Dollar Free Fall?

[Dirk_brijs]

this morning tradings at 31.15 at banks?

Not one month ago it was 32.12 thats 1bhat per dollar in one month??

Never saw the dollar fall that fast?

where will it stop? 29 28 27 26 ......

[gotlost]

Bangkok Bank as of now 31.19. Throw out the boat anchor.

[bangsaenguy]

I've been stashing money in a USD account. Kicking myself now. Maybe it will come back.

[luangtom]

I've been stashing money in a USD account. Kicking myself now. Maybe it will come back.

I would not bet on it...some pundits have predicted back to the 25-baht/dollar scale

of the earlier years. Scary.

[bangsaenguy]

The T/T rate at SCB this morning is 31.44

[ExpatJ]

Yes abit worrying especially because the economist magazine thinks the baht is undervaled. I moved a large portion of my savings out of US dollars and into thai baht (equities actually) in January.

[123ace]

Yes abit worrying especially because the economist magazine thinks the baht is undervaled. I moved a large portion of my savings out of US dollars and into thai baht (equities actually) in January.

It seems clear that the dollar will see a major decline, as such the THB will improve sharply possibly below even 25 (the historical benchmark pre 97 anyway). Thereafter exports will crash as goods will be over priced and the exporters will no doubt refuse to drop prices in a timely manner (as is their way) and a sharp drop in profits will be seen due to reduced demand and follwed by a crash in the currency to remain competitive. wait and see..

[opalhort]

Be glad that all your worries are only about the US$.

What shall we exporters say who rely mostly on the EURO?

Last year the € was about 50.-Baht, early this year as low as 38 and now about 40.-Baht. A loss of 20% within less than a year.

Or think of the people living in Thailand but receive their pension from the EURO zone. Some retirees may even have visa problems because of the weak EURO.

opalhort

[Jingthing]

Strong resistance at 25.

[ThaiPauly]

Its affecting the pound as well, thats dropped now from 51.5-49.0 in the last two weeks

[millionair]

unlike others

for me stronger the baht better for me.

i buy good from west and sell in thailand,i receive my money in baht and pay in us$.

[gotlost]

Its affecting the pound as well, thats dropped now from 51.5-49.0 in the last two weeks

Look again.

USD 31.12

GBP 48.06

[chiang mai]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

[gotlost]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

The way this is going it won't be that long.

[NamF0n]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

But if the bht were to go to 25 v usd and 35 v gbp and similar to the euro, then thatll make most of Thailands exports around twice as expensive as they were a few years ago thus companies will go to Africa or to jungle people of the Amazon or wherever else is the next place cheap enough to make their goods.

Or is Thailand all of a sudden going to be the hub of invention and intellectual property rights?

The only way Thailand can stay competitive is too have a weak (ish) currency, or grow from within which they havent yet managed to do to a sustainable level ..... or at some point in the future things will go tits up here.

The argument against the UK US does seem to forget about the world class companies both nations have aswell as the ability to create and invent, Thailand has NONE of these aspects!

Edited August 20, 2010 by NamF0n

[Abrak]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

For those who actually live in Thailand and have assets, I believe we are very lucky. Economic fundamentals are solid, the economy generates surpluses and the currency appears somewhat undervalued (on PPP). In other words there really seems little to be achieved by betting against the baht and matching your future liabilities with baht assets seems appropriate. It acts as both a hard and stable currency which is perhaps what people should desire if it is justified by the fundamentals.

Obviously things are not good for expats with overseas income but they should admit that an underlying assumption they made when they came here is that their overseas income would give them a better life here and was based on an assumption that they respected the fact that the underlying currency was undervalued.

Edited August 20, 2010 by Abrak

[Benjie]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

Yes, back to where it was previously.

[NamF0n]

Be glad that all your worries are only about the US$.

What shall we exporters say who rely mostly on the EURO?

Last year the € was about 50.-Baht, early this year as low as 38 and now about 40.-Baht. A loss of 20% within less than a year.

Or think of the people living in Thailand but receive their pension from the EURO zone. Some retirees may even have visa problems because of the weak EURO.

opalhort

The Euro is holding up better then the USD GBP on its mid term averages, i was getting paid in Euros 3-4 yrs ago and it was 45 to the BHT then, when at the same time it was 70s for GBP.

Though i think the Euros time is bad time is yet to come, as i for one and praying that in its current fascist form that it fails.

Edited August 20, 2010 by NamF0n

[gotlost]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

Yes, back to where it was previously.

January 2, 1997 USD 25.30:bah:

[chiang mai]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

But if the bht were to go to 25 v usd and 35 v gbp and similar to the euro, then thatll make most of Thailands exports around twice as expensive as they were a few years ago thus companies will go to Africa or to jungle people of the Amazon or wherever else is the next place cheap enough to make their goods.

Or is Thailand all of a sudden going to be the hub of invention and intellectual property rights?

The only way Thailand can stay competitive is too have a weak (ish) currency, or grow from within which they havent yet managed to do to a sustainable level ..... or at some point in the future things will go tits up here.

The argument against the UK US does seem to forget about the world class companies both nations have aswell as the ability to create and invent, Thailand has NONE of these aspects!

Expect regional exports to get more expensive and the West will pay the price, look also for regional labour costs to increase sharply, sooner rather than later - indeed, tapping Africa or other cheaper countries will be a temporary stopgap for the West. World class companies you say, world class companies depend on cheap labour and inexpensive manufacturing costs and until the West wants to/is able to deliver those things, ownership/invention/creation don't really matter.

[NamF0n]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

Yes, back to where it was previously.

January 2, 1997 USD 25.30:bah:

And we all know what happened after this date.

I can see why you are saying it'll go to such levels but common sense says that if it is cheaper to make goods elsewhere in the world then thats what will happen, and at 25bht to the dollar 35 to gbp and say 30 v the euro then this is what will happen.

Edited August 20, 2010 by NamF0n

[NamF0n]

Strong resistance at 25.

That's actually funny, true nevertheless - USD/THB 25, GBP/THB 35, within ten years.

But if the bht were to go to 25 v usd and 35 v gbp and similar to the euro, then thatll make most of Thailands exports around twice as expensive as they were a few years ago thus companies will go to Africa or to jungle people of the Amazon or wherever else is the next place cheap enough to make their goods.

Or is Thailand all of a sudden going to be the hub of invention and intellectual property rights?

The only way Thailand can stay competitive is too have a weak (ish) currency, or grow from within which they havent yet managed to do to a sustainable level ..... or at some point in the future things will go tits up here.

The argument against the UK US does seem to forget about the world class companies both nations have aswell as the ability to create and invent, Thailand has NONE of these aspects!

Expect regional exports to get more expensive and the West will pay the price, look also for regional labour costs to increase sharply, sooner rather than later - indeed, tapping Africa or other cheaper countries will be a temporary stopgap for the West. World class companies you say, world class companies depend on cheap labour and inexpensive manufacturing costs and until the West wants to/is able to deliver those things, ownership/invention/creation don't really matter.

But tell me how is the west going to pay the price with huge tax increases on the imminent horizon, mass unemployment and wages stagnating and already unaffordable housing that govts have done whatever necessary to keep inflated?

I agree that SOME companies need cheap labour to make themselves as profitable as theyve been, but at 25 to the dollar and having to ship goods to the other side of the world then Thailand is certainly not going to be cheap anymore.

Your trying to say Thailands going to be pretty much unaffected by the upcoming credit crunch thats been delayed by politicians, i believe this is impossible.

Edited August 20, 2010 by NamF0n

[Abrak]

Expect regional exports to get more expensive and the West will pay the price, look also for regional labour costs to increase sharply, sooner rather than later - indeed, tapping Africa or other cheaper countries will be a temporary stopgap for the West. World class companies you say, world class companies depend on cheap labour and inexpensive manufacturing costs and until the West wants to/is able to deliver those things, ownership/invention/creation don't really matter.

I think you raise a very good point Chiang Mai. To the extent there is a general appreciation of Asian surplus producing currencies, I think we will find less elasticity in demand than people expect because the major shift in the manufacturing base has largely occurred. The price effect will be a wealth effect that is the key to balance.

And please respect that when people resort 'world class companies' 'financial centres' 'uneducated competitors' 'lack of competitiveness to a current account surplus nation' they are simply spouting cliches because they have no economic arguments. They might as well as add 'crony capitalism' as well.

What the West needs to consider is what he doesnt have - the liabilities throughout its economy including the unemployable, ageing, debts etc. Ultimately or your superior assets will clearly make sure they are not around to clean up the mess.

[seanocasey]

let say 8% of rich Thais have invested 35% of Thailand wealth in china's real-estate when the bubble busts where will all that dosch go.

with exporters now in trouble with baht appreciation soon there will be wage demands and wage increases,as we have seen of late in china.

there is as some say a new world order coming, now is the time to invest in land and grow your own.

[Abrak]

let say 8% of rich Thais have invested 35% of Thailand wealth in china's real-estate when the bubble busts where will all that dosch go.

That would explain the massive capital outflows and collapse in forex reserves.

with exporters now in trouble with baht appreciation soon there will be wage demands and wage increases,as we have seen of late in china.

Baht appreciation depresses inflation as does a lack of excessive money supply growth. Exporters are doing exceptionally well as is the trade balance. Exporters are the people who actually make all the money rather than anyone else.

there is as some say a new world order coming, now is the time to invest in land and grow your own.

There will never be a new world order. Everything will go to the rich and powerful. Eventually the US will get its act together is my bet. I would still put my money on Thailand though.

[NamF0n]

Abrak ChiangMai

Please can you tell me at which point a strong baht will start affecting Thailands economy, as you seem to think it will do nothing but rise in the coming years.

..........................................

But please can you answer the following -

Tell me how is the west going to pay the extra price of Thai goods with huge tax increases imminently occurring, mass unemployment and wages stagnating and already unaffordable housing that govts have done whatever necessary to keep inflated?

Ive an old fashioned view on looking at economics, if youve got money you can buy if you havent you cant, and if youve borrowed as the western govts have then one way or another its got to be paid back and then as if by magic you havent got any money to buy.

[NamF0n]

Expect regional exports to get more expensive and the West will pay the price, look also for regional labour costs to increase sharply, sooner rather than later - indeed, tapping Africa or other cheaper countries will be a temporary stopgap for the West. World class companies you say, world class companies depend on cheap labour and inexpensive manufacturing costs and until the West wants to/is able to deliver those things, ownership/invention/creation don't really matter.

I think you raise a very good point Chiang Mai. To the extent there is a general appreciation of Asian surplus producing currencies, I think we will find less elasticity in demand than people expect because the major shift in the manufacturing base has largely occurred. The price effect will be a wealth effect that is the key to balance.

But Chiang Mai has which we both agree on said companies will always look for the cheapest place for labour. (and relatively stable)

Youve agreed, and as you believe Thailand may go 25 to the dollar you are also CONFIRMING that Thailand will no longer be even close to being the cheapest, yet you arent accepting that a strong bht will at some point affect Thailands economy.

And as these companies arent Thai as Thailand has NO world class companies they have no allegiance to stay here what so ever, its just as easy to pack and ship the machinery in the factories here to India as it was when shipping it in from wherever it came.

[Abrak]

Abrak ChiangMai

Please can you tell me at which point a strong baht will start affecting Thailands economy, as you seem to think it will do nothing but rise in the coming years.

I essentially would take the view that as the economy generates surpluses it has stable growth and if inflation is kept under control it can gradually appreciate say 3% a year from an undervalued positioned and still be competitive. Although many PPP valuations imply it is very undervalued, I doubt it is. Maybe 15% or so. The bar is set very low aginst the fundamentals of more developed economies.

..........................................

But please can you answer the following -

Tell me how is the west going to pay the extra price of Thai goods with huge tax increases imminently occurring, mass unemployment and wages stagnating and already unaffordable housing that govts have done whatever necessary to keep inflated?

My general assumption would be that most Asian currencies appreciate and as they produce similar goods this will be inflationary. Luckily they will have higher wages to buy western imports. The West will buy less but at a higher price. This will boost growth in the West relative to the East which will hopefully mean that Thailand is in a position to spend its surpluses on its own people instead of lending them back to the US (without causing inflation.)

Ive an old fashioned view on looking at economics, if youve got money you can buy if you havent you cant, and if youve borrowed as the western govts have then one way or another its got to be paid back and then as if by magic you havent got any money to buy.

Please accept that the very principle is that say Thailand has massive excess reserves and that appreciation of Asian currencies will give their consumers more spending power. The whole point of an appreciation is that. Asian Governments with money spend it in a less inflationary environment and Asian consumers spend more. They stop lending their surpluses back to the US etc to increase their debt to support their consumption but the West generates more income on the basis that they can sell more to people who have money.

So on a very old fashioned view, we need the people with money to spend it and the people without to earn it.