Pound Starting To Stenghen.

[Thongkorn]

Things are starting to change, A lot of company's who have moved out of the UK, are starting to return because products are not being made as reliable, Cheapness is starting to show. Also the cost of transport is very expensive.The future of the UK is in Technology and Science, if and a big if, is that the government start to invest In Science University's.

[Abrak]

Currently Thailand is running a surplus, and, if you agree that this is not good for the long term, then you have to accept that either prices will rise or the THB will continue to appreciate, or both.

In the normal world this would be regarded as a statement of the obvious.

Actually there is one other possibility which is that your central bank could intervene to sterilize capital inflows by issuing bonds. However if you suppress the asppreciation or inflation then people increasingly bet their will be appreciation and inflation which cost you increasing amounts of money. At some point it becomes counter productive in that benefits of maintaining an under valued exchange rate are lower than the costs of sterilization. The general rule is 10% and Thailand is at 18% (which sort of implies 18% undervaluation or 18% inflation. Tarisa should have been shot for this. Because you have gone well beyond any boundary that sterilization must end leading to inflation and/or appreciation. I think 12D is spot on, Thailand needs to raise its inflation target to make the baht less attractive. And where normally would expect excess cashflows to turn into inflation, the stockmarket. That is why you are beginning to see the short dollar long baht trades beginning to move into the market

[12DrinkMore]

Things are starting to change, A lot of company's who have moved out of the UK, are starting to return because products are not being made as reliable, Cheapness is starting to show. Also the cost of transport is very expensive.The future of the UK is in Technology and Science, if and a big if, is that the government start to invest In Science University's.

Maybe you can provide some references to support that statement?

1. There maybe a lot of cheap plastic crap emanating from China, but there is also a lot of quality stuff as well.

2. Four decades ago the Japanese had a reputation for producing cheap and inferior goods. Now they are leaders in quality mechanical, optical and electronic products. I am sure that the Chinese will also up the quality as necessary.

3. Asia is the de-facto manufacturing base of the world, applying Western quality standards to goods produced for shipment to to the West.

4. The cost of transport by sea is negligible, the costs only escalate once the Western land based transport companies get involved.

5. To be honest I am still at a loss to see where a successful future of the UK lies. The majority of the students studying science and technology in the UK come from abroad. India and China are building up their base of universities and graduates. And they certainly do not focus on "history of art" or the "political history of the UK from 1800 to 1851" woolly bullshit subjects.

6. The focus of the UK government seems to be

A. keeping itself in power

B. awarding itself huge salaries

C. growing the size of government

D. keeping itself in power

And to this end their main policies revolve around

A. keeping the bankers happy

B. keeping the minorities happy

C. keeping the debtors happy

D. supporting the Great British Property Prices

E. spending even more money that they don't have

F. destroying the GBP as the main effect of their profligate financial policies, but fed to the peeps as "increasing competitiveness"

And on my list I do not see anywhere

A. encouraging investment in industry

B. reducing government overheads

C. reducing social benefits to encourage or even force the spongers to find some work

D. improving the quality of education (the opposite is in operation, dumb down the system so that everyone can boast a degree)

E. restructuring the banking industry so that it becomes more profitable to actually develop and make products rather than juggle with complicated and ultimately destructive financial instruments.

F. solving any of the structural financial problems facing the UK over the next decade

[12DrinkMore]

And to continue along the same theme

http://blogs.telegraph.co.uk/finance/jerem...-boost-exports/

And don't miss out the comments, here are a few,

We are told that maufacturing is only 8% of UK economic, so if it doubled as a result of favourable exchange rates, would we notice? Nobody mentions that most UK manufacturing uses imported foreign components paid for in other currencies so factory gate prices could not be dramatically lower if production increased – even hugely. Sadly, this debate was over 20 years ago when making things became despised – or was it just too much like hard work?

and

There is no point in investing or doing anything in the UK as:

(i) the reward is so poor (after tax)

(ii) the risk is too great (due to director’s liabilities, excessive business rates, minimum wages, unregulated utilities and corrupt local authorities

(iii) the bureaucracy is too troublesome

Brown & Co (or to be fair, the bureaucrats) have choked off enterprise in the UK. They have encourage moral hazard on an enormous scale so that it is more profitable to be idle and dishonest than to be industrious and honourable.

This cannot be turned around in the normal course of the economic cycle. It is much more profound than that and reflects the huge extent to which the population of the country has changed through immigration and emigration.

and from smile12 (not me, by the way )

Join the Euro when the £ is low. Foreign investment will then flow back in. As things stand the country has to devalue sterling every time boom turns to bust because of incompetent UK governments running chronic budget and trade deficits. Manufacturers want a stable currency. We already have cheap currencies and workers in the world, in the far east and india. Why on earth would a foreign investor risk money in the UK when the investment devalues 25%~ over 2 years. Sterling has lost 30% against the Thai Baht in 2 years. Then there is overregulation and an indebted workforce exposed to high taxation and serviced based. The culture of factory workings is alien to young people. A sensible government would slash public spending and get budgets into shape to show some responsibility. Far eastern workers work longer and don’t demand pensions, generous welfare payments or an nhs. Interest rates should be raised to reflect risk and savers need to be rewarded. Without savings, investment will not happen. Manufacturers are right not to expand their UK capacity in the current environment and most financiers in the city have their eyes focused on foreign investments. Peruse the constituents of the FTSE100 and you will see companies with mostly foreign earnings. The Prudential is to sell its european assets and raise £36 billion to invest in AIG’s far eastern assets. Go figure, the west has lost influence because most things can be made cheaper and of equal quality not too far from this island. After politicians courted globalisation, they put the 64 million people of the UK into economic competition with 2 billion people of India and China. Radical change to the structure of society is needed, not just reliance on the quick fix currency devaluation.

[abcz9]

yes obviously it helps people who are earning there money in thai baht or are currently exporting from uk, but i do feel sorry for all expat retirees on a pension living in Thailand and people who rely on money from a uk bank account to live in LOS, it really must be hard now with the crap exchange rate and the rising prices in Thailand.

for my own personal interests i hope it doesn't take 2 years for the pound to strenghten again i have already put off moving back to LOS since the exchange rate dropped in october 08. i would be happy at least if it rose to about 60 baht to the pound in the not too distant future, but at this point nobody can really tell what will happen.

i think the pound will drop to 41bt in june when theres a hang paliment

[12DrinkMore]

i think the pound will drop to 41bt in june when theres a hang paliment

http://www.bloomberg.com/apps/news?pid=206...7R41I&pos=4

As Brown and Cameron squabble on the deficit, the Conservatives’ lead among voters is declining. The opposition party, which led by as much as 17 percentage points in polls in December, is now ahead by just 4 points, according to a YouGov Plc survey published in the Sun yesterday. That wouldn’t be enough to guarantee a majority in Parliament.

I won't bother posting all the other bad news about the UK economy from the same Bloomberg article.

It really does look like the UK has completely lost the plot.

Taking the 41 THB/GBP this would put the EUR/GBP at 0.95 and the USD/GBP at 1.26.

Jeeze, that is a little scary.....

Can we not be a little more optimistic and just aim for EUR parity?

[whichschool]

6. The focus of the UK government seems to be

A. keeping itself in power

B. awarding itself huge salaries

C. growing the size of government

D. keeping itself in power

And to this end their main policies revolve around

A. keeping the bankers happy

B. keeping the minorities happy

C. keeping the debtors happy

D. supporting the Great British Property Prices

E. spending even more money that they don't have

F. destroying the GBP as the main effect of their profligate financial policies, but fed to the peeps as "increasing competitiveness"

And on my list I do not see anywhere

A. encouraging investment in industry

B. reducing government overheads

C. reducing social benefits to encourage or even force the spongers to find some work

D. improving the quality of education (the opposite is in operation, dumb down the system so that everyone can boast a degree)

E. restructuring the banking industry so that it becomes more profitable to actually develop and make products rather than juggle with complicated and ultimately destructive financial instruments.

F. solving any of the structural financial problems facing the UK over the next decade

Guarantee a referendum on membership of the EU and id vote for you ... i think this is when Cameron lost it by backtracking, but i also cant believe people would be so stupid to vote for Labour again. Though UKIP could be the Tories downfall, and play an interesting role in May and the BNP could do the same for Labour ... im hoping so!

[Abrak]

I wouldn't be surprised to see it strengthen against over priced currencies such as the Euro or Faht. But no reason otherwise and in fact every reason for it to continue being held down- UK is cleaning up at present. As a patriot, long may it continue. As someone living in Thailand, well you just have to get on with it, and remind yourself that in the long term an appreciation is a certainty.

I wish people who state that an appreciation of sterling against the baht is a certainty over the long term would at least explain why it is even particularly likely - we are not all financial geniuses, Most people judge a currencies worth on basic fundamentals - PPP, current a/c surplus, overall surplus, debt position, the fact that BoT has spent so much money trying to limit the baht's appreciation etc. All these things seem to favor the baht but I agree it is incredibly simple analysis.

However, if you turn to the UK economy most people I think would look at the currency and believe it is in the UK's best interests to devalue it. If you think about various shitty economies in Europe - Greece, Spain, Portugal - if they had their own currencies they would have devalued them by now to restore competitiveness and inflate away and devalue their debt. They cant do that because they cant devalue the Euro (Ok Greece is doing its best to prove that isnt true) and all their debt is in Euro. They have had to devalue their economies through deflation and austerity. So when people look at the UK which has all the usual problems and certainly does not give much impression of going down the austerity path you would tend to think it will devalue

Finally you would expect that sterling would attract a discount because it is home to a rather large banking business - which appears to be about the most value destructive industry known to mankind.Personally instead of trying to reform it in a manner so that it doesnt have to be bailed out by the tax man every few years they should take Ross Perot's advice 'If you see a snake, just kill it - dont appoint a snake committee.'

[whichschool]

However, if you turn to the UK economy most people I think would look at the currency and believe it is in the UK's best interests to devalue it.

But about 30% from recent highs against the Dollar/Euro and more so V the Yen is a devaluation isnt it?

[sokal]

However, if you turn to the UK economy most people I think would look at the currency and believe it is in the UK's best interests to devalue it.

But about 30% from recent highs against the Dollar/Euro and more so V the Yen is a devaluation isnt it?

Yeah if you like taking a pay cut then go ahead and do that. The UK blew it, they will be a poorer country in the future, there is no future in the pound, its done, history. Get used to it.

[neil324]

However, if you turn to the UK economy most people I think would look at the currency and believe it is in the UK's best interests to devalue it.

But about 30% from recent highs against the Dollar/Euro and more so V the Yen is a devaluation isnt it?

Yeah if you like taking a pay cut then go ahead and do that. The UK blew it, they will be a poorer country in the future, there is no future in the pound, its done, history. Get used to it.

Lol, what are you the kettle or pot?

[whichschool]

However, if you turn to the UK economy most people I think would look at the currency and believe it is in the UK's best interests to devalue it.

But about 30% from recent highs against the Dollar/Euro and more so V the Yen is a devaluation isnt it?

Yeah if you like taking a pay cut then go ahead and do that. The UK blew it, they will be a poorer country in the future, there is no future in the pound, its done, history. Get used to it.

Go ahead and do what?

[MJP]

I got US and UK laboratories to tender for quite a big job ast year. The US labs were 3 times the price of the UK labs. From what I can make out, the US is running some very high, uncompetitive costs.

However, if you turn to the UK economy most people I think would look at the currency and believe it is in the UK's best interests to devalue it.

But about 30% from recent highs against the Dollar/Euro and more so V the Yen is a devaluation isnt it?

Yeah if you like taking a pay cut then go ahead and do that. The UK blew it, they will be a poorer country in the future, there is no future in the pound, its done, history. Get used to it.

[pkrv]

I personally think that the USD will break first - GBP is penuts in comparison and will probably rebound when the USD goes south. I am still on for the end of this year.

[MJP]

You know all manner of things could happen. There's a hint that China is about to raise rates iminently. Or we could have Black Swan events.

Seems to be bouncing off $1.51/THB 49 right now.

Another poll put the Tories on 8% lead, enough for a small majority. They need a minimum swing of 6% I believe.

I personally think that the USD will break first - GBP is penuts in comparison and will probably rebound when the USD goes south. I am still on for the end of this year.

[sarahsbloke]

Thailand has two rather large problems about to happen (within the next 5 years)

The UK pound pretty much moves with the USD, with a few minor variations.

What goes down usually goes back up.

I predict 70Bht to the UKP within the next 5 years.

[MJP]

I know one of the large problems you hint at. Just trying to figure out the other.

Thailand has two rather large problems about to happen (within the next 5 years)

The UK pound pretty much moves with the USD, with a few minor variations.

What goes down usually goes back up.

I predict 70Bht to the UKP within the next 5 years.

[neil324]

You know all manner of things could happen. There's a hint that China is about to raise rates iminently. Or we could have Black Swan events.

Seems to be bouncing off $1.51/THB 49 right now.

Another poll put the Tories on 8% lead, enough for a small majority. They need a minimum swing of 6% I believe.

I personally think that the USD will break first - GBP is penuts in comparison and will probably rebound when the USD goes south. I am still on for the end of this year.

You got a link for that poll?

The problem with a Black Swan event is it would surely trigger flight to safety. I agree though a few twist and turns ahead.

[chiang mai]

Thailand has two rather large problems about to happen (within the next 5 years)

The UK pound pretty much moves with the USD, with a few minor variations.

What goes down usually goes back up.

I predict 70Bht to the UKP within the next 5 years.

Why not tell us all about the one that we are allowed to talk about on this forum, the one that we don't know what you're referring to, that way you may make it to your third post with some credibility, as things stand, 70 Baht is a tad far fetched even for dreamers!

[12DrinkMore]

Guarantee a referendum on membership of the EU and id vote for you ... i think this is when Cameron lost it by backtracking, but i also cant believe people would be so stupid to vote for Labour again. Though UKIP could be the Tories downfall, and play an interesting role in May and the BNP could do the same for Labour ... im hoping so!

I am not standing for election in the UK, and indeed sincerely hope that I never have to go there again. But have to admit that I'm counting on a couple of UK based pension schemes paying me some money in a few years. If those fail, then I might end up collecting my benefits from the social services too!

There is no limit to stupidity, and one of the most stupid things I have heard recently is that Labour should be allowed to win so than can stew in their own mess. Oh dear, oh dear, with that attitude there is no more hope left.

To be honest, there are no more political leaders in the UK that have any charisma or vision.....

[VegasVic]

Thailand has two rather large problems about to happen (within the next 5 years)

The UK pound pretty much moves with the USD, with a few minor variations.

What goes down usually goes back up.

I predict 70Bht to the UKP within the next 5 years.

The UK pound moves pretty much with the U.S. Dollar? Really, well seeing the Pound now at $1.49 vs. the Dollar and remembering that the pound was $2.10+ vs. the Dollar around 2 years ago, pretty much shoots that theory down As far as Thailand having 2 rather large problems over the next 5 years is concerned, I think if I was holding Sterling right now I might be a bit more concerned about the Pounds coming colapse over the next 2 months Everyone likes to talk about the PIIGS countires and their problems for the EU and the Euro, and indeed they are very serious and they will damage the EU for years to come, but the dirty little secret in Europe is that the UK is in far worse shape than any of the PIIGS and those chickens are finally coming home to roost

[neil324]

http://uk.news.yahoo.com/22/20100312/tuk-u...ll-fa6b408.html

[Naam]

The UK pound pretty much moves with the USD, with a few minor variations.

minor variations?

Edited March 12, 2010 by Naam

[Chaimai]

The UK pound pretty much moves with the USD, with a few minor variations.

minor variations?

Nice one Naam.

A 20 year market time-frame. Looks about right to me.

........ and you would pitch the average at.....say, 1.70 ? chai mai ?

(I remember 2007, November wasn't it ? )

Edited March 12, 2010 by Chaimai

[roamer]

I know of one multinational with a manufacturing subsidiary in Thailand that employs several hundred workers and needs significant investment in new plant and machinery if it is to meet its projected growth targets in 5 years time. Ain't going to happen and Vietnam is now amongst the list of contenders. The reasons are legion, the problems of doing business in Thailand, the high baht, but first and foremost the lack of stability. I suspect they are not alone. Wasn't that long ago that Thailand was a major force in the clothes manufacturing business, much of it moved to Vietnam, India where the workforce was cheaper and the problems of doing business less onerous. Bit harder to pack up engineering plant than sewing machines but the principle is the same.

A weaker currency in today's economic climate is no bad thing for a nation, even though its no fun for those who depend on a favorable exchange rate. A strong currency no indicator of a vibrant economy, witness Japan, the worlds strongest currency and the worlds weakest economic growth.

Its political uncertainty that is keeping sterling down, the prospect of a hung parliament, not the prospect of a Labour victory. If you avoid a hung parliament which we most likely will, there is no mood or desire for it, then whoever is in power will be acceptable to world markets and currency flows because the deficit will be addressed. If the Euro goes south as many suspect it will then the problem might actually be trying to sustain the weakness of sterling.

I read that the Red Shirts are preparing bags of shit and fermented fish to hurl around, that's a smell that might linger around a lot longer than the dwindling bag of companies prepared to invest in Thailand.

[MJP]

I know of one multinational with a manufacturing subsidiary in Thailand that employs several hundred workers and needs significant investment in new plant and machinery if it is to meet its projected growth targets in 5 years time. Ain't going to happen and Vietnam is now amongst the list of contenders. The reasons are legion, the problems of doing business in Thailand, the high baht, but first and foremost the lack of stability. I suspect they are not alone. Wasn't that long ago that Thailand was a major force in the clothes manufacturing business, much of it moved to Vietnam, India where the workforce was cheaper and the problems of doing business less onerous. Bit harder to pack up engineering plant than sewing machines but the principle is the same.

A weaker currency in today's economic climate is no bad thing for a nation, even though its no fun for those who depend on a favorable exchange rate. A strong currency no indicator of a vibrant economy, witness Japan, the worlds strongest currency and the worlds weakest economic growth.

Its political uncertainty that is keeping sterling down, the prospect of a hung parliament, not the prospect of a Labour victory. If you avoid a hung parliament which we most likely will, there is no mood or desire for it, then whoever is in power will be acceptable to world markets and currency flows because the deficit will be addressed. If the Euro goes south as many suspect it will then the problem might actually be trying to sustain the weakness of sterling.

I read that the Red Shirts are preparing bags of shit and fermented fish to hurl around, that's a smell that might linger around a lot longer than the dwindling bag of companies prepared to invest in Thailand.

No. Those are just packed lunches.

The markets do fear both a hung parliament, but worse a Labour victory. Brown is mad and everyone knows it.

[Naam]

The UK pound pretty much moves with the USD, with a few minor variations.

minor variations?

Nice one Naam. A 20 year market time-frame. Looks about right to me.

if it wasn't for the sake of other readers who look for information i wouldn't waste my time to prove that some "contributors" are nothing but ignorant clowns who poke their noses and present the results here.

[wolf5370]

There will not be a hung parliament - the polls look say it will and since when have the polls even been remotely correct. Major was supposed to loose by a landslide, and won - Bush was supposed to losse the second term and won - polls are almost the best way the predict what will NOT happen!

Edited March 13, 2010 by wolf5370

[MJP]

Brown hasn't even announced the GE date yet.

Who knows mush. But I do fear another 5 years of Labour.

There will not be a hung parliament - the polls look say it will and since when have the polls even been remotely correct. Major was supposed to loose by a landslide, and won - Bush was supposed to losse the second term and won - polls are almost the best way the predict what will NOT happen!

[Chaimai]

Brown hasn't even announced the GE date yet.

Who knows mush. But I do fear another 5 years of Labour.

Fear not MJP.

May is getting closer - it is not "if", it is "exactly" when.

Adios Gordy. The Sun newspaper has barely started to get it's teeth into Labour. It has committed to the Conservaties and it hates losing face more than an Isaan farm girl.