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USD appears to be the main driver to the USD/THB.

With USD (and likewise JPY) its recent strength has mostly been to do with "money flow".

ie money flowing out of equities/commodities and into banks via hedge funds.

One reason for USD to weaken significantly (and therefore for the THB to weaken against GBP) should be a reversal of this.

Deflation - Institutions are able to make money by simply staying in cash at near 0% in a deflationary environment, which is what is happening now, assets are deflating house prices, commodities, cars, electrical goods etc.

Inflation - At some piont all this apparent money printing and cheap money will cause inflation, and thus institutions will have to switch from cash to avoid the value of there money being eroded by inflation, however also at this time central banks will start to raise interest-rates once again.

Edited by ArranP
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lo and behold! as so often the prophets have spoken. unfortunately until today most prophets who posted on TV were wrong, no matter what references they used for their conclusions. let's check in a year again who was right and who was wrong :o

Quite happy to put my money where my mouth is Naam (no offence intended).

Lay the stakes at where you think the baht/dollar and sterling/baht ratios will be in a years time ??

Chivas

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USD appears to be the main driver to the USD/THB.

With USD (and likewise JPY) its recent strength has mostly been to do with "money flow".

ie money flowing out of equities/commodities and into banks via hedge funds.

One reason for USD to weaken significantly (and therefore for the THB to weaken against GBP) should be a reversal of this.

Deflation - Institutions are able to make money by simply staying in cash at near 0% in a deflationary environment, which is what is happening now, assets are deflating house prices, commodities, cars, electrical goods etc.

Inflation - At some piont all this apparent money printing and cheap money will cause inflation, and thus institutions will have to switch from cash to avoid the value of there money being eroded by inflation, however also at this time central banks will start to raise interest-rates once again.

I think an early indicator of this, would be yields on TS Bonds going up and yields on corporate bonds coming down. As this shows risk appetite returning to the market in the form of money moving out of government guaranteed bonds.

Edited by ArranP
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I for one will be interested to learn why you think the Baht will fall, can you give examples?

At the risk of being pilloried by the estimable Naam, I would say that most commentators point to the vulnerability of the Thai economy due to it's very high dependence on exports. This worked well when the world economy was pumping along, but will have extremely negative effects during a world recession, due to the decreased demands for the their products.

that of course is a valid reason why the Bank of Thailand might stop its alleged intervention in the currency market thus causing a weakening of THB. what we don't know whether other reasons exist to keep the currency artificially high which the BOT considers more important.

basically i agree that THB is overvalued and poised to weaken. but i'm not that arrogant (as it seems many other posters are) to predict for that a timetable and a certain exchange rate or rubbish such as "will crash". those who tried to forecast currencies (not only THB but GPB, AUD, NZD, EUR et al) failed miserably as the last 12 months clearly show.

Wednesday 8:30 AM EST

http://biz.yahoo.com/c/e.html

Edited by lannarebirth
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There's a long way to go yet, but IMO the Baht will gradually depreciate against most major currencies, including the pound.

As has been discussed many times in these forums, the Baht appears to be over valued, and will lose value over the coming months as the full effects of it's dependence on exports and tourism starts to hit home.

But then again ...I am probably wrong :o

I'd say you are probably right :D

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About exchange rates, I have no clue other than supppy/demand.

A relatively strong baht makes Thai imports (read OIL) cheap at the expense of Thai exports/tourism.

In the short run curriencies can be supported; in the long run Mr. Market will set the real price :o

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lo and behold! as so often the prophets have spoken. unfortunately until today most prophets who posted on TV were wrong, no matter what references they used for their conclusions. let's check in a year again who was right and who was wrong :o

Quite happy to put my money where my mouth is Naam (no offence intended).

Lay the stakes at where you think the baht/dollar and sterling/baht ratios will be in a years time ??

Chivas, as an investor with an experience of more than three decades i wouldn't dare to lay any stakes what the markets will do tomorrow, especially not the currency markets and no <deleted> way i'd try to forecast what will happen in one year from now.

:D

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Expect this to continue - the Bahts heydays are numbered - expect a slow but continual downturn (against Western currencies) for the rest of this year - and quite possibly a steep drop last quater '09, or during first 2 quaters '10.

Hang on to your forex - now is not the time to change it into Baht - wait to later this year, and even better first half next year.

Unfortunately, in the meantime we have to live, take care of sick buffaloes and feed the rubber plantations.... :D

Also pay school-fees, and hold B400k for 3 months, to satisfy the Immigration Dept. :o

By the way, I have just invented this miracle new health-serum for sick water-buffaloes, please send $10 or 500B (Sterling not accepted) for a free sample, sent under plain-cover. :D

Edited by Ricardo
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Forget the GBP

http://www.bloomberg.com/apps/news?pid=206...id=ahCfdnOZ3Nfo

Zero rate interest and printing Pounds.

It will be parity with the Euro, then parity with the Dollar and then heading towards PARITY with the BAHT.

If anybody can give me a reason other than BLIND HOPE that the Pound of today should have any value other than sweet FA then state it NOW!

(Yep Zimbabwe here we come, the IMC has already stated that IT DOES NOT HAVE THE FUNDS to rescue more economies)

I am moving my money firstly out of the GBP and then out of the UK as fast as I can cancel bonds, write letters and open accounts abroad. Paranoia? Maybe, but Jesus is this looking bad. And I think that a Euro account in the UK is almost as bad as holding GBPs in the UK. The bstards are bankrupt, insolvent; both morally and financially.

Edited by 12DrinkMore
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Forget the GBP

http://www.bloomberg.com/apps/news?pid=206...id=ahCfdnOZ3Nfo

Zero rate interest and printing Pounds.

It will be parity with the Euro, then parity with the Dollar and then heading towards PARITY with the BAHT.

If anybody can give me a reason other than BLIND HOPE that the Pound of today should have any value other than sweet FA then state it NOW!

(Yep Zimbabwe here we come, the IMC has already stated that IT DOES NOT HAVE THE FUNDS to rescue more economies)

I am moving my money firstly out of the GBP and then out of the UK as fast as I can cancel bonds, write letters and open accounts abroad. Paranoia? Maybe, but Jesus is this looking bad. And I think that a Euro account in the UK is almost as bad as holding GBPs in the UK. The bstards are bankrupt, insolvent; both morally and financially.

OTT

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OTT

Well OK, give an alternative.

Where does it end? What defines the value of a currency?

The main reason the GBP surged was the high rate of interest compared to other currencies. Now the interest rates are universally low, with the GBP destined to be the lowest with the USD at ZERO. Those with CASH that can be moved around are looking NOT for return ON capital but for return OF capital.

A promise of Cyclops to repay a Pound of today with ZERO interest with a DEVALUED Pound of tomorrow is simply NOT GOING TO WORK. The man is persuing insane policies unless you are in debt.

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Could be that a sterling crisis is going to be the only way out for the beleaguered British economy. With interest rates reaching zero and (probably) plenty more bad economic news to come the BOE has very little room to manoeuvre.

A weaker pound will make British products and services cheaper. It's inflationary but with weaker domestic demand the effect might be muted.

If one remembers the last sterling crisis back in '92 when the pound crashed out of the ERM. That signaled the recovery point in Britain from the last severe recession.

Can it be the BOE is engineering a repeat? Another sterling crisis Would spell disaster for Gordon Brown and the Labour party especialy as it was Gordon Brown, who the day after Labour's landslide victory in the 1997 general election gave the bank it's independance in setting interest rates.

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Forget the GBP

http://www.bloomberg.com/apps/news?pid=206...id=ahCfdnOZ3Nfo

Zero rate interest and printing Pounds.

It will be parity with the Euro, then parity with the Dollar and then heading towards PARITY with the BAHT.

If anybody can give me a reason other than BLIND HOPE that the Pound of today should have any value other than sweet FA then state it NOW!

(Yep Zimbabwe here we come, the IMC has already stated that IT DOES NOT HAVE THE FUNDS to rescue more economies)

I am moving my money firstly out of the GBP and then out of the UK as fast as I can cancel bonds, write letters and open accounts abroad. Paranoia? Maybe, but Jesus is this looking bad. And I think that a Euro account in the UK is almost as bad as holding GBPs in the UK. The bstards are bankrupt, insolvent; both morally and financially.

12DrinkMore, when I read your post this morning it made me smile and laugh, as I remember you always have a dismal view on these current events, I mean this in a nice way, as it brightens my day a little to see your consistency.

I recently moved most of my capital from USD into GBP recently.

You keep going on about GBP weakness, I do not think it is about GBP weakness, I think the GBP is just a by stander in all of this getting swept along with the tide. The major player is the USD and its about its current strength due the money flowing back into the USD via hedge funds selling their positions and giving the money back to banks.

With all this cheap money, and money being printed, at some point inflation will re-appear, bank interest rates will go back up, markets will begin to rise as commodities do, when this does the USD will weaken again and likewise GBP strengthen, look at historical charts FTSE/DOW/S&P charts and compare them to USD/GBP fx charts.

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12DrinkMore, when I read your post this morning it made me smile and laugh, as I remember you always have a dismal view on these current events, I mean this in a nice way, as it brightens my day a little to see your consistency.

Thanks, in that case I'll do my best to continue to brighten up your days. Mine are all full of gloom and despondency :o:D

I recently moved most of my capital from USD into GBP recently.

must have been you causing the small blip in strength

You keep going on about GBP weakness, I do not think it is about GBP weakness, I think the GBP is just a by stander in all of this getting swept along with the tide. The major player is the USD and its about its current strength due the money flowing back into the USD via hedge funds selling their positions and giving the money back to banks.

Well, the rest of the world reckons that the UK is going to be worst hit out of the G7 bunch. Agreed that there has been a surge in USD buying as carry trades were unwound, and the hedge funds moving back USD to pay off their debts.

With all this cheap money, and money being printed, at some point inflation will re-appear, bank interest rates will go back up, markets will begin to rise as commodities do, when this does the USD will weaken again and likewise GBP strengthen, look at historical charts FTSE/DOW/S&P charts and compare them to USD/GBP fx charts.

This is a bit of good ol' Keynes logic but there are a few questions that cannot be answered so easily.

What shape will price inflation take? Consumer products and food will certainly start heading upwards very soon due to imported inflation, but house prices will continue to fall, as there will be 3,000,000 jobless and no mortgages available, as with the current model invented by Cyclops banks are borrowing at 5% from the government, so why should they lend out at less than this? I wouldn't. With interest rates of zero, debts will be paid off and people will be very wary of taking out credit in the future.

Will Brown increase interest rates if prices rise? Or will he keep them low to remove a few more debts from the system? I suspect the latter.

At the moment the UK is cheap for foreigners. But once the imported inflation takes off, then prices must rise to "even" it out. The end result will be that everybody in the UK is a lot poorer.

In order for Brown to finance his massive and increasing deficits he must either sell off bonds, but with zero interest who will buy them? Or print more GBPs, which will further devalue the GBP.

With 3,000,000 unemployed there will be little pressure on employers to raise wages to compensate for the higher prices. There is currently no incentive to rebuild the lost manufacturing industry, finance is impossible to raise, UK regulations strangle any startups, and who is going to take the optimistic view that it will get better and invest rather than save?

In my view, as you have observed, things are looking very dire for the UK. There will be a lot of suffering before this depression is over. I cannot see any reason why the GBP will not hit parity with the Euro (one of the real reserve currencies) and then move towards the USD.

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Forget the GBP

http://www.bloomberg.com/apps/news?pid=206...id=ahCfdnOZ3Nfo

Zero rate interest and printing Pounds.

It will be parity with the Euro, then parity with the Dollar and then heading towards PARITY with the BAHT.

If anybody can give me a reason other than BLIND HOPE that the Pound of today should have any value other than sweet FA then state it NOW!

(Yep Zimbabwe here we come, the IMC has already stated that IT DOES NOT HAVE THE FUNDS to rescue more economies)

I am moving my money firstly out of the GBP and then out of the UK as fast as I can cancel bonds, write letters and open accounts abroad. Paranoia? Maybe, but Jesus is this looking bad. And I think that a Euro account in the UK is almost as bad as holding GBPs in the UK. The bstards are bankrupt, insolvent; both morally and financially.

12DrinkMore, when I read your post this morning it made me smile and laugh, as I remember you always have a dismal view on these current events, I mean this in a nice way, as it brightens my day a little to see your consistency.

I recently moved most of my capital from USD into GBP recently.

You keep going on about GBP weakness, I do not think it is about GBP weakness, I think the GBP is just a by stander in all of this getting swept along with the tide. The major player is the USD and its about its current strength due the money flowing back into the USD via hedge funds selling their positions and giving the money back to banks.

With all this cheap money, and money being printed, at some point inflation will re-appear, bank interest rates will go back up, markets will begin to rise as commodities do, when this does the USD will weaken again and likewise GBP strengthen, look at historical charts FTSE/DOW/S&P charts and compare them to USD/GBP fx charts.

By my very nature I like to disagree, but on this point I find I cannot.

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Could be that a sterling crisis is going to be the only way out for the beleaguered British economy. With interest rates reaching zero and (probably) plenty more bad economic news to come the BOE has very little room to manoeuvre.

A weaker pound will make British products and services cheaper. It's inflationary but with weaker domestic demand the effect might be muted.

That's all well and good if we've got plenty of resources to export, but we've fck all compared with other countries like Japan, the US etc.

Factor in that oil is rock-bottom as well and we've got few, if any bargaining chips...

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Could be that a sterling crisis is going to be the only way out for the beleaguered British economy. With interest rates reaching zero and (probably) plenty more bad economic news to come the BOE has very little room to manoeuvre.

A weaker pound will make British products and services cheaper. It's inflationary but with weaker domestic demand the effect might be muted.

That's all well and good if we've got plenty of resources to export, but we've fck all compared with other countries like Japan, the US etc.

Factor in that oil is rock-bottom as well and we've got few, if any bargaining chips...

We are not an exporting nation along the lines of Japan and the US but that doesn't mean we don't have exports and industry wont respond to a vastly weaker sterling and step in and capitalise on it.

It is a possible scenario for the eventual recovery of the UK economy.

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UK to print more money. Get ready for hyperinflation.

The Bank of England’s Governor admitted yesterday that Britain is now in “deep recession” and signalled that it is ready to start “printing money” as soon as next month in aggressive, last-ditch moves to limit the slump.

Mervyn King indicated that the Bank is poised to move beyond relying on further interest rate cuts to combat recession. It will give a green light within weeks to a strategy of “quantitative easing”, the modern equivalent of printing money, he made clear.

http://business.timesonline.co.uk/tol/busi...icle5708039.ece

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Could be that a sterling crisis is going to be the only way out for the beleaguered British economy. With interest rates reaching zero and (probably) plenty more bad economic news to come the BOE has very little room to manoeuvre.

A weaker pound will make British products and services cheaper. It's inflationary but with weaker domestic demand the effect might be muted.

That's all well and good if we've got plenty of resources to export, but we've fck all compared with other countries like Japan, the US etc.

Factor in that oil is rock-bottom as well and we've got few, if any bargaining chips...

We are not an exporting nation along the lines of Japan and the US but that doesn't mean we don't have exports and industry wont respond to a vastly weaker sterling and step in and capitalise on it.

It is a possible scenario for the eventual recovery of the UK economy.

Didn't think that the US was a net exporter. We already have a vastly devalued GBP. How much more "vastly" is needed or indeed will be achieved by Brown?

There is a tsunami of import fuelled price increases in basic consumable heading towards the UK. As we have no more natural resources apart from maybe coal, everything required for production and manufacture is dependent on imports. This will feed through into the factory gate prices, so our exports will possibly not be that much cheaper than the competitors abroad.

For the last decade or so, a substantial part of UK based production capacity has been shipped abroad. Unless the regulations in the UK are eliminated, and the labour force is prepared to compete with Asian wages, how can you expect any big surge in manufactured "made in the UK" goods? Now we could talk about services. Well, what do we have? Ah yes, the financial services, which have contributed substantially to both the GDP over the last decade, but unfortunately very substantially to the massive problems we are having. We could very easily see the banks being nationalised and all the intricate and opaque "investment banking" disappearing.

And then we have the "educational services", which are still surprisingly popular. Unfortunately the best of the teachers are being attracted to working abroad.

I suppose there is also the tourist industry. Which might have a small upward movement until we have 3,000,000 unemployed, rampant crime and inflation has brought prices back to European levels, even though for Brits the GBP has sunk to its lowest level since the world began, somewhere around parity with the USD, leaving us all in penury for the next decade.

Maybe the biggest hope is that global warming will take off, leaving the UK as a tropical paradise :o:D :D :D :D

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12DrinkMore. you need to Drink less methinks.

This constant OTT reaction to the economy and the state of the country itself makes me wonder if you have an ulterior motive.

I realise you probably do not have any motive as such but that is how it seems to a spectator.

Yes things are not good but people are not dying from starvation and cold.

Europe is yet to face the economic slowdown ( hel_l i would truly be worried if i were German ) in full and other countries are probably less well placed than the UK to ride the storm out. Asia is only just beginning to feel the brunt of the trouble and the likes of Thailand is in a very false position of strength that cannot be sustained indefinitely. Of all the powerful currencies in Asia, the Baht is probably the most overvalued and as a high volume exporter this is already biting. Give it a few months.

The US Dollar is temporarily strong and this exacerbates the figures from the BOE but in real terms the lack of exports from the UK historically will in to some extent cushion the coming world trade problems.

I still believe that once the global economic correction takes place ( it may happen in one month or 6 but it will happen eventually) the greatly undervalued £ will increase in value against both the Dollar and the euro and the Thai Baht will drop a bit too.

Expect in the short term some more pain but long term the average Englishman will still be relatively affluent on the world stage.

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I hear that the UK financial services authority is changing the warnings given to investors before they sign on the dotted line....Financial Health Warning. Investments will only go down ... invest what you want to lose.

But when the bottom comes, whenever that will be, and certainly not any time soon, fortunes will be made.

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12DrinkMore. you need to Drink less methinks.

This constant OTT reaction to the economy and the state of the country itself makes me wonder if you have an ulterior motive.

I realise you probably do not have any motive as such but that is how it seems to a spectator.

Yes things are not good but people are not dying from starvation and cold.

Europe is yet to face the economic slowdown ( hel_l i would truly be worried if i were German ) in full and other countries are probably less well placed than the UK to ride the storm out. Asia is only just beginning to feel the brunt of the trouble and the likes of Thailand is in a very false position of strength that cannot be sustained indefinitely. Of all the powerful currencies in Asia, the Baht is probably the most overvalued and as a high volume exporter this is already biting. Give it a few months.

The US Dollar is temporarily strong and this exacerbates the figures from the BOE but in real terms the lack of exports from the UK historically will in to some extent cushion the coming world trade problems.

I still believe that once the global economic correction takes place ( it may happen in one month or 6 but it will happen eventually) the greatly undervalued £ will increase in value against both the Dollar and the euro and the Thai Baht will drop a bit too.

Expect in the short term some more pain but long term the average Englishman will still be relatively affluent on the world stage.

I agree.

I also think that 12DrinkMore is causing more harm/panic than good with his continual OTT comments. People are not dying in the streets, life goes on and the economic cycle will go round. I believe that we are somewhere near the bottom and things in 2010 will be better than 2009.

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With 3,000,000 unemployed there will be little pressure on employers to raise wages to compensate for the higher prices. There is currently no incentive to rebuild the lost manufacturing industry, finance is impossible to raise, UK regulations strangle any startups, and who is going to take the optimistic view that it will get better and invest rather than save?

In my view, as you have observed, things are looking very dire for the UK. There will be a lot of suffering before this depression is over. I cannot see any reason why the GBP will not hit parity with the Euro (one of the real reserve currencies) and then move towards the USD.

We're probably a year into this mess already, since the Bear Sterns last March 08, which is therefore one year less to go before things improve.

Whilst we're in this mess, its hard to see if we're going into it, at the middle or coming out of it. But one things for sure we got one year less to go!!

Here goes little bit of humour....

...

How for can one run into a forest? Half way! Cause after half way your running out of the forest.

...

To the man on the ground though, he can't tell cause all he can see is one tree after another, only when it ends can he know where half way was and when he was reaching the end.

However sometimes it can be a stressfull time financially, and not just for the likes of you and me but also for the people who have the power to change things, if you catch my drift....

We don't know exactly when all this will end, but each day is one day less. The USD won't be strong forever.

Edited by ArranP
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lo and behold! as so often the prophets have spoken. unfortunately until today most prophets who posted on TV were wrong, no matter what references they used for their conclusions. let's check in a year again who was right and who was wrong :o

Quite happy to put my money where my mouth is Naam (no offence intended).

Lay the stakes at where you think the baht/dollar and sterling/baht ratios will be in a years time ??

Chivas, as an investor with an experience of more than three decades i wouldn't dare to lay any stakes what the markets will do tomorrow, especially not the currency markets and no <deleted> way i'd try to forecast what will happen in one year from now.

:D

Well as an investor with three decades of experience than I find your claim of not knowing where the markets will be the following day let alone one years time a little short sighted at best ??

Ive never seen such profitable trading positions re Sterling/Dollar as they are currently.

No point in stating how much profit Ive personally made as anyone could pluck figures out of the air but if you need direction dont hesitate to ask :D :D

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