The Mighty Strength Of Thai Baht?! Explain

[chiang mai]

Ok, no direspect Chiang Mai, but if you do not want to be engaged, why the hel_l are you posting then?!

I posted in order to point you at recent extensive discussions on the same topic in the hope that perhaps you might want to learn rather than just spout, that not being the case and since you seem to know all the answers, feel free to continue.

[12DrinkMore]

12DrinkMore, I agree with you there, but the point i was trying to make was, all Asian country's have been hit and affected, may be not to extreme like other country's. But it seems that Thailand is the only country that is not suffering at all.

Reading the papers everyday, they keep talking about the problems, but looking at the exchange rate-it does not seem to show.

What, Thailand is not suffering?

You have to be joking. There are Thais loosing their jobs as I write this. The tourist season has been dismal. Thailand is not isolated from the rest of the world. But the Thais are MUCH more able to handle this than their Farangland colleagues, who are buried in personal and national debt far beyond what they or their offspring can pay for.

But you specifically mention to the exchange rate. This is a vastly complex topic, but IMO, there is currently a carousel running around where the speculators are shorting one currency and then the next and then the next in order to make themselves a profit at the expense of the world's population. So the question is, where should the exchange rate be?

I have no frigging idea, otherwise I would be a millionaire several times over.

However, IMO, looking at the global economic situation, I think that we are experiencing a massive and painful shift of the standard of living from the West to the East. After all, over the last 20 years the West has been living on the bent backs of the Asians slaving away to create affordable goods for the West. Now the prices have come down to such a level that the Asians can afford to buy them, look at LCD TVs, mobile phones, cars, computers. All within affordable reach of the workers here. This was not true ten years ago.

The big question is, and you have to think this one through, why shouldn't a factory worker in Asia NOT be able to afford to buy the product of the company he works for? I think that the situation has been reached where he CAN and that is a MASSIVE change from having to sell the products to the West. And, if the population of Asia can afford the products, why should they continue to devalue their currencies to pander to the West?

So, to take this a little further, how about if the (as far as I can tell VERY SOLIDLY financed) banks in Asia start lending money a bit more liberally to the workers here? Yep, consumption in Asia will increase and take up the capacity of the companies.

IMO this is an INCREDIBLE revelation and requires a totally new way of looking at the global economy. The ramifications of globalisation have never been foreseeable and we are in the midst of them.

[Kharzi]

Would people please try and desist from the tedious nesting of quotes only to add a two or three line comment. Its so pointless when your comment will inevitably be self explanatory in terms of context by a simple following of the thread. If you think it wont then use the quote function.

[Owain]

Would people please try and desist from the tedious nesting of quotes only to add a two or three line comment.

Ooopps wrong guy. Sorry.

Edited January 19, 2009 by Owain

[mojo80]

Do you see any bailouts in Asia? Banking failures?

China was one of the first countries to introduce a stimuls package, as they foresaw the currently problems and tried to protect help the economy.

[redfish44]

...There are Thais loosing their jobs as I write this. The tourist season has been dismal. Thailand is not isolated from the rest of the world. But the Thais are MUCH more able to handle this than their Farangland colleagues, who are buried in personal and national debt far beyond what they or their offspring can pay for.

But you specifically mention to the exchange rate. This is a vastly complex topic, but IMO, there is currently a carousel running around where the speculators are shorting one currency and then the next and then the next in order to make themselves a profit at the expense of the world's population. So the question is, where should the exchange rate be?

I have no frigging idea, otherwise I would be a millionaire several times over...

My colleagues who also live in Thailand and I have been pondering this a lot from where we are working overseas. I did study economics and was aiming at a financial career when I was younger (hard to believe if you know me now), so have found the Thai Baht intriguing.

Similar odd currency vs economy things have happened elsewhere before - the aussie dollar has gone through the floor before at the same time that the economy seemed to be doing great, huge manufacturing expansions announced, financial institutions seemed stable etc; then when it all seems to be going pear shaped, the currency is tough as nails and flying up and up.

Tourist season has been dismal, but the percentage of Thais with amounts owing from credit and the numbers involved may be a lot less in comparison to other nations - maybe a factor, I wonder.

My dad (retired financial kinda guy) is of the theory that it is the big currency speculators that can end up affecting exchange rates the most - they sink a lot into a currency but can then drop it whenever they feel like it. Whoever/wherever/however these speculators work could potentially have massive effects if it is a huge enough sum of one currency.

Maybe they are holding Thai Baht recently? If so, I hope they don't dump it.

[Pakeha]

Wow, so lets assume when you talk about Asia you mean China, Korea, Thailand, Singapore etc RIGHT?

Have you been drunk for the last few months or do not watch the news and read the papers?

China-big problems, Korea-currency almost crashed, big economic trouble, Singapore-officially in recession

Thailand- no problems at all!!!

What is Thailand an exporter of? and where does it export? How can you possibly write the rubbish you have written?

If west does not buy, what and where would Thailand sell?

What does Thailand manufacture? Tell me one Thai owned company who has gone international besides Thai Airways

All manufacturing in Thailand is western owned, Most developments are Western owned, not to mention supermarket chains such as Tesco, Carefour etc

Who and what money has built Thailand?

All auto manufacturing is suffering worldwide so your Thailand exports-gone to sh***t

All electronics gone down and loosing money, clothing manufactures are in China not in Thailand, rubber, steel etc is all down world wide, so again who needs whom? What is Thailand with out the West?Where was Thailand 40 years ago and where it is now, who has made it to what it is? Who owns all hotel chains? Who owns all resorts? who owns half of if not all contstruction company's

Please do not write stupidity without having common sense to analyse the facts.

Wow. Kuffki I think you should take a deep breath and relax. You sound like you are going to blow a fuse. 12DrinkMore simply gave you his oppinion as you requested. Currencies will go up and down, exchange rates will change and some people will make money and some will lose it. Of course there will be different oppinions.

Edited January 20, 2009 by byoung2

[Richie1971]

[

1. If the West does not buy, then maybe the developing East can? Lots of potential to develop here and the Asians are keen to own cars, houses, and all the other stuff that the West has been enjoying but produced in the East, and the Asians are very keen to work for it. Who in the West would spend a month's salary on a mobile phone? In Thailand this is not unusual.

2. So Western companies have invested in Asia. Well, that seems to confirm EXACTLY what I said. Here is the future and they want to be a part of it. I suppose the question is whether they sell the products in the West or in the East. Do they care provided profits come in? The question you should ask is why they are not investing in the West.

I absolutely agree that without the West Asia would not be at the level of economic development it is now. The mistake is to think that they will CONTINUE to need the West for future economic expansion. And THAT is the point I am making.

I did not say that things would be easy anywhere on the globe, but I did say that Asia is much better positioned to survive and profit, even WITHOUT the West.

Although it is not unusual for Thais to spend a months income on a mobile phone or pay every month for a car that it really beyond their means it is also becoming incresingly common for a number of these people to have their cars etc repossessed becuase they cannot keep up with the payments -

[Richie1971]

However, IMO, looking at the global economic situation, I think that we are experiencing a massive and painful shift of the standard of living from the West to the East. After all, over the last 20 years the West has been living on the bent backs of the Asians slaving away to create affordable goods for the West. Now the prices have come down to such a level that the Asians can afford to buy them, look at LCD TVs, mobile phones, cars, computers. All within affordable reach of the workers here. This was not true ten years ago.

Surely alot of this 'new found wealth' can be attributed at least in some part to the ease in which people can obtain credit - take a look at the offer at Carrefour, Lotus etc and they offer monthly payment (with interest) on almost every product worth more than 1000bht. According to my Thai friends many of them are getting in over their head and really cannot afford to meet these payments every month (motorbike, phone etc) - in some respects like the UK - irresponsible lending

[Nouf]

However, IMO, looking at the global economic situation, I think that we are experiencing a massive and painful shift of the standard of living from the West to the East. After all, over the last 20 years the West has been living on the bent backs of the Asians slaving away to create affordable goods for the West. Now the prices have come down to such a level that the Asians can afford to buy them, look at LCD TVs, mobile phones, cars, computers. All within affordable reach of the workers here. This was not true ten years ago.

Surely alot of this 'new found wealth' can be attributed at least in some part to the ease in which people can obtain credit - take a look at the offer at Carrefour, Lotus etc and they offer monthly payment (with interest) on almost every product worth more than 1000bht. According to my Thai friends many of them are getting in over their head and really cannot afford to meet these payments every month (motorbike, phone etc) - in some respects like the UK - irresponsible lending

I agree. When I look around I see new vehicles everywhere, and Thai's living beyond their means. I see debt, and a lot of Thai's are entrapped in credit cards as well. It can all go sour very quickly.

Aint that the truth, i live in a fairly resonable condo, not a slum, but not a palace either, where the rental is not silly but above the average Thai i would hazard a guess, however there are smaller condo/rooms which are catered for the middle class Thai, as i look over my balcony all i see is row upon row of Toyota & Honda cars`s i mean these cars are like brand new, motor bikes by the 100`s it seem everyone buys new in my block

Yet i tried doing the maths against the avergae Thai earnings and what i pay in rent etc and unless these guys are making a fair sized amount then they have to be using credit, as i have seen some of those deals of 2 years free credit out and about in Seacon Sq etc

Something tells me alot of Thai`s are Playing the "lets keep up with the neighbour" game

it reminds me of my own country and the meltdown that`s gone on there, i just think many Thailand are behind the curve and i suspect the middle to latter half of this year will see bigger changes in Thailand

i agree with the earlier comments Thailand is an exporting nation, and likley to get hit hard this year as this mess gets underway.

The Arguments for the Asians taking up the slack is of produciton, is valid , but i dont see the wages in line with the price of goods

The Mobile phone statement is a good example, i find it amazing that Thai`s pay 10k for a mobile yet they seemsto change them regulary as well. (well the thais i know do)

The other thing i find amazing and i have witnessed this, is that the Thai`s will buy a 900k car yet they live in a 4k a month room, but because no ones visits they see no need

i have tried to explain that people in thewest would buy property instead of a car, but i think that idea fell of deaf ears so i gave up explaining

I mean if annual average salaries are 12k-15k (thats being generous) then how can someone pay down rent, and finance a 900k car if you allowed for a cheaper vechicle of 700k, hence i know of many in credit and i can see how it ends, but the thais i have spoken to seem to discard it

The prices of cars and trucks are more expensive in Thailand, than my home country and the price of Electrical goods, its cheaper back home

Tthe only expection is why i am still here and Rent/bills for power water is still far cheaper and food is cheaper, if you in the right places is still cheaper, and the weather amongst other things

The Thai Bhat i think is behind the curve, however the Western nations are getting destroyed so its fairly obvious to most that the currency exchange rates will suffer.

as this lingers on i suspect a re-balance of sorts to take place as bad news on the economic from from Thailand goes to the media, and captial flight takes hold, its just perceived that Asian countries are in a better postion to ride this wolrdwide meltdown ( however they could be but are they hiding more than we know???)

It could be that this happens, but with so many Asian countries depending on exports these nations will have to come with ideas of taking up the slack of production themselves or they will be hit hard like the rest of the world i suspect its all on the timing and it will take a while for reality to catch up

The example can be used on the US housng market it topped n 2005 where the UK topped in 2007, and the UK housing market is seeing the meltdown the US has already.

so i suspect we are just playing for time as events unravel

of course that dont help any ex-pats here, but like everyhting in life you have to plan and take action where its neccessary like moving condo, eating less, spending less, simply cutting back on finances, no KFC or macdonlds, no ladies of the night etc

Those that cant or wont, will suffer, its all down to mathematics and life style choices, you cant spend what you dont earn as eventually the laws of Mathematics catch up, like what we are witnessing in the World on the back of the Ponzi credit scheme

Edited January 20, 2009 by Nouf

[Naam]

My dad (retired financial kinda guy) is of the theory that it is the big currency speculators that can end up affecting exchange rates the most - they sink a lot into a currency but can then drop it whenever they feel like it. Whoever/wherever/however these speculators work could potentially have massive effects if it is a huge enough sum of one currency.

Maybe they are holding Thai Baht recently? If so, I hope they don't dump it.

currency speculators normally rake in profits by attacking a currency via short shelling and not the other way round as you, respectively your dad, described it

[jackr]

_{THE THAI BAHT IS GOING TO NOSEDIVE IN MARCH}

i hope

[kuffki]

Its amazing!!! so many posts and so few people actually posting something useful!

Just proves the point of how many people have nothing to do but sit around and post"crap" and believe how smart they are

[jackdanielsesq]

The exchange rate mechanism or its ratio is merely a mathematical indicator of perceived value as measured against other currencies, or indeed their perceived values - do you see the double entendre?.

It does not mean that its purchase power is any better or worse.

The almighty Greenback is worth more now than previously thought - it is a safe haven, it constitutes 80% of global trade..

The Thai Bhat is way too high and will benefit from an adjustment to say +40 - it encourages tourism & exports - to name a few.

Thai exports are good - it remains stable - in spite of PAD, etc, the Government reacts quickly to most of its financial quirks

A gallon of gas was $1 - then went to $4 - now back down to $1

It was a global adjustment that was imperative.

Wall St bankers are not rock stars - they simply thought the 'air guitar' was real.

There is nothing wrong with your thinking - which is quite possibly why were are all here.

BR>Jack

[chiang mai]

Its amazing!!! so many posts and so few people actually posting something useful!

Just proves the point of how many people have nothing to do but sit around and post"crap" and believe how smart they are

I was going to post an important opinion that I thought would help the debate but then I realized, you would believe it to be crap so I've decided not to waste my time or yours.

[kuffki]

Its amazing!!! so many posts and so few people actually posting something useful!

Just proves the point of how many people have nothing to do but sit around and post"crap" and believe how smart they are

I was going to post an important opinion that I thought would help the debate but then I realized, you would believe it to be crap so I've decided not to waste my time or yours.

Well Chiang Mai, you are a platinum member with over 2500 posts, so you tell me after reading the original post,who has addressed the actual question,who understands basic economics or exchange rates?Just the fact that some people think 10,000 baht is a lot of money goes to show their ability's

So you right, no point in wasting time. I was hoping to get an educated responses with some theory's, instead got some blah blah about blah

[Naam]

_{THE THAI BAHT IS GOING TO NOSEDIVE IN MARCH}

i hope

which year?

[The Philosopher]

Being propped up by the BOT - plain/simple.

Thanks Chivas, i guess i am not as smart as some

britmaveric-it is not that simple, because they have to be able to back it up with something, otherwise it may lead to some serious trouble in the near future.

May be i should of added in the original post that only people who know what they talking about should respond

So if you do not know economics but like to appear smart, and really want to reply-then just post something like "yes it is puzzling" or "good questions" etc

PS. Thanks again Chivas for being "normal"

Thailand learned from the Asian crash in the late 80's and bulit up reserves. These however will be starting to dwindle it may only be a matter of time.

[Naam]

Well Chiang Mai, you are a platinum member with over 2500 posts, so you tell me after reading the original post,who has addressed the actual question,who understands basic economics or exchange rates?Just the fact that some people think 10,000 baht is a lot of money goes to show their ability's

So you right, no point in wasting time. I was hoping to get an educated responses with some theory's, instead got some blah blah about blah

member britmaverick explained it already and i second his explanation. you of course are so wrapped in your own incoherent blah-blah

-I have been living in Thailand for past 5 years...

-Can anyone please explain how thai baht remain sooooo strong?

-I understand that Thai baht is measured compared to USD

-I have studied business, and consider myself a fairly smart man, but...

that you don't listen to the only logical explanation which, by the way, was discussed by presenting facts and figures in several other threads

[henryalleman]

[Here is another mind blowing fact

Exchange rate in Bangkok is NOT the same as in Pattaya

While in Bangkok Bangkok Bank was changing AUD$1 =24.40 Thai Baht, where in Pattaya on that same day i was able to get AUD$1=25.60 Thai Baht(only for cash exchange)

So figure this one out!

Same bank, same time, same currency but different rate

Maybe different time in the day. The rate at 8.15 is sometimes quite different at 15.15

check it out bhy yourself

http://www.scb.co.th/exchange/bk-pvsexchange.htm

[Naam]

britmaveric-it is not that simple, because they have to be able to back it up with something, otherwise it may lead to some serious trouble in the near future.

there is nothing to "back up". the BOT has 100+ billion dollars worth of fx reserves. a continous selling of a (rather small) part of that forex in the market props up the Baht as long as there are no shortening attacks (happened in 1997) from cash laden foreign speculators. but even if these kind of attacks are contemplated the present restrictions will (unlike 1997) buffer any attacks. as simple as that.

[Naam]

(kuffki @ 2009-01-19 17:55:31) *

Here is another mind blowing fact. Exchange rate in Bangkok is NOT the same as in Pattaya.

= mind blowing rubbish.

[beechguy]

Its amazing!!! so many posts and so few people actually posting something useful!

Just proves the point of how many people have nothing to do but sit around and post"crap" and believe how smart they are

Well you started it. There were already several threads before concerning the subject. And, except for Naam's opinion, it has been pretty much crap. My sympathy for you guys that have Euros and Pounds.

[henryalleman]

Its amazing!!! so many posts and so few people actually posting something useful!

Just proves the point of how many people have nothing to do but sit around and post"crap" and believe how smart they are

Well you started it. There were already several threads before concerning the subject. And, except for Naam's opinion, it has been pretty much crap. My sympathy for you guys that have Euros and Pounds.

Thank's for your sympathy. I must transfer about 50 000 EURO's in a few months, And when the Baht rate is going on like a roller-coaster as it is since the last 6 months, I'm in danger to loose a few hundred thousands Baht.

[chiang mai]

Its amazing!!! so many posts and so few people actually posting something useful!

Just proves the point of how many people have nothing to do but sit around and post"crap" and believe how smart they are

I was going to post an important opinion that I thought would help the debate but then I realized, you would believe it to be crap so I've decided not to waste my time or yours.

Well Chiang Mai, you are a platinum member with over 2500 posts, so you tell me after reading the original post,who has addressed the actual question,who understands basic economics or exchange rates?Just the fact that some people think 10,000 baht is a lot of money goes to show their ability's

So you right, no point in wasting time. I was hoping to get an educated responses with some theory's, instead got some blah blah about blah

When you talk to people the way you do, all you are going to get is blah blah because people simply don't care about having the debate with you. Others offer their opinion and views which you reject as "crap" and are rude beyond belief, yet you claim to want an educated response, hmm, I don't think so. You know, it's not so much that the answers really matter as it is the way the debate is held that's important to many, you might want to think about that.

[CPH]

One of the reasons for the Thai Baht strength is maybe the recent rules concerning the import of foreign currency into Thailand. (30 % was withheld)

These rules could very easily be reinforced if foreign speculation against Thai Baht took place. Other reasons could be that Thailand has large foreign loans nominated in USD. Therefore BOT want to keep Thai Baht pegged to USD.

The coming expected large falls in Thai Export income will most propably lead to a weaker baht.

[jumnien]

Can someone post the export income from Thailand by year for the last ten years. I think a lot would become self-evident to most here.

[jackr]

Its amazing!!! so many posts and so few people actually posting something useful!

Just proves the point of how many people have nothing to do but sit around and post"crap" and believe how smart they are

Summed yourself up nicely there pal.

You've had several measured replies and rebuff anyone and everyone with diatribe. Do us a favour, either get with it, grow up or bog off.

[12DrinkMore]

Thank's for your sympathy. I must transfer about 50 000 EURO's in a few months, And when the Baht rate is going on like a roller-coaster as it is since the last 6 months, I'm in danger to loose a few hundred thousands Baht.

I suggest that you make a series of transfers over several months to average out the swings.

It is easier to toss a coin than trying to forecast how this will develop. Although at the moment the bad news is all in Euroland, Poundland and Dollarland. Which might mean the THB will get a little stronger.

[kuffki]

Well Chiang Mai, you are a platinum member with over 2500 posts, so you tell me after reading the original post,who has addressed the actual question,who understands basic economics or exchange rates?Just the fact that some people think 10,000 baht is a lot of money goes to show their ability's

So you right, no point in wasting time. I was hoping to get an educated responses with some theory's, instead got some blah blah about blah

member britmaverick explained it already and i second his explanation. you of course are so wrapped in your own incoherent blah-blah

-I have been living in Thailand for past 5 years...

-Can anyone please explain how thai baht remain sooooo strong?

-I understand that Thai baht is measured compared to USD

-I have studied business, and consider myself a fairly smart man, but...

that you don't listen to the only logical explanation which, by the way, was discussed by presenting facts and figures in several other threads

Naam! just the fact that you have over 7500 posts shows you have no life but to spend it on the computer! 110 billion is Chinese reserve not Thai-get your facts straight before posting it.