How Long Before Baht Plummets ?

[meom]

Or is it just a case of foreign investors changing their baht investments back into dollars?

That would be buying dollars with Baht, the opposite of what jdrake says is strengthening the Baht.

--

Maestro

You're right. As usual I got the buying and selling mixed up.

[jesimps]

Something wrong here, makes me think that baht isn't tied to dollar.

GBP/USD = 1.49 (pound up)

USD/THB = 34.9 (dollar down)

THB/GBP = 52.1 (Baht up)?????

Either baht is acting independantly or dollar is no longer a safe haven, or both. Seems that no matter what, the baht is going to carry on strengthening.

[mommysboy]

Stepping back from the conventional analysis, look if you had to name one country that would attempt to pervert the course of things, acted in inexplicible manner, completely mismanage a situation financially, and deny anything was wrong, which country would that be ?

rhetorical

[cclub75]

I think I found something. I need the help of experts.

-the foreign currency reserves of BOT seem flat : 103 billions USD (december 5) (no big move, unlike countries like Russia for instance who is fighting its currency depreciation by selling big amounts of USD).

http://www.bot.or.th/English/Statistics/Ec...lReserves.aspx#

-what is moving a lot, decreasing a lot, are the net forward positions : from a peak of 25 billions USD in march... to only 6,5 billions USD now.

-what are forward positions ? We have more details on the site of the IMF about Thailand's reserves (last data : september).

Aggregate short and long positions in forwards and futures in foreign currencies vis-à-vis the domestic currency (including the forward leg of currency swaps)

http://www.imf.org/external/np/sta/ir/tha/eng/curtha.htm

-and here, we see that we have only "long positions" (for a total of 13 billions USD, in september).

-question : is it correct to say that those "long positions vis a vis the domestic currency" mean that the BOT has committed itself to buy for 13 billions USD ?

-if yes, then we could say : the BOT doesn't touch (for the moment) to its foreign currency reserves... but rather is changing only the total amount of its foward positions, by reducing them a lot.

-AKA : the BOT is buying less and less USD (in the future, through the forward positions). It would be a clear sign of the current BOT's policy, although a little bit hidden.

Could you confirm this ?

Edited December 14, 2008 by cclub75

[TheJoker]

The Baht is gliding slowly already towards the Euro

on Nov 20 1 Euro=43,71

on Dec 12 1 Euro=46,41

In Feb this year the Baht stood 1 Euro=49,89

[jdrake72]

There have been few articles regarding the "mystery" of the Thai Baht exchange rate,one of them was few weeks ago in the Wall Street Journal.

BTW, we have a couple of facts which are out of discussions:

-Thai Baht -as admitted by BOT- is "set" in line according to a basket of other currencies.

It is not clear how is the composition and % of these currencies,but we can say the Baht is working with a kind of peg.

-By depending on other currencies, the Baht value is no set according to domestic market or buying and selling, but its set with an average on other countries markets, with their ecomomical and financial situations. That means its value is "artificial" and it is not given by the domestic market.

Now, the question is: What would happen if the BOT decided to free the Baht's exchange rate ?

Would it going down ,up or stay pretty much stable ?

I tend to believe there would be risks for the Baht to going down and with this perception, there could be panic and speculation and the baht could plunge.

I also tend to believe BOT fears a situation like this ,that s why is keeping the Baht with this pseudo-peg.

I also think Thailand economy depends inevitably on its political situation , Thailand has alsways been lucky (or successful) and favorable to attract investors despite its turmoils,but if the social-political situation turned to be too volatile, Thailand would be skipped by many investors and its economy suffers; that in turn would affect the currency (under a floating exchange rate).

This climate of uncertain could be the reason of the BOT 's "stubborness" not to let the baht floating.

I think they fear a sudden currency crisis. I also think BOT has not a medium-term strategy, they are just buying time awaiting for the situation to stabilize ....indefinitely. They are scared to take important decisions.

The problem is they are also transmitting their fear to foreigner investors too ,who cannot see a medium and long term monetary policy.

that's the most reasonable explanation I have found.

do you guys agree with me ?

Edited December 15, 2008 by jdrake72

[lannarebirth]

I tend to believe there would be risks for the Baht to going down and with this perception, there could be panic and speculation and the baht could plunge.

I also tend to believe BOT fears a situation like this ,that s why is keeping the Baht with this pseudo-peg.

I also think Thailand economy depends inevitably on its political situation , Thailand has alsways been lucky (or successful) and favorable to attract investors despite its turmoils,but if the social-political situation turned to be too volatile, Thailand would be skipped by many investors and its economy suffers; that in turn would affect the currency (under a floating exchange rate).

A couple of questions if I may. Could you be more specific on why the baht might "plunge". I can see it continuing to weaken, but what might the catalyst for a "plunge" be?

Certainly Thailand is being skipped by many investors, as are many other emerging markets. Don't you think most of those folks have taken their money and run already?

[jdrake72]

…Thailand reserves are huge and they are allowing BOT to keep the baht afloat, but actually Thai reserves are dropping very fast…

From www.xe.com/news/Fri%20Dec%2012%2002:46:00%20EST%202008/127173.htm?categoryId=1&currentPage=4:

Thai foreign reserves $105.8 bln on Dec 5

2008-12-12 07:46 (UTC)

BANGKOK, Dec 12 (Reuters)

Graph based on the table on the linked web page:

--

Maestro

So they are down approximately 20% since Songkraan according to the graphic.

I don t have an idea which is a "bottom line" under which reserves start to be dangerously low , Thailand is still far from that line but if the trend follows this way, more sooner than later we can face the problem and it would be very hard to sustain the baht.

[jdrake72]

I tend to believe there would be risks for the Baht to going down and with this perception, there could be panic and speculation and the baht could plunge.

I also tend to believe BOT fears a situation like this ,that s why is keeping the Baht with this pseudo-peg.

I also think Thailand economy depends inevitably on its political situation , Thailand has alsways been lucky (or successful) and favorable to attract investors despite its turmoils,but if the social-political situation turned to be too volatile, Thailand would be skipped by many investors and its economy suffers; that in turn would affect the currency (under a floating exchange rate).

A couple of questions if I may. Could you be more specific on why the baht might "plunge". I can see it continuing to weaken, but what might the catalyst for a "plunge" be?

Certainly Thailand is being skipped by many investors, as are many other emerging markets. Don't you think most of those folks have taken their money and run already?

Baht has actually being very strong compared to other asian currencies (with 3-4 exceptions).

But I think baht could plunge due to panic and speculation. There is lots of money in Thailand , not only foreigner's, rich Thais could swap their assets fast if they perceive a fear of a currency crisis.

With a peg, there is no reason to do that.

That's what I think and what BOT may also fears. But it is just my idea.

We have to start from the point Thai politics now is one of the most unstable and volatile of the region and we don t really know what else (after the aiport seizure) can expect in the following months/years.

Politics affects the economy and economy (under a floating market) also affects the currency.

It may not be immediate,but is almsot unavoidable.

There is also another reason which makes me think: according to many economists including an article on the excellent The Economist the main difference between current situation and 1997 situation in Thailand is the ammout of reserves: that's the main reason (may not be the only one, but it is regarded as the main reason) why a currency crisis is said not to be likely.

Fine, but reserves have actually dropped by 20% in 8 months, if they follow this path, Thailand could reach a point in which its situation could resemble the one of 1997. We don't have to forget Thailand was the first country which allow its currency to float and caused a domino-effect accross Asia.

Edited December 15, 2008 by jdrake72

[tartempion]

The Baht is gliding slowly already towards the Euro

on Nov 20 1 Euro=43,71

on Dec 12 1 Euro=46,41

In Feb this year the Baht stood 1 Euro=49,89

July 15, 2008 1 euro = 52.77875 Baht

November 20, 2008 1 euro = 43.2925

December 15, 2008 1 euro = 47.1075

returning to 50 soon?

[Golden Nugget]

Back to the OP's question - How long before the baht plummets? Inquiring minds want to know!

Now I'm about to go to Thailand, the dollar is heading back to its single-ply toilet paper status again!

[jdrake72]

Back to the OP's question - How long before the baht plummets? Inquiring minds want to know!

Now I'm about to go to Thailand, the dollar is heading back to its single-ply toilet paper status again!

that was a reaction to the foiled rescue plan for auto car and the today's likely lowering of the interest rate to a record low.

I noted that traditionally Thai Baht has been strong almost every year towards the end of the year and starts to be weaker around Songkraan.

Also, yesterday in Bloomberg I read about the Russian roble, which is falling after Russia had tried to sustain its value by spending about 25% of its reserves without any result.

Although Thai and Russian economy have different realities, there are some common points: Thailand has also spent around 20% of its resevres in order to keep the baht afloat.

This trend (pressure for a devaluation) started around Songkraan last year, before that it was the opposite: Thailand had bought huge reserves of dollars not to let the baht go too expensive.

The same reserves are now sold out ,...

we see guys a very clear fact: BOT fears strong fluctuations of the baht, why ?

Well, i think there are big ammount of capitals which can change hands very fast, speculators and panic are factors which can sway the currency to both extremes very fast and BOT wants to avoid to have a volatile currency in an already volatile political enviroment.

The more I think about it the more I am convinced.

But in few months when the reserves start to be low, BOT should at least allow a more managed devaluation.

I cannot say more...but let s wait around Songkraan ...

Edited December 16, 2008 by jdrake72

[cclub75]

we see guys a very clear fact: BOT fears strong fluctuations of the baht, why ?

Well, i think there are big ammount of capitals which can change hands very fast, speculators and panic are factors which can sway the currency to both extremes very fast and BOT wants to avoid to have a volatile currency in an already volatile political enviroment.

The more I think about it the more I am convinced.

But in few months when the reserves start to be low, BOT should at least allow a more managed devaluation.

I share your views : the BOT doesn't seem to have a clear policy. They just have one terror : volatility. They want to have a "slow moving" USDTHB exchange rate. Why ? I think they don't really know.

But, as you've pointed out... the game could change quickly.... Exports numbers are going to be awful in november and december... they have only one solution in order to ease quickly the pressure on thai companies : to let the THB going down versus the USD.

The crap about cut interest rates won't product any effect before at least 6 months... Same for the so called fiscal policy, and all the bullshit about mega-projects, and various "stimulus".... The fastest weapon to ease the pressure is : exchange rates. Now.

(too bad that no one is able to answer my previous question about forward positions for the foreign currency reserves of the BOT, I really think there is an indicator to be found there).

Edited December 16, 2008 by cclub75

[lannarebirth]

I tend to believe there would be risks for the Baht to going down and with this perception, there could be panic and speculation and the baht could plunge.

I also tend to believe BOT fears a situation like this ,that s why is keeping the Baht with this pseudo-peg.

I also think Thailand economy depends inevitably on its political situation , Thailand has alsways been lucky (or successful) and favorable to attract investors despite its turmoils,but if the social-political situation turned to be too volatile, Thailand would be skipped by many investors and its economy suffers; that in turn would affect the currency (under a floating exchange rate).

A couple of questions if I may. Could you be more specific on why the baht might "plunge". I can see it continuing to weaken, but what might the catalyst for a "plunge" be?

Certainly Thailand is being skipped by many investors, as are many other emerging markets. Don't you think most of those folks have taken their money and run already?

Baht has actually being very strong compared to other asian currencies (with 3-4 exceptions).

But I think baht could plunge due to panic and speculation. There is lots of money in Thailand , not only foreigner's, rich Thais could swap their assets fast if they perceive a fear of a currency crisis.

With a peg, there is no reason to do that.

That's what I think and what BOT may also fears. But it is just my idea.

We have to start from the point Thai politics now is one of the most unstable and volatile of the region and we don t really know what else (after the aiport seizure) can expect in the following months/years.

Politics affects the economy and economy (under a floating market) also affects the currency.

It may not be immediate,but is almsot unavoidable.

There is also another reason which makes me think: according to many economists including an article on the excellent The Economist the main difference between current situation and 1997 situation in Thailand is the ammout of reserves: that's the main reason (may not be the only one, but it is regarded as the main reason) why a currency crisis is said not to be likely.

Fine, but reserves have actually dropped by 20% in 8 months, if they follow this path, Thailand could reach a point in which its situation could resemble the one of 1997. We don't have to forget Thailand was the first country which allow its currency to float and caused a domino-effect accross Asia.

Ok, thanks for your clarification. You may be right, and we'll know in the fullness of time.

My take is that the THB will continue to weaken slowly against the $USD, as will most other currencies for the next few years.

[churchill]

"My take is that the THB will continue to weaken slowly against the $USD, as will most other currencies for the next few years."

In these markets I don't think anything is happening slowly - If the dollar starts to weaken , as it has , it may tumble quite quickly soon - and not slowly over a few years . IMHO

[chiang mai]

I tend to believe there would be risks for the Baht to going down and with this perception, there could be panic and speculation and the baht could plunge.

I also tend to believe BOT fears a situation like this ,that s why is keeping the Baht with this pseudo-peg.

I also think Thailand economy depends inevitably on its political situation , Thailand has alsways been lucky (or successful) and favorable to attract investors despite its turmoils,but if the social-political situation turned to be too volatile, Thailand would be skipped by many investors and its economy suffers; that in turn would affect the currency (under a floating exchange rate).

A couple of questions if I may. Could you be more specific on why the baht might "plunge". I can see it continuing to weaken, but what might the catalyst for a "plunge" be?

Certainly Thailand is being skipped by many investors, as are many other emerging markets. Don't you think most of those folks have taken their money and run already?

Baht has actually being very strong compared to other asian currencies (with 3-4 exceptions).

But I think baht could plunge due to panic and speculation. There is lots of money in Thailand , not only foreigner's, rich Thais could swap their assets fast if they perceive a fear of a currency crisis.

With a peg, there is no reason to do that.

That's what I think and what BOT may also fears. But it is just my idea.

We have to start from the point Thai politics now is one of the most unstable and volatile of the region and we don t really know what else (after the aiport seizure) can expect in the following months/years.

Politics affects the economy and economy (under a floating market) also affects the currency.

It may not be immediate,but is almsot unavoidable.

There is also another reason which makes me think: according to many economists including an article on the excellent The Economist the main difference between current situation and 1997 situation in Thailand is the ammout of reserves: that's the main reason (may not be the only one, but it is regarded as the main reason) why a currency crisis is said not to be likely.

Fine, but reserves have actually dropped by 20% in 8 months, if they follow this path, Thailand could reach a point in which its situation could resemble the one of 1997. We don't have to forget Thailand was the first country which allow its currency to float and caused a domino-effect accross Asia.

Ok, thanks for your clarification. You may be right, and we'll know in the fullness of time.

My take is that the THB will continue to weaken slowly against the $USD, as will most other currencies for the next few years.

I know that you know that I don't know where USD will be in two years but now I know that you do know although I don't know that you really do know! Anyway, why is it that you think that USD will strengthen in relative terms, all the indicators would seem to suggest otherwise, unless there's something I don't know?

[lannarebirth]

I tend to believe there would be risks for the Baht to going down and with this perception, there could be panic and speculation and the baht could plunge.

I also tend to believe BOT fears a situation like this ,that s why is keeping the Baht with this pseudo-peg.

I also think Thailand economy depends inevitably on its political situation , Thailand has alsways been lucky (or successful) and favorable to attract investors despite its turmoils,but if the social-political situation turned to be too volatile, Thailand would be skipped by many investors and its economy suffers; that in turn would affect the currency (under a floating exchange rate).

A couple of questions if I may. Could you be more specific on why the baht might "plunge". I can see it continuing to weaken, but what might the catalyst for a "plunge" be?

Certainly Thailand is being skipped by many investors, as are many other emerging markets. Don't you think most of those folks have taken their money and run already?

Baht has actually being very strong compared to other asian currencies (with 3-4 exceptions).

But I think baht could plunge due to panic and speculation. There is lots of money in Thailand , not only foreigner's, rich Thais could swap their assets fast if they perceive a fear of a currency crisis.

With a peg, there is no reason to do that.

That's what I think and what BOT may also fears. But it is just my idea.

We have to start from the point Thai politics now is one of the most unstable and volatile of the region and we don t really know what else (after the aiport seizure) can expect in the following months/years.

Politics affects the economy and economy (under a floating market) also affects the currency.

It may not be immediate,but is almsot unavoidable.

There is also another reason which makes me think: according to many economists including an article on the excellent The Economist the main difference between current situation and 1997 situation in Thailand is the ammout of reserves: that's the main reason (may not be the only one, but it is regarded as the main reason) why a currency crisis is said not to be likely.

Fine, but reserves have actually dropped by 20% in 8 months, if they follow this path, Thailand could reach a point in which its situation could resemble the one of 1997. We don't have to forget Thailand was the first country which allow its currency to float and caused a domino-effect accross Asia.

Ok, thanks for your clarification. You may be right, and we'll know in the fullness of time.

My take is that the THB will continue to weaken slowly against the $USD, as will most other currencies for the next few years.

I know that you know that I don't know where USD will be in two years but now I know that you do know although I don't know that you really do know! Anyway, why is it that you think that USD will strengthen in relative terms, all the indicators would seem to suggest otherwise, unless there's something I don't know?

That's not correct. I don't know where it will be in two years, I only have a working theory on where it may be. It is very possible my theory is wrong, but it hasn't been yet, so it would be foolish to abandon it.

Principally, my theory is based on the observed 17-18 year Hurst Cycle in the US Dollar. If it indeed has bottomed (which has not been confirmed) it will have beeen a shortened cycle since it's last bottom in 1992. What is different now about the $USD price action since it topped out in 2001 is that it's short term cycles (measured from low to low) have been right translated (they peak out in the latter half of the cycle). As I noted in prior posts its 10, 20 and 40 week cycles have all been right translated. This week marks it's 40th week since bottoming on March 16th. My expectation is it should provide a low sometime in the next week or so. That does not mean that it has to immediately resume its rapid rise however.

FYI, roughly the 18 year cycle is broken down into 2 nine year cycles that contain 2 - 4.5 year cycles that contain 3 - 80 week cycles, that contain 2 - 40 week cycles that comtain 2 - 20 week cycles that containt 2 -10 week cycles which contain 2 - 5 week cycles. There are lots of other shorter and longer term cycles going on simultaneously, but these are the principal ones.

My longer term expectation is that the 18 year cycle will be left translated and that the $USD will make new lows into its close.

Its all subject to be wrong of course, but one needs a roadmap to work with, or one would never know when they've deviated off course.

From a non cyclical standpoint, and therefore of less importance to me, but something I still consider, I expect deleveraging to go on a few more years yet. Also, once a currency has been damaged enough, it makes more sense to trade in the direction of the move, rather than expect that it will resume its prior valuation anytime soon.

Also FYI, when I make comments (which of course may be wrong) I'm not talking about trading for pips income like some other posts you may see here. All my work is with an eye toward weath preservation only.

[churchill]

You are looking backwards to predict what might happen - but I think the current situation is unique , because of the way the fed are trying to stall the recession , and so i don't think what happened in the past will mirror the current crisis .

Edited December 16, 2008 by churchill

[chiang mai]

I think it's a pretty safe bet that history does and always will repeat itself, it's one of the few things I would gamble on. To think otherwise is to presume that human beings are smarter than they are and that's simply not the case.

[terryp]

All this about cycles is rubbish…why? Because the World has never been in a situation like now.

The US$ is about to be hit big time & the baht is going to be hit Jan09 Why?...because there are less FX coming in like other high seasons …that’s why the baht always drops at songkran, plus don’t forget Thai exports are going down the drain; so no $ in FX payments for exports as the BOT stopped the mandatory US$ only payments for exports….bang!!!

[lannarebirth]

You are looking backwards to predict what might happen - but I think the current situation is unique , because of the way the fed are trying to stall the recession , and so i don't think what happened in the past will mirror the current crisis .

No I'm not. I'm looking at present price action.

Undoubtedly the current situation is unique in its specifics, but if one is an active participant in markets and not merely an observer/commentator one needs a theory, an expectation of what may happen. One also needs a mechanism to know when ones theory is wrong. That works for me.

Edited December 16, 2008 by lannarebirth

[chiang mai]

All this about cycles is rubbish…why? Because the World has never been in a situation like now.

The US$ is about to be hit big time & the baht is going to be hit Jan09 Why?...because there are less FX coming in like other high seasons …that’s why the baht always drops at songkran, plus don’t forget Thai exports are going down the drain; so no $ in FX payments for exports as the BOT stopped the mandatory US$ only payments for exports….bang!!!

If you look in one of the other threads on this subject currently you will see that BOT reserves have hardly been dented as a result of them supporting the Baht over recent months. As for incoming FX: you seem to imply that tourism is THE major source of FX whereas I believe that regional trade, particularly China is likely to provide a much larger contribution.

[lannarebirth]

All this about cycles is rubbish…why? Because the World has never been in a situation like now.

The US$ is about to be hit big time & the baht is going to be hit Jan09 Why?...because there are less FX coming in like other high seasons …that's why the baht always drops at songkran, plus don't forget Thai exports are going down the drain; so no $ in FX payments for exports as the BOT stopped the mandatory US$ only payments for exports….bang!!!

So, you think the THB and the USD are about to be hit big time. and you could very well be right. Good luck to you..

In currencies there's always a winner and a loser. Which currencies will be the chief beneficiaries of these moves you foresee?

[12DrinkMore]

All this about cycles is rubbish…why? Because the World has never been in a situation like now.

The US$ is about to be hit big time & the baht is going to be hit Jan09 Why?...because there are less FX coming in like other high seasons …that's why the baht always drops at songkran, plus don't forget Thai exports are going down the drain; so no $ in FX payments for exports as the BOT stopped the mandatory US$ only payments for exports….bang!!!

Why did they drop the mandatory USD? Possibly to give the choice to move away from the USD to other currencies.

IMO, and here it comes,

Although Thailand needs foreign investment to support large development projects, compare this with the US, UK and other "Farang" economies, that desperately need foreign investment (or rather massive creditors, China being the biggest by far) just to support the humongous debt mountain. Now, if I had large amounts of USD, which have recently risen in value, I would also be selling them off, as I cannot see any basis for a further rise in the USD. Rather than precipitate a massive swing, a slow but sure sell off seems like a good idea.

And, in the same way that China has, by and large, funded the massive consumer boom in the west, I would, in the position of China, be looking to support consumers in the countries where it sees a future in selling its exports for the next few years. And these are Asian countries. It would not surprise me to find out that the Thai/Chinese trade is now in THB, requiring that THB is bought up by China, causing the stability in the Baht. Tourism in Thailand is also turning more to the Asian countries.

And to take it to the final conclusion, in the end every country will be in debt to China, who will then financially rule the universe. They will be able to dictate terms to every country in its debt. It can probably do this now with the States. Chinese dominance of the financial world.

So will there be a massive fall in the THB? I do not think so.

The Farang tourist industry can be replaced by an Asian tourist industry, the Thai exports, which are staple requirements of the West still have to be bought by the West to avoid starvation, as the West cannot support itself with food.

Maybe I will be eating my cap in six months, or next month.

What do you think? Am I so far off the mark that it is ridiculous? Or is the thought that the Chinese, by providing the funds, have allowed the West to self destruct in a massive credit boom and bust, not credible?

[SomNamNah]

wow, thats a great post!

The profit margin on Chinese imports into Thailand is much smaller i would imagine. Maybe a 30% markup - wholesale.

But to the west the Chinese profit margins are probably 500% plus even with distribution costs etc - I guess land routes from the North may benefit Thailand, but not much, im guessing the ports are where the bulk of the goods are. Thats just my take on the THB.

West cannot support itself with food? Im not sure thats correct is it? scary if its true. But I imagine a time will come when it is true. Fresh vegetables in the UK have been a luxury item for years now

Thats if the Chinese dont go hungry first, and eat everything that moves..

god what a mess.

[RAZZELL]

What do you think? Am I so far off the mark that it is ridiculous? Or is the thought that the Chinese, by providing the funds, have allowed the West to self destruct in a massive credit boom and bust, not credible?

Well, I don't know what all the Chinese factory workers are going to do (something like 300m???) when "The West" don't by Chinese goods...

Plus, I don't think the Chinese elite want that on their plates, do you?

RAZZ

P.S. Back on topic...US dollar dropped by 2 cents against the pound on close and more on Thursday.

Baht down to around 60-62 to the pound by mid-January.

Edited December 16, 2008 by RAZZELL

[Naam]

Thailand has also spent around 20% of its resevres in order to keep the baht afloat.

But in few months when the reserves start to be low, BOT should at least allow a more managed devaluation.

I cannot say more...but let s wait around Songkraan ...

that information indicates that you are sitting on BOT's board

[MJP]

What do you think? Am I so far off the mark that it is ridiculous? Or is the thought that the Chinese, by providing the funds, have allowed the West to self destruct in a massive credit boom and bust, not credible?

Well, I don't know what all the Chinese factory workers are going to do (something like 300m???) when "The West" don't by Chinese goods...

Plus, I don't think the Chinese elite want that on their plates, do you?

RAZZ

P.S. Back on topic...US dollar dropped by 2 cents against the pound on close and more on Thursday.

Baht down to around 60-62 to the pound by mid-January.

The FED just cut rates to 0-0.25% (range, whatever that is) from 1%.

Dollar to slide. This signals asset buying, expect stocks to rocket for a bit. Forget deflation, here we go again . . .

Jim Puplava of FinancialSense predicted this 18 months ago. Rates to go to zero, big bailouts. Leads to big inflation end of 2009, huge rate hikes and depression in 2010.

Well there's fun innit?

[chiang mai]

What do you think? Am I so far off the mark that it is ridiculous? Or is the thought that the Chinese, by providing the funds, have allowed the West to self destruct in a massive credit boom and bust, not credible?

Well, I don't know what all the Chinese factory workers are going to do (something like 300m???) when "The West" don't by Chinese goods...

Plus, I don't think the Chinese elite want that on their plates, do you?

RAZZ

P.S. Back on topic...US dollar dropped by 2 cents against the pound on close and more on Thursday.

Baht down to around 60-62 to the pound by mid-January.

The FED just cut rates to 0-0.25% (range, whatever that is) from 1%.

Dollar to slide. This signals asset buying, expect stocks to rocket for a bit. Forget deflation, here we go again . . .

Jim Puplava of FinancialSense predicted this 18 months ago. Rates to go to zero, big bailouts. Leads to big inflation end of 2009, huge rate hikes and depression in 2010.

Well there's fun innit?

Look on the bright side, if your scenario matures and I think it just might, we could easily see 70 baht per Pound again by end 09 as UK interest rates rise. As for the following year, well, just make sure you time your conversion to Baht properly otherwise it doesn't bear thinking about. Have to say though that I'm feeling fairly chirpy this morning for two reasons. The first is I got tired yesterday of screwing around with my remaining USD in the that death zone of 1.45/1.52 and decided to get out completely, that was one lucky move on my part since this morning it's showing at 1.55. I always have problems in the 1.40-1.60 window and hope I have learned my lesson this time and will never play there again!

Secondly, I took another fixed rate deposit on GBP yesterday (can still get 4.5%) and despite the temptation to go for two years I have followed my gut and stuck with one year. Twelve months hence we could well be in a totally different ball game, as our American cousins like to say.

[Mosha]

70 Baht hooray Out of curiosity, any forcasts for end of 2nd quarter GBPvBaht?