How Long Before Baht Plummets ?

[chiang mai]

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

2Q09 you say, yes I have several possibilities for you to chose from, based on the analytical methodology that is employed and your preferences for structured or unstructured analysis. The choices are 36, 42, 50, 52, 55, 60 or 62. Having said that there is a tendency for one of the models to suggest that 38, 39, 53, 58 and 61 are also candidates. I can however confirm that it will definitely NOT be 59.

cheers

On a more serious note, it's interesting to see what's happening with the GBP/THB exchnage rate this morning. GBP/USD is rising and whilst GBP/THB was rising it is now falling - I detect the hands of currency manipulators at work, BOT perhaps?

Edited December 17, 2008 by chiang mai

[Mosha]

Since I last looked about 75 mins back the pound v USD has risen against the Baht almost no movement approx 53.95. OK gotta go for 90 day report.

[chiang mai]

Since I last looked about 75 mins back the pound v USD has risen against the Baht almost no movement approx 53.95. OK gotta go for 90 day report.

GBP/USD now over 1.56, GBP/THB down from 54.08 to 53.93. Ah OK, USD/THB down to 34.55 from 34.80, that explains it - forgot for a moment that THB is USD linked not GBP linked, duh!

[MJP]

Since I last looked about 75 mins back the pound v USD has risen against the Baht almost no movement approx 53.95. OK gotta go for 90 day report.

GBP/USD now over 1.56, GBP/THB down from 54.08 to 53.93. Ah OK, USD/THB down to 34.55 from 34.80, that explains it - forgot for a moment that THB is USD linked not GBP linked, duh!

Fear not boys and girls.

I think it's well to remember that many of us have enjoyed a free lunch for years in Thailand due to the weak Baht. The tables have not been turned, we are just seeing perhaps the real value of Sterling.

An old Japanese friend, retired Honda executive, always used to berate me about the Pound and why it was so strong. He'll be happy next time I see him, that's for sure.

Small blessings really. At least Sterling is trading in the 51-55 range (as I suspect it will for a while) rather than the 38-40 range it was during the 1990's. Things could be worse.

Don't worry, be happy.

(and don't spend to much)

[12DrinkMore]

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.

Sorry if I disturb your chirpy mood, but we will never see 70 Baht/Pound ever again.

The problem is the massive debt mountain. I can only see one possible way of clearing these debts, and that is to create rampant inflation. And to do that what would be the policy?

- drop interest rates to zero

- devalue the currency

- print trillions of notes

Which is exactly what is happening.

Even though Brown is saying this is a fight against deflation, the man is lying. Why would he drop VAT, an action which in itself will instantly lower inflation? Maybe just to ensure he can justify the cutting of interest rates to zero? Inflation rate is STILL at over twice the target rate of 2%, DESPITE the massive fall in oil price, it is IMPOSSIBLE that inflation will drop much if indeed at all further because all imports are now 30% more expensive, which will result in a substantial rise in prices early next year.

And Brown (he is now controlling the interest rates, NOT the MPC) will refuse to put up interest rates because of the next trumped up reason, and that is to get the economy restarted, with a much lower Pound, a workforce desperate for a job, so companies can cut wages.

The result is that the debts will be paid off with valueless paper and savings will be destroyed. So where will we be over the next couple of years?

- the prudent savers will have spent their savings or suffer massive real term losses due to inflation. (This is what Brown wants, SPEND your money)

- due to the depression and unemployment, anybody with debts they cannot service will lose their property to the nationalised banks, who will in this way rebuild their asset base (so Brown has saved the banking industry)

- after the anger and acceptance phases, there will be a labour force prepared to work for peanuts and so industry will gradually rebuild itself in a recovery.

It is everyone for themselves, and a lot of people are going to have to reassess their dreams and lifestyles.

My personal suggestion, if Thailand is your country of choice, is to bring enough funds across to support yourself for the next five years at least and, once the property prices in the UK crash another 20% buy with cash, which will give another 5% discount. People will be desperate to sell.

Anybody relying on returns from deposit accounts with reducing returns and falling GBP must earnestly review their situation.

Sorry for being the monger of doom here, but if you can see a more optimistic scenario please let me know, because this is giving me sleepless nights trying to consolidate all the news into a consistent thread.

[MJP]

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.

Sorry if I disturb your chirpy mood, but we will never see 70 Baht/Pound ever again.

The problem is the massive debt mountain. I can only see one possible way of clearing these debts, and that is to create rampant inflation. And to do that what would be the policy?

- drop interest rates to zero

- devalue the currency

- print trillions of notes

Which is exactly what is happening.

Even though Brown is saying this is a fight against deflation, the man is lying. Why would he drop VAT, an action which in itself will instantly lower inflation? Maybe just to ensure he can justify the cutting of interest rates to zero? Inflation rate is STILL at over twice the target rate of 2%, DESPITE the massive fall in oil price, it is IMPOSSIBLE that inflation will drop much if indeed at all further because all imports are now 30% more expensive, which will result in a substantial rise in prices early next year.

And Brown (he is now controlling the interest rates, NOT the MPC) will refuse to put up interest rates because of the next trumped up reason, and that is to get the economy restarted, with a much lower Pound, a workforce desperate for a job, so companies can cut wages.

The result is that the debts will be paid off with valueless paper and savings will be destroyed. So where will we be over the next couple of years?

- the prudent savers will have spent their savings or suffer massive real term losses due to inflation. (This is what Brown wants, SPEND your money)

- due to the depression and unemployment, anybody with debts they cannot service will lose their property to the nationalised banks, who will in this way rebuild their asset base (so Brown has saved the banking industry)

- after the anger and acceptance phases, there will be a labour force prepared to work for peanuts and so industry will gradually rebuild itself in a recovery.

It is everyone for themselves, and a lot of people are going to have to reassess their dreams and lifestyles.

My personal suggestion, if Thailand is your country of choice, is to bring enough funds across to support yourself for the next five years at least and, once the property prices in the UK crash another 20% buy with cash, which will give another 5% discount. People will be desperate to sell.

Anybody relying on returns from deposit accounts with reducing returns and falling GBP must earnestly review their situation.

Sorry for being the monger of doom here, but if you can see a more optimistic scenario please let me know, because this is giving me sleepless nights trying to consolidate all the news into a consistent thread.

An excellent summary of the situation. I too doubt we will see 70 THB again.

[chiang mai]

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.

Sorry if I disturb your chirpy mood, but we will never see 70 Baht/Pound ever again.

The problem is the massive debt mountain. I can only see one possible way of clearing these debts, and that is to create rampant inflation. And to do that what would be the policy?

- drop interest rates to zero

- devalue the currency

- print trillions of notes

Which is exactly what is happening.

Even though Brown is saying this is a fight against deflation, the man is lying. Why would he drop VAT, an action which in itself will instantly lower inflation? Maybe just to ensure he can justify the cutting of interest rates to zero? Inflation rate is STILL at over twice the target rate of 2%, DESPITE the massive fall in oil price, it is IMPOSSIBLE that inflation will drop much if indeed at all further because all imports are now 30% more expensive, which will result in a substantial rise in prices early next year.

And Brown (he is now controlling the interest rates, NOT the MPC) will refuse to put up interest rates because of the next trumped up reason, and that is to get the economy restarted, with a much lower Pound, a workforce desperate for a job, so companies can cut wages.

The result is that the debts will be paid off with valueless paper and savings will be destroyed. So where will we be over the next couple of years?

- the prudent savers will have spent their savings or suffer massive real term losses due to inflation. (This is what Brown wants, SPEND your money)

- due to the depression and unemployment, anybody with debts they cannot service will lose their property to the nationalised banks, who will in this way rebuild their asset base (so Brown has saved the banking industry)

- after the anger and acceptance phases, there will be a labour force prepared to work for peanuts and so industry will gradually rebuild itself in a recovery.

It is everyone for themselves, and a lot of people are going to have to reassess their dreams and lifestyles.

My personal suggestion, if Thailand is your country of choice, is to bring enough funds across to support yourself for the next five years at least and, once the property prices in the UK crash another 20% buy with cash, which will give another 5% discount. People will be desperate to sell.

Anybody relying on returns from deposit accounts with reducing returns and falling GBP must earnestly review their situation.

Sorry for being the monger of doom here, but if you can see a more optimistic scenario please let me know, because this is giving me sleepless nights trying to consolidate all the news into a consistent thread.

It was in fact Mervyn the man himself that put me in a chipper mood this morning, this plus my other bits of good fortune. Merv, Governor of the BOE, said in his letter to Gordo that whilst inflation remains high at present he expects that in 2009 he will be writing to say that inflation is drastically under target as deflation has taken hold. Classically the only way out of deflation is massively increased interest rates which inevitably could lead to a full blown depression. But if we were to see UK interest rates move up to say 15% or 16%, 70 baht to the Pound would be very real. The other side effects of course would be nightmarish!

[12DrinkMore]

It was in fact Mervyn the man himself that put me in a chipper mood this morning, this plus my other bits of good fortune. Merv, Governor of the BOE, said in his letter to Gordo that whilst inflation remains high at present he expects that in 2009 he will be writing to say that inflation is drastically under target as deflation has taken hold. Classically the only way out of deflation is massively increased interest rates which inevitably could lead to a full blown depression. But if we were to see UK interest rates move up to say 15% or 16%, 70 baht to the Pound would be very real. The other side effects of course would be nightmarish!

EH?

Raising interest rates is the opposite of what would be done to stop deflation. Economic theory reckons that to get out of deflation you need to get people to spend money by DROPPING interest rates, which are now already at almost zero and then, if that doesn't work start running the printing presses (until rampant inflation takes over).

Putting up interest rates in a time of deflation would encourage everybody to save every penny, as not only day by day the deposits would become more valuable, but also earning interest on top. This is absolutely NOT what any government wants. They want a small level of inflation, which manifests itself as a form of stealth tax, eroding the value of savings, encouraging people to spend.

Double figure interest rates are definitely not on the cards, Brown wants a dose of sizeable inflation and he will not try and keep it under control until the banks' debts have been inflated away (IMO), then, as I said above, he will STILL delay putting up the interest rates substantially to try and start the economy.

Edited December 17, 2008 by 12DrinkMore

[imaneggspurt]

Full of fortune tellers and black magic advisers in thailand, they will know,. .my feeling ,will slowly climb back to 60 to the pound, then go over that in time,.( today 54.32 )

[bendix]

I love these threads. They are perfect examples of the triumph of hope over experience.

All it's lacking is britmaveric to pop in and boldly predict the US$ - THB rate heading to 40-45 by years end, something he's been predicting for the past three years.

Now that inflation rates in the US and UK are so low (o.25% in US, for chrissakes?) there will be no chance of any return to those kind of exchange rates.

It's not rocket science, people. Many on here were gleeful that the US dollar has rallied over the past three months. They couldnt see it was a temporary glitch as US dollars were being bought to repatriate overseas investments. The dollar rose temporarily because of US weakness, not strength.

Now look what is happening. All time low interest rates and US Mint printing presses working overtime to print trillions of extra dollars in an economy that is collapsing. How anyone can be bullish against the dollar under those circumstances is beyond me. It defies logic.

[MJP]

It was in fact Mervyn the man himself that put me in a chipper mood this morning, this plus my other bits of good fortune. Merv, Governor of the BOE, said in his letter to Gordo that whilst inflation remains high at present he expects that in 2009 he will be writing to say that inflation is drastically under target as deflation has taken hold. Classically the only way out of deflation is massively increased interest rates which inevitably could lead to a full blown depression. But if we were to see UK interest rates move up to say 15% or 16%, 70 baht to the Pound would be very real. The other side effects of course would be nightmarish!

EH?

Raising interest rates is the opposite of what would be done to stop deflation. Economic theory reckons that to get out of deflation you need to get people to spend money by DROPPING interest rates, which are now already at almost zero and then, if that doesn't work start running the printing presses (until rampant inflation takes over).

Putting up interest rates in a time of deflation would encourage everybody to save every penny, as not only day by day the deposits would become more valuable, but also earning interest on top. This is absolutely NOT what any government wants. They want a small level of inflation, which manifests itself as a form of stealth tax, eroding the value of savings, encouraging people to spend.

Double figure interest rates are definitely not on the cards, Brown wants a dose of sizeable inflation and he will not try and keep it under control until the banks' debts have been inflated away (IMO), then, as I said above, he will STILL delay putting up the interest rates substantially to try and start the economy.

It wouldn't take double digit IR's now. With the debt mountain as it is, it would only take say 6% to have a drastic effect.

Of course Brown wants inflation. He thinks it will fill the hole. Trouble is Britain has a growing grey population dependent on their savings. Pensions will not keep up with inflation either.

IMO, the only way to start to fill the hole is reduce corporation tax to zero, reduce employer's NI contribution to zero and get rid of all the BS regulation, get government out of the way of real wealth producers and let's get back to doing real things.

New Labour have been the worst possible government this country has ever had.

[MJP]

I love these threads. They are perfect examples of the triumph of hope over experience.

All it's lacking is britmaveric to pop in and boldly predict the US$ - THB rate heading to 40-45 by years end, something he's been predicting for the past three years.

Now that inflation rates in the US and UK are so low (o.25% in US, for chrissakes?) there will be no chance of any return to those kind of exchange rates.

It's not rocket science, people. Many on here were gleeful that the US dollar has rallied over the past three months. They couldnt see it was a temporary glitch as US dollars were being bought to repatriate overseas investments. The dollar rose temporarily because of US weakness, not strength.

Now look what is happening. All time low interest rates and US Mint printing presses working overtime to print trillions of extra dollars in an economy that is collapsing. How anyone can be bullish against the dollar under those circumstances is beyond me. It defies logic.

Something else people miss. Any sudden benefit from weakness in USD and therefore THB will soon be lost through rocketing oil prices and other commodities.

End of 2009, big inflation, IR's to race upwards.

[britmaveric]

40-44 by 1st Quarter of 2009!!!!

[MJP]

40-44 by 1st Quarter of 2009!!!!

Anythings possible in these times . . .

[12DrinkMore]

It wouldn't take double digit IR's now. With the debt mountain as it is, it would only take say 6% to have a drastic effect.

Of course Brown wants inflation. He thinks it will fill the hole. Trouble is Britain has a growing grey population dependent on their savings. Pensions will not keep up with inflation either.

IMO, the only way to start to fill the hole is reduce corporation tax to zero, reduce employer's NI contribution to zero and get rid of all the BS regulation, get government out of the way of real wealth producers and let's get back to doing real things.

New Labour have been the worst possible government this country has ever had.

Brown does not care. He just wants to be re-elected.

Reduce taxation.... you have to be kidding, that is against Labour's religion.

Reduce NI contributions.... NI is another Ponzi scheme, you can't stop this otherwise the pensioners will be hanging out tea bags so they get three cuppas from a single bag.

And look at this for where a few cuts can be made, but won't because Brown needs the votes

http://www.timesonline.co.uk/tol/comment/c...icle5354902.ece

Get that about this place Castle Morpeth, no idea what or where it is, but 57% of the employed are state employees!!!! That means the burden of one of them is being carried by a single private sector employee. This cannot continue. Unbelievable. The national average is about 25%, all with "jobs and pension for life". So everybody in a "real" job is supporting 1/3 of a state employee. With private firms letting off employees left right and centre this burden is going to strangle the whole economy. And again, the only way out is to let inflation rip and not pass on the full rate to state salaries and pensions, effectively cutting them.

[MJP]

It wouldn't take double digit IR's now. With the debt mountain as it is, it would only take say 6% to have a drastic effect.

Of course Brown wants inflation. He thinks it will fill the hole. Trouble is Britain has a growing grey population dependent on their savings. Pensions will not keep up with inflation either.

IMO, the only way to start to fill the hole is reduce corporation tax to zero, reduce employer's NI contribution to zero and get rid of all the BS regulation, get government out of the way of real wealth producers and let's get back to doing real things.

New Labour have been the worst possible government this country has ever had.

Brown does not care. He just wants to be re-elected.

Reduce taxation.... you have to be kidding, that is against Labour's religion.

Reduce NI contributions.... NI is another Ponzi scheme, you can't stop this otherwise the pensioners will be hanging out tea bags so they get three cuppas from a single bag.

And look at this for where a few cuts can be made, but won't because Brown needs the votes

http://www.timesonline.co.uk/tol/comment/c...icle5354902.ece

Get that about this place Castle Morpeth, no idea what or where it is, but 57% of the employed are state employees!!!! That means the burden of one of them is being carried by a single private sector employee. This cannot continue. Unbelievable. The national average is about 25%, all with "jobs and pension for life". So everybody in a "real" job is supporting 1/3 of a state employee. With private firms letting off employees left right and centre this burden is going to strangle the whole economy. And again, the only way out is to let inflation rip and not pass on the full rate to state salaries and pensions, effectively cutting them.

Shocking isn't it?

It's one of the reasons I gave up with the UK at the tender age of 33. Houses unaffordable, pensions impossible, regulation and government spies dedicated to your persecution.

I'd had enough of all the hypocrisy and downright lying evil of the place.

There is forum I used to be a regular poster, very regular in fact, which covered all of which you speak. It became too depressing. Fact is the UK is no longer part of my life. Can't say I'll miss it.

[lannarebirth]

I love these threads. They are perfect examples of the triumph of hope over experience.

All it's lacking is britmaveric to pop in and boldly predict the US$ - THB rate heading to 40-45 by years end, something he's been predicting for the past three years.

Now that inflation rates in the US and UK are so low (o.25% in US, for chrissakes?) there will be no chance of any return to those kind of exchange rates.

It's not rocket science, people. Many on here were gleeful that the US dollar has rallied over the past three months. They couldnt see it was a temporary glitch as US dollars were being bought to repatriate overseas investments. The dollar rose temporarily because of US weakness, not strength.

Now look what is happening. All time low interest rates and US Mint printing presses working overtime to print trillions of extra dollars in an economy that is collapsing. How anyone can be bullish against the dollar under those circumstances is beyond me. It defies logic.

If US dollars continue to be repatriated as global bankers deleverage it would take years not months to accomplish. To this point I am bullish on the dollar and its recent weakness was an expectation that I have posted about for the past 4 weeks. I don't know if a LT bullish trend is in place but its recent moves say that is where the bets should be placed until proven wrong. The notional 40 week cycle is due to bottom next Monday, so we'll know soon enough.

I'm not certain what the purpose of these threads are if one isn't trying to take advantage of market movements to benefit their own economic situation. I fear a lot of the posters are merely observers to the market machinations and have no plan at all in place to either take advantage of the market moves, or even protect themselves from same.

It should be noted that other cyclists of note do not see the $USD bottoming before February.

Edited December 17, 2008 by lannarebirth

[chiang mai]

It was in fact Mervyn the man himself that put me in a chipper mood this morning, this plus my other bits of good fortune. Merv, Governor of the BOE, said in his letter to Gordo that whilst inflation remains high at present he expects that in 2009 he will be writing to say that inflation is drastically under target as deflation has taken hold. Classically the only way out of deflation is massively increased interest rates which inevitably could lead to a full blown depression. But if we were to see UK interest rates move up to say 15% or 16%, 70 baht to the Pound would be very real. The other side effects of course would be nightmarish!

EH?

Raising interest rates is the opposite of what would be done to stop deflation. Economic theory reckons that to get out of deflation you need to get people to spend money by DROPPING interest rates, which are now already at almost zero and then, if that doesn't work start running the printing presses (until rampant inflation takes over).

Putting up interest rates in a time of deflation would encourage everybody to save every penny, as not only day by day the deposits would become more valuable, but also earning interest on top. This is absolutely NOT what any government wants. They want a small level of inflation, which manifests itself as a form of stealth tax, eroding the value of savings, encouraging people to spend.

Double figure interest rates are definitely not on the cards, Brown wants a dose of sizeable inflation and he will not try and keep it under control until the banks' debts have been inflated away (IMO), then, as I said above, he will STILL delay putting up the interest rates substantially to try and start the economy.

Perhaps reading the attached link will help you to understand the cycle. In summary, printing money to get out of deflation causes inflation which in turn leads to high interest rates.

http://economics.about.com/cs/inflation/a/deflation.htm

[chiang mai]

40-44 by 1st Quarter of 2009!!!!

There's a fine line Brit between optimism and wishful thinking.

[pauls2979]

It wouldn't take double digit IR's now. With the debt mountain as it is, it would only take say 6% to have a drastic effect.

Of course Brown wants inflation. He thinks it will fill the hole. Trouble is Britain has a growing grey population dependent on their savings. Pensions will not keep up with inflation either.

IMO, the only way to start to fill the hole is reduce corporation tax to zero, reduce employer's NI contribution to zero and get rid of all the BS regulation, get government out of the way of real wealth producers and let's get back to doing real things.

New Labour have been the worst possible government this country has ever had.

Brown does not care. He just wants to be re-elected.

Reduce taxation.... you have to be kidding, that is against Labour's religion.

Reduce NI contributions.... NI is another Ponzi scheme, you can't stop this otherwise the pensioners will be hanging out tea bags so they get three cuppas from a single bag.

And look at this for where a few cuts can be made, but won't because Brown needs the votes

http://www.timesonline.co.uk/tol/comment/c...icle5354902.ece

Get that about this place Castle Morpeth, no idea what or where it is, but 57% of the employed are state employees!!!! That means the burden of one of them is being carried by a single private sector employee. This cannot continue. Unbelievable. The national average is about 25%, all with "jobs and pension for life". So everybody in a "real" job is supporting 1/3 of a state employee. With private firms letting off employees left right and centre this burden is going to strangle the whole economy. And again, the only way out is to let inflation rip and not pass on the full rate to state salaries and pensions, effectively cutting them.

great post IMO , England needs to start making things to sell again , there's to much government , in all walks of life ,

[chiang mai]

I love these threads. They are perfect examples of the triumph of hope over experience.

All it's lacking is britmaveric to pop in and boldly predict the US$ - THB rate heading to 40-45 by years end, something he's been predicting for the past three years.

Now that inflation rates in the US and UK are so low (o.25% in US, for chrissakes?) there will be no chance of any return to those kind of exchange rates.

It's not rocket science, people. Many on here were gleeful that the US dollar has rallied over the past three months. They couldnt see it was a temporary glitch as US dollars were being bought to repatriate overseas investments. The dollar rose temporarily because of US weakness, not strength.

Now look what is happening. All time low interest rates and US Mint printing presses working overtime to print trillions of extra dollars in an economy that is collapsing. How anyone can be bullish against the dollar under those circumstances is beyond me. It defies logic.

If US dollars continue to be repatriated as global bankers deleverage it would take years not months to accomplish. To this point I am bullish on the dollar and its recent weakness was an expectation that I have posted about for the past 4 weeks. I don't know if a LT bullish trend is in place but its recent moves say that is where the bets should be placed until proven wrong. The notional 40 week cycle is due to bottom next Monday, so we'll know soon enough.

I'm not certain what the purpose of these threads are if one isn't trying to take advantage of market movements to benefit their own economic situation. I fear a lot of the posters are merely observers to the market machinations and have no plan at all in place to either take advantage of the market moves, or even protect themselves from same.

It should be noted that other cyclists of note do not see the $USD bottoming before February.

Like you I am very much in wealth preservation mode, the fact that I have made some money in the process is a bonus and really all that does is to offset future potential losses caused by events that I cannot foresee. You have the benefit of much experience in the field of economics and charting monetary cycles whilst I do not. You are equipped to adopt a strategy and on the basis of learned experience trust that it will be unsuccessful. I on the other hand, and many other posters like me do not have that luxury and despite studying the subject and attempting to cram as heavily as possible am struggling to maintain the status quo. Certainly I would adopt a longer term strategy if I was confident that I knew what to adopt and was able to manage it through to conclusion. But with so many differing views on possible strategies and potential outcomes, it's almost impossible for a novice to decide.

[samui04]

40-44 by 1st Quarter of 2009!!!!

There's a fine line Brit between optimism and wishful thinking.

well, every day the baht is slowly getting stronger....

fortunately the Euro is flying but the strong baht will remain a real mistery.

[Naam]

40-44 by 1st Quarter of 2009!!!!

There's a fine line Brit between optimism and wishful thinking.

but the distance between posting (since quite a long time) rubbish and wishful thinking is huge

[Naam]

I love these threads. They are perfect examples of the triumph of hope over experience.

All it's lacking is britmaveric to pop in and boldly predict the US$ - THB rate heading to 40-45 by years end, something he's been predicting for the past three years.

Now that inflation rates in the US and UK are so low (o.25% in US, for chrissakes?) there will be no chance of any return to those kind of exchange rates.

It's not rocket science, people. Many on here were gleeful that the US dollar has rallied over the past three months. They couldnt see it was a temporary glitch as US dollars were being bought to repatriate overseas investments. The dollar rose temporarily because of US weakness, not strength.

Now look what is happening. All time low interest rates and US Mint printing presses working overtime to print trillions of extra dollars in an economy that is collapsing. How anyone can be bullish against the dollar under those circumstances is beyond me. It defies logic.

If US dollars continue to be repatriated as global bankers deleverage it would take years not months to accomplish. To this point I am bullish on the dollar and its recent weakness was an expectation that I have posted about for the past 4 weeks. I don't know if a LT bullish trend is in place but its recent moves say that is where the bets should be placed until proven wrong. The notional 40 week cycle is due to bottom next Monday, so we'll know soon enough.

I'm not certain what the purpose of these threads are if one isn't trying to take advantage of market movements to benefit their own economic situation. I fear a lot of the posters are merely observers to the market machinations and have no plan at all in place to either take advantage of the market moves, or even protect themselves from same.

It should be noted that other cyclists of note do not see the $USD bottoming before February.

i [not so] humbly beg to differ LRB.

reasons:

-most of the repatriation is already done.

-it wasn't only plain dollars that were repatriated but investment in other currencies were sold, those currencies were converted in dollars and then repatriated and invested "by flight into quality, i.e. one of the major reasons why global (and of course US markets) suffered and the dollar had a few "field months".

whether we see another swing to a stronger dollar remains to be seen. personally i'd love it because my forex dealings (USD/EUR) balanced nearly all the book losses i incurred in 2008.

[lannarebirth]

I love these threads. They are perfect examples of the triumph of hope over experience.

All it's lacking is britmaveric to pop in and boldly predict the US$ - THB rate heading to 40-45 by years end, something he's been predicting for the past three years.

Now that inflation rates in the US and UK are so low (o.25% in US, for chrissakes?) there will be no chance of any return to those kind of exchange rates.

It's not rocket science, people. Many on here were gleeful that the US dollar has rallied over the past three months. They couldnt see it was a temporary glitch as US dollars were being bought to repatriate overseas investments. The dollar rose temporarily because of US weakness, not strength.

Now look what is happening. All time low interest rates and US Mint printing presses working overtime to print trillions of extra dollars in an economy that is collapsing. How anyone can be bullish against the dollar under those circumstances is beyond me. It defies logic.

If US dollars continue to be repatriated as global bankers deleverage it would take years not months to accomplish. To this point I am bullish on the dollar and its recent weakness was an expectation that I have posted about for the past 4 weeks. I don't know if a LT bullish trend is in place but its recent moves say that is where the bets should be placed until proven wrong. The notional 40 week cycle is due to bottom next Monday, so we'll know soon enough.

I'm not certain what the purpose of these threads are if one isn't trying to take advantage of market movements to benefit their own economic situation. I fear a lot of the posters are merely observers to the market machinations and have no plan at all in place to either take advantage of the market moves, or even protect themselves from same.

It should be noted that other cyclists of note do not see the $USD bottoming before February.

Like you I am very much in wealth preservation mode, the fact that I have made some money in the process is a bonus and really all that does is to offset future potential losses caused by events that I cannot foresee. You have the benefit of much experience in the field of economics and charting monetary cycles whilst I do not. You are equipped to adopt a strategy and on the basis of learned experience trust that it will be unsuccessful. I on the other hand, and many other posters like me do not have that luxury and despite studying the subject and attempting to cram as heavily as possible am struggling to maintain the status quo. Certainly I would adopt a longer term strategy if I was confident that I knew what to adopt and was able to manage it through to conclusion. But with so many differing views on possible strategies and potential outcomes, it's almost impossible for a novice to decide.

I have a longer term view, but it is only subject to my intermediate term view being correct, which is subject to my short term view being correct. I have to be prepared to change my view if evidence suggests I'm wrong. That's really hard to do, because you get things like fear and ego in the mix. So far my ST and IT view has been correct, so my methodology says take the next step. I try to avoid looking at fundamentals, news opinions (though true insight is appreciated but hard to find).

I understand that these are not things that everyone are cut out to do. It actually goes against my very own nature. I'm as risk averse a person as you're likely to meet, yet I trade highly leveraged instruments. You need a lot of rules to do that succesfully and it helps if you lose a little money first, because losing is part of the game.

[lannarebirth]

I love these threads. They are perfect examples of the triumph of hope over experience.

All it's lacking is britmaveric to pop in and boldly predict the US$ - THB rate heading to 40-45 by years end, something he's been predicting for the past three years.

Now that inflation rates in the US and UK are so low (o.25% in US, for chrissakes?) there will be no chance of any return to those kind of exchange rates.

It's not rocket science, people. Many on here were gleeful that the US dollar has rallied over the past three months. They couldnt see it was a temporary glitch as US dollars were being bought to repatriate overseas investments. The dollar rose temporarily because of US weakness, not strength.

Now look what is happening. All time low interest rates and US Mint printing presses working overtime to print trillions of extra dollars in an economy that is collapsing. How anyone can be bullish against the dollar under those circumstances is beyond me. It defies logic.

If US dollars continue to be repatriated as global bankers deleverage it would take years not months to accomplish. To this point I am bullish on the dollar and its recent weakness was an expectation that I have posted about for the past 4 weeks. I don't know if a LT bullish trend is in place but its recent moves say that is where the bets should be placed until proven wrong. The notional 40 week cycle is due to bottom next Monday, so we'll know soon enough.

I'm not certain what the purpose of these threads are if one isn't trying to take advantage of market movements to benefit their own economic situation. I fear a lot of the posters are merely observers to the market machinations and have no plan at all in place to either take advantage of the market moves, or even protect themselves from same.

It should be noted that other cyclists of note do not see the $USD bottoming before February.

i [not so] humbly beg to differ LRB.

reasons:

-most of the repatriation is already done.

-it wasn't only plain dollars that were repatriated but investment in other currencies were sold, those currencies were converted in dollars and then repatriated and invested "by flight into quality, i.e. one of the major reasons why global (and of course US markets) suffered and the dollar had a few "field months".

whether we see another swing to a stronger dollar remains to be seen. personally i'd love it because my forex dealings (USD/EUR) balanced nearly all the book losses i incurred in 2008.

I think most of the riskiest stuff has been done, ie: emering market suff (though I think its got another leg down coming sometime). I expect to see more forced liquidations of less "risky" assets as well, though that isn't part of my reasoning on the $USD..

I agree it remains to be seen whether the $USD can continue to strengthen. That it might is my working thesis, for reasons I've outlined before.

Great to see you back BTW.

[jdrake72]

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?

yes, but there is a difference between facts and hopes.

Look at the Thaivisa home page: 3 million tourists have already disappeared.

they MAY BE replaceed by asian tourists.

Maybe...when./...where....

The fact is there 3 million tourists less NOW and other stuff is just hope...

Reserves have been DENTED for sure...about 20% less in 8 months... Thre is still 100billion,which is huge, but in few months there could be just 60-70B...it is not the same...

Anyway, let s wait and see...I agree that a faster programmed devaluation would be better and it would avoid a sharp correction in case the baht would be floated in some time.

Apparently the BOT is split almpost 50% 50% while to let the baht depreciating gradually.

We will see what they decide after New Year.

[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.

Well, it's been a rapid ascent for the $USD Index since making it's 40 week Hurst Cycle low as outlined. This week marked its 10 week cycle (severely right translated) low in its next 40 week cycle in the continuing 80 week cycle. There is room for optimism with a new intraday and closing cycle high this week. The best thing that's happened is that if the $USD rolls over anytime soon, one will not have to wait for its prior lows to be broke for confirmation.

[colibra]

USD goes to 40 within 6months.

The pound goes to 44 within six months if it doesn't totally collapse because of the eastern European banking crises and a domino effect that begins to take down western European banking also, eventual spreading to the US and then on to Asia. I hope it doesn't happen but there is a distinct possibility that it will.

China's economy worse than predicted, with stimulus plans not working, rising unemployment, and falling exports, creates a similar situation that the Soviet Union was in, leading to a break up of China.

Thailand economy whoas worse than 97.

If your from the UK or Europe better start looking for a job if your dependent on pensions and other source of income from your home country. Holland excluded. Fun times ahead for all.

[lannarebirth]

USD goes to 40 within 6months.

The pound goes to 44 within six months if it doesn't totally collapse because of the eastern European banking crises and a domino effect that begins to take down western European banking also, eventual spreading to the US and then on to Asia. I hope it doesn't happen but there is a distinct possibility that it will.

China's economy worse than predicted, with stimulus plans not working, rising unemployment, and falling exports, creates a similar situation that the Soviet Union was in, leading to a break up of China.

Thailand economy whoas worse than 97.

If your from the UK or Europe better start looking for a job if your dependent on pensions and other source of income from your home country. Holland excluded. Fun times ahead for all.

That's an astounding statement. Would you care to describe what a "post breakup" China might look like?