UK Pound Collapse 47.99 against the Baht

[thaibeachlovers]

Well, we all complain now the pound is so low, but how low does it have to be to keep us away?

Or, to put it another way, how low do the tourist/ expat numbers have to go to make the Thai government do something about the forex rate?

Personally, I'll keep coming as long as I still have enough money to get here and stay in some sort of accomodation and eat. However, it'll be interesting to see how long I keep the TGF as the money I have available to pay for sick buffalos etc disappears.

Have to say though, if I was 30 years younger, and just starting off on my travels, I don't think I'd be returning to LOS while the pound is such rubbish value.

We are told that tourism is not important to Thailand, clearly the welfare of the people and environement too. It seems to be set on its way as Asia's assembly plant. I really think the powers that truly be want us farangs out.

Regards your commitment, ok, but what if you fall ill?

Cambodia seems to be coming up the ranking. Where else would you go?

Assuming that was meant for me- I never leave home without travel insurance, and, so long as the TGF will have me there's no other place for me but LOS ( and perhaps the home country if she ever qualifies for a visa ).

As for the tourism not being important, given the "real" number of people involved, I don't think even the Thai government could allow perhaps millions of people to be so impoverished that there was open revolt. After all, there's only so many assembly jobs available, and the rest aren't just going to go home and starve to death quietly.

[mommysboy]

Well, we all complain now the pound is so low, but how low does it have to be to keep us away?

Or, to put it another way, how low do the tourist/ expat numbers have to go to make the Thai government do something about the forex rate?

Personally, I'll keep coming as long as I still have enough money to get here and stay in some sort of accomodation and eat. However, it'll be interesting to see how long I keep the TGF as the money I have available to pay for sick buffalos etc disappears.

Have to say though, if I was 30 years younger, and just starting off on my travels, I don't think I'd be returning to LOS while the pound is such rubbish value.

We are told that tourism is not important to Thailand, clearly the welfare of the people and environement too. It seems to be set on its way as Asia's assembly plant. I really think the powers that truly be want us farangs out.

Regards your commitment, ok, but what if you fall ill?

Cambodia seems to be coming up the ranking. Where else would you go?

Assuming that was meant for me- I never leave home without travel insurance, and, so long as the TGF will have me there's no other place for me but LOS ( and perhaps the home country if she ever qualifies for a visa ).

As for the tourism not being important, given the "real" number of people involved, I don't think even the Thai government could allow perhaps millions of people to be so impoverished that there was open revolt. After all, there's only so many assembly jobs available, and the rest aren't just going to go home and starve to death quietly.

I assumed you were actually living here. It's an important distinction, and that's when the realities and expense catch up.

I was just relaying what is happening that's all, clearly the Govt. does not care about tourism and is quite happy to keep people poor, easier to control and less farangs around to complain.

But the baht goes from strength to strength. Today UK will have an 'anaemic' budget, that will have the market jittery and I must say I'm quite fearful.

[mommysboy]

Well-----Gordon's not such a moron! A very good budget and sensible handling of the crisis, and the claim is that UK debt is already being paid down. UK is not going bankrupt and need the pound really be so reviled?

Market's are perverse devil's however and I wouldn't be surprised if there is a rich backlash tomorrow with all sorts of doom and gloom stories perpetrated by the blodsuckers intent on destroying Great Britain, the very people that got us in to this mess anyway.

Currencies excepted, Thailand and UK do have quite a lot in common then!

[thaibeachlovers]

This morning Krungsri are doing 47.47

Ouch

And it still falls.

While many tourists probably booked holidays when the forex was better for them, and that would account for the reported high levels of western tourists, if the baht keeps going up, there must come a time when the average family heads elsewhere.

[MJP]

Here's the interbank daily average going back to October 1993 to yesterday. I reckon a spike down is coming, similar to the spike up during the Asian crisis in 1997. Sokal has called 25 THB to GBP sometime in the near future. It's possible.

GBP_THB_241093_to_240310.pdf

[mommysboy]

Here's the interbank daily average going back to October 1993 to yesterday. I reckon a spike down is coming, similar to the spike up during the Asian crisis in 1997. Sokal has called 25 THB to GBP sometime in the near future. It's possible.

That's plain crazy MJP. Why on earth would that happen?

[MJP]

A spike dude, not forever, perhaps a few months though. UK's in deep, deep trouble. Deeper than any in fact.

Here's the interbank daily average going back to October 1993 to yesterday. I reckon a spike down is coming, similar to the spike up during the Asian crisis in 1997. Sokal has called 25 THB to GBP sometime in the near future. It's possible.

That's plain crazy MJP. Why on earth would that happen?

[mommysboy]

A spike dude, not forever, perhaps a few months though. UK's in deep, deep trouble. Deeper than any in fact.

Here's the interbank daily average going back to October 1993 to yesterday. I reckon a spike down is coming, similar to the spike up during the Asian crisis in 1997. Sokal has called 25 THB to GBP sometime in the near future. It's possible.

That's plain crazy MJP. Why on earth would that happen?

How can you justify that?

[chiang mai]

As pessimistic as I am about the Pound, even I can't buy that one, 25 against USD perhaps in an absolute worst case scenario but even then, that would put Thai exports out of reach to anyone in the Western markets - such a rate would also mean a GBP/USD rate of less than parity, in which case America might just buy the island for use as a penal colony! No, I think 40 is dooable but not much worse than that.

[MJP]

Ummmm . . . boys . . . I'm talking about a spike to 25 THB for a short period then recovery to perhaps 45. Read 'downgrade' as the initiator to this scenario. Coming after the GE, when the books are finally wrestled off Brown and the real mess is revealed.

I'll find a few debt charts to back it up. It's not only that the UK is in the same fiscal position as Japan (but without the industry) it's the current rate of national debt growth. But right now I'm Cuprinoling two old cart wheels up here in Issan, 250 Baht each! Bargain!

As pessimistic as I am about the Pound, even I can't buy that one, 25 against USD perhaps in an absolute worst case scenario but even then, that would put Thai exports out of reach to anyone in the Western markets - such a rate would also mean a GBP/USD rate of less than parity, in which case America might just buy the island for use as a penal colony! No, I think 40 is dooable but not much worse than that.

[MJP]

Here's the McKinsey report with all the blah, blah, blah in it . . . plus charts. These old cart wheels look lovely. Going on the outside walls and going to grow creepers round them. I'll post picks in another thread when they're done. I'm still in agreement with Sokal over the Quid.

debt_and_deleveraging_full_report.pdf

[MJP]

[Abrak]

Ummmm . . . boys . . . I'm talking about a spike to 25 THB for a short period then recovery to perhaps 45. Read 'downgrade' as the initiator to this scenario. Coming after the GE, when the books are finally wrestled off Brown and the real mess is revealed.

I'll find a few debt charts to back it up. It's not only that the UK is in the same fiscal position as Japan (but without the industry) it's the current rate of national debt growth. But right now I'm Cuprinoling two old cart wheels up here in Issan, 250 Baht each! Bargain!

As pessimistic as I am about the Pound, even I can't buy that one, 25 against USD perhaps in an absolute worst case scenario but even then, that would put Thai exports out of reach to anyone in the Western markets - such a rate would also mean a GBP/USD rate of less than parity, in which case America might just buy the island for use as a penal colony! No, I think 40 is dooable but not much worse than that.

Conceptually, I think a GBP1:Bt25 is quite possible on say a 5 year view. If you take Asian currencies they still look very undervalued on the basis of PPP, C/A surpluses. Clearly that rate will not be achieved by a revaluation of the baht alone. But if say the RMB appreciated 40% then other Asian currencies would follow. As they are all basically producing the same goods the elasticity of demand may not be all that high. Obviously they would appreciate against other currencies so perhaps the USD1:Bt20 might also be possible.

Just to show you how possible it is as a concept. Wikipedia lists Thailand nominal GDP at US$4,000 per capita, it also estimates its PPP per capita at US$7,900. It lists the UK nominal at US$35,000 per capita and UK PPP at US$35,000 per capita implying the GBP:USD exchange rate is around fair value when they made those estimations. Now if those estimates were made yesterday (which of course they werent) it would imply that the fair value GBP baht rate was approximately GBP1:Bt24.

[MJP]

Abrak, don't. You'll frighten them.

Ummmm . . . boys . . . I'm talking about a spike to 25 THB for a short period then recovery to perhaps 45. Read 'downgrade' as the initiator to this scenario. Coming after the GE, when the books are finally wrestled off Brown and the real mess is revealed.

I'll find a few debt charts to back it up. It's not only that the UK is in the same fiscal position as Japan (but without the industry) it's the current rate of national debt growth. But right now I'm Cuprinoling two old cart wheels up here in Issan, 250 Baht each! Bargain!

As pessimistic as I am about the Pound, even I can't buy that one, 25 against USD perhaps in an absolute worst case scenario but even then, that would put Thai exports out of reach to anyone in the Western markets - such a rate would also mean a GBP/USD rate of less than parity, in which case America might just buy the island for use as a penal colony! No, I think 40 is dooable but not much worse than that.

Conceptually, I think a GBP1:Bt25 is quite possible on say a 5 year view. If you take Asian currencies they still look very undervalued on the basis of PPP, C/A surpluses. Clearly that rate will not be achieved by a revaluation of the baht alone. But if say the RMB appreciated 40% then other Asian currencies would follow. As they are all basically producing the same goods the elasticity of demand may not be all that high. Obviously they would appreciate against other currencies so perhaps the USD1:Bt20 might also be possible.

Just to show you how possible it is as a concept. Wikipedia lists Thailand nominal GDP at US$4,000 per capita, it also estimates its PPP per capita at US$7,900. It lists the UK nominal at US$35,000 per capita and UK PPP at US$35,000 per capita implying the GBP:USD exchange rate is around fair value when they made those estimations. Now if those estimates were made yesterday (which of course they werent) it would imply that the fair value GBP baht rate was approximately GBP1:Bt24.

[caf]

Abrak, don't. You'll frighten them.

Ummmm . . . boys . . . I'm talking about a spike to 25 THB for a short period then recovery to perhaps 45. Read 'downgrade' as the initiator to this scenario. Coming after the GE, when the books are finally wrestled off Brown and the real mess is revealed.

I'll find a few debt charts to back it up. It's not only that the UK is in the same fiscal position as Japan (but without the industry) it's the current rate of national debt growth. But right now I'm Cuprinoling two old cart wheels up here in Issan, 250 Baht each! Bargain!

As pessimistic as I am about the Pound, even I can't buy that one, 25 against USD perhaps in an absolute worst case scenario but even then, that would put Thai exports out of reach to anyone in the Western markets - such a rate would also mean a GBP/USD rate of less than parity, in which case America might just buy the island for use as a penal colony! No, I think 40 is dooable but not much worse than that.

Conceptually, I think a GBP1:Bt25 is quite possible on say a 5 year view. If you take Asian currencies they still look very undervalued on the basis of PPP, C/A surpluses. Clearly that rate will not be achieved by a revaluation of the baht alone. But if say the RMB appreciated 40% then other Asian currencies would follow. As they are all basically producing the same goods the elasticity of demand may not be all that high. Obviously they would appreciate against other currencies so perhaps the USD1:Bt20 might also be possible.

Just to show you how possible it is as a concept. Wikipedia lists Thailand nominal GDP at US$4,000 per capita, it also estimates its PPP per capita at US$7,900. It lists the UK nominal at US$35,000 per capita and UK PPP at US$35,000 per capita implying the GBP:USD exchange rate is around fair value when they made those estimations. Now if those estimates were made yesterday (which of course they werent) it would imply that the fair value GBP baht rate was approximately GBP1:Bt24.

"This is Money

25 March 2010, 1:25pm

Sterling hit a one-month high against the euro today after a stronger-than-expected headline reading of UK retail sales suggested the economy is slowly improving.

Read more: http://www.thisismoney.co.uk/markets/artic...5#ixzz0jCSXZEOe

caf

[chiang mai]

Here's the McKinsey report with all the blah, blah, blah in it . . . plus charts. These old cart wheels look lovely. Going on the outside walls and going to grow creepers round them. I'll post picks in another thread when they're done. I'm still in agreement with Sokal over the Quid.

I've worked with McKinsey twice in my career, they were seriously wrong on both occasions, as for Sokal, he needs to stop doing what ever he's doing because it's just not working out for him.

[smokie36]

I love the doom and gloom...

25 any advance on that? 20 anyone?.....going going.....

A sensible budget which should see things stabilise a little imo. However wait for the GE in the UK for a Tory win and some prospect of better times ahead....if you're lucky!

[HardenedSoul]

The pound will be at $1.37/38 within the next couple of weeks but 25THB to the pound ??!! Unthinkable

[HardenedSoul]

The pound will be at $1.37/38 within the next couple of weeks but 25THB to the pound ??!! Unthinkable

[thaibeachlovers]

Conceptually, I think a GBP1:Bt25 is quite possible on say a 5 year view. If you take Asian currencies they still look very undervalued on the basis of PPP, C/A surpluses. Clearly that rate will not be achieved by a revaluation of the baht alone. But if say the RMB appreciated 40% then other Asian currencies would follow. As they are all basically producing the same goods the elasticity of demand may not be all that high. Obviously they would appreciate against other currencies so perhaps the USD1:Bt20 might also be possible.

Just to show you how possible it is as a concept. Wikipedia lists Thailand nominal GDP at US$4,000 per capita, it also estimates its PPP per capita at US$7,900. It lists the UK nominal at US$35,000 per capita and UK PPP at US$35,000 per capita implying the GBP:USD exchange rate is around fair value when they made those estimations. Now if those estimates were made yesterday (which of course they werent) it would imply that the fair value GBP baht rate was approximately GBP1:Bt24.

"This is Money

25 March 2010, 1:25pm

Sterling hit a one-month high against the euro today after a stronger-than-expected headline reading of UK retail sales suggested the economy is slowly improving.

Read more: http://www.thisismoney.co.uk/markets/artic...5#ixzz0jCSXZEOe

caf

Well it ain't higher against the baht ( down again today ), and that's the only exchange rate we care about.

If for argument's sake we take the figure of 25 bht to the pound as being proposed by some, could all the UK expats living in LOS on fixed incomes still survive. Probably not, so they'd have to go back to the UK ( and that'd cause a HUGE problem there ), so there are thousands of destitute ex dependants of UK expats, hundreds of thousands of Thais facing penury because all the money that "trickled down" from the expats disappearing, and that's not even getting into the tourist trade, which must employ ( directly or indirectly ) millions of Thais.

Could LOS be "sleepwalking" into this scenario?

Answers? I don't know, but I sure hope someone who can actually do something about it does.

[caf]

Conceptually, I think a GBP1:Bt25 is quite possible on say a 5 year view. If you take Asian currencies they still look very undervalued on the basis of PPP, C/A surpluses. Clearly that rate will not be achieved by a revaluation of the baht alone. But if say the RMB appreciated 40% then other Asian currencies would follow. As they are all basically producing the same goods the elasticity of demand may not be all that high. Obviously they would appreciate against other currencies so perhaps the USD1:Bt20 might also be possible.

Just to show you how possible it is as a concept. Wikipedia lists Thailand nominal GDP at US$4,000 per capita, it also estimates its PPP per capita at US$7,900. It lists the UK nominal at US$35,000 per capita and UK PPP at US$35,000 per capita implying the GBP:USD exchange rate is around fair value when they made those estimations. Now if those estimates were made yesterday (which of course they werent) it would imply that the fair value GBP baht rate was approximately GBP1:Bt24.

"This is Money

25 March 2010, 1:25pm

Sterling hit a one-month high against the euro today after a stronger-than-expected headline reading of UK retail sales suggested the economy is slowly improving.

Read more: http://www.thisismoney.co.uk/markets/artic...5#ixzz0jCSXZEOe

caf

Well it ain't higher against the baht ( down again today ), and that's the only exchange rate we care about.

If for argument's sake we take the figure of 25 bht to the pound as being proposed by some, could all the UK expats living in LOS on fixed incomes still survive. Probably not, so they'd have to go back to the UK ( and that'd cause a HUGE problem there ), so there are thousands of destitute ex dependants of UK expats, hundreds of thousands of Thais facing penury because all the money that "trickled down" from the expats disappearing, and that's not even getting into the tourist trade, which must employ ( directly or indirectly ) millions of Thais.

Could LOS be "sleepwalking" into this scenario?

Answers? I don't know, but I sure hope someone who can actually do something about it does.

My post was a response to MJP's logic

You talk of only worrying about the exchange between baht and sterling but you can not isolate one or the other. Sterling is under pressure for reasons already discussed and widely known ( though my quoted source gave some relief ); but the fx rate is also determined by the us dollar and the baht. And the baht is being propped up.

No point worrying, but perhaps consider what you think will happen in say the next four years in the UK and Thailand an how that will affect the fx. In both countries, what looks rosy to you and what looks a problem?

caf

[BygonKeaw]

If the baht ends up at 25 to 1 pound im selling my house here and sending the money back to the uk..ill be turning 39230 pounds into 112000 pounds in about 5 years if the latest prediction is correct.

I know one thing for sure i wont be paying 4 pound a bottle of beer in a bar in the daytime(over a pound more at night) or 2 pound at home for low grade beer or 400 pounds for my car everymonth orrrrrrrrrr even worse 1- 2 pound a meal from a street vendor that uses low quality ingrediants compared to that in the uk

btw did anyone know the baht used to be 11 to 1 pound??

Edited March 26, 2010 by BygonKeaw

[BygonKeaw]

Oh and then if it recovers as mjp predicts to 45 to 1 pound ill send all my money back and buy a bigger house...think positive

This is the first time i have been on thaivisa for around a year i think and its still depressing hence the reason i stopped reading it.

Seeya in another year

[chiang mai]

Conceptually, I think a GBP1:Bt25 is quite possible on say a 5 year view. If you take Asian currencies they still look very undervalued on the basis of PPP, C/A surpluses. Clearly that rate will not be achieved by a revaluation of the baht alone. But if say the RMB appreciated 40% then other Asian currencies would follow. As they are all basically producing the same goods the elasticity of demand may not be all that high. Obviously they would appreciate against other currencies so perhaps the USD1:Bt20 might also be possible.

Just to show you how possible it is as a concept. Wikipedia lists Thailand nominal GDP at US$4,000 per capita, it also estimates its PPP per capita at US$7,900. It lists the UK nominal at US$35,000 per capita and UK PPP at US$35,000 per capita implying the GBP:USD exchange rate is around fair value when they made those estimations. Now if those estimates were made yesterday (which of course they werent) it would imply that the fair value GBP baht rate was approximately GBP1:Bt24.

"This is Money

25 March 2010, 1:25pm

Sterling hit a one-month high against the euro today after a stronger-than-expected headline reading of UK retail sales suggested the economy is slowly improving.

Read more: http://www.thisismoney.co.uk/markets/artic...5#ixzz0jCSXZEOe

caf

Well it ain't higher against the baht ( down again today ), and that's the only exchange rate we care about.

If for argument's sake we take the figure of 25 bht to the pound as being proposed by some, could all the UK expats living in LOS on fixed incomes still survive. Probably not, so they'd have to go back to the UK ( and that'd cause a HUGE problem there ), so there are thousands of destitute ex dependants of UK expats, hundreds of thousands of Thais facing penury because all the money that "trickled down" from the expats disappearing, and that's not even getting into the tourist trade, which must employ ( directly or indirectly ) millions of Thais.

Could LOS be "sleepwalking" into this scenario?

Answers? I don't know, but I sure hope someone who can actually do something about it does.

My post was a response to MJP's logic

You talk of only worrying about the exchange between baht and sterling but you can not isolate one or the other. Sterling is under pressure for reasons already discussed and widely known ( though my quoted source gave some relief ); but the fx rate is also determined by the us dollar and the baht. And the baht is being propped up.

No point worrying, but perhaps consider what you think will happen in say the next four years in the UK and Thailand an how that will affect the fx. In both countries, what looks rosy to you and what looks a problem?

caf

You're sure the Baht is being propped up Caf, you're in the minority on that point, a minority of one.

[Abrak]

If for argument's sake we take the figure of 25 bht to the pound as being proposed by some, could all the UK expats living in LOS on fixed incomes still survive. Probably not, so they'd have to go back to the UK ( and that'd cause a HUGE problem there ), so there are thousands of destitute ex dependants of UK expats, hundreds of thousands of Thais facing penury because all the money that "trickled down" from the expats disappearing, and that's not even getting into the tourist trade, which must employ ( directly or indirectly ) millions of Thais.

Let's say we take an exchange rate of Bt48. If your economic argument is that an expat (with his expat income) is beneficial to one country but but a burden to his home country you are simply stating that his home country's exchange rate is probably overvalued.

If you think about it the concept of an expat is to take his domestic income and move to a country with an undervalued currency relative to his domicile so he can enjoy a better quality of life.

From an economic perspective it really isnt a case of whether the baht is undervalued against GBP but simply by how much.

[Abrak]

You're sure the Baht is being propped up Caf, you're in the minority on that point, a minority of one.

Oh and Chiang Mai, on the basis that the BoT's policy of shorting the baht only fooled one guy (and you were lucky to find him), I hope you see why it didnt seem a great policy in the first place.

[chiang mai]

You're sure the Baht is being propped up Caf, you're in the minority on that point, a minority of one.

Oh and Chiang Mai, on the basis that the BoT's policy of shorting the baht only fooled one guy (and you were lucky to find him), I hope you see why it didnt seem a great policy in the first place.

You can imagine the conversation at the BOT can't you: "what shall we do today lads, I know let's make life really difficult for our exporters and make the Baht artificially high. Yeah, cheers all round. But wait a minute, that'll mean we have to sell all our foreign reserves and we won't have any US Dollars left for our next holiday. Oh, don't worry, we've got lots of Dollars after all the Baht we've been selling lately, anyway the tourists will bring in lots more and then they'll get replaced in no time. (small voice from the back of the room) Um excuse me, but if we wanted to make the Baht stronger why don't we just do nothing, that won't cost us anything - (long pregnant silence and embarrassed glances then sheepish grins all round) right then so what's for lunch, somtam or KFC, next!

[tw25rw]

If for argument's sake we take the figure of 25 bht to the pound as being proposed by some, could all the UK expats living in LOS on fixed incomes still survive. Probably not, so they'd have to go back to the UK ( and that'd cause a HUGE problem there ),

Problems like what? A load of elderly miserable moaners will disappear into the landscape quite quickly once their tans fade. The only obvious difference will be that their wives are more desirable.

[mommysboy]

If for argument's sake we take the figure of 25 bht to the pound as being proposed by some, could all the UK expats living in LOS on fixed incomes still survive. Probably not, so they'd have to go back to the UK ( and that'd cause a HUGE problem there ),

Problems like what? A load of elderly miserable moaners will disappear into the landscape quite quickly once their tans fade. The only obvious difference will be that their wives are more desirable.

What a mad conversation anyway, I mean 25!

Mind you 45 is getting closer and closer, and what about the Euro? Looks like the baht is unstoppable.

[fenny99]

The thing is . If you buy a bottle of beer in the U.K pub resturant or bar ,then you will pay 3-3.50 pounds .

If you multiply 3x 47 = 148 you can still but a bottle of singha for 40 bhat in Pattaya new Plaza .

Most bars in Pattaya charge between 40 - 65 bhat . With exeptions of the few ridiculessly priced bars

That means you can get drink at a third of the price in Thailand ( bargain )

ok I am new to Pattaya I first came here 6 years ago 76 bhat for 1 pound ( even better bargain )

The truth is if the pound dropps to 30 bhat for 1 pound that means a bottle of singa will cost

30 bhat = 1 pound

40 bhat would be 1.33

Come on 1.33 for a bottle of beer 1.33 is that not cheap .

Ok befor it might have cost 50p so what if it costs 1.33 now

Are you going to stop comming to Thailand because beer is 1.33

If you do you are cutting your nose off to spite your face

GET A LIFE . LIVE IT . WHATEVER THE FINANCIAL BURDEN

AND MOST OF ALL SMILE