Us Dollar Plunges, Bank Of Thailand Intervenes To Stabilise The Baht

[PattayaBunLover]

That's bad news for those on US Dollar retirement. Really boring, actually.

not necessairly, those on pensions only will feel the pinch but most have other assets as well and if the economy is recovering these other assets will be increasing in value (as evidenced by 30% + stock market gain over past few months) so their overall wealth will be greater. They may loose a little more when they bring money over to spend but their overall wealth will be much greater.

[bdenner]

Don't know why the Americans are crying fowl over all this. They started it in the first place. What's happening now is the rest of the world is correcting an over correction and leaving the Americans to stew in their own crap.

[Beggar]

Don't know why the Americans are crying fowl over all this. They started it in the first place. What's happening now is the rest of the world is correcting an over correction and leaving the Americans to stew in their own crap.

How can you say this? Bernanke said the interest rate for USD should be between 0 and 0.25. With 0.25 he cared about all the software that cannot handle 0 for the calculation. A genius - or not! There is more to come...

[bdenner]

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How can you say this? Bernanke said the interest rate for USD should be between 0 and 0.25. With 0.25 he cared about all the software that cannot handle 0 for the calculation. A genius - or not! There is more to come...

Don't quite know what your saying here?

Lets just say if I still had a hoard of USD I'd be getting out fast --- Euros, Yen, Canadian or even my home AUD but more than likely Chinese Yuan. They have the USD by the balls and if they decide to let go you Americans will be lucky to get 15 Baht to the USD.

There are some on this forum that have not stopped speculating about an amazing USD comeback for the last 15 months. DON'T BET ON IT!

Edit: Typos

Edited September 18, 2009 by bdenner

[Beggar]

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How can you say this? Bernanke said the interest rate for USD should be between 0 and 0.25. With 0.25 he cared about all the software that cannot handle 0 for the calculation. A genius - or not! There is more to come...

Don't quite know your saying here?

Lets just say if I still had a hoard of USD I'd be getting out fast --- Euros, Yen, Canadian or even my home AUD but more than likely Chinese Yuan. They have the USD by the balls and if they decide to let go you Americans will be lucky to get 15 Baht to the USD.

There are some on this forum that have not stopped speculating about an amazing USD comeback for the last 15 months. DON'T BET ON IT!

Edit: Typos

One day there will be the NEW USD. It will be at least 10 times stronger then the USD we know now. Is this no future? And then there will be 1 Euro to 1 New USD!!!

[bdenner]

Gottcha!

[Donnyboy]

That's bad news for those on US Dollar retirement. Really boring, actually.

not necessairly, those on pensions only will feel the pinch but most have other assets as well and if the economy is recovering these other assets will be increasing in value (as evidenced by 30% + stock market gain over past few months) so their overall wealth will be greater. They may loose a little more when they bring money over to spend but their overall wealth will be much greater.

what happens if the dollar loses even more in the coming months and years and your investments are in US stocks? Any gains made would be wiped out essentially wouldnt it, unless the US market continues to climb higher, which i wouldnt bet on.

[slipperx]

Isn't a lower USD good in the short term as it reduces the cost of US exports, so that they can compete against low cost countries like China? It also reduces the debt held by foreign countries, since they hold USD debt, right? Sucks to be a US expat though, but I don't think the minimum wage earner in Alabama that can't get health insurance is worried about that.

With people like Greenspan and Bernanke + their team of banks they might achieve the goal to compete in an easy way with China pretty soon. When the standard of living is higher there they will be happy. But can it be a goal to bring down the own country and all the people in it just to be able to be competitive? It is a very sad story for a country if there is no better way to achieve this. Better products? Better quality? A very dangerous game for most of the US population not belonging to this "elite". And they are just watching and let them do...

Yes get rid of the unions and let people compete for jobs thus bringing wage bills down, pass legislation to cap the pay of the management and ensure any profit incentive schemes are long term not short term. Of course not PC nor necessarily what society wants which is why it doesn't happen.

[Beggar]

what happens if the dollar loses even more in the coming months and years and your investments are in US stocks? Any gains made would be wiped out essentially wouldnt it, unless the US market continues to climb higher, which i wouldnt bet on.

I had exactly this experience. After the Iraq war I bought stocks at Nasdaq for Euros. They went up. At the same time the $ went down by the same amount. It was just an empty trade with a lot of risk :-)

[PattayaBunLover]

not necessairly, those on pensions only will feel the pinch but most have other assets as well and if the economy is recovering these other assets will be increasing in value (as evidenced by 30% + stock market gain over past few months) so their overall wealth will be greater. They may loose a little more when they bring money over to spend but their overall wealth will be much greater.

what happens if the dollar loses even more in the coming months and years and your investments are in US stocks? Any gains made would be wiped out essentially wouldnt it, unless the US market continues to climb higher, which i wouldnt bet on.

Of course if one had an exclusive concentration of US stocks (leaving aside the question that many US multinationals get 50% of more of sales/profits abroad these days so act more like a world-wide company stock and not one with purely domestic sales/profits) of course one would want to be diversified. Living overseas, there is always currency risks one has to deal with and plan for to one's best ability. All fiat currencies are just pieces of paper after all.

A prudent hedge is always 10-20% of one's portfolio in gold to act as ballast for both inflation and currency swings.

[ludosiam]

Hi Beggar, this is why I think the BoT is doing the wrong thing (given the other statements are correct). I bet you would be more careful to invest in foreign currency stocks now after realizing that there is quite a forex risk besides the prospective gains in stocks. Putting this into the Thai model: BoT wants the Baht / THB ratio stable but an influx of USD to invest in stocks here forces them to intervene. If they wouldn't intervene here USD investors could make a profit on the market but bear forex risks as their investment would decrease due to a stronger Baht. Thus it looks to me as the BoT fills up foreign investors bank accounts by taking these risks away and subsequently encouraging more investments. More investments, more pressure on the Baht, more interventions needed again and so on.

[Beggar]

Hi Beggar, this is why I think the BoT is doing the wrong thing (given the other statements are correct). I bet you would be more careful to invest in foreign currency stocks now after realizing that there is quite a forex risk besides the prospective gains in stocks. Putting this into the Thai model: BoT wants the Baht / THB ratio stable but an influx of USD to invest in stocks here forces them to intervene. If they wouldn't intervene here USD investors could make a profit on the market but bear forex risks as their investment would decrease due to a stronger Baht. Thus it looks to me as the BoT fills up foreign investors bank accounts by taking these risks away and subsequently encouraging more investments. More investments, more pressure on the Baht, more interventions needed again and so on.

It is not only about investing in stocks. It is important to be competitive with the economy. And other countries here devalue their currencies. So Thailand has to follow. But this could be changed if the $ loses the reserve currency status and contracts are made in Euro. Greenspan was always hoping so much that this might happen. But he showed enough how unqualified he was. And such statements confirm this even more. He wanted to destroy the USA I guess. But Bernanke does a good job too. If the $ ends to be the reserve currency what a chaos for the US.

[ericthai]

I remember when it hit the 50's, back early 98. I remember it hit 53 and thinking no way will it go any higher, I exchanged $5,000 USD the next day it hit 55, couldn't believe it. It was good back then, but the Thai's wasted no time upping the prices. It seemed bar fines went for 150 to 300 baht overnight. cant believe it was that long along, Hope it goes back up to 40, so much easier for the math and the pocket

Edited September 20, 2009 by ericthai

[glegolo]

33.65 mid-market per XE.com now.

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Lopburi99.. this site XE is good in it´s on way. But you cannot use it to compare what you gonna get from a bank.

The rate of exchange is so much higher on XE than the banks ever can give you. i.e. SEK XE 4.84 - swedish bank 4.67.

So 33.65 on XE is actually NOt what people gonna get.

Glegolo

[OILMAN13]

That's bad news for those on US Dollar retirement. Really boring, actually.

Are we gonna see more farangs doing bank robbery in the time to come?

So kind of you to say.

Hope your currency of choice doesn't tank too....

The US dollar isn't anyone's fault except Americans who keep electing corrupt governments who ignore the Constitution and drive their once great economy and country into the dirt so that the bankster political financiers and associated sycophants can get richer.

My currency doesn't look like tanking at all, but there again we never allowed our banks to to suck the life out of our economy.

Khun Chunkton, You almost have it right, almost isn't good enough for these pages. The U.S. Government is run by a privately owned bank called "The Federal Reserve Bank". Six families have controlled it since it's inception on December 24, 1913 at 11:30 PM, passed by no quorum, just three Senators planted to vote on the bill and it was passed 3-0. That was the beginning of them taking over running the US economy and ALL government employees really work for them. I know it's tempting to blame the American Citizen for the corrupt governments that keep appearing, it's because there are people in the Feds pockets that run the country. It doesn't really matter which party is in power to the bankers. Take an hour or so and watch a video called "MoneyMasters", found on google. Cheerio.

[SteveB2]

I don't know what all the fuss is about...

When I first came here 15 years a go, the rate was USD1.00 = THB25.4

This artificialy pegged rate collapsing somewhere around the Asian financial crisis of '97 when the Thai Baht eventualy slipped to 97 against the Matabeeli gumbo bean

[Naam]

I remember when it hit the 50's, back early 98. I remember it hit 53 and thinking no way will it go any higher, I exchanged $5,000 USD the next day it hit 55, couldn't believe it. It was good back then, but the Thai's wasted no time upping the prices. It seemed bar fines went for 150 to 300 baht overnight. cant believe it was that long along, Hope it goes back up to 40, so much easier for the math and the pocket

monday january 19, 1998 arriving in BKK i got THB 55.28 for one Dollar.

[sibeymai]

Aahhh, the good ol' days. Like people will be remembering 33.5 when the US$ hits 25baht again in the coming year.

Edited September 20, 2009 by sibeymai

[featography]

That's bad news for those on US Dollar retirement. Really boring, actually.

Are we gonna see more farangs doing bank robbery in the time to come?

So kind of you to say.

Hope your currency of choice doesn't tank too....

The US dollar isn't anyone's fault except Americans who keep electing corrupt governments who ignore the Constitution and drive their once great economy and country into the dirt so that the bankster political financiers and associated sycophants can get richer.

My currency doesn't look like tanking at all, but there again we never allowed our banks to to suck the life out of our economy.

Amen to that Brothers and sisters!! The American populace is waking up to that fact too. Come time, its going to be a very exciting election year up on Capitol Hill.

[featography]

"We believe the global financial market remains volatile and the baht is likely to strengthen or weaken depending on economic indicators in the US," she said.

Right, it's really not rocket science. If the U.S. economy improves, the USD weakens thus strengthening the baht. If the U.S. economy strengthens, the USD weakens thus strengthening the baht. Got it?

First good laugh of the day. By Jove, I think you've got it. It's called, Thai Way

[crocodilexp]

What an irresponsible, sensationalist headline!

From what I can see, USD fell from ~33.9 to ~33.2 (2-3%) within a day and then stabilized (presumably due to BOT measures). USD has been at the same or lower rate throughout almost all of 2007 and 2008 (down to 30 at times).

No need to run around screaming that the sky is falling.

[featography]

What an irresponsible, sensationalist headline!

From what I can see, USD fell from ~33.9 to ~33.2 (2-3%) within a day and then stabilized (presumably due to BOT measures). USD has been at the same or lower rate throughout almost all of 2007 and 2008 (down to 30 at times).

No need to run around screaming that the sky is falling.

I agree. Its is time to run around screaming Where's The Cafe Yenne?!?!?!

[barryofthailand]

Not really news been stuck at 33-34 for sometime, expect 35 or so in the coming months.

Hey Brit,

The Dollar was at 36 six months ago.

Barry

[Heng]

And even if it does crash eventually, it's not like we haven't had years and years to plan for it.

[Lancelot]

That's bad news for those on US Dollar retirement. Really boring, actually.

Are we gonna see more farangs doing bank robbery in the time to come?

So kind of you to say.

Hope your currency of choice doesn't tank too....

The US dollar isn't anyone's fault except Americans who keep electing corrupt governments who ignore the Constitution and drive their once great economy and country into the dirt so that the bankster political financiers and associated sycophants can get richer.

My currency doesn't look like tanking at all, but there again we never allowed our banks to to suck the life out of our economy.

Your kindness and sympathy are overwhelming.

Some of us NEVER voted for corruption.

Yawn....

If China were the worlds leading economic posters, then posters would be railing against the Chinese and gloating at any negative news from the Chinese currency.

Just substitute Brazil or India or Russia (BRIC Countries) for the worlds leading economy and posters would rail against those countries as well. Some folks need a bad guy

I'm goin have another cup of coffee

[midland204]

just a longer term view. The THB traded at 25=1USD before the Thai economic crisis of 1997. It then depreciated to about 57 or so. Local prices then took a year or so to settle in based on this new exchange rate and the local Thais suffered greatly witht he inflation due to this swift devaluation. Then for a number of years the exchange rate hung in the mid 40's before this latest trend of a weaker dollar (as opposed to a stronger THB). With the increased uncontrolled US Governement spending expected to continue for the next 3 years and the massive printing of dollars one can expect that in this 3 year time period we could easily see an exchange rate of 28-29 THB = 1 USD which was previously thought unfathonable to approach 1997 levels with the local prices fixed at 1999 levels. Big pain for those retirees on fixed income based on USD

[AsiaCheese]

Ya, I thought that was pretty funny as well - talk about stating the obvious.

Am I missing something here? The sensationalist Headline says "...US Dollar Punges". However, when I look at the SCB curreny site the US dollar is the usual 33.xx baht that it's been for ages. When did it "plunge"? Or are the execs at BoT just catching on now that it dropped signifigantly in value a year ago or so? I'm so confused by this thread.

Well, it's not only the greenback per se; THB is still "tied" to the USD (not officially anymore, since a couple of years as far as I recall, but it still is de facto). But: there are a whole bunch of currencies that aren't tied to the USD, and their exchange rate is therefore going through the roof. CHF, NZD are two that I keep track of, but there are quite a few more.

[britmaveric]

Aahhh, the good ol' days. Like people will be remembering 33.5 when the US$ hits 25baht again in the coming year.

Highly unlikely, more chance being 45 than 25!!!

[orlov]

Well no it hasn't. -1.3pct over 3 months, -4.5 pct over 6 months and -9.7 pct over 3 years.

Compare that to pound sterling which is -21.5 pct over 3 years. Now that's what I call a plunge!

[flago007]

Well no it hasn't. -1.3pct over 3 months, -4.5 pct over 6 months and -9.7 pct over 3 years.

Compare that to pound sterling which is -21.5 pct over 3 years. Now that's what I call a plunge!

Remember in 1993 we got 35/36 to the £,but only a few years ago got 72,so now 54.It would be nice if we got to 60 plus but cant see it for some time