Central Bank Jumps In To Strengthen Falling Baht

[Shotime]

THE PRICE OF OIL !! Now who controls the price of oil? "OPEC". This week the leading countries of economic growth for most of the world asked " OPEC" to increase production to help

offset the coming economic slowdown. What was their answer " screw you" we are really enjoying all the wealth that is coming our way from you.$ 139.00 usd a barrel We stick a staff in the earth and up pops oil. It is the will of whats his name !! WE will rule the world! My question is what scientific, medical, or humanitarian contributions have we seen from these countries. Everybody here seems to forget the target of 9/11. " The World Trade Center" , This attack on the USA was not a spur of the moment plan. It took 4 years to plan and impliment ! It was not the plan of 17 deranged men. Most were well educated. It took a lot of planning and training. This kind of operation takes support from major sponsers with unlimited bankrolls. It was just the start ! Think about it folks, what you are talking about is peanuts to those that control the real money ( oil ) = Economic Power and they showed their real face to us this week. Personally if the baht is 30 or 40 to the dollar will not affect my enjoyment of this interesting country and its culture and people. Lets just enjoy the hospitality of the Thais and their lovely country. While we can!. Sawadee Kup.

Right on. That was their goal. Destroy the economy. 3 or 4 baht to the dollar isn't going to change my life that much either. What does "while we can" mean? The only good thing I've found about getting old is you don't really give a f__k that much. Why doesn't the Central Bank mind their own business? I didn't see them jump in and do anything when the $ dropped 25%.

[ray23]

You know I think we are all in different position the difference between 30 and 34 baht is enough to make my house payment every month I could survive 20 but living well requires a bit more the that.

We are definetly back burner stuff with all the upheavel goign on. I think the country is facing much more difficult problems then this. Will it hurt them if they intervene to much I think so. But we were told as the dollar was dropping they were buying dollars to keep the baht low. That would lead one to believe there should be a surplus of dollars on hand.

[ray23]

Thank goodness no Thai's involved themsleves in this.

"Some foreign speculation on baht, says Thai central bank

BANGKOK, June 11 (TNA) – Bank of Thailand (BoT) Assistant Governor Suchada Kirakul on Tuesday revealed that the central bank had monitored movements of the baht, which had weakened to a 5-month low at 33.30 to the dollar, and found that three or four specific foreign investors were found to have speculated on the currency.

She said the foreign investors had purchased and sold the baht in greater amounts than ordered in transactions and without any business support through foreign banks in Thailand and Thai bank branches overseas.

The bank had already warned them not to do that and believed that in future the baht would move in a more appropriate manner.

Mrs. Suchada conceded that the currency had weakened considerably because foreign investors had dumped Thai shares and brought money out of the stock and gold markets.

But she affirmed the baht had moved more steadily at present because exporters and importers in general had placed purchase and sale orders normally.

The baht strengthened against the dollar, closing at 33.00/05 baht, compared with 33.21/24 on Monday.

Meanwhile, The Stock Exchange of Thailand(SET) composite index lost 13.64 points to close at 791.94 Tuesday. Dealers said investors were concerned over record oil prices and high inflation as well as political turmoil.

Regarding mounting concerns over Thailand's economic sluggishness, she said the Thai economy was not in trouble although the country experienced a trade deficit.

The bank remains confident that the country's current account would remain in balance or in a small surplus this year if the average price of oil stays at no more than US$124 per barrel as earlier assumed, she added. (TNA)"

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[wade72]

Folks, last year the oil price wasn't $139 a barrel. So any savings you see from the baht falling is going to be eaten up at the pumps +++. Which is also why the gov is worried about the baht falling now and last year they were more concerned about it's strenght.

Very simple economics; last year it cost me 1500 to fill my tank, yesterday it cost 2100. So that means the baht will have to fall more then 25% for that to even out, which won't be the case since if it falls, the price for fuel will go up even higher. Becareful what you wish for, you just might get it.

[ray23]

Inflation is definelty here, then only thing I can control is my amount of travel. I'm American so let me tell you what ticks me off, we sit on huge amount of oil reserves that is untouchable. Simply can not drill for it. Secondly alternatives have been around for years and just as it is happening now everyone gets on the band wagon. Then the crisis goes away and i's forgeotten again. Before you lable me Green Peace, not the issue I'm looking at. What is happening with enrgy cost will make the financial crisis look like a bump in the road. This will grind economies to a stand still.

I'm on this guys team never meant to much to me what number they put on the rate of exchange, but what was my buying poawer. With or with this my buying power over the past few years has decreased. I would like to see tht return no matter how it's labled.

Easy to balme the investors on what happened with the baht, but that is waht they do invest money to make money as opportunties comes if they want to survive they have to take profits. None of what is being talked about will really stablize anything.

My guess yes we will see more baht on exchange and yes fuel costs will go up, which will effect every aspect of living How is to be really controlled got me.

[RAZZELL]

You can't buck the market.

I think the thai baht will weaken further.

RAZZ

[papajohn]

THE PRICE OF OIL !! Now who controls the price of oil? "OPEC". This week the leading countries of economic growth for most of the world asked " OPEC" to increase production to help

offset the coming economic slowdown. What was their answer " screw you" we are really enjoying all the wealth that is coming our way from you.$ 139.00 usd a barrel We stick a staff in the earth and up pops oil. It is the will of whats his name !! WE will rule the world! My question is what scientific, medical, or humanitarian contributions have we seen from these countries. Everybody here seems to forget the target of 9/11. " The World Trade Center" , This attack on the USA was not a spur of the moment plan. It took 4 years to plan and impliment ! It was not the plan of 17 deranged men. Most were well educated. It took a lot of planning and training. This kind of operation takes support from major sponsers with unlimited bankrolls. It was just the start ! Think about it folks, what you are talking about is peanuts to those that control the real money ( oil ) = Economic Power and they showed their real face to us this week. Personally if the baht is 30 or 40 to the dollar will not affect my enjoyment of this interesting country and its culture and people. Lets just enjoy the hospitality of the Thais and their lovely country. While we can!. Sawadee Kup.

Right on. That was their goal. Destroy the economy. 3 or 4 baht to the dollar isn't going to change my life that much either. What does "while we can" mean? The only good thing I've found about getting old is you don't really give a f__k that much. Why doesn't the Central Bank mind their own business? I didn't see them jump in and do anything when the $ dropped 25%.

Good question ! When I arrived in Thailand the EX rate was 39/1usd. My bank account in the USA was hit for $265.00 for a 10,000 baht withdrawl. today my account is hit for $320.00. for the same amount of baht ! I am not an economist, I am only a retired guy that likes it here and wants to enjoy what few years I have left. You are right, I do not give a dam_n

as long as I can enjoy my last years in peace in a country where people give respect to us " old" folks.

I have to adjust to the whims of the money thing.

A little bit less of this and that, I will survive ! Living

in Thailand is what counts to me. Yes there are times when I get frustrated or surprised at the culture of the things I have seen but that is thru my western eyes. Age and experience has taught me to accept

things as they are here. It is only a state of mind thing. KISS, Keep It Sweet and Simple. Enjoy where you are. To answer your question " while we can "

You are not paying attention to the "BIG" picture

that I set forth. Get ready , this is only the start !

I wish you well ! Sawadee Kup

[madi]

Factors Contributing to a Weak Currency

Federal Reserve Bank, Chicago

Lower interest rates in home country than abroad

Higher rates of inflation

A domestic trade deficit relative to other countries

A consistent government surplus

Relative political/military stability in other countries

A collapsing domestic financial market

Weak domestic economy/stronger foreign economies

Frequent or recent default on government debt

Monetary policy that frequently changes objectives.

[madi]

baht going even weaker

[bangon04]

Thank goodness no Thai's involved themsleves in this.

"Some foreign speculation on baht, says Thai central bank

BANGKOK, June 11 (TNA) – Bank of Thailand (BoT) Assistant Governor Suchada Kirakul on Tuesday revealed that the central bank had monitored movements of the baht, which had weakened to a 5-month low at 33.30 to the dollar, and found that three or four specific foreign investors were found to have speculated on the currency.

She said the foreign investors had purchased and sold the baht in greater amounts than ordered in transactions and without any business support through foreign banks in Thailand and Thai bank branches overseas.

The bank had already warned them not to do that and believed that in future the baht would move in a more appropriate manner.

Mrs. Suchada conceded that the currency had weakened considerably because foreign investors had dumped Thai shares and brought money out of the stock and gold markets.

But she affirmed the baht had moved more steadily at present because exporters and importers in general had placed purchase and sale orders normally.

The baht strengthened against the dollar, closing at 33.00/05 baht, compared with 33.21/24 on Monday.

Meanwhile, The Stock Exchange of Thailand(SET) composite index lost 13.64 points to close at 791.94 Tuesday. Dealers said investors were concerned over record oil prices and high inflation as well as political turmoil.

Regarding mounting concerns over Thailand's economic sluggishness, she said the Thai economy was not in trouble although the country experienced a trade deficit.

The bank remains confident that the country's current account would remain in balance or in a small surplus this year if the average price of oil stays at no more than US$124 per barrel as earlier assumed, she added. (TNA)"

_________________

.

Yes it must be a comfort in these troubled times that the falang can be blamed for the problems of Thailand....... as usual

[Heng]

I think a lot of folks on these boards have "center of the universe" issues. Foreign doesn't always, and especially in terms of foreign direct investment/investment in the stock market/forex speculation/tourism/etc. etc. mean "falang."

[Shotime]

You are not paying attention to the "BIG" picture

that I set forth. Get ready , this is only the start !

I wish you well ! Sawadee Kup

Papa, I was only asking how long we got. It seems like it's so easy to blame the US for what goes on in the world. I was just reading another thread where they were blaming the US for what's going on in the world because they drive gas guzzlers. We live in a time where it's become easy to manipulate the news (only word I could think of) media to divert attention from the truth and keep the people heaped in BS. I'm going to stick to the threads where they talk about the situations some foreigners get themselves into here in Thailand. At least there's some humor there. Enjoy yourself, Papa. It's later than you think?

[ray23]

Well another aspect that came up today leading to inflation, besides food and oil. Was the easy credit available of that last few years. For example in the housing areas I live there are several houses being reposed, they are ones purchased by Thai owners adn were mean to be a reidence for them but a investment. We as farrang had to come up with a 40% down to get a loan, Thai's as low a 10%.

Well now they are paying much more for fuel and food. Can't a make the payments.

The amount of new pickups and those dreaded SUV's being driven around was huge. The majority of which are driven by Thai's not farrangs. Six years go it was very difficult to find a used vehicle in Udon, toady there are at leat 12 different lots. Most are stocked with repos.

An Asian economist today on Bloomberg pointed out that the growth in consumer loans also increased inflation, as inflation hits it drives currencies down. A lot of rating agencies are now rating the Asian markets zero. So his recommendation wa o oput the brakes on now in loose lending practises. That i going to be a hard one for the banks to apply. They have had years of growth and they want mn more of that money.

More and more it is being pointed out that specualtion is major contributor to the cost of oil, which also contributes to food costs and everything else that I can think of. Why becuae seculaotors, hedge fund and even pesnion plans can make a lot of money in commodities. What will cahne that a stronger dollar will help. If oild starts on the road down they will pull out of commodities an for the better money elsewhere. Anyone remember the same investors driving the baht down. Everyone except the Thai Stock Market seemed to understand that.

Now they are seing those investors walking away for greener patures and hey actually seem surprised. Well quick money in not long term money, those investors are here for the quick bucks they are Thai an farrang alike. That is thier business and how they make money, Simple as that.

The government is in almost an imposible situtation now, vouhers issued to the poor isnt; much from waht i hear about $10 a month but there are millions who need them. Reducing the cost of fule fo neccessay transporato ion. Has to be thing and people in todays world have to be mobile. Guranting prices to farmers, we all have to eat. But in the it all contributes to inflation. Which drives the currency down

[madi]

Inflation- - -Too much money chasing to few goods

prices go up

If you think we have trouble now, what if Oil goes to 200 dollars a barrel?

[ray23]

Hope you have space and know how to garden

[cclub75]

More and more it is being pointed out that specualtion is major contributor to the cost of oil, which also contributes to food costs and everything else that I can think of.

The buzz against the "speculators" is totally surreal.

Take oil for instance.

If you think that the peak (cheap) oil is uppon us... what would you do ? You would buy, because you'd assume that "tomorrow" it will be even more expensive. It would be a bet.

So you would be a "speculator".

I mean ! that's the nature of the market !

But with the newspeak of the politicians, the word "speculation" now points to something not natural. But I repeat, if you believe in peak oil, then to buy oil now at 130 USD is perfectly normal. And cheap.

[ray23]

No doubt in the logic in that statement, it's just the current bubble it will go away and when it doe the amatures will be hit hard, just the nature of the beast. It will be replaced by another just like subprime was.

[Naam]

Why doesn't the Central Bank mind their own business?

what the BOT is doing IS their "own business". well... that's what they think

[ray23]

YEP

But having nothing much esle to do on rainy days this will do

[bonobo]

More and more it is being pointed out that specualtion is major contributor to the cost of oil, which also contributes to food costs and everything else that I can think of.

The buzz against the "speculators" is totally surreal.

Take oil for instance.

If you think that the peak (cheap) oil is uppon us... what would you do ? You would buy, because you'd assume that "tomorrow" it will be even more expensive. It would be a bet.

So you would be a "speculator".

I mean ! that's the nature of the market !

But with the newspeak of the politicians, the word "speculation" now points to something not natural. But I repeat, if you believe in peak oil, then to buy oil now at 130 USD is perfectly normal. And cheap.

As a logical sort of guy, I don't like emotionally driven markets and "speculators." I would much rather have a world where people buy what they need and no more. I t would be much easier to make decision based on a reasonable foreseeable future.

On the other hand, I am a "speculator." I buy stocks in Argentine silver mines, in American fast food companies, and in emerging market funds, among many. I am "speculating" that their values will rise in the future.

But then back to my distaste of many speculators, when it is driven by emotions and not by real supply and demand, then people and economies are asking for a spectacular fall. Bubble economies alwasy crash at some point They are not sustainable.

Right now, oil should not be this high. Higher than it was, sure, but not this high, and not jumping up $11 in one day. That is emotions talking. It could rise higher in the future based on true economic fundamentals, but for now, the price in over-inflated.

[TEFLMike]

It's OK I found it sorry , not moved up much

[ray23]

To me you sound more like an investor then a speculator. To me one tries to make sound business decesions and the other manipulates the market for short term gain.

[ataloss]

I'm American so let me tell you what ticks me off, we sit on huge amount of oil reserves that is untouchable. Simply can not drill for it. yes fuel costs will go up, which will effect every aspect of living How is to be really controlled got me.

Actually I believe the USA 'Simply will not drill for it'; not now at least. Not until the west has used up every last drop of Saudi, Arab and Persian oil. Then the USA expects to have the upper hand. The interim and unexpected problem for the USA and others is the startling sky-high price of oil. More to do with speculators, and IMHO the glossed over issue of the scarcity and age of US oil refineries. In the meantime, as usual, consumers are expected to bite the bullet, as it were.

[VegasVic]

Interesting home sale in april in the US up 6.3%

Dollar up 106.29 to the Yen

I think we will see baht at 34 soon.

How in the world can the BOT stop that, it's not just Thailand

Ray, the BOT's efforts to stop the rapid rise of the baht last year was largely unsuccessful just as any efforts on their part to stop the decline currently will be. I think that the BOT's main concern is not in stopping the bahts decline, but rather to insure that the bahts decline is a slow and measured one and not a replay of 1997. A weaker baht is actually a win-win scenario for Thailand, as long as the decline is an orderly one.

Normally, the BOT does want relative stability, but these days with oil prices through the roof a stronger THB/USD exchange rate is preferable (albeit beyond their control).

OMR, It is indeed beyond the BOT's control. The dollar and oil have an inverse relationship, and oils meteoric rise over the past 4-5 years has had much to do with the weakening dollar. When oil crashes I would look for a much stronger dollar, the dollar will strengthen mostly against the Yen, Euro and especially the Pound, but I would imagine that the baht/dollar rate could rise above 36 quite rapidly (ironically the rate at which the BOT was trying to stabilize the baht at last year when the baht was heading the other direction). Hopefully after the initial shock the baht will stabilize in the 36-38 range, and God and Budda willing, Thailand can get through their current inflation crisis.

[VegasVic]

I'm American so let me tell you what ticks me off, we sit on huge amount of oil reserves that is untouchable. Simply can not drill for it. yes fuel costs will go up, which will effect every aspect of living How is to be really controlled got me.

Actually I believe the USA 'Simply will not drill for it'; not now at least. Not until the west has used up every last drop of Saudi, Arab and Persian oil. Then the USA expects to have the upper hand. The interim and unexpected problem for the USA and others is the startling sky-high price of oil. More to do with speculators, and IMHO the glossed over issue of the scarcity and age of US oil refineries. In the meantime, as usual, consumers are expected to bite the bullet, as it were.

ataloss, your post was spot on! The worlds largest known oil reserves are indeed in North America, in the form of oil shale on the west slope of the rockies and the tar sands in Alberta. While worldwide oil demand has been risng over the last few years, it has been flat to slightly down over the past 12 months, and yet the price of oil has doubled in that same time frame. Oil seems to have replaced gold as an inflation hedge and when that hedge comes off the price of oil will plummet as the longs get eaten alive. When gold supassed the $1000 mark a few months ago nobody really cared except a few gold bugs because gold is a purely speculative play, demand for gold in industrial applications has been declining for many years and the only other "real market" for gold is jewelry. The doubling of the price of oil due to speculation while demand stays constant has affected billions of people worldwide, and the public outcry around the globe is deafening. I would look for oil to drop $20/bbl or better in a single day sometime very soon, and by years end oil could easily be below $80/bbl.

[OlRedEyes]

Everyone bullish on oil. Hmmmm. Maybe time to sell......

[ray23]

On UBC Channel 5 at 0830 there is a Thai news program in englsih. Today topice wa about the BOT. What I'm going to say are the man who was interviewed words not mine, As usual don't trust anything I have to say do yuo own research come ot your own conclusion.

He said what we see going on with the BOT is a result of a law, the implemenation is spearheaded by the PM. There was no evidence tht Mr. Taksin was involved. Basically it creates a advisory comittee tha has no power except one to hire and fire the BOT Governor. The also basically form a shield circle to the Finance Minister, Yuo want to get to him you go throgh them. Which apparently makes the is comittee profitable and powerful in that sence.

He said he expected that comittee to be formed from some of the 111 TRT politicians that have been banned from Politics. He also said these guys have always been in a advisor capacity going all the way back to the TRT days and the Military days as well.

I didn't catch anything about when the law was created or what administration it came from.

Remember this is just what I understood it to be, not a fact.

[gadinaz]

Don't get me wrong - I'm an exporter and paid in USD, surely like the trend after all the increases from my supplier.

Quite right. The trend for the USD has been down:

Eight Year US Dollar

Since it's high of 121 back in 2001 & 2002, the USD has lost 40% of it's value. Good for Exporters - Bad for Expats who's income is in Dollars.

If I'm correct ... we should experience, at least for the short term, a bottom in the US Dollar and of course that translates to a weaking of the Thai Baht as well as other International Currencies.

US Dollar last 72.38

Looks like the US Dollar is basing ...

Weekly Chary for USD

US Dollar last 74.60

[gadinaz]

Don't get me wrong - I'm an exporter and paid in USD, surely like the trend after all the increases from my supplier.

Quite right. The trend for the USD has been down:

Eight Year US Dollar

Since it's high of 121 back in 2001 & 2002, the USD has lost 40% of it's value. Good for Exporters - Bad for Expats who's income is in Dollars.

If I'm correct ... we should experience, at least for the short term, a bottom in the US Dollar and of course that translates to a weaking of the Thai Baht as well as other International Currencies.

US Dollar last 72.38

Looks like the US Dollar is basing ...

Weekly Chary for USD

US Dollar last 74.60

The euro broke through support at $1.53, signaling the start of a primary down-trend. Bearish divergence on Twiggs Money Flow (13-week) and breakout from the rising trend channel both confirm the signal. Expect support at $1.50 and a retracement to test the new resistance level.