50 Baht To The Pound..the Dream Is Over..!

[mommysboy]

Not great like that day in 97 when it hit...97...but...

The date & time now is 2009-10-23 17:53:21 GMT.

For ATM rates, select the TT currency type.

Bank Country Updated by bank Update no. From To Rate Inverse of rate Chart

Kasikorn Bank Thailand 2009-10-22 07:10 3 GBP THB 55.22375 0.0181082 Chart

Siam City Bank Thailand 2009-10-22 06:58 2 GBP THB 55.21875 0.0181098 Chart

CIMB Thai Thailand 2009-10-22 06:25 3 GBP THB 55.165 0.0181274 Chart

Bangkok Bank Thailand 2009-10-22 10:15 4 GBP THB 55.11 0.0181455 Chart

Thanachart Bank Thailand 2009-10-22 09:44 5 GBP THB 55.09 0.0181521 Chart

Siam Commercial Bank Thailand 2009-10-22 11:10 GBP THB 55.07375 0.0181575 Chart

Bank of Ayudhya Thailand 2009-10-22 10:08 4 GBP THB 55.005 0.0181802 Chart

UOB Thailand 2009-10-21 17:00 3 GBP THB 54.976 0.0181898 Chart

Krung Thai Bank Thailand 2009-10-22 09:17 GBP THB 54.97 0.0181917 Chart

Percentage difference between minimum and maximum exchange rates above = 0.46%

Average bank exchange rate from data above: 1 GBP = 55.0924722 THB

What's your point, rinrada?

[Abrak]

Let's then look at this sensibly!

USA C/A Deficit 3%

Thailand C/A Surplus 9%

USA fiscal deficit 13%

Thailand fiscal deficit 4% (yeah I know is supposed to be a lot higher)

So one country is running a 5% surplus and one a 16% deficit. So a 20% appreciation of one currency against another doesnt

seem unreasonable at some point. Actually I dont think the baht really needs to appreciate much more the dollar depreciate by 25%

or so restore net exports and investment to make up for declining consumption (and that will only happen when the Yuan floats which

cause the baht to rise.)

Apologies see this is a UK thread - but it sort of same, same with additional QE.

I bet you are either a Brit or a Yank and you are talking about comparing household debt when it is less than 25% of GDP what is it in the UK?

But I do agree with one point, forex reserves have increased US$20bn since the beginning of the year and forward commitments have increased too in an increasingly desperate attempt to stop the baht appreciating (reserves are 12 months imports) and as it inevitably does they will lose money. If they had taken that money, with any modest multiplier the economy would have grown 5%.

Edited October 23, 2009 by Abrak

[mommysboy]

Let's then look at this sensibly!

USA C/A Deficit 3%

Thailand C/A Surplus 9%

USA fiscal deficit 13%

Thailand fiscal deficit 4% (yeah I know is supposed to be a lot higher)

So one country is running a 5% surplus and one a 16% deficit. So a 20% appreciation of one currency against another doesnt

seem unreasonable at some point. Actually I dont think the baht really needs to appreciate much more the dollar depreciate by 25%

or so restore net exports and investment to make up for declining consumption (and that will only happen when the Yuan floats which

cause the baht to rise.)

Apologies see this is a UK thread - but it sort of same, same with additional QE.

I bet you are either a Brit or a Yank and you are talking about comparing household debt when it is less than 25% of GDP what is it in the UK?

But I do agree with one point, forex reserves have increased US$20bn since the beginning of the year and forward commitments have increased too in an increasingly desperate attempt to stop the baht appreciating (reserves are 12 months imports) and as it inevitably does they will lose money. If they had taken that money, with any modest multiplier the economy would have grown 5%.

Brit.

But you didn't deal with the question at all, are you a politician?

[Abrak]

Brit.

But you didn't deal with the question at all, are you a politician?

Well to be fair you did ask a lot of questions.

Perhaps the one you are referring to is the wouldnt the government have spend an extra 3% of GDP on the economy?

Well at the moment Thailand is accumulating forex reserves equivalent to 10% of GDP in order to stop its exchange rate appreciating. So the government can quite easily afford to spend an extra 3% of GDP boosting its economy - in fact it plans to. Or put another way with a 9% current account surplus the current fiscal deficit of 4% is way too low anyways. Essentially all Thailand is doing is building up forex reserves to finance other countries problems.

If Thailand had run a western style fiscal deficit this year it would have grown.

Unfortunately it must face the fact that if it allows the likes of the UK and US to continue on their paths of no growth and twin deficits they will ultimately disintegrate.

And if you still havent got it - just very simply think, Thailand is generating a twin surplus of 5% of its GDP at current exchange rates and GDP will fall 3.5%. That is an extremely solid economic dynamic in the current environment. Meanwhile, the UK is generating twin deficits of 15% relative to GDP and GDP is still declining 3%, which really is not good.

The big concern for the West should not be whether these currencies appreciate but what will happen if they dont.

[mommysboy]

Brit.

But you didn't deal with the question at all, are you a politician?

Well to be fair you did ask a lot of questions.

Perhaps the one you are referring to is the wouldnt the government have spend an extra 3% of GDP on the economy?

Well at the moment Thailand is accumulating forex reserves equivalent to 10% of GDP in order to stop its exchange rate appreciating. So the government can quite easily afford to spend an extra 3% of GDP boosting its economy - in fact it plans to. Or put another way with a 9% current account surplus the current fiscal deficit of 4% is way too low anyways. Essentially all Thailand is doing is building up forex reserves to finance other countries problems.

If Thailand had run a western style fiscal deficit this year it would have grown.

Unfortunately it must face the fact that if it allows the likes of the UK and US to continue on their paths of no growth and twin deficits they will ultimately disintegrate.

And if you still havent got it - just very simply think, Thailand is generating a twin surplus of 5% of its GDP at current exchange rates and GDP will fall 3.5%. That is an extremely solid economic dynamic in the current environment. Meanwhile, the UK is generating twin deficits of 15% relative to GDP and GDP is still declining 3%, which really is not good.

The big concern for the West should not be whether these currencies appreciate but what will happen if they dont.

No I have got rather lost here and the math has gone a bit beyond me. But in effect I think you are saying that Thailand can quite easily cope without the exports and tourism and so the exchange rate does not matter really, which is an interesting point and I can see how that might actually suit a nation like this. Looking around, it certainly needs to do a lot of spending and then yes it would be possible to believe that this is a wealthy country. But I wonder whether it will ever happen, corruption is such a terrible thing.

[mommysboy]

sorry forgot.

Thai GDP is forecast to shrink 3.5% this year and thereafter growth of just 1-3% is forecast for several years to come. Isn't this rather serious, and wouldn't a strong baht impact on that still further?

And a general discussion point from that, if a country were simply to minimise it's imports/exports, could that country still thrive? It does appear as if Thailand has bagged the swag and is benefiting from decreased trade.

[chiang mai]

The pound was overvalued, now it's undervalued.

I think you may be wrong.

The pound is in a downward spiral that's likely to last a good couple of years.

The reality is that the GBP was over valued for a long time and now its back to fair value.

Plenty of room for it to drop what with the govt needing 200 BILLION GBP from somewhere. China wont help.

The IMF may have to dole out some credits to it soon.

Spot on.

Possibly. surely just normal parameters though!- say plus or minus 10% against most currencies and possibly rises against a currency like the Euro. Can anyone honestly see a major plunge?, it's already happened, and it's already lasted a fair while already. We're seeing historic effects at present, markets are generally future priced.

Again we need to remind ourselves that most economies are in a similar boat, that's a point that otherwise astute posters miss time and time again.

I think a general comment is that the West, most notably the UK, has lived well beyond its means for many decades, there is a major revision in living standards on the cards, and that may well extend to Thailand for instance as opposed to Vietnam although that may seem rather unfair. In a sense then yes the UK or most likely it's residents is/are destined to a 3rd world lifestyle. There never was enough money to maintain the standards they seem to think are their right! and there certainly will not be in the future.

What is a little puzzling to me is that in the five years I'd been away the UK seemed to have moved forward enormously in terms of infrastructure, whereas Thailand still looks a dump. Just one person's view but doesn't investment in infrastructure, communications, education, etc, count. I mean yes UK is in debt but at least some of it was spent wisely. Thailand seems to have gone backwards to me, and the real pressure isn't even on at the moment. So I think it's important to make real comparisons in real life.

But I do agree that a plunge could take place and have personally always said 48 is my floor, and that's priced in to my own finances.

[Pib]

The baht was around 25 to the dollar from 1985 to July of 97, so it's got a ways to go before it reaches it's highs. It was 20 baht to the USD from 73 to 78. Hopefully we will not see those highs again.

O' so true. But in 1973 the 20 Baht-to-the-1 Dollar bought so much more (preaching to the choir I know)...and I was here in 1973. The world turns...the world changes...hopefully the Baht to Dollar (or other currencies) won't change so much that it becomes "expensive to live in Thailand." It's already expensive for many Thai's (especially in Bangkok); hopefully it won't reach the point that most farangs start saying "I can live cheaper in my home country."

[mommysboy]

The baht was around 25 to the dollar from 1985 to July of 97, so it's got a ways to go before it reaches it's highs. It was 20 baht to the USD from 73 to 78. Hopefully we will not see those highs again.

O' so true. But in 1973 the 20 Baht-to-the-1 Dollar bought so much more (preaching to the choir I know)...and I was here in 1973. The world turns...the world changes...hopefully the Baht to Dollar (or other currencies) won't change so much that it becomes "expensive to live in Thailand." It's already expensive for many Thai's (especially in Bangkok); hopefully it won't reach the point that most farangs start saying "I can live cheaper in my home country."

At what exchange rate would that happen?. I'd hazard a guess at 28 to the dollar. Thailand will still be cheap if you come to retire and have a pension and good health plan, as the rent is so economical and you can eat like a king for a pittance. But at what point does it become cheaper for a a 30-50 year old to live elsewhere?. I'd say we've passed that point already in one sense, but the sting in the tail is that the USA and UK have been living an unsustainable quality of life for years and the future doesn't look good. A very interesting posting.

[whichschool]

The baht was around 25 to the dollar from 1985 to July of 97, so it's got a ways to go before it reaches it's highs. It was 20 baht to the USD from 73 to 78. Hopefully we will not see those highs again.

But that doesnt take into account the inflation in prices of food, land/property and other essentials one needs to live in LOS in comparison to the US/UK.

[whichschool]

hopefully it won't reach the point that most farangs start saying "I can live cheaper in my home country."

Supermarket food is cheaper in the UK then LOS and pretty much every country ive ever been to, accommodation in the suburbs of the southern town where i live is cheaper then where i stay in BKK (ie an area that has similar amenities to where i live)

A pint of beer is cheaper (per ml) then the bottles that now cost about 2 quid in most places in BKK, and pub food is similar priced.

Transport, healthcare and immoral ladies are definitely cheaper in LOS though.

Edited October 24, 2009 by whichschool

[neil324]

hopefully it won't reach the point that most farangs start saying "I can live cheaper in my home country."

Supermarket food is cheaper in the UK then LOS and pretty much every country ive ever been to, accommodation in the suburbs of the southern town where i live is cheaper then where i stay in BKK (ie an area that has similar amenities to where i live)

A pint of beer is cheaper (per ml) then the bottles that now cost about 2 quid in most places in BKK, and pub food is similar priced.

Transport, healthcare and immoral ladies are definitely cheaper in LOS though.

Pretty fair summary. Quiet staggering given the average wages in the said countries. Was reading a post someone saying on the PPI that the baht is undervalued

[Pib]

The baht was around 25 to the dollar from 1985 to July of 97, so it's got a ways to go before it reaches it's highs. It was 20 baht to the USD from 73 to 78. Hopefully we will not see those highs again.

O' so true. But in 1973 the 20 Baht-to-the-1 Dollar bought so much more (preaching to the choir I know)...and I was here in 1973. The world turns...the world changes...hopefully the Baht to Dollar (or other currencies) won't change so much that it becomes "expensive to live in Thailand." It's already expensive for many Thai's (especially in Bangkok); hopefully it won't reach the point that most farangs start saying "I can live cheaper in my home country."

At what exchange rate would that happen?. I'd hazard a guess at 28 to the dollar. Thailand will still be cheap if you come to retire and have a pension and good health plan, as the rent is so economical and you can eat like a king for a pittance. But at what point does it become cheaper for a a 30-50 year old to live elsewhere?. I'd say we've passed that point already in one sense, but the sting in the tail is that the USA and UK have been living an unsustainable quality of life for years and the future doesn't look good. A very interesting posting.

I think a drop to the 26-28 Baht range (approx 20% from the current exchange rate) would prevent many farangs from settling down in Thailand due to cost preception/reality combined with certain benefits which can't be used/are hard to use when living outside their home country. Of course each individuals case will vary and largely determined how much living money they have coming in.

[Naam]

I think a drop to the 26-28 Baht range (approx 20% from the current exchange rate) would prevent many farangs from settling down in Thailand due to cost preception/reality combined with certain benefits which can't be used/are hard to use when living outside their home country. Of course each individuals case will vary and largely determined how much living money they have coming in.

it's not only a matter of how much money is coming in. in certain cases it is important how much the taxman in one's home country takes. if the Baht would appreciate 40 (FORTY!) percent vs. the EUR i'd still live cheaper in Thailand than in Germany not even taken into consideration that i can afford things in Thailand which are out of my financial reach anywhere in Europe.

[samuidave]

Thought I would save build and retire to Thailand, seems the pound has found it's true value. Let's face it, the UK produces and manufactures nothing of any great use to the outside world. Is my dream really over...?

Many of the comments made on this posting are rather amateurish, the USD & GBP are weak due to financial policies introduced by both countries that is to say extremly low interest rates in order stimulate the economy, that is to say create low cost business lending on the one hand, so that companies can survive the depression, and on the other promoting export in order help the economy, PR. Obama and PM. Brown have made it clear that they intent to keep their respective currency low for sometime (perhaps two years) but it might not be possible since a low currency value has also negative aspects, the USD being the global reserve currency (replacing GBP after the war) has immensely benefited from this since major counties have invested trillions in USD, thus helping the US for years to balance their enormous annual budged deficit with the influx of foreign currency, those countries ... the middle east oil giants, China, Russia, India, Japan, are most unhappy with this as they have been suffering havy losses as a result, they are now looking for an alternative global currency more stable that the USD it may take some time but the actions are in progress.

Moreover, the low interest rates of both the USD and GBP will eventually create inflation, which has to be avoided, thus the policy of a low value currency for major economies can

not last and should not last for long, and a global currency balance has to be reached, the FED and No 11 are of course aware of this, and as a result interest rates for their respective currencies will gradually increase and both currencies will rise again against the THB to what extent depends as always on the market in this case the 24/7 FX.

However, Brit expats in Thailand (unlike Americans) have a more serious problem, their state pension is not indexed it stays the same as it started years ago, and due to inflation its value goes down annually and this will have serious repercussion, there is one last chance (apart from the British parliament itself) and that is the European Court of Human Rights the first case there was lost and last month (Sept) the case was presented to the "Grand Chamber" of the Human Right Court, and the verdict is due in March 2010.

Unfortunately, our American friends can not help us with this, the question is will the outcome of the European Court of Human Rights be as successful as our combined landing in Normandy (France 1944) when we saved Europe from tyranny, now will Europe (the EU) in return save us British expat retirees from financial disaster by granting the indexation of our state pension to which we contributed all our working life and thus give us the dignity which we deserve.

Basics here: Creditors are only going to prop up the debtors until it is worth their while to not do so.

The emerging economic players, also major creditors to the US --Japan, China, and India -- are only going to help maintain the greenback until they can devise a new paradigm for a trade currency.

When that is accomplished, keeping in mind the new model must be implemented so the creditors win (and not take an enormous economic loss due to the relatively valueless greenback which they have heavily invested in), then the US will be left to pay its way for the last 40-year party it has had at the world's expense. This is not to say the US is going to disappear and not be a player -- politics and debt to power behind the scenes is going to ensure that -- it's just that its role is going to significantly change on the world stage.

But then the US will not be able to rely on others having to buy its money supply to 'play', so realistic economic policies are going to have to be imposed which is going to drop the standard of living significantly in America (and countries who have decided to tie their boat to this sinking ship - eg, Canada).

Just a thought.

[neil324]

I think a drop to the 26-28 Baht range (approx 20% from the current exchange rate) would prevent many farangs from settling down in Thailand due to cost preception/reality combined with certain benefits which can't be used/are hard to use when living outside their home country. Of course each individuals case will vary and largely determined how much living money they have coming in.

it's not only a matter of how much money is coming in. in certain cases it is important how much the taxman in one's home country takes. if the Baht would appreciate 40 (FORTY!) percent vs. the EUR i'd still live cheaper in Thailand than in Germany not even taken into consideration that i can afford things in Thailand which are out of my financial reach anywhere in Europe.

Is there a wealth tax in Germany ontop of earnings tax? What things can't you afford in Europe?

[loverboy44]

No, there is no "wealth" tax in Germany.

[Naam]

I think a drop to the 26-28 Baht range (approx 20% from the current exchange rate) would prevent many farangs from settling down in Thailand due to cost preception/reality combined with certain benefits which can't be used/are hard to use when living outside their home country. Of course each individuals case will vary and largely determined how much living money they have coming in.

it's not only a matter of how much money is coming in. in certain cases it is important how much the taxman in one's home country takes. if the Baht would appreciate 40 (FORTY!) percent vs. the EUR i'd still live cheaper in Thailand than in Germany not even taken into consideration that i can afford things in Thailand which are out of my financial reach anywhere in Europe.

Is there a wealth tax in Germany ontop of earnings tax? What things can't you afford in Europe?

wealth tax was abolished several years ago, but talk is that it might be introduced again.

unaffordable for me would be the house i built in Thailand (estimated cost without land approximately €UR 2.2-2.5 million) and three fulltime domestic employees.

total income tax from regular income would be in my case 48.18% plus 25% tax on any capital gains achieved by either trading or simply shifting assets.

[AbeSurd]

it's not only a matter of how much money is coming in. in certain cases it is important how much the taxman in one's home country takes. if the Baht would appreciate 40 (FORTY!) percent vs. the EUR i'd still live cheaper in Thailand than in Germany not even taken into consideration that i can afford things in Thailand which are out of my financial reach anywhere in Europe.

So you pay little - if any - tax to Germany.

If it's not a secret, what country/countries (if any) do you pay tax to?

[neil324]

it's not only a matter of how much money is coming in. in certain cases it is important how much the taxman in one's home country takes. if the Baht would appreciate 40 (FORTY!) percent vs. the EUR i'd still live cheaper in Thailand than in Germany not even taken into consideration that i can afford things in Thailand which are out of my financial reach anywhere in Europe.

So you pay little - if any - tax to Germany.

If it's not a secret, what country/countries (if any) do you pay tax to?

I'd imagine his domicile is Thailand, so pays tax in Thailand.

Edit

Or slips under the radar and does'nt pay tax at all

Edited November 13, 2009 by neil324

[Naam]

it's not only a matter of how much money is coming in. in certain cases it is important how much the taxman in one's home country takes. if the Baht would appreciate 40 (FORTY!) percent vs. the EUR i'd still live cheaper in Thailand than in Germany not even taken into consideration that i can afford things in Thailand which are out of my financial reach anywhere in Europe.

So you pay little - if any - tax to Germany. If it's not a secret, what country/countries (if any) do you pay tax to?

I'd imagine his domicile is Thailand, so pays tax in Thailand. Or slips under the radar and does'nt pay tax at all

i am not paying any tax to any country and that legally without "slipping under the radar". as a retiree living in Thailand, having all my income offshore the thai taxman does not bother me and an attempt of mine (several years ago) to pay income tax on the amount of living expenses i transfer to Thailand was not successful.

there are two interpretations of thai tax law:

1. if you are a resident of Thailand you pay income tax on the amount you transfer to Thailand.

2. if you are a resident of Thailand you pay income tax on the amount you transfer to Thailand in the same calendar year in which the income was earned.

Thai tax authorities use interpretation #2 although i think it is not according to prevailing law and i'd gladly pay taxes on the amount i transfer and spend in Thailand.