Is The Thai Baht Going To Collapse Due To The Ongoing Mess

[chiang mai]

That can only mean that someone with enough money to influence the Baht rate is either selling dollars or buying Baht. And I believe that is the Thai government.

If your theory was correct, surely there should be evidence in the BOT accounts such as a reduction in their holdings of USD and not an increase each month as we see currently?

You don't have the inside track on liquidation of debt or U.S. securities which is the major foreign assets held by commercial institutions and the government. These instruments are being dumped at a higher rate due to fear of default or foreign policies to "reduce" debt.

Holding actual currency could be for any number of reasons that has nothing to do with speculation.

You missed my point, BOT has been selling THB and buying USD for many months hence their foreign currency reserves have risen to record highs.

[wintermute]

That can only mean that someone with enough money to influence the Baht rate is either selling dollars or buying Baht. And I believe that is the Thai government.

If your theory was correct, surely there should be evidence in the BOT accounts such as a reduction in their holdings of USD and not an increase each month as we see currently?

You don't have the inside track on liquidation of debt or U.S. securities which is the major foreign assets held by commercial institutions and the government. These instruments are being dumped at a higher rate due to fear of default or foreign policies to "reduce" debt.

Holding actual currency could be for any number of reasons that has nothing to do with speculation.

You missed my point, BOT has been selling THB and buying USD for many months hence their foreign currency reserves have risen to record highs.

I mentioned that..holding actual foreign currency could be due to any number of reasons and has nothing to do with future speculation that it will appreciate in value. The BOT is not a gambling den no matter what people on here think.

[Jingthing]

The mass consensus is that the baht won't crash. I always get suspicious when everyone predicts the same thing. Therefore, I predict the baht will weaken against the dollar 5 to 10 percent in the next few months.

[steven100]

I don't believe some of the questions I read on TV.

Is the baht going to collapse !! DUH !!

Is the ice going to melt in alaska !!

Why would you post this question on TV for all general jack and toms to answer ?

Are you going to use there answer to convert thai baht !! I woudn't think so ...

I mean really .... what does anyone opinion here mean to you for an answer to your question ...

How about we get a crystal ball and then see what will happen ....

GL....

Edited April 27, 2010 by steven100

[roamer]

The mass consensus is that the baht won't crash. I always get suspicious when everyone predicts the same thing. Therefore, I predict the baht will weaken against the dollar 5 to 10 percent in the next few months.

The mass consensus a few months ago would have been that the chances of Thailand sliding into anarchy were close to zero.

There is more than a little unease in the rest of SEA as well, no doubt worried this could spread faster than the bird flu virus.

"Thailand's neighbors are watching the political unrest in Bangkok with growing concern. The Association of Southeast Asian Nations (ASEAN) has said the protests there could spread economic and political instability throughout the region.

ASEAN has called on the Thai government and the anti-government demonstrators to exercise restraint and to seek a settlement through dialogue and reconciliation. The foreign ministers of Singapore and Indonesia have made similar statements.

Since March, 26 people have been killed and almost 1,000 injured in bomb blasts and confrontations between police and anti-government protesters in Bangkok known as red shirts. The red shirts, made up mostly of rural and urban poor, demand new elections. The demonstrations have disrupted businesses and tourism in the country.

Protests Could Affect Investments

Indonesian Foreign Ministry spokesman Teuku Faizasyah says he is concerned that instability in Thailand could lead to a repeat of the 1997 Asian economic crisis. Then, the collapse of the Thai baht hurt investor confidence in the region.

"Well its rather too early to assess what would be the direct impact of the development in Thailand on the economy, but we did hope actually that it would not create similar situations [like] in the '90's when the contagion effect of the economic meltdown was felt in our region," said Faizasyah. "But hopefully this is a very isolated case but we are also very hopeful that with our efforts together then we can resolve the situation in a peaceful way."

Michael Montesano with the Singapore Institute of International Affairs says right now most foreign investors see the crisis as specific to Thailand only. But, he says, as the protests continue investment in the region could be affected.

"The only effect that we need to be afraid of is those people on the outside of the region who see the region as a whole, and who have their antenna up to instability and political crisis in Southeast Asia, and who, when they see crisis in one country become skittish about how to deal with investment and the economy and other activities in the region as a whole," said Montesano.

Here.

[chiang mai]

The mass consensus is that the baht won't crash. I always get suspicious when everyone predicts the same thing. Therefore, I predict the baht will weaken against the dollar 5 to 10 percent in the next few months.

It's widely agreed that it will be hot in Thailand tomorrow Jingthing so best be certain to wear thermals and a parka if you go out!

[sarahsbloke]

The money markets have no interest in dealing Bhat so it is fairly stable.

Big swings in USD/UKP/EURO are made by big players trading the currency.

If you know who in Thailand were to do the unmentionable .... the Bhat would plummit.

Anything else, nobody cares about.

Just my opinion.

PS

Nothing worthwhile is ever achieved by consensus.

Edited April 27, 2010 by sarahsbloke

[Gambles]

The money markets have no interest in dealing Bhat so it is fairly stable.

Big swings in USD/UKP/EURO are made by big players trading the currency.

If you know who in Thailand were to do the unmentionable .... the Bhat would plummit.

Anything else, nobody cares about.

Just my opinion.

PS

Nothing worthwhile is ever achieved by consensus.

A significant degree of risk remains priced in otherwise THB would be the best part of 10% higher (using Baht underperformance vs other Asian/Asean currencies as a proxy)

Meawhile fundamentals remain strong -

CURRENCY STORM SURGES: WHAT COURSE TO SET FOR THE BAHT?

Rampant volatility in currency markets recently surged to a three-month high. There is little sign of this turbulent trend abating. Such uncertainty can have a dramatic impact on key economic drivers, as well as having a crippling effect on the individual finances of expatriates based in Thailand who are remunerated in weakening western currencies or who haven't hedged their investments and savings.

While the Greenback and the Euro have slid down the league table of global currencies over the past 18 months, the Baht has held its ground (although it has fallen against other trading partner currencies such as Canadian and Australian Dollars) leading senior figures from both the foreign and Thai business communities to repeatedly call on the central bank to cause the Baht to weaken in line with other regional currencies. This would help boost exports by making them cheaper and could provide some solace for the tourism industry by making Thailand a better value destination.

Currency management is one of two control levers which central banks use to influence events related to their country's financial flows, with the other lever being interest rates. Essentially when one lever is pulled, the other is free to find its own level in response. Fixing or "pegging" the currency rate would cause interest rates to fluctuate in response to market activity. Conversely, if a central bank fixes interest rates, currencies fluctuate instead.

It is possible for both levers can be pulled at the same time However if the combined levels are set at or become too different from the market expectations, pressures build up. Typically these end up being released explosively. A good example of this is the Baht's valuation in the mid-90s which failed to fully reflect the requirement for overseas capital, foreign goods and expensive imports. Capital tended to be imported in hard currency due to exchange restrictions on the Baht. Foreign investors typically leant in Dollars and demanded Dollars back because they didn't want to hold an overvalued, hard to trade, artificially priced currency. The problem eventually became self-fulfilling. Pushing interest rates up into the high teens did nothing to address the structural problems, merely papering over the cracks and tending to attract hot money which tried to head for the hills at the first signs of trouble in 1997.

Global Markets Asia's John Sheehan recently mooted the idea of implementing a fixed Baht exchange rate now, on the grounds that we're currently in the opposite situation to 1997. Today, we have a global currency system where competitive devaluations are the likely order of the day and fixing the rate at a defined level lower than the current market rate can stimulate growth. Ultimately the explosive pressure could lead to revaluation upwards at some point and meanwhile inflationary pressures may be unleashed but that wouldn't necessarily be a bad thing right now and could stimulate badly-needed inflows too. A competitive rate fix could also be very good for Thai exports. The proposal is not as crazy as it sounds but may be too risky for most mainstream politicians to consider at this stage.

A key point is that right now both China and the US are accusing each other of manipulating their currencies for their own ends and the truth is that, in different ways, they're probably both right. Ultimately the Yuan will probably win the battle with the Greenback, though essentially it's a game of chicken to see who'll blink first. Meanwhile all other currencies that "play fair" are paying an exorbitant privilege by subsidising US and Chinese gross domestic product. Thailand does have alternatives however unlikely.

The impact of recent volatility goes beyond economic management and central bank policy; it also creates huge difficulties for expats living in Thailand whose finances are built on foreign currencies.

Scott Campbell, three times S&P award-winning CEO of international portfolio management company MitonOptimal, can claim to have made more prescient currency calls than anyone on his recent trips to Bangkok. In 2007 he predicted weakening of the US Dollar. In June 2008 he called a Dollar bounce when consensus was that the Greenback had become a banana currency, and in February last year he once again correctly called a weakening of the Dollar. During April 26-29 he'll be briefing investors in Bangkok on surviving and exploiting the prevailing currency calamities.

His recent take has been that US Dollar was due short term strength but Asian currencies could prevail in the mid- to long-term once the various local and global crises are over. Even though currency volatility could surge going forwards Asian currencies that are not linked to the US Dollar, such as Singapore Dollar and Baht, are poised to benefit. Amazingly these two currencies have become a relatively safe haven now, a far cry from events in 1997. One potential solution to successfully navigate the shifting sands of the currency market and the profit at the same time is to hedge into Asian currencies. Scott Campbell has pioneered the only global investment portfolios available fully hedged into Baht and Singapore Dollars as well as the major currencies. As with most things in life hedging your bets is a sensible strategy to adopt, and for the time being the safest bets may be in Asia.

Edited April 27, 2010 by Gambles

[chickenslegs]

For us Brits it`s bad news.

George Brown has announced that there maybe a hung parliament.

Is he still alive?

Or, are you quoting a 1960's pre-election article from the 'Daily Worker'?

Or, did you mean Gordon Brown?

Sorry, just couldn't resist

[yeesipha]

CRYSTAL BALL TIME AGAIN FOLKS.

[roamer]

The money markets have no interest in dealing Bhat so it is fairly stable.

Big swings in USD/UKP/EURO are made by big players trading the currency.

If you know who in Thailand were to do the unmentionable .... the Bhat would plummit.

Anything else, nobody cares about.

Just my opinion.

PS

Nothing worthwhile is ever achieved by consensus.

Scott Campbell, three times S&P award-winning CEO of international portfolio management company MitonOptimal, can claim to have made more prescient currency calls than anyone on his recent trips to Bangkok. In 2007 he predicted weakening of the US Dollar. In June 2008 he called a Dollar bounce when consensus was that the Greenback had become a banana currency, and in February last year he once again correctly called a weakening of the Dollar. During April 26-29 he'll be briefing investors in Bangkok on surviving and exploiting the prevailing currency calamities.

The nation is descending into anarchy, civil law looms so hope he has a good crystal ball.

Tell me Gambles is this you as you do seem to have somewhat of a vested interest here ?

"Paul Gambles, managing partner MBMG Group

- other panelists to be confirmed

MBMG Portfolios

As the MBMG Group is not authorized to provide financial or investment advice in Thailand, we have an exclusive arrangement with two multi-award winning and top-ranked global portfolio managers – Scott Campbell and Martin Gray of MitonOptimal Guernsey (MOG). As part of this exclusive arrangement the MBMG Group can offer both corporate and individual clients unique access to advice from both of these portfolio managers. Their funds have outperformed the MSCI world index by as much as 240% over the last 10 years, demonstrating their ability to actively manage your money to achieve higher returns in both bull and bear markets.

RSVP: [email protected]

* This program is a paid event. Responsibility for program content is solely that of the event organizer. "

Here.

BTW. Event location moved

[iwad2010]

Move it ASAP.

Invest in Laos boarder projects.

[Gambles]

That can only mean that someone with enough money to influence the Baht rate is either selling dollars or buying Baht. And I believe that is the Thai government.

If your theory was correct, surely there should be evidence in the BOT accounts such as a reduction in their holdings of USD and not an increase each month as we see currently?

You don't have the inside track on liquidation of debt or U.S. securities which is the major foreign assets held by commercial institutions and the government. These instruments are being dumped at a higher rate due to fear of default or foreign policies to "reduce" debt.

Holding actual currency could be for any number of reasons that has nothing to do with speculation.

You missed my point, BOT has been selling THB and buying USD for many months hence their foreign currency reserves have risen to record highs.

Correct - on which they have to mark a loss to market

[Gambles]

The money markets have no interest in dealing Bhat so it is fairly stable.

Big swings in USD/UKP/EURO are made by big players trading the currency.

If you know who in Thailand were to do the unmentionable .... the Bhat would plummit.

Anything else, nobody cares about.

Just my opinion.

PS

Nothing worthwhile is ever achieved by consensus.

Scott Campbell, three times S&P award-winning CEO of international portfolio management company MitonOptimal, can claim to have made more prescient currency calls than anyone on his recent trips to Bangkok. In 2007 he predicted weakening of the US Dollar. In June 2008 he called a Dollar bounce when consensus was that the Greenback had become a banana currency, and in February last year he once again correctly called a weakening of the Dollar. During April 26-29 he'll be briefing investors in Bangkok on surviving and exploiting the prevailing currency calamities.

The nation is descending into anarchy, civil law looms so hope he has a good crystal ball.

Tell me Gambles is this you as you do seem to have somewhat of a vested interest here ?

"Paul Gambles, managing partner MBMG Group

- other panelists to be confirmed

MBMG Portfolios

As the MBMG Group is not authorized to provide financial or investment advice in Thailand, we have an exclusive arrangement with two multi-award winning and top-ranked global portfolio managers – Scott Campbell and Martin Gray of MitonOptimal Guernsey (MOG). As part of this exclusive arrangement the MBMG Group can offer both corporate and individual clients unique access to advice from both of these portfolio managers. Their funds have outperformed the MSCI world index by as much as 240% over the last 10 years, demonstrating their ability to actively manage your money to achieve higher returns in both bull and bear markets.

RSVP: [email protected]

* This program is a paid event. Responsibility for program content is solely that of the event organizer. "

Here.

BTW. Event location moved

it's me!

Cheers,

Paul

[Gambles]

CRYSTAL BALL TIME AGAIN FOLKS.

or maybe just open your eyes time ??

[roamer]

CRYSTAL BALL TIME AGAIN FOLKS.

or maybe just open your eyes time ??

There are none so blind as those that will not see.

[Jingthing]

The mass consensus is that the baht won't crash. I always get suspicious when everyone predicts the same thing. Therefore, I predict the baht will weaken against the dollar 5 to 10 percent in the next few months.

It's widely agreed that it will be hot in Thailand tomorrow Jingthing so best be certain to wear thermals and a parka if you go out!

Talking MARKETS, not weather, dude. Geez. My prediction stands.

[TheItaliann]

Take a look at what makes up the Thai GDP... then ask yourself how Yellow vs Red fights affect it...

Is there less rice being grown? Less fishing? Less manufacturing.

I know, I know, its really hard to get over the fact that Patpong being closed for a week does not mean the Thai economy is collapsing, it's just your sad little world.

[stuandchris]

I understand the UK/US problems [a bit] but people are predicting the pound will fall again if there is a hung parliament even though it has happened before, the thb meanwhile goes from strength to strength when the place is descending into anarchy.

It makes no sense to me.

[Jingthing]

The dollar has been creeping up against the baht the last few days. My prediction stands, here goes ...

[Heng]

Make sure you have revenue in multiple currencies, then you don't have to worry about sweating/diazapamming through the financial news.

[TheItaliann]

^^ + Gold.

[Gambles]

I understand the UK/US problems [a bit] but people are predicting the pound will fall again if there is a hung parliament even though it has happened before, the thb meanwhile goes from strength to strength when the place is descending into anarchy.

It makes no sense to me.

In general, the currencies of strong balance sheet (i.e. no/low debt) countries are strengthening against weak balance sheet (i.e. high debt countries)

- there are exceptions such as Australia that has a problematic balance sheet but a temporarily strong currency

however Thailand, although in the former category, hasn't been strengthening as much as countries with similar debt profiles. This is presumed to be related to the politics - look at how much stronger IR, MYR and PHP have been against Baht over the last 1, 3 & 12 months. This differential is widely held to be largely due to 'pricing in' of political risk

[Ulysses G.]

Patpong being closed for a week does not mean the Thai economy is collapsing,

It does make for a lot of lonely English teachers though.

[Gambles]

The dollar has been creeping up against the baht the last few days. My prediction stands, here goes ...

In very general terms and not to be taken as advice, the US Dollar has been weaker against Baht for the last year or so but any global economic problems would likley lead to strong Dollar outperformance for a period although medium to long term Asian and Thai fundamentals should dominate, notwithstanding political risk.

[ronz28]

The red mess that's destroying the Thai economy will sooner or later get to the Thai Baht. I hate to see this happening but I am just a falang observer and its up to them.

[bdenner]

Once again another thread for the wishful thinkers. NO the Baht will not suffer due to a few MINOR political problems.

[anon7867763]

Thailands economy is in very good health , exports are rising even with a strong baht.More of their exports are going to the rising Asian economy so the government can allow the baht to rise even further.Thailand is holding alot of foreign reserves so they can prop the baht up at any given moment and that is an insurance against speculation against the baht.Without these current troubles probably the baht would be about 40 to the € and thats where I expect it to be and for quite along time.

[Jingthing]

Once again another thread for the wishful thinkers. NO the Baht will not suffer due to a few MINOR political problems.

Minor problems? That's funny.

[Carmine6]

The port is open and the land routes open. As long as that is the case, the baht is supported by trade. Outflows would have to overwhelm that to move the baht significantly weaker.

Thai trade is so close to balanced that in 2005 and 2008, there was a slight net import balance. For the 15 months through February however, the country was a net exporter every month. (March and April not reported yet.) A total of US$20 billion net exports for those 15 months. In recent months, it is likely that imports have been much more affected than exports. Less imported food items being sold in Bangkok due to the disruptions and less imported items being needed for tourists, for example.

Trade statistics here:

http://www.bot.or.th/English/Statistics/Ec...onalTrade.aspx#

So on net, there's still demand for baht from:

Trade

Tourism - still more tourists in Thailand than Thais as tourists elsewhere

Support for girlfriends and families

Expats receiving pensions and bringing in money for living expenses

Investment is the remaining big item. That can swing the other way, but it doesn't seem like people are heading for the exits yet.