all these 2 areas account for 78% of GDP on what is visible, before we even consider the greyer areas of the tourist buck, and they are both in freefall from what can be gathered.

After that it's a bit meandering, sheer opinion and your own moral vision of fairness.

What big party was that by the way ?. dam_n missed out again

There is a big dynamic from East and West and it's really about those rather odd bed fellows USA and China. Both are dependent on each other for survival.

[Jake1]

GREAT Post 12DrinkMore!

Exactly what I've been thinking. The shift is currently taking place but most in the West still have their blinders on. Thailand won't be leading the way but they do have a viable Economy and a good global positioning. They will rise with the Eastern tide as the West sinks itself.

[12DrinkMore]

A very powerful opening paragraph and then it fizzled out. Indeed though it must be about fundamentals, the big difference IMHO is time lag.

I certainly agree about the basic point of competitiveness and gross inequality. But, and it is a big but, The West tends to specialise in high tech areas, has superior innovative skills, and is generally more advanced in the savvy ways of business.

The Chinese are sending their kids to university and are catching up quickly. It may be the case that the West still has the edge in high tech areas, but this alone is not going to hold up the massive economies of the West. The big money earners are the production facilities. And I would disagree with "savvy ways", there are few more astute than the Chinese in running businesses.

You rather skipped over the downside for Thailand: 'a fall in exports and tourism'. Considering the rest of your piece is based on hyperbole couldn't you have gone a little more emphatic on this too, after all these 2 areas account for 78% of GDP on what is visible, before we even consider the greyer areas of the tourist buck, and they are both in freefall from what can be gathered.

After that it's a bit meandering, sheer opinion and your own moral vision of fairness.

What big party was that by the way ?. dam_n missed out again

There is a big dynamic from East and West and it's really about those rather odd bed fellows USA and China. Both are dependent on each other for survival.

Sure its based on my own opinion. But I have been out here for well over a decade and watched how rapidly things are developing and progressing. China has only been a player for two decades, and in this short time has made incredible development. There will doubtless be a few setbacks along the way, but I do not believe the Chinese are so stupid that they will carry on supporting the decadent lifestyle of the West into the future.

Sooner or later the West has to start producing something that people want to buy. Rising property prices and Stock markets don't count anymore.

http://www.china.org.cn/english/features/C...2004/106995.htm

In 1987, the Chinese government set out a clear and definite economic construction objective: The first step was to double the 1980 GNP and ensure that the people have enough food and clothing. China attained this by the end of the 1980s. The second step was to quadruple the 1980 GNP by the end of the 20th century. This was achieved in 1995, ahead of time. The third step is to increase the per-capita GNP to the level of the medium-developed countries by the mid-21st century. At this point, Chinese people will have achieved a high standard of living and modernization basically will be realized.

I, for one, believe that they will achieve this. They are dedicated, are on a mission, and are able to move millions of people around as needed to fulfill their goals. Unlike the West, where you can't do anything without upsetting somebody, and overcoming immense restrictions and obstacles.

What have the Chinese achieved in the last two decades? Built up huge production facilities producing goods to western standards, built up huge foreign currency reserves, and are producing huge numbers of graduates. These I would view as huge stepping stones on the way to achieving their goal.

But, coming back to Thailand,

I agree that exports will fall and the global depression is going to affect Thailand. But the question is, will it be worse than in the West? The West will still have to buy food from Asia. And there will always be Westerners with jobs and money to spend on holidays, looking to escape the cold winters of Scandinavia and Germany, Thailand is a preferred destination.

And a Thai without a job can generally find somewhere to live and eat, and doesn't get cold. In the West without a job things get pretty dire. The UK has 2,000,000 jobless forecast to rise to 3,000,000.

And going back specifically to the question of the THB. What is the best thing for the Thai government to do? Weigh the Baht against a basket of currencies and keep it roughly in line with them? Or take a wild gamble and try a competitive devaluation of the currency, possibly destabilising the Asian currencies as they all start playing the same destructive game?

I think by far the best plan is to continue the existing policies and wait until the clowns in the West have stopped knee jerking and experimenting with Quantitative Easing. The Bank of Thailand is doing a great job. Thank you.

(Oh, and the big party was the house price and stock market bubbles, both finished for ever, or rather, until those with short term memories start them up again, only to relive the pain of the past)

Edited March 21, 2009 by 12DrinkMore

[jdrake72]

and in the meanwhile the THB is rising against almost every currencies.

USD totally collapsed against the THB , having lost almost 3% in just a couple of days, today even euro,yen,pound and other currencies went down against the THB (and the USD keep falling of course).

Thai government keeps this menthality on having the world most overvalued currency in order to humilate the other countries and show the superiority of Thailand.

But I am afraid hundreds of thousands of new jobless and impoverished people would not agree with this idiotic policy.

[churchill]

How does Thailand manage their currency - If I was them I would be tempted to track the chinese yuan ?How does the yuan compare to these other currencies ?

[mommysboy]

A very powerful opening paragraph and then it fizzled out. Indeed though it must be about fundamentals, the big difference IMHO is time lag.

I certainly agree about the basic point of competitiveness and gross inequality. But, and it is a big but, The West tends to specialise in high tech areas, has superior innovative skills, and is generally more advanced in the savvy ways of business.

The Chinese are sending their kids to university and are catching up quickly. It may be the case that the West still has the edge in high tech areas, but this alone is not going to hold up the massive economies of the West. The big money earners are the production facilities. And I would disagree with "savvy ways", there are few more astute than the Chinese in running businesses.

You rather skipped over the downside for Thailand: 'a fall in exports and tourism'. Considering the rest of your piece is based on hyperbole couldn't you have gone a little more emphatic on this too, after all these 2 areas account for 78% of GDP on what is visible, before we even consider the greyer areas of the tourist buck, and they are both in freefall from what can be gathered.

After that it's a bit meandering, sheer opinion and your own moral vision of fairness.

What big party was that by the way ?. dam_n missed out again

There is a big dynamic from East and West and it's really about those rather odd bed fellows USA and China. Both are dependent on each other for survival.

Sure its based on my own opinion. But I have been out here for well over a decade and watched how rapidly things are developing and progressing. China has only been a player for two decades, and in this short time has made incredible development. There will doubtless be a few setbacks along the way, but I do not believe the Chinese are so stupid that they will carry on supporting the decadent lifestyle of the West into the future.

Sooner or later the West has to start producing something that people want to buy. Rising property prices and Stock markets don't count anymore.

http://www.china.org.cn/english/features/C...2004/106995.htm

In 1987, the Chinese government set out a clear and definite economic construction objective: The first step was to double the 1980 GNP and ensure that the people have enough food and clothing. China attained this by the end of the 1980s. The second step was to quadruple the 1980 GNP by the end of the 20th century. This was achieved in 1995, ahead of time. The third step is to increase the per-capita GNP to the level of the medium-developed countries by the mid-21st century. At this point, Chinese people will have achieved a high standard of living and modernization basically will be realized.

I, for one, believe that they will achieve this. They are dedicated, are on a mission, and are able to move millions of people around as needed to fulfill their goals. Unlike the West, where you can't do anything without upsetting somebody, and overcoming immense restrictions and obstacles.

What have the Chinese achieved in the last two decades? Built up huge production facilities producing goods to western standards, built up huge foreign currency reserves, and are producing huge numbers of graduates. These I would view as huge stepping stones on the way to achieving their goal.

But, coming back to Thailand,

I agree that exports will fall and the global depression is going to affect Thailand. But the question is, will it be worse than in the West? The West will still have to buy food from Asia. And there will always be Westerners with jobs and money to spend on holidays, looking to escape the cold winters of Scandinavia and Germany, Thailand is a preferred destination.

And a Thai without a job can generally find somewhere to live and eat, and doesn't get cold. In the West without a job things get pretty dire. The UK has 2,000,000 jobless forecast to rise to 3,000,000.

And going back specifically to the question of the THB. What is the best thing for the Thai government to do? Weigh the Baht against a basket of currencies and keep it roughly in line with them? Or take a wild gamble and try a competitive devaluation of the currency, possibly destabilising the Asian currencies as they all start playing the same destructive game?

I think by far the best plan is to continue the existing policies and wait until the clowns in the West have stopped knee jerking and experimenting with Quantitative Easing. The Bank of Thailand is doing a great job. Thank you.

(Oh, and the big party was the house price and stock market bubbles, both finished for ever, or rather, until those with short term memories start them up again, only to relive the pain of the past)

That's a very good piece of analysis.

But, don't you think this is really about time lag? Oddly enough the export driven economies seem to be slowing the most, eg, Japan, Germany and by extension Thailand. I don't know but Thailand in many ways seems to be a sub contractor for the USA. In this respect no more than a hired hand. I think while USA, UK, etc, are at their lowest ebb, Thailand is only just moving in to the slump.

I agree agriculture is a jewel for Thailand but as far as I'm aware it only accounts for 10-15% of GDP, although it does employ many millions, officially and unofficially.

The thing is modern economies can not afford even small drops in GDP for any length of time as most people, businesses and govts are so indebted- that's the insanity of big business.

I think your argument is based on the notion that Thailand is comparatively healthier than the Western economies and I think this is due to the phase the respective economies are in. Sure they didn't get caught up in the credit crunch, but the country is now facing a severe downturn with what appears to be yet another ineffective govt. It's swings and roundabouts.

There certainly seems nothing to justify the strength of the bt in my opinion and as an earlier poster mentioned it would be better to use the yuan as a yardstick.

[bangkokrick]

The pound is weak and down against most of the major currencies it has nothing to do with the Baht being strong. I live in Thailand and i have seen the Baht to the GBP fall from 74 to 50 Ish in a short period of time. I am now in China and the last time i came here i got 16 RMB to the pound, now it stands at 9 RMB. Nothing to do with a strong Baht.

Cheers, Rick

[12DrinkMore]

and in the meanwhile the THB is rising against almost every currencies.

Thai government keeps this menthality on having the world most overvalued currency in order to humilate the other countries and show the superiority of Thailand.

But I am afraid hundreds of thousands of new jobless and impoverished people would not agree with this idiotic policy.

The Thai Baht is not the world's most overvalued currency, possibly the USD and GBP have that distinction.

And the THB is not rising against almost every currency.

Just check out this nice tool on the Bank of Thailand's website and you can investigate the THB against 35 odd currencies from January 2002 until now.

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

And then maybe you can tell us which currencies it is persistently and continuously rising against.

How does Thailand manage their currency - If I was them I would be tempted to track the chinese yuan ?How does the yuan compare to these other currencies ?

The Bank of Thailand aims to keep the value of the Baht stable against a basket of currencies. I think it is doing an excellent job. Just check out the fluctuation against the Asian currencies. Mostly the THB is fairly stable over the last year, except notably the Yuan, which has increased in strength.

As I have already spouted on several threads, the Thai banking industry is solid, Thailand is still making a trading surplus. All the bullshit about the THB

being incredibly strong is simply wrong.

It is the basket case economies and banking systems in the West that have weakened their respective currencies. The THB against the regional currencies is fairly stable. And I hope that the Asians will continue to pursue this course of stability. It is bad enough to have the UK and US insanely bailing out failed banks and trying to support no longer competitive and viable industries. And now the utterly insane experiment with printing money by buying up worthless toxic crap.

The Asians learned a lot from 1997. I wish that the Farang would recognise this and put the blame for the unfavourable exchange rates well and truly where it lies, and that is not here in Asia.

[12DrinkMore]

The thing is modern economies can not afford even small drops in GDP for any length of time as most people, businesses and govts are so indebted- that's the insanity of big business.

Yep, stand by for some HUGE drops in GDP in the UK and USA, as the previous contributions from the financial industry and property markets disappear up the Khyber.

I think your argument is based on the notion that Thailand is comparatively healthier than the Western economies and I think this is due to the phase the respective economies are in. Sure they didn't get caught up in the credit crunch, but the country is now facing a severe downturn with what appears to be yet another ineffective govt. It's swings and roundabouts.

Hmm, well that got me thinking, on the contrary I think that the Thai government is one of the BEST assets they have. They fart around with their own squabbles and let business carry on doing business, not getting in the way.

Compare this to what you presumably call "effective" governments in the US and the UK, and I think that we have examples of the most INEFFECTIVE, NON FUNCTIONING BLOATED governments, that work actively AGAINST INDUSTRY by issuing a continuous stream of legislation and rules, and permitting minority groups to make the decisions for the majority.

No, I am totally convinced that Thai government is a HUGE HUGE asset.

There certainly seems nothing to justify the strength of the bt in my opinion and as an earlier poster mentioned it would be better to use the yuan as a yardstick.

As I just pointed out in my last post in this thread, it is not the Baht that is strong, it is a handful of western currencies that are weak because their banking systems and economies have failed, and the governments are on the path to financial suicide by meddling with forces they haven't got a clue about, The Great Quantitative Easing Experiment.

[ChiangMaiFun]

The thing is modern economies can not afford even small drops in GDP for any length of time as most people, businesses and govts are so indebted- that's the insanity of big business.

Yep, stand by for some HUGE drops in GDP in the UK and USA, as the previous contributions from the financial industry and property markets disappear up the Khyber.

I think your argument is based on the notion that Thailand is comparatively healthier than the Western economies and I think this is due to the phase the respective economies are in. Sure they didn't get caught up in the credit crunch, but the country is now facing a severe downturn with what appears to be yet another ineffective govt. It's swings and roundabouts.

Hmm, well that got me thinking, on the contrary I think that the Thai government is one of the BEST assets they have. They fart around with their own squabbles and let business carry on doing business, not getting in the way.

Compare this to what you presumably call "effective" governments in the US and the UK, and I think that we have examples of the most INEFFECTIVE, NON FUNCTIONING BLOATED governments, that work actively AGAINST INDUSTRY by issuing a continuous stream of legislation and rules, and permitting minority groups to make the decisions for the majority.

No, I am totally convinced that Thai government is a HUGE HUGE asset.

There certainly seems nothing to justify the strength of the bt in my opinion and as an earlier poster mentioned it would be better to use the yuan as a yardstick.

As I just pointed out in my last post in this thread, it is not the Baht that is strong, it is a handful of western currencies that are weak because their banking systems and economies have failed, and the governments are on the path to financial suicide by meddling with forces they haven't got a clue about, The Great Quantitative Easing Experiment.

The problem is that the THB is being artificially propped up - 'managed' in other words - I'm sure if it were left to the market it would crash - tourism down 30%? exports down etc. etc. it's all got to come home to roost at some stage - and anyway I wasn't particularyy commenting on the strength of the Thai economy but rather suggesting that the dollar will reduce and the GBP will strength - we are at 52 today and I was only saying 55 is reasonable within the next month - the response that it will fall to 40 is absurd.

[ChiangMaiFun]

Let's put some timeline on this - I think 55 by 20th April - when do you think 40?

[bangkokrick]

The pound is worth 52 as we speak, maybe we are on the up!

Cheers, Rick

[badge]

http://www.dailymail.co.uk/news/article-11...7-election.html

its pointless following GBPTHB as its simply USDTHB x cable. It has no driving flows to speak of. USDTHB, and perhaps EURTHB are the only crosses of relevance.

[yabaaaa]

The pound is worth 52 as we speak, maybe we are on the up!

Cheers, Rick

Nope today its 51 so what!! next week 49 next week 52.

[jdrake72]

The thing is modern economies can not afford even small drops in GDP for any length of time as most people, businesses and govts are so indebted- that's the insanity of big business.

Yep, stand by for some HUGE drops in GDP in the UK and USA, as the previous contributions from the financial industry and property markets disappear up the Khyber.

I think your argument is based on the notion that Thailand is comparatively healthier than the Western economies and I think this is due to the phase the respective economies are in. Sure they didn't get caught up in the credit crunch, but the country is now facing a severe downturn with what appears to be yet another ineffective govt. It's swings and roundabouts.

Hmm, well that got me thinking, on the contrary I think that the Thai government is one of the BEST assets they have. They fart around with their own squabbles and let business carry on doing business, not getting in the way.

Compare this to what you presumably call "effective" governments in the US and the UK, and I think that we have examples of the most INEFFECTIVE, NON FUNCTIONING BLOATED governments, that work actively AGAINST INDUSTRY by issuing a continuous stream of legislation and rules, and permitting minority groups to make the decisions for the majority.

No, I am totally convinced that Thai government is a HUGE HUGE asset.

There certainly seems nothing to justify the strength of the bt in my opinion and as an earlier poster mentioned it would be better to use the yuan as a yardstick.

As I just pointed out in my last post in this thread, it is not the Baht that is strong, it is a handful of western currencies that are weak because their banking systems and economies have failed, and the governments are on the path to financial suicide by meddling with forces they haven't got a clue about, The Great Quantitative Easing Experiment.

that s not quite true

THB is amongst the strongest currencies in the world and by far the most overvalued.

Not just the western currencies are weak, just look at the Australian Dollar, New Zealand, all african currencies, all south american currencies , they are all down vs. the USD between 10% and 100% and similar compared to the THB too.Many of these third world countries are competitors of Thailand. THB value is the biggest scam in the world, the only currency keep rising despite the economy being in a total disaster and going into a ravine.

Euro e Pound today collapsing against the THB, the THB rising also against the dollar and all other world currencies, dollar down 3% in one week, euro down 2.5% in just 2 days, THB is rising at amazing pace despite the collapse of its economy (1 million jobless and 3% GDP shrink are now the more optimistic forecasts, but it will be worse, of course).

Thai economy will shrink more than most of western economies (with some exceptions) and its currency is stronger than almost every one , including for example 20% higher in few months compared to the Indian rupiah which economy is 10 times in better shape than Thai economy (+5% againts -3%).

There is no doubt THB current value is the biggest scam of the world currency system, it should be lower than the 1997 lowest peak and in fact it 30% higher than in 1997 (realated to USD).

But you know, when the Govt policy is to show "its superiority" by having the world most overvalued currency, we cannot be surprised if the economy is going to crash....

Edited March 27, 2009 by jdrake72

[12DrinkMore]

that s not quite true

THB is amongst the strongest currencies in the world and by far the most overvalued.

Not just the western currencies are weak, just look at the Australian Dollar, New Zealand, all african currencies, all south american currencies , they are all down vs. the USD between 10% and 100% and similar compared to the THB too.Many of these third world countries are competitors of Thailand. THB value is the biggest scam in the world, the only currency keep rising despite the economy being in a total disaster and going into a ravine.

Euro e Pound today collapsing against the THB, the THB rising also against the dollar and all other world currencies, dollar down 3% in one week, euro down 2.5% in just 2 days, THB is rising at amazing pace despite the collapse of its economy (1 million jobless and 3% GDP shrink are now the more optimistic forecasts, but it will be worse, of course).

Thai economy will shrink more than most of western economies (with some exceptions) and its currency is stronger than almost every one , including for example 20% higher in few months compared to the Indian rupiah which economy is 10 times in better shape than Thai economy (+5% againts -3%).

There is no doubt THB current value is the biggest scam of the world currency system, it should be lower than the 1997 lowest peak and in fact it 30% higher than in 1997 (realated to USD).

But you know, when the Govt policy is to show "its superiority" by having the world most overvalued currency, we cannot be surprised if the economy is going to crash....

I am not sure where you are getting all your data from.

But here is a good source of exchange rates

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

I can't see these massive up movements you are talking about that you claim to have seen over the last couple of days.

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

All seems fairly stable to me, where are you getting the data to show the THB up some 3% in a week?

And looking back over the data for the last few years, the THB has remained stable against the Asian currencies. And going back to 1997, before the Asian crisis the Baht was pegged at 25 and now the USD buys 35 Baht, a drop of 40% in value for the Baht.

So I am a little clueless as to where you are getting your exchange rates, and where you see the fair value for the THB. But a big scam? Certainly not, with a sound banking system, solid foreign reserves and a policy to maintain stability against a basket of other currencies, Thailand is doing OK.

[ChiangMaiFun]

that s not quite true

THB is amongst the strongest currencies in the world and by far the most overvalued.

Not just the western currencies are weak, just look at the Australian Dollar, New Zealand, all african currencies, all south american currencies , they are all down vs. the USD between 10% and 100% and similar compared to the THB too.Many of these third world countries are competitors of Thailand. THB value is the biggest scam in the world, the only currency keep rising despite the economy being in a total disaster and going into a ravine.

Euro e Pound today collapsing against the THB, the THB rising also against the dollar and all other world currencies, dollar down 3% in one week, euro down 2.5% in just 2 days, THB is rising at amazing pace despite the collapse of its economy (1 million jobless and 3% GDP shrink are now the more optimistic forecasts, but it will be worse, of course).

Thai economy will shrink more than most of western economies (with some exceptions) and its currency is stronger than almost every one , including for example 20% higher in few months compared to the Indian rupiah which economy is 10 times in better shape than Thai economy (+5% againts -3%).

There is no doubt THB current value is the biggest scam of the world currency system, it should be lower than the 1997 lowest peak and in fact it 30% higher than in 1997 (realated to USD).

But you know, when the Govt policy is to show "its superiority" by having the world most overvalued currency, we cannot be surprised if the economy is going to crash....

I am not sure where you are getting all your data from.

But here is a good source of exchange rates

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

I can't see these massive up movements you are talking about that you claim to have seen over the last couple of days.

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

All seems fairly stable to me, where are you getting the data to show the THB up some 3% in a week?

And looking back over the data for the last few years, the THB has remained stable against the Asian currencies. And going back to 1997, before the Asian crisis the Baht was pegged at 25 and now the USD buys 35 Baht, a drop of 40% in value for the Baht.

So I am a little clueless as to where you are getting your exchange rates, and where you see the fair value for the THB. But a big scam? Certainly not, with a sound banking system, solid foreign reserves and a policy to maintain stability against a basket of other currencies, Thailand is doing OK.

Now, now Drinkmore... how can you say 'sound banking system'? I think a Tsunami will hit Thailand (unfortunately) as they are more concerned with 'losing face' than economic reality - only today several of my farang friends have left the Kingdom worried about a possible airport closures - this and other things (i.e. 30% drop in tourism) isn't exactly going to help the 'sound financial' system you dream about is it? chai mai? I admire your optimism though! but I think you are a little over zealous in your views (with respect of course). However I do enjoy your posts however overly pessimistic they are about the 'West' and however overly 'Optimistic' they are about LOS.

[12DrinkMore]

Now, now Drinkmore... how can you say 'sound banking system'?

Until a single bank in Thailand, or even Asia, comes whining to the government asking for a huge bailout, I would say that the banking system is sound. So far they have not put any money of mine in jeopardy or, indeed, erased a fair chunk as the fukcing Icelanders have done with Kapthing and Landsbanki. Since the 1997 Asian Crisis the Thai banks have been run on a very conservative basis offering pisspoor deposit rates and charging relatively high borrowing rates. They have no involvement in the debacle that has enveloped the banking systems in the UK and USA.

I think a Tsunami will hit Thailand (unfortunately) as they are more concerned with 'losing face' than economic reality - only today several of my farang friends have left the Kingdom worried about a possible airport closures - this and other things (i.e. 30% drop in tourism) isn't exactly going to help the 'sound financial' system you dream about is it? chai mai? I admire your optimism though! but I think you are a little over zealous in your views (with respect of course). However I do enjoy your posts however overly pessimistic they are about the 'West' and however overly 'Optimistic' they are about LOS.

I know of nobody who is concerned about possible airport closures, but have met many "first time in Thailand" tourists over the last few months who are already planning a return visit. In particular the Scandinavians will not forsake Thailand as a major tourist destination. Tourism, according to the official figures, contributes just a single figure percentage to the Thai gdp. I find this a bit hard to believe, but that is what they say.

I think you have to separate the financial system from the economic situation.

But surely Thailand offers a unique holiday experience? Safety, good food, pleasant smiles, an infrastructure that functions, medical care to western standards, great food at a GREAT price, beer available 24/7, warm weather all year around, beaches, mountains and, of course, the other delights in Pattaya, Patong etc. all at great prices. And for those over 50 the easiest expat visa available. Just name one country that has all of this. I cannot think of any alternative.

Where have your friends disappeared to? Back to Farangland? Oh dear, somehow I think they will regret that decision.

[ChiangMaiFun]

Now, now Drinkmore... how can you say 'sound banking system'?

Until a single bank in Thailand, or even Asia, comes whining to the government asking for a huge bailout, I would say that the banking system is sound. So far they have not put any money of mine in jeopardy or, indeed, erased a fair chunk as the fukcing Icelanders have done with Kapthing and Landsbanki. Since the 1997 Asian Crisis the Thai banks have been run on a very conservative basis offering pisspoor deposit rates and charging relatively high borrowing rates. They have no involvement in the debacle that has enveloped the banking systems in the UK and USA.

I think a Tsunami will hit Thailand (unfortunately) as they are more concerned with 'losing face' than economic reality - only today several of my farang friends have left the Kingdom worried about a possible airport closures - this and other things (i.e. 30% drop in tourism) isn't exactly going to help the 'sound financial' system you dream about is it? chai mai? I admire your optimism though! but I think you are a little over zealous in your views (with respect of course). However I do enjoy your posts however overly pessimistic they are about the 'West' and however overly 'Optimistic' they are about LOS.

I know of nobody who is concerned about possible airport closures, but have met many "first time in Thailand" tourists over the last few months who are already planning a return visit. In particular the Scandinavians will not forsake Thailand as a major tourist destination. Tourism, according to the official figures, contributes just a single figure percentage to the Thai gdp. I find this a bit hard to believe, but that is what they say.

I think you have to separate the financial system from the economic situation.

But surely Thailand offers a unique holiday experience? Safety, good food, pleasant smiles, an infrastructure that functions, medical care to western standards, great food at a GREAT price, beer available 24/7, warm weather all year around, beaches, mountains and, of course, the other delights in Pattaya, Patong etc. all at great prices. And for those over 50 the easiest expat visa available. Just name one country that has all of this. I cannot think of any alternative.

Where have your friends disappeared to? Back to Farangland? Oh dear, somehow I think they will regret that decision.

I apologise for again... disagreeing... I know personally of a few farangs who have left Thailand prematurely to escape any possible 'airport problem' - and your 'over 50 easiest (sic) expat visa available' is somewhat 'optomistic'. I can only report what I have been told and seen - in fact all flights are fully booked and many are scrambling around for seats -

I don't like it, I don't want it - you don't like it and you don't want it - but Thailand's economy is vastly over valued and the Reds are on the march - I love Thailand and I won't leave, much like yourself I believe, but we have to face facts not just forelorn hopes!!! I believe you geneuine lover for Thailand somewhat gives you a rosetinted view... if I am wrong I shall rejoice!!!

[jdrake72]

and in the meanwhile the THB is rising against almost every currencies.

Thai government keeps this menthality on having the world most overvalued currency in order to humilate the other countries and show the superiority of Thailand.

But I am afraid hundreds of thousands of new jobless and impoverished people would not agree with this idiotic policy.

The Thai Baht is not the world's most overvalued currency, possibly the USD and GBP have that distinction.

And the THB is not rising against almost every currency.

Just check out this nice tool on the Bank of Thailand's website and you can investigate the THB against 35 odd currencies from January 2002 until now.

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

And then maybe you can tell us which currencies it is persistently and continuously rising against.

How does Thailand manage their currency - If I was them I would be tempted to track the chinese yuan ?How does the yuan compare to these other currencies ?

The Bank of Thailand aims to keep the value of the Baht stable against a basket of currencies. I think it is doing an excellent job. Just check out the fluctuation against the Asian currencies. Mostly the THB is fairly stable over the last year, except notably the Yuan, which has increased in strength.

As I have already spouted on several threads, the Thai banking industry is solid, Thailand is still making a trading surplus. All the bullshit about the THB

being incredibly strong is simply wrong.

It is the basket case economies and banking systems in the West that have weakened their respective currencies. The THB against the regional currencies is fairly stable. And I hope that the Asians will continue to pursue this course of stability. It is bad enough to have the UK and US insanely bailing out failed banks and trying to support no longer competitive and viable industries. And now the utterly insane experiment with printing money by buying up worthless toxic crap.

The Asians learned a lot from 1997. I wish that the Farang would recognise this and put the blame for the unfavourable exchange rates well and truly where it lies, and that is not here in Asia.

I have checked over 150 currencies in Oanda and the fact is THB has risen against 90% of the world currencies in the past 6 months.

Despite being its politics and economy amongst the WORST.

Of cours ethere is no even the minimal doubt THB is the world most overvalued currency.

The economy disaster will be a consecuence of that stupid and insane governemtn policies.

http://www.bangkokpost.com/breakingnews/13...ded-for-economy

Read the last two lines please.... When you will see Thailand amongst the bottom of the worst economical performers - in few months- maybe you will review your words of "Thai giovt has managed it very well"...yes, very well towards the crash...

MILLIONS of jobless, poverty going back to levels of 20 years ago , etc etc...

say thanks to the strong THB for that...

Edited March 29, 2009 by jdrake72

[jdrake72]

that s not quite true

THB is amongst the strongest currencies in the world and by far the most overvalued.

Not just the western currencies are weak, just look at the Australian Dollar, New Zealand, all african currencies, all south american currencies , they are all down vs. the USD between 10% and 100% and similar compared to the THB too.Many of these third world countries are competitors of Thailand. THB value is the biggest scam in the world, the only currency keep rising despite the economy being in a total disaster and going into a ravine.

Euro e Pound today collapsing against the THB, the THB rising also against the dollar and all other world currencies, dollar down 3% in one week, euro down 2.5% in just 2 days, THB is rising at amazing pace despite the collapse of its economy (1 million jobless and 3% GDP shrink are now the more optimistic forecasts, but it will be worse, of course).

Thai economy will shrink more than most of western economies (with some exceptions) and its currency is stronger than almost every one , including for example 20% higher in few months compared to the Indian rupiah which economy is 10 times in better shape than Thai economy (+5% againts -3%).

There is no doubt THB current value is the biggest scam of the world currency system, it should be lower than the 1997 lowest peak and in fact it 30% higher than in 1997 (realated to USD).

But you know, when the Govt policy is to show "its superiority" by having the world most overvalued currency, we cannot be surprised if the economy is going to crash....

I am not sure where you are getting all your data from.

But here is a good source of exchange rates

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

I can't see these massive up movements you are talking about that you claim to have seen over the last couple of days.

http://www2.bot.or.th/statistics/ReportPag...mp;language=eng

All seems fairly stable to me, where are you getting the data to show the THB up some 3% in a week?

And looking back over the data for the last few years, the THB has remained stable against the Asian currencies. And going back to 1997, before the Asian crisis the Baht was pegged at 25 and now the USD buys 35 Baht, a drop of 40% in value for the Baht.

So I am a little clueless as to where you are getting your exchange rates, and where you see the fair value for the THB. But a big scam? Certainly not, with a sound banking system, solid foreign reserves and a policy to maintain stability against a basket of other currencies, Thailand is doing OK.

well, I take the data hour by hour by official exchange rates from SCB ...THB has risen almost 3% in TWO DAYS against USD last week (I also lost a half million dollar sell for that problem :-( .

Your figure is also biased, coz THB was almost 57 for 1 USD in 1997, yes it had been 25 for decades but how much accumulated inflation has had Thailand in decades ??

If you calculate accumulated inflation and exchange rates, it is clear THB is by far the most overvalued currency of the region.

The evidence is that asian countries with FAR BETTER ecomomies (during the past decade) and political enviroments than Thailand have now their currencies at similar or lower value than during the 1997 lowest peak despite having LESS accumulated inflation.

South Korean won for example is short of its lowet 1997 peak, so that Taiwanese dollar, and Indian rupiah is even lower ... THB is VERY FAR away from 56-57 for 1USD despite its accumulated inflation is higher than 2 of these 3 countries and its accumulated GDP growth is LOWER. So,explain me that...

So tell me which BOT bullshit is that THB is keeping competitive and in line with the other regional currencies.... only a child could believe these lies... just see the facts....

Other regional currencies plus south american and african currencies and east european currencies (third world countries like Thailand) have their currencies plunged vs. the THB between 10% and 100% in the past 6 months... I mean 90% of the world currencies and almost the whole of Thailand competitors or countries with similar level of developement.

Look now at the Thai economy plunging and the budget deficit booming,every week the Govt, admits a worse and worse figure, now it looks to be a real DISASTER of Thai economy,worse than many asian and european countries....

THB devaluation itself wouldn t be the only panacea of course but it would help to revitilize exports, giving oxigene to moribund factories and companies on the verge of collapse and helping preservcing few hundreds thousands jobs which in turn would prevent internal consumption to collapse to infimous levels......

Not say THB going to 1997 levels at 60 for 1 USD but at the average 1998-2004 levels of 40-42 for 1 USD would be a more realistic exchange rate and good equilibrium between imprt and export prices (In inquired few hundreds importers/exporters regarding their most profitable exchange rate ,i am not just guessing).

Edited March 29, 2009 by jdrake72

[snuggzzz]

OP............ I think I'd leave it a while, The THB's rate will go down giving you more THB for your GBP...!!

[ourmanflint]

Nice to see that there at least a few of you still around. It must be getting lonely in the "this is thailand, everything is OK club" . Is it that you think there is some kind of special barrier around Thailand that repels all the nasty things that happen elsewhere, financial crisis, rising sea levels etc etc.?

How is it that some of you think any financial institution in any country is immune to the disease spreading around the globe? I know there are always optimists, but really you need to get out a bit more. To say that the problem is restricted to the USA or Europe just shows your complete ignorance of how the world in reality functions.

The longer the denial goes on the more damage will be done, Thailands economy at present seems to be a very accurate reflection of the very worst aspect of Thai culture, that of saving face. It will eventually have to give way to the reality of the rest of the world and when it goes it will go in spectacular fashion.

But keep the drums drumming... it can't happen here... it can't happen here

[Gary A]

Just over ten years ago, the Thai economy suffered a huge crash. I think they have learned valuable lessons from that disaster. The worst problem Thailand has are its incredibly corrupt politicians. That is just a way of life here and will no be cured for many years if ever.

If you are of the opinion that the British pound, the Euro or the Dollar are in better shape than the baht, I'd say that is totally wishful thinking and that you are going to be very disappointed. With the entire Western world leaning heavily towards socialism, things are just going to get worse.

[ourmanflint]

Just over ten years ago, the Thai economy suffered a huge crash. I think they have learned valuable lessons from that disaster. The worst problem Thailand has are its incredibly corrupt politicians. That is just a way of life here and will no be cured for many years if ever.

If you are of the opinion that the British pound, the Euro or the Dollar are in better shape than the baht, I'd say that is totally wishful thinking and that you are going to be very disappointed. With the entire Western world leaning heavily towards socialism, things are just going to get worse.

I think that the economies behind the Euro , Dollar and even the Pound are far more durable than Thailands, which seems in all honesty to be me a complete fantasy. I've never understood why Thailands economy as it is, can be immune from the ridiculous property boom that has been happening over the past 7-9 years. I really think that 1997 will seem like a hiccough compared to what's around the corner.

[Naam]

I think that the economies behind the Euro , Dollar and even the Pound are far more durable than Thailands, which seems in all honesty to be me a complete fantasy. I've never understood why Thailands economy as it is, can be immune from the ridiculous property boom that has been happening over the past 7-9 years. I really think that 1997 will seem like a hiccough compared to what's around the corner.

well done Flint! keep up the good job and think. perhaps one day you'll understand

[Jake1]

I think that the economies behind the Euro , Dollar and even the Pound are far more durable than Thailands, which seems in all honesty to be me a complete fantasy.

They produce more than they consume, they work for extremely low wages, and Thailands Government isn't indebted by Trillions of Dollars in Debt and Obligations.

Don't you think an Economy which borrows to spend and one that makes promises of a cushy life for each and every individual is living a fantasy? Thailands Economy is far more durable then that of the U.S, U.K, and many in the Euroland.

[wolf5370]

OK, I'm no economist (and I'm sure I'll get some 'and you can say that again' flames) and I am writing from thought rather than facts.

I don't pretend to be an expert, and I base this on my own, probably floored, understanding and muses - please correct me if (where) I'm wrong as this is what I am after - undersanding.

Where does Thailand, China and even India get its income from? If those that are saying that the Thai economy is strong and baht is stable because they can survive the global crisis because they have few debts and can live on their own produce, then fine, sure. Does that make a country powerful ecomincally though? There are several countries that are self sufficient and owe little, yet they are hardly ecomic giants (I am talking about countries that do not rely on forign trade/income to raise their econimies). Countries like India that may have trillions in reserves will weather the storm I guess, but as most of their income is from western countries - selling services - they are somewhat dependant on those countries - if the west falls their income disolves. Can they make it with trading with eachother? Possibly, but where is the market? The people are mostly very impoverished, can they really make enough money internally to go ahead? I don't doubt they are technically able, but in as far as the sociological side of thing - the materialisation of the masses perhaps - they are way way behind, rich elite, sure - but can they really support the massive trade they are set to loose?

As I said, I am probably posting from ignorance, but I have seen nothing but hyperbole and misdirection - Thailand has no debts, India has big reserves, China is educating its masses (really?) - but is it enough to cover the loss of the massive honey pot that is (was?) the west?

[badge]

Wolf - I wouldnt concern yourself with the general postings on TV, they seem to be aimed more at internal bickering than any sort of reasonable, sourced analysis.

Your essentially correct. Its called 'decoupling theory', that asia can now be self sufficient, and not rely on their exports. Theyre wrong of course, due to chaos theory!

All the 'wealth' that was accumulated since 1997 in the recent grand economic run, is simply disappearing, much faster than it appeared. A few savvy folks will have cashed out, most will see their investments and assets collapse, as with those in the West. Although the financial destruction in the West has truly been immense, I doubt it will be as pronounced in Asia. They had less to lose in anycase. They will suffer economically though.

Thai's exports and tourism are both collapsing. They comprise around 65% of GDP I believe. Im sure services will remain a little more resiliant, from all the cash based transactions(hookers, drug money etc).

These figures continue the trend...

http://malaysia.news.yahoo.com/rtrs/200902...my-5b757e1.html

But yes, everything points to a weaker THB.

Who what or why it remains relatively strong is anyones guess. Incidentally as someone mentioned earlier, GBPTHBs weakness is down to GBPs weakness, not THBs strength. There are little flows of GBPTHB, its simply a product of USDTHB X GBPUSD.

[badge]

re: THB pegged to CNY

CNY is pegged to the USD, with a 0.5% daily trading 'band' allowance I believe. So a THBCNY peg, is essentially a USDTHB peg, with a 0.5% band allowance per day. Not far off their current managing MO.