Baht-uk Pound

[mommysboy]

It's simply that when I read a thread you are there and I disagree with what you write in the main.

On previous threads I pointed why I felt your predictions were wrong, not just wrong but wholly wrong. Central to this is your belief is that the pound will fall to 35bt. You regarded this as a historical norm, in part accurate but only in as much as it was fixed at a particularly unrealistic price against the dollar with disasterous consequences. When challenged to provide figures you did not do so. Nor acknowledge the effect of inflation in eroding currency values- on this point I'm not so sure of relative diffs. myself.

Then we were given all sorts of reasons as to why powerhouse Thailand would motor through the recession leaving UK standing. They seemed to revolve around the notion that demand would pick up in Asia from other countries, but it is clear that all countries are in the mire, and Asia seems very dependent on the west for demand. Thailand's contraction in particular seems alarming, especially given that it is still an emerging market. And it's performance is weak anyway and has been for years.

You have taken many aspects and glorified them where Thailand is concerned and downplayed them where UK is concerned. Where you acknowledge a problem you simply dismissed it as trivial, eg, the decline in tourism, as if a few percent made no difference! I know this thread is about UK and Thailand, but you do seem to be oblivious to the plight of other countries. Sure the UK is in big trouble so is every major economy in fact some worse.

As far as I can see though the UK has awful public finances and the only storm could be a major breakdown if it fell in to a position of default, and indeed Moodys changed it's rating to negative. It's taken to be a shot across the bows and I think we can take it as read that public spending will be massively reduced in coming years. Thailand on the other hand seems to have balanced finances for the time being, but later not so.

I can't predict a rate and it is best if we all say we are guessing- yes guessing. I think it's also best to average out, in effect change money in chunks if poss.

[BigC]

one reason is due to the fact that gordern Brown sold all the countries gold and bought currency. had he kept on to the gold then the country wouldn't have lost so much money. then it has just been expose that many english pollitions are corrupt. they should get jail sentences.

also the would debt might have been slightly bought on by the war on terror. think 750 billions dollars spent on Iraq. that was last year. that money could have helped alot of banks out.

i herd from an Iranian that the tactics of the Muslim terror groups is the starve the world out of money. he told me that story more than 2 years ago before this credit crunch

[Lite Beer]

Inflammatory post deleted.

[chiang mai]

It's simply that when I read a thread you are there and I disagree with what you write in the main.

On previous threads I pointed why I felt your predictions were wrong, not just wrong but wholly wrong. Central to this is your belief is that the pound will fall to 35bt. You regarded this as a historical norm, in part accurate but only in as much as it was fixed at a particularly unrealistic price against the dollar with disasterous consequences. When challenged to provide figures you did not do so. Nor acknowledge the effect of inflation in eroding currency values- on this point I'm not so sure of relative diffs. myself.

Then we were given all sorts of reasons as to why powerhouse Thailand would motor through the recession leaving UK standing. They seemed to revolve around the notion that demand would pick up in Asia from other countries, but it is clear that all countries are in the mire, and Asia seems very dependent on the west for demand. Thailand's contraction in particular seems alarming, especially given that it is still an emerging market. And it's performance is weak anyway and has been for years.

You have taken many aspects and glorified them where Thailand is concerned and downplayed them where UK is concerned. Where you acknowledge a problem you simply dismissed it as trivial, eg, the decline in tourism, as if a few percent made no difference! I know this thread is about UK and Thailand, but you do seem to be oblivious to the plight of other countries. Sure the UK is in big trouble so is every major economy in fact some worse.

As far as I can see though the UK has awful public finances and the only storm could be a major breakdown if it fell in to a position of default, and indeed Moodys changed it's rating to negative. It's taken to be a shot across the bows and I think we can take it as read that public spending will be massively reduced in coming years. Thailand on the other hand seems to have balanced finances for the time being, but later not so.

I can't predict a rate and it is best if we all say we are guessing- yes guessing. I think it's also best to average out, in effect change money in chunks if poss.

Well my stalking friend I'm not sure that what you have written here is entirely accurate in as much as I don't recall you ever pointing out in any detail why you disagree with my earlier opinion - nor do I see the links I asked you to provide to support your claims nor do I see evidence to support your theory that the UK economy is better than some! But never mind, let's go back in time and start again shall we!! For the purposes of our disagreement on these matters let's refer to the following as my baseline post shall we, that way we have a point of reference:

In a separate thread some time ago a poster stated that he saw GBP strengthening to 80 Baht per Pound and I replied by way of contrast saying that over the next seven to ten years I see THB strengthening to around 35/40 per Pound. In the short term I said I see THB weakening to the mid 50's (+/- a 10% margin of error) and there after I see THB strengthening against the Pound. When asked why I was so bullish on THB I replied that I thought the UK economy would soon see a second tranche of falls in value and that the effects of QE and government debt would linger far longer and have a greater impact than the effects of the loss of tourists and exports would on the THai GDP - in summary I said I thought that Thailand would recover more quickly than the UK.

In respect of tourism: I said that the current 7% of GDP generated by tourism was not a huge number and that even if arrivals are down 50% for a twelve month period (which they are not), a 50% drop in tourism revenues would only be temporary and would likely be made up again by tourists from other destinations over time - regardless, 3.5% of GDP remains a small number.

Going into the recession I said that Thailand was better positioned than many countries, mainly as a result of the discipline instilled into it by the IMF following the 1997 crash. Foreign reserves are at an enviable level of circa 120 bill (the UK I think is around 17 bill), government borrowings is placed mainly with their regional trading parties and their own national banks (not the other way around as in the case of the UK!) and their central bank is well respected (not like the BOE unfortunately). Indeed, I read a survey in the past week that showed the top twenty countries most likely to be the LEAST impacted by the global recession and six of those countries were in Asia with Thailand being around number fourteen as I recall.

As for exports: I said that less around 50% of Thailands exports are to regional destinations and it is mainly the other 50% to the west that has been effected as a result of the recession. I said that I see Thailand's economy picking up again quickly once the latter 50% starts to grow again and that there will little overhang on the economy resulting from gearing up once again or from social readjustment (unemployed workers in Thailand will return to their villages and farms to pursue other work but will return to employment quickly as soon as it becomes available - western cultures tend to rely heavily on social support from central government which in many cases is a disincentive to return to full time paid employment quickly, case in point the percentage of the UK population who exists on benefits).

AS for historic exchange rates: what I said was that there has been an emotional attachment by many to a GBP/THB exchange rate of 70 for many years but that rate does not reflect fair or true value. Prior to 97 I said that the rate was around 35, or about 20 to the USD as I recall and that rate was closer to the real value. But there is no peg between THB and USD (as in the case of say Hong Kong where HKD is pegged to USD) and the only real link between the two currencies lies in the fact that BOT export bills are settled in USD. Today the BOT manipulates its currency to try and ensure a) there are no wild and sudden swings, and to ensure that THB remains competitive against a basket of regional currencies.

Now, I think that's pretty much all I have said previously on this subject but no doubt you will tell me if I have missed anything. What I have also said is that I am not an expert on economics but the above represents my opinion and am quite happy for my opinions to be challenged constructively. Your task now is to tell us all why my opinion is dangerous, where it could cost people money and if you like, why you disagree (but with supportive links only this time or your credibility might take a hit).

Edited May 25, 2009 by chiang mai

[Familyonthemove]

.... Makes sense to me .... Thailand looks to be in a better position geographically and economically to recover in the medium to longer term than a country with huge public debt, high unemployment and no industry. But in the shorter term, the inevitable change of governemnt after the next UK election may see a slight rise in confidence.

It's a shame to see the slow decline of a once great country, but unless the UK can find a way to export single mums and feckless yobs to raise capital, I can't see much hope in the longer term.

[phaethon]

It's a shame to see the slow decline of a once great country, but unless the UK can find a way to export single mums and feckless yobs to raise capital, I can't see much hope in the longer term.

Yeeees.... If it gets any more serious we may have to sell America...

[kennkate]

The GBP is still in the Oven and cooking Nicely.

Slowly but surely it is on it's way UP to 60 Baht= £1

Mr Brown has it under control ??

[mommysboy]

.... Makes sense to me .... Thailand looks to be in a better position geographically and economically to recover in the medium to longer term than a country with huge public debt, high unemployment and no industry. But in the shorter term, the inevitable change of governemnt after the next UK election may see a slight rise in confidence.

It's a shame to see the slow decline of a once great country, but unless the UK can find a way to export single mums and feckless yobs to raise capital, I can't see much hope in the longer term.

It may read well but is it right? CM should have been a politician.

UK is in a state though no doubt, but again so are all the major economies, and Thailand is taking on more and more debt. Note too that Thailand already had it's credit rating reduced by Moodys, so clealy one rating agency doesn't agree with CM's rosy perspective.

[HardenedSoul]

Mommysboy, the UK is in a far more precarious state than its peers. The populus is in debt up to its eyeballs, its property market is on its knees and soon to be on its back, it doesn't have a manufacturing sector worth mentioning, North Sea oil is virtually a spent resource, the public debt is over 30% of GDP and growing and the country relies very heavily on a financial sector that WILL be over-regulated in the months going forward to prevent a re-occurence of this type of crisis.

Both RBS and Lloyd's are going to need more money from the government and, frankly, may have be nationalized. I'd be interested to hear your comments on why you think the Treasury and the FSA have refused to release results of the stress tests on UK banks ? I could be wrong but I think it's because there are huge shrtfalls in their capital which will only be made whole by a rights issue to the market or a bailout by the government. In the case of Lloyd's - already 70% owned by the taxpayer, we are talking about nationaization.

[citizen33]

Mommysboy, the UK is in a far more precarious state than its peers. The populus is in debt up to its eyeballs, its property market is on its knees and soon to be on its back, it doesn't have a manufacturing sector worth mentioning, North Sea oil is virtually a spent resource, the public debt is over 30% of GDP and growing and the country relies very heavily on a financial sector that WILL be over-regulated in the months going forward to prevent a re-occurence of this type of crisis.

Both RBS and Lloyd's are going to need more money from the government and, frankly, may have be nationalized. I'd be interested to hear your comments on why you think the Treasury and the FSA have refused to release results of the stress tests on UK banks ? I could be wrong but I think it's because there are huge shrtfalls in their capital which will only be made whole by a rights issue to the market or a bailout by the government. In the case of Lloyd's - already 70% owned by the taxpayer, we are talking about nationaization.

The bitterness in some of the comments above have everything to do with the reasons certain people left the UK and not so much to do with the current situation. The markets take a hard-nosed look at this and are presently making an adjustment to take account of the fact that the previous selling of sterling was overdone. There are some real basket cases in Europe where scope for national variation in fiscal and monetary policy is limited, whatever the circumstances of the particular country. The UK still has real expertise in many sectors of the knowledge-based economy: in my opinion Thailand does not. Even the IMF was making reasonable positive noises last week, though it is obvious that difficult times are still ahead.

[MJP]

The only thing that is plainly obvious is that no one really knows. But I am willing to stick to my election theory and there are now rumours of a possible election end of this year. If one is announced I believe GBP will go higher. Election and change of govt will lead to return in confidence and strength returning to the GBP. That is my theory anyway.

That is a plausible factor. Labour are bound to lose to the Tories, who the markets expect will slash spending and reduce debt.

[GuestHouse]

When taking a measure of a nation's financial stability and financial risk it is also necessary to take into account the political stability.

Now while the UK Parliamentarians are grabbing the headlines with the 'scandal' over expenses (measure that against what the Thai Politicians get up to at some other time) the bottom line on political stability in Thailand is not at all rosy.

One might argue that the Pound is going to loose it's value, but when the political situation is taken into account then sticking your money into Bht/Thai Banks/Thailand based assets is not such a good bet... especially for the British.

Thaksin might well return (he might be the only viable option or even the most desirable option when the inevitable occurs) - He has a great deal of unfinished business with that Green and Pleasant Land.

Life and life savings in Thailand is all your eggs in a rather weak looking basket.

An advantage of money in the UK (for Brits) is it’s a boat to back home if and when you need to go back there.

Never ever forget - You’re a guest here.

If you really believe the pound is shakey then that would be an argument to put money in a spread of currencies - life and life's savings in Thailand.... not a bright idea.

Edited May 25, 2009 by GuestHouse

[chiang mai]

.... Makes sense to me .... Thailand looks to be in a better position geographically and economically to recover in the medium to longer term than a country with huge public debt, high unemployment and no industry. But in the shorter term, the inevitable change of governemnt after the next UK election may see a slight rise in confidence.

It's a shame to see the slow decline of a once great country, but unless the UK can find a way to export single mums and feckless yobs to raise capital, I can't see much hope in the longer term.

It may read well but is it right? CM should have been a politician.

UK is in a state though no doubt, but again so are all the major economies, and Thailand is taking on more and more debt. Note too that Thailand already had it's credit rating reduced by Moodys, so clealy one rating agency doesn't agree with CM's rosy perspective.

I have no idea if it's right or not and obviously only time will tell. But if I had to take a guess at the future, the points I have set out and the reasons why tell me that, on the basis of probability, the conclusions I have drawn are the right ones. Now, if anyone can provide other factors that influence that conclusion and/or provide imputs that change the answer, please feel free. You know Mommysboy, you've accused me of a range of things recently when al I've really done is put forward a scenario and shown how and why I've arrived at a certain answer. You on the other hand have done nothing constructive to influence that answer and now you suggest I should have been a politician, I mean really! And now you claim a Moody's downgrade of the Thai economy as evidence that I am wrong - you do realize of course that Moody's is also contemplating a downgrade of the US as well.

This subject interests me greatly because like many others on TV my financial future rests on me making the right decisions now on a range of related topics - should I invest more heavily in THB now, should I invest in Thai real estate now so that I have a Thai asset. Or should I rely on the Pound and lots of tradition and hope that my Englishness will see it all come right in the end - well, I think you can see the way I am leaning at present and why. Mine is not a rosy perspective it's just a different view from yours and I hope that you can now understand that.

[chiang mai]

.... Makes sense to me .... Thailand looks to be in a better position geographically and economically to recover in the medium to longer term than a country with huge public debt, high unemployment and no industry. But in the shorter term, the inevitable change of governemnt after the next UK election may see a slight rise in confidence.

It's a shame to see the slow decline of a once great country, but unless the UK can find a way to export single mums and feckless yobs to raise capital, I can't see much hope in the longer term.

It may read well but is it right? CM should have been a politician.

UK is in a state though no doubt, but again so are all the major economies, and Thailand is taking on more and more debt. Note too that Thailand already had it's credit rating reduced by Moodys, so clealy one rating agency doesn't agree with CM's rosy perspective.

I have no idea if it's right or not and obviously only time will tell. But if I had to take a guess at the future, the points I have set out and the reasons why tell me that, on the basis of probability, the conclusions I have drawn are the right ones. Now, if anyone can provide other factors that influence that conclusion and/or provide imputs that change the answer, please feel free. You know Mommysboy, you've accused me of a range of things recently when al I've really done is put forward a scenario and shown how and why I've arrived at a certain answer. You on the other hand have done nothing constructive to influence that answer and now you suggest I should have been a politician, I mean really! And now you claim a Moody's downgrade of the Thai economy as evidence that I am wrong - you do realize of course that Moody's is also contemplating a downgrade of the US as well.

This subject interests me greatly because like many others on TV my financial future rests on me making the right decisions now on a range of related topics - should I invest more heavily in THB now, should I invest in Thai real estate now so that I have a Thai asset. Or should I rely on the Pound and lots of tradition and hope that my Englishness will see it all come right in the end - well, I think you can see the way I am leaning at present and why. Mine is not a rosy perspective it's just a different view from yours and I hope that you can now understand that.

[chiang mai]

When taking a measure of a nation's financial stability and financial risk it is also necessary to take into account the political stability.

Now while the UK Parliamentarians are grabbing the headlines with the 'scandal' over expenses (measure that against what the Thai Politicians get up to at some other time) the bottom line on political stability in Thailand is not at all rosy.

One might argue that the Pound is going to loose it's value, but when the political situation is taken into account then sticking your money into Bht/Thai Banks/Thailand based assets is not such a good bet... especially for the British.

Thaksin might well return (he might be the only viable option or even the most desirable option when the inevitable occurs) - He has a great deal of unfinished business with that Green and Pleasant Land.

Life and life savings in Thailand is all your eggs in a rather weak looking basket.

An advantage of money in the UK (for Brits) is it’s a boat to back home if and when you need to go back there.

Never ever forget - You’re a guest here.

If you really believe the pound is shakey then that would be an argument to put money in a spread of currencies - life and life's savings in Thailand.... not a bright idea.

Yes I agree. But the answer to the questions I have posed about relative currency and economic strengths will determine the percentage of my investments I might be prepared to leave invested in one currency or the other. As ChianMaiFun pointed out the other day through his personal example, it makes no sense to remain nearly wholly invested in Streling when Thailand is your long term home and you are spending Baht on a daily basis but a 50/50 split or similar would provide a good hedge and de-risk the problem.

[Orac]

When taking a measure of a nation's financial stability and financial risk it is also necessary to take into account the political stability.

Now while the UK Parliamentarians are grabbing the headlines with the 'scandal' over expenses (measure that against what the Thai Politicians get up to at some other time) the bottom line on political stability in Thailand is not at all rosy.

One might argue that the Pound is going to loose it's value, but when the political situation is taken into account then sticking your money into Bht/Thai Banks/Thailand based assets is not such a good bet... especially for the British.

Thaksin might well return (he might be the only viable option or even the most desirable option when the inevitable occurs) - He has a great deal of unfinished business with that Green and Pleasant Land.

Life and life savings in Thailand is all your eggs in a rather weak looking basket.

An advantage of money in the UK (for Brits) is it’s a boat to back home if and when you need to go back there.

Never ever forget - You’re a guest here.

If you really believe the pound is shakey then that would be an argument to put money in a spread of currencies - life and life's savings in Thailand.... not a bright idea.

Yes I agree. But the answer to the questions I have posed about relative currency and economic strengths will determine the percentage of my investments I might be prepared to leave invested in one currency or the other. As ChianMaiFun pointed out the other day through his personal example, it makes no sense to remain nearly wholly invested in Streling when Thailand is your long term home and you are spending Baht on a daily basis but a 50/50 split or similar would provide a good hedge and de-risk the problem.

CM,

I am curious as to why you seem to have an either/or strategy regarding GBP/THB and do not consider looking at other global markets/currencies. Surely, as GH has suggested, in such an uncertain time you would have less risk if you had a spread of currencies rather than relying on two economies which could end up with major problems as have been highlighted already.

[Merangue]

Whilst i do not consider that anyone would be foolish enough to invest on the words of one poster on here i do agree with mommysboy to some extent.

The pound is bad... very bad.

So is pretty much everywhere else.

The Eurozone is in dire straights as is the US dollar.

The likes of Dubai have ground to a halt.

Eastern Europe is quite frankly in so much trouble it is hard to know where to start.

Not sure how Africa and South America are faring but their economies are hardly likely to fare well in the current climate.

The Asian economies are struggling to keep their heads above water and the biggest one of them outside of the obvious ( Japan) is in a real pickle.

China is fiddling its figures in the attempt to hid the growing crisis they have there but unemployment is rising quicker than your average Yasothon Rocket.

Thailand had just published some figures here http://www.thaivisa.com/forum/Thailand-s-E...Ce-t268099.html which suggests (as most of us thought) that Thailand itself is suffering greatly. 7.1% contraction of GDP?

The piece goes on to assume that everything will be rosy later on IF the political situation is resolved. (Fat chance of that)

The IMF have actually praised the UK somewhat for its tactics in this 'global' crisis and quite frankly i think people forget the powerhouse that is the City of London, where so much business and so many deals are worked out. Do you honestly think that a place where so many strings are pulled is going to go under? I do not.

The housing problems in the UK, even if they get worse, will not make quite as much of an impact as people seem to think. Property Values may well fall but that will simply allow people previously priced out of the market, able to make that first purchase. There is a deep well of people who want to buy but cannot afford to do so and if the prices fall, they will actually help to stop the rot rather quickly.

As the Euro tanks (and it will) anyone looking for an avenue into Europe is going to consider the UK. It is placed in a very good position for both import/export and and has a hel_l of a lot of logistical and financial expertise available.

Even before the crisis the Freeports in the UK were growing and now they are escalating the business they do by large margins.

Writing off the £ is a mistake. There will be a resurgence over time finally hitting its peak around May next year when the Tories are voted in. The US dollar is riding high at the moment as a safe currency and on the back of a new president. It's value is much higher than it should be. After the election in the UK and the end of the honeymoon period that it will bring, i think sterling will dip slightly but not much and the £ - $ rate will settle somewhere around the $1.70 area for the forseeable future.

The Thai Baht is artificially high and eventually it will come down in Value. In truth i think the powers that be are working towards a time when they can allow the baht to fall slightly but they are doing so slowly to avoid a run. This could in fact be partly what has happened in the recent weeks. .5 baht a month for 12 months would be my guess.

I expect a settled period for a very long time around the 60 area. It may go slightly higher on the back of a Tory win but will also fall after the honeymoon period.

I am no expert in any way whatsoever but this is how i see it going.

[chiang mai]

When taking a measure of a nation's financial stability and financial risk it is also necessary to take into account the political stability.

Now while the UK Parliamentarians are grabbing the headlines with the 'scandal' over expenses (measure that against what the Thai Politicians get up to at some other time) the bottom line on political stability in Thailand is not at all rosy.

One might argue that the Pound is going to loose it's value, but when the political situation is taken into account then sticking your money into Bht/Thai Banks/Thailand based assets is not such a good bet... especially for the British.

Thaksin might well return (he might be the only viable option or even the most desirable option when the inevitable occurs) - He has a great deal of unfinished business with that Green and Pleasant Land.

Life and life savings in Thailand is all your eggs in a rather weak looking basket.

An advantage of money in the UK (for Brits) is it’s a boat to back home if and when you need to go back there.

Never ever forget - You’re a guest here.

If you really believe the pound is shakey then that would be an argument to put money in a spread of currencies - life and life's savings in Thailand.... not a bright idea.

Yes I agree. But the answer to the questions I have posed about relative currency and economic strengths will determine the percentage of my investments I might be prepared to leave invested in one currency or the other. As ChianMaiFun pointed out the other day through his personal example, it makes no sense to remain nearly wholly invested in Streling when Thailand is your long term home and you are spending Baht on a daily basis but a 50/50 split or similar would provide a good hedge and de-risk the problem.

CM,

I am curious as to why you seem to have an either/or strategy regarding GBP/THB and do not consider looking at other global markets/currencies. Surely, as GH has suggested, in such an uncertain time you would have less risk if you had a spread of currencies rather than relying on two economies which could end up with major problems as have been highlighted already.

If I've portrayed it as an either/or strategy I apologize as this is not the case. I live in Thailand and spend Baht and currently have about enough Baht for one year, the majority of my other investments (mostly cash deposits) are in Sterling with small volumes of USD and EUR also.

In looking forward beyond one year I need to decide want I want to do and how - do I take advantage of falling real estate prices in the UK and buy a base there spending say three or four months in the UK and the rest in Thailand and elsewhere or do I buy a base in Thailand and continue to spend the majority of my time here as at present (I'm 60 years old and have been here for seven years). If I do the latter I need to take a longer term view on GBP/THB. If I invest say seven million in Thai real estate and five years from now the rate reverts to 35 ish I need to have a larger percentage of my holdings in Baht to be offset the currency risk otherwise Thailand becomes too expensive to live on a daily basis. But if I buy in the UK I need only a smaller percentage in THB. So really it's all about the percentage of my money I want to commit to THB versus any other currency I may view as sensible or necessary - at present I don't have any other currency on my radar that seems to make sense but I'm always happy to hear other people's thoughts on this subject.

[chiang mai]

Whilst i do not consider that anyone would be foolish enough to invest on the words of one poster on here i do agree with mommysboy to some extent.

The pound is bad... very bad.

So is pretty much everywhere else.

The Eurozone is in dire straights as is the US dollar.

The likes of Dubai have ground to a halt.

Eastern Europe is quite frankly in so much trouble it is hard to know where to start.

Not sure how Africa and South America are faring but their economies are hardly likely to fare well in the current climate.

The Asian economies are struggling to keep their heads above water and the biggest one of them outside of the obvious ( Japan) is in a real pickle.

China is fiddling its figures in the attempt to hid the growing crisis they have there but unemployment is rising quicker than your average Yasothon Rocket.

Thailand had just published some figures here http://www.thaivisa.com/forum/Thailand-s-E...Ce-t268099.html which suggests (as most of us thought) that Thailand itself is suffering greatly. 7.1% contraction of GDP?

The piece goes on to assume that everything will be rosy later on IF the political situation is resolved. (Fat chance of that)

The IMF have actually praised the UK somewhat for its tactics in this 'global' crisis and quite frankly i think people forget the powerhouse that is the City of London, where so much business and so many deals are worked out. Do you honestly think that a place where so many strings are pulled is going to go under? I do not.

The housing problems in the UK, even if they get worse, will not make quite as much of an impact as people seem to think. Property Values may well fall but that will simply allow people previously priced out of the market, able to make that first purchase. There is a deep well of people who want to buy but cannot afford to do so and if the prices fall, they will actually help to stop the rot rather quickly.

As the Euro tanks (and it will) anyone looking for an avenue into Europe is going to consider the UK. It is placed in a very good position for both import/export and and has a hel_l of a lot of logistical and financial expertise available.

Even before the crisis the Freeports in the UK were growing and now they are escalating the business they do by large margins.

Writing off the £ is a mistake. There will be a resurgence over time finally hitting its peak around May next year when the Tories are voted in. The US dollar is riding high at the moment as a safe currency and on the back of a new president. It's value is much higher than it should be. After the election in the UK and the end of the honeymoon period that it will bring, i think sterling will dip slightly but not much and the £ - $ rate will settle somewhere around the $1.70 area for the forseeable future.

The Thai Baht is artificially high and eventually it will come down in Value. In truth i think the powers that be are working towards a time when they can allow the baht to fall slightly but they are doing so slowly to avoid a run. This could in fact be partly what has happened in the recent weeks. .5 baht a month for 12 months would be my guess.

I expect a settled period for a very long time around the 60 area. It may go slightly higher on the back of a Tory win but will also fall after the honeymoon period.

I am no expert in any way whatsoever but this is how i see it going.

And I can agree with most of that, as a short and medium term picture because you are referring to a timescale of around one year as far as I can tell. But my reference to 35, which seems to be the bone of contention here, is in a timescale of seven to ten years.

[GuestHouse]

The problem with hedging in Thailand is that you are playing two bets on the same horse.

Again, a belief that sterling will weaken is a reason to move your sterling cash into a spread of other countries - moving it into Thai Bht is taking the double risk that your Bht and your life in Thailand will remain stable.

This is exactly the mistake many made when they moved their life and life savings to Thailand at an exchange rate of Bht70/£. TV has been awash with people reporting how the slip has hurt their life style and/or how they have had to move on.

I personally consider the risks that might arise from the return of Thaksin to be significant while on the other hand I also believe that Thailand cannot continue to have such a large slice of international trade within Asia at a time when China absolutely must maintain production and employment. There is no longer enough business to go around for the golden days of Thailand's economy to continue.

I may be wrong, but I certainly would not bet my home and life savings on Thailand - not right now anyway.

[HardenedSoul]

Whilst i do not consider that anyone would be foolish enough to invest on the words of one poster on here i do agree with mommysboy to some extent.

The pound is bad... very bad.

So is pretty much everywhere else.

The Eurozone is in dire straights as is the US dollar.

The likes of Dubai have ground to a halt.

Eastern Europe is quite frankly in so much trouble it is hard to know where to start.

Not sure how Africa and South America are faring but their economies are hardly likely to fare well in the current climate.

The Asian economies are struggling to keep their heads above water and the biggest one of them outside of the obvious ( Japan) is in a real pickle.

China is fiddling its figures in the attempt to hid the growing crisis they have there but unemployment is rising quicker than your average Yasothon Rocket.

Thailand had just published some figures here http://www.thaivisa.com/forum/Thailand-s-E...Ce-t268099.html which suggests (as most of us thought) that Thailand itself is suffering greatly. 7.1% contraction of GDP?

The piece goes on to assume that everything will be rosy later on IF the political situation is resolved. (Fat chance of that)

The IMF have actually praised the UK somewhat for its tactics in this 'global' crisis and quite frankly i think people forget the powerhouse that is the City of London, where so much business and so many deals are worked out. Do you honestly think that a place where so many strings are pulled is going to go under? I do not.

The housing problems in the UK, even if they get worse, will not make quite as much of an impact as people seem to think. Property Values may well fall but that will simply allow people previously priced out of the market, able to make that first purchase. There is a deep well of people who want to buy but cannot afford to do so and if the prices fall, they will actually help to stop the rot rather quickly.

As the Euro tanks (and it will) anyone looking for an avenue into Europe is going to consider the UK. It is placed in a very good position for both import/export and and has a hel_l of a lot of logistical and financial expertise available.

Even before the crisis the Freeports in the UK were growing and now they are escalating the business they do by large margins.

Writing off the £ is a mistake. There will be a resurgence over time finally hitting its peak around May next year when the Tories are voted in. The US dollar is riding high at the moment as a safe currency and on the back of a new president. It's value is much higher than it should be. After the election in the UK and the end of the honeymoon period that it will bring, i think sterling will dip slightly but not much and the £ - $ rate will settle somewhere around the $1.70 area for the forseeable future.

The Thai Baht is artificially high and eventually it will come down in Value. In truth i think the powers that be are working towards a time when they can allow the baht to fall slightly but they are doing so slowly to avoid a run. This could in fact be partly what has happened in the recent weeks. .5 baht a month for 12 months would be my guess.

I expect a settled period for a very long time around the 60 area. It may go slightly higher on the back of a Tory win but will also fall after the honeymoon period.

I am no expert in any way whatsoever but this is how i see it going.

Oh dear

The City of London's position as the financial capital of Europe is at an end. It's "success" was largely based on the attraction of the very deregulated environment that caused this financial crisis in the first instance. It should come as no surprise that AIG Financial Products, the division of the American insurance giant responsible for the causing the largest quarterly loss in American corporate history, ($60 BILLION ) is headquartered in the City of London just near Fenchurch Street. We all know that heavy regulation is on the way and that this will remove the City of London's advantage over other financial centres like Frankfurt. That party is well and truly over. Period.

As for the housing market, forget it. Prices have already fallen 30% from their peak. The "green shoots" that politicians and Sunday paper supplement "experts" are forever banging on about are nothing more than weeds. If you don't believe me, then may I suggest you visit housepricecrash.co.uk and navigate to the newspaper archive section where you'll find headlines pertaining to the last property crash. I seem to recall that it all went wrong in 1989. Well, the papers were chock full of idiots claiming to have seen "green shoots" as early as 1991. They claimed, triumphantly, that prices were levelling out but the slump lasted right through to 1995/96. What's worse is that, back then, there was no global financial crisis, no CDOs blowing up at RBS and Northern Rock, no £1.4 TRILLION banking bailout and no quantitative easing. China was still defending their smoking of students in Tiananmen Square, not exporting their hearts out and undercutting what remained of our manufacturing sector so you can see the headwinds.

Sentiment has changed and banks aren't giving 5 or 6 times earnings anymore so even if one wants to buy, where on earth are they going to get the mortgages from ? Interest rates are going to rise far sooner than people realise. If the BofE don't do it then the market will do it for them but, know this . . . there are a LOT of homeowners with mortgages they can't refinance due to negative equity or insufficient income in this new "prudent lending criteria" age. I GUARANTEE that there will be far more repossessions than commentators admit and that the property market will take another substantial leg down.

We cannot - I repeat, CANNOT - tinker our way out of this one. It will be a long, arduous grind to recovery.

Trust me, things are going to get very, VERY nasty in Blighty.

Edited May 25, 2009 by HardenedSoul

[mommysboy]

Mommysboy, the UK is in a far more precarious state than its peers. The populus is in debt up to its eyeballs, its property market is on its knees and soon to be on its back, it doesn't have a manufacturing sector worth mentioning, North Sea oil is virtually a spent resource, the public debt is over 30% of GDP and growing and the country relies very heavily on a financial sector that WILL be over-regulated in the months going forward to prevent a re-occurence of this type of crisis.

Both RBS and Lloyd's are going to need more money from the government and, frankly, may have be nationalized. I'd be interested to hear your comments on why you think the Treasury and the FSA have refused to release results of the stress tests on UK banks ? I could be wrong but I think it's because there are huge shrtfalls in their capital which will only be made whole by a rights issue to the market or a bailout by the government. In the case of Lloyd's - already 70% owned by the taxpayer, we are talking about nationaization.

The stress test angle is very important to me as I deal in the banks in a small way, but I can't find anything, have you got a link? Yes I honestly think you are wrong, the rights issues and bail outs have already come and gone. Taking RBS, this is a company that I unfortunately got stuck in. It's tier 1 capital is now very high, last quarter it incurred a minor loss. As far as I'm aware no further funds will be needed. Lloyds again has a strong tier 1 capital and no further losses expected, and again in general why should UK banks we any better or worse off than the other leading countries? In general the banking sector is now in profit again, with Barclays and HSBC performing well given the conditions.

One of the reasons the pound has risen is that investment has now been moving in to UK equities. Shares have been so heavily undervalued you see and likewise the currency. That augurs well for financial services.

At last glance, exports accounted for 20% of GDP, which has some pretty big players on the global scene, particularly in drugs.

House prices are falling dramatically that's for sure and that results in less consumer spending due to diminished or negative equity. Great, sanity at last, at a big cost though you are right.

No that's a fallacy about reserves, not wholly sure.

For sure public debt is a mess, but come on it's not going to be like that for much longer, already taxes have been increased, and there will be dramatic cuts in public spending to avoid any downgrade.

It's bad but yes I'd say no worse that any other major economy bar none.

Well let's see what pans out, if you are right about the banks, bank shares will dive bomb and I'll have more to worry about than the bt exchange rate.

[mommysboy]

And only today Thailand reported a 7.1% contraction in GDP 1st quarter- and it isn't even a mature economy.. It's now officially in recession. Read the report in Bangkok Post or News Clippings forum. Neither the figures nor what is said give any comfort, quite the opposite. The figures seem to me to be particularly bad. Quite apart from the slump in world demand, Thailand now has a credibility problem, and a strong currency that makes it's products less attractive. I can't see why posters should feel so confident that Thailand will recover more quickly, it strikes me the smart buyer will be looking at China, or S. Korea, and might be thinking it's time to switch production to Vietnam or Cambodia. Thailand's public finances are sound though, although that can't remain so as it will (and is) have to borrow heavily to support an extremely ailing economy.

[Merangue]

And I can agree with most of that, as a short and medium term picture because you are referring to a timescale of around one year as far as I can tell. But my reference to 35, which seems to be the bone of contention here, is in a timescale of seven to ten years.

It is here i do not entirely agree with you. Thailand is a mess and is likely to take a lot more than 1 year to sort itself out. Even then i do not see a rate of 1-35 being a realistic likelyhood.

Thailand had a false rate pre 97 and that in part caused the original crash in the first place. All the old Tiger economies which were punching way above their weight at the time, crashed drastically Thailand probably the worst of the lot and whilst i do see a readjustment over time i cannot see a return to 1-35 anytime in the next 20 years never mind 7-10 years.

Thailand has in many ways fallen behind its local rivals over the last decade again in part to the political state it is in. Where do you get your reasoning suggesting it is poised to make a great comeback on the next decade? All i can see is trouble for the country until the political upheavals are complete. Whilst there is a body we should not talk about. If and when that body ceases to be an influence i can see Thailand becoming worse not better for some time.

[Merangue]

And only today Thailand reported a 7.1% contraction in GDP 1st quarter- and it isn't even a mature economy.. It's now officially in recession. Read the report in Bangkok Post or News Clippings forum. Neither the figures nor what is said give any comfort, quite the opposite. The figures seem to me to be particularly bad. Quite apart from the slump in world demand, Thailand now has a credibility problem, and a strong currency that makes it's products less attractive. I can't see why posters should feel so confident that Thailand will recover more quickly, it strikes me the smart buyer will be looking at China, or S. Korea, and might be thinking it's time to switch production to Vietnam or Cambodia. Thailand's public finances are sound though, although that can't remain so as it will (and is) have to borrow heavily to support an extremely ailing economy.

I agree to some extent although i think the smart money will avoid China like the plague. It is a thin veneer keeping its head above water but there is a lot of social unrest just waiting to happen there.

Agree on S Korea, Vietnam, Cambodia and would add the likes of Malaysia to the list as well.

[HardenedSoul]

And only today Thailand reported a 7.1% contraction in GDP 1st quarter- and it isn't even a mature economy.. It's now officially in recession. Read the report in Bangkok Post or News Clippings forum. Neither the figures nor what is said give any comfort, quite the opposite. The figures seem to me to be particularly bad. Quite apart from the slump in world demand, Thailand now has a credibility problem, and a strong currency that makes it's products less attractive. I can't see why posters should feel so confident that Thailand will recover more quickly, it strikes me the smart buyer will be looking at China, or S. Korea, and might be thinking it's time to switch production to Vietnam or Cambodia. Thailand's public finances are sound though, although that can't remain so as it will (and is) have to borrow heavily to support an extremely ailing economy.

Well I certainly haven't championed Thailand's economic cause and, frankly, I don't really give a monkey's about it. I have a current account here to which I transfer Canadian dollars as and when needed and a stack of gold and silver bullion tucked away for when the forthcoming currency crisis sets in proper.

Here's he link to the stress test news. http://www.bloomberg.com/apps/news?pid=new...id=ah46_sK09p9o

Very strange that a government and a regulator supposedly committed to fostering transparency should feel the need to withhold information capable of doing just that, don't you think ?

[Orac]

And I can agree with most of that, as a short and medium term picture because you are referring to a timescale of around one year as far as I can tell. But my reference to 35, which seems to be the bone of contention here, is in a timescale of seven to ten years.

It is here i do not entirely agree with you. Thailand is a mess and is likely to take a lot more than 1 year to sort itself out. Even then i do not see a rate of 1-35 being a realistic likelyhood.

Thailand had a false rate pre 97 and that in part caused the original crash in the first place. All the old Tiger economies which were punching way above their weight at the time, crashed drastically Thailand probably the worst of the lot and whilst i do see a readjustment over time i cannot see a return to 1-35 anytime in the next 20 years never mind 7-10 years.

Thailand has in many ways fallen behind its local rivals over the last decade again in part to the political state it is in. Where do you get your reasoning suggesting it is poised to make a great comeback on the next decade? All i can see is trouble for the country until the political upheavals are complete. Whilst there is a body we should not talk about. If and when that body ceases to be an influence i can see Thailand becoming worse not better for some time.

Though I would be surprised to see 1-35 over the next 10 years I can see where CM is coming from based on his early comments - I don't know how many people here based there retirement plans on a rate of below 60 up to a couple of years ago but, with the current turmoil in the world, 35 could offer the safety net that quite a few have lost recently.

[chiang mai]

Mommysboy, the UK is in a far more precarious state than its peers. The populus is in debt up to its eyeballs, its property market is on its knees and soon to be on its back, it doesn't have a manufacturing sector worth mentioning, North Sea oil is virtually a spent resource, the public debt is over 30% of GDP and growing and the country relies very heavily on a financial sector that WILL be over-regulated in the months going forward to prevent a re-occurence of this type of crisis.

Both RBS and Lloyd's are going to need more money from the government and, frankly, may have be nationalized. I'd be interested to hear your comments on why you think the Treasury and the FSA have refused to release results of the stress tests on UK banks ? I could be wrong but I think it's because there are huge shrtfalls in their capital which will only be made whole by a rights issue to the market or a bailout by the government. In the case of Lloyd's - already 70% owned by the taxpayer, we are talking about nationaization.

The stress test angle is very important to me as I deal in the banks in a small way, but I can't find anything, have you got a link? Yes I honestly think you are wrong, the rights issues and bail outs have already come and gone. Taking RBS, this is a company that I unfortunately got stuck in. It's tier 1 capital is now very high, last quarter it incurred a minor loss. As far as I'm aware no further funds will be needed. Lloyds again has a strong tier 1 capital and no further losses expected, and again in general why should UK banks we any better or worse off than the other leading countries? In general the banking sector is now in profit again, with Barclays and HSBC performing well given the conditions.

One of the reasons the pound has risen is that investment has now been moving in to UK equities. Shares have been so heavily undervalued you see and likewise the currency. That augurs well for financial services.

At last glance, exports accounted for 20% of GDP, which has some pretty big players on the global scene, particularly in drugs.

House prices are falling dramatically that's for sure and that results in less consumer spending due to diminished or negative equity. Great, sanity at last, at a big cost though you are right.

No that's a fallacy about reserves, not wholly sure.

For sure public debt is a mess, but come on it's not going to be like that for much longer, already taxes have been increased, and there will be dramatic cuts in public spending to avoid any downgrade.

It's bad but yes I'd say no worse that any other major economy bar none.

Well let's see what pans out, if you are right about the banks, bank shares will dive bomb and I'll have more to worry about than the bt exchange rate.

A couple of points here:

I don't know that much about the equity markets but what I do know is that the recent rise in the FTSE from a base of 3,500 was based on such small volumes as to be inconsequential - indeed the FTSE has risen to 4,300 but the markets appear to be saying this is a bear market rally and nothing more. So no, investment has not returned to the UK equities market.

The bank bail outs have not come and gone they are simply work in progress at this time and even the IMF has said that UK banks will need further capitalization this summer and beyond. Also, the HBOS takeover is being challenged in the European Parliament and there is a strong sense that challenge may be successful. The Building Society sector is going to go through a period of consolidation over the next twelve months (see recent UK papers on this) and this in turn will lead to the UK government needing to fund the larger players as they take on the debt of the smaller societies (banks by any other name from a funding perspective). No, the banks are not in good shape when you consider the larger picture over the medium term.

Unsure what you mean by, "no that's a fallacy about reserves". please explain.

Yes the UK economy is in bad shape and yes, far worse than many others. Not as bad a s Ireland, Spain or Iceland but much worse than the major countries in Europe and far worse than the USA.

[chiang mai]

And I can agree with most of that, as a short and medium term picture because you are referring to a timescale of around one year as far as I can tell. But my reference to 35, which seems to be the bone of contention here, is in a timescale of seven to ten years.

It is here i do not entirely agree with you. Thailand is a mess and is likely to take a lot more than 1 year to sort itself out. Even then i do not see a rate of 1-35 being a realistic likelyhood.

Thailand had a false rate pre 97 and that in part caused the original crash in the first place. All the old Tiger economies which were punching way above their weight at the time, crashed drastically Thailand probably the worst of the lot and whilst i do see a readjustment over time i cannot see a return to 1-35 anytime in the next 20 years never mind 7-10 years.

Thailand has in many ways fallen behind its local rivals over the last decade again in part to the political state it is in. Where do you get your reasoning suggesting it is poised to make a great comeback on the next decade? All i can see is trouble for the country until the political upheavals are complete. Whilst there is a body we should not talk about. If and when that body ceases to be an influence i can see Thailand becoming worse not better for some time.

I agree the political situation causes concern and this is probably the wild card in the deck, don't have an answer to this one except to say that I sense the Thai people are reaching a point where they are saying, enough is enough and that things may settle down soon.

As for my logic about recovery, I already explained that. In part it results from the disciplines instilled in the country's financial system resulting from their IMF loans in 97 and the subsequent changes they made to their banking and finance systems.

[churchill]

I think the UK is in a better postion than Europe because it can manage its currency and is a lot more flexible . Also I think it is in a better position than the US that has mounting problems that are not going to disapear in a short time .

So in that case I see the pound going up towards 60 to the Baht .