The Race To 20 Thb Per Dollar

[Spee]

But Reagonomics involved spending money they havent got, the Dems/Reps as the LIB/LAB/Cons in the UK are all one side of the same coin, theyre not capitalist theyre just interested in doing whatever necessary to stay in power.

Besides i believe i am right in thinking it was Clintons deregulation of the banking system that led to the current financial mess we're in and Obama rewarded his advisers by giving them all jobs!

You guys are at best grossly misinformed and at worst extremely delusional.

There are many many examples throughout history showing that when taxes are cut, government tax revenue increases, and when taxes are increased, government tax revenue decreases.

As for the current fiscal crisis, there are three things at the core: excessive government spending, the mortgage securities fraud (CRA, Fannie/Freddie), and monetizing the debt. There is a very close 4th being collusion and corruption between government and private industry (see the Rolling Stone article on Goldman Sachs for a stunning example).

The dollar is in the toilet because the treasury is printing money like crazy, government spending is completely out of control, and in only 20 months the unholy trinity of Obama/Pelosi/Reid have rung up the massive sum of $4.4 TRILLION in additional debt.

[Chunky1]

But if you're considering moving over, a 3,000,000 Baht low-end investment for a house, vehicle, etc will cost you $95,000 and change today compared to $75,000 when the Baht was 40/1.

Don't I know it! We built our home between 2004-2006 when the exchange rates were much more favorable. Paid in cash by the month as we built, so all bought and paid for. If we were shifted to the present, with exchange rates around 30/$1, I'm not sure we could do it. Or maybe we could only on a much smaller scale.

Switching gears, the dollar is in the toilet to be sure, with the euro and pound not far behind. But this is due entirely, absolutely, 1000-percent to ballooning growth in national governments and extorting the private sector with excessive taxation. The political winds are shifting quickly in the US, and there is likely chance that the leftists will lose one and perhaps both houses of Congress. Should this happen, followed shortly by slashing government spending and taxes, there would be a very rapid turn-around in the dollar's valuation.

For those who are thoroughly pissed off about the exchange rate, there is only one thing to do. Get politically active in your home country and throw out the bureaucrats whose ruinous economic policies are causing you to live life as they see fit and killing your ability to life your life as you see fit.

For the first time in its history, the US social security program is paying out more money that it has taken in. And this is the cash cow/Ponzi scheme that politicians have looted for decades to redistribute wealth through welfare programs. This is one of many reasons why the dollar is tanking, and probably closer to the root cause than the Fed printing money like it is going out of style.

Tax cuts and deregulation were tried and led directly to the situation we're in now. And your solution is more of what didn't work?

Exactly! Reaganomics was a failure. I think some people fall in for the scare tactics of the talk-radio mentality (and that of FOX -- one and the same!)

I am fast becoming an old white man (46) ... they type that talk radio/FOX panders to, thankfully I have never been that gullible. Perhaps if a few new wars are started we can spend our way further into debt but make those folks happy! After all ... trillions spent on Iraq after all the lies certainly helped the US get into the situation it is in now ... perhaps more of the same will get us out!

The US gov is trading dollars for assets (Iraqi Oil). It's like going on a shopping spree to max out your credit cards before declaring bankruptcy. Stay tuned to the war in Iran, coming as soon as they get a Republican in office.

[ClareQuilty]

Actually large scale quantitative easing and/or increasing government debt should make the dollar stronger, not weaker. See Japan.

[Englander]

But Reagonomics involved spending money they havent got, the Dems/Reps as the LIB/LAB/Cons in the UK are all one side of the same coin, theyre not capitalist theyre just interested in doing whatever necessary to stay in power.

Besides i believe i am right in thinking it was Clintons deregulation of the banking system that led to the current financial mess we're in and Obama rewarded his advisers by giving them all jobs!

You guys are at best grossly misinformed and at worst extremely delusional.

There are many many examples throughout history showing that when taxes are cut, government tax revenue increases, and when taxes are increased, government tax revenue decreases.

As for the current fiscal crisis, there are three things at the core: excessive government spending, the mortgage securities fraud (CRA, Fannie/Freddie), and monetizing the debt. There is a very close 4th being collusion and corruption between government and private industry (see the Rolling Stone article on Goldman Sachs for a stunning example).

The dollar is in the toilet because the treasury is printing money like crazy, government spending is completely out of control, and in only 20 months the unholy trinity of Obama/Pelosi/Reid have rung up the massive sum of $4.4 TRILLION in additional debt.

Whats your excuse for not being to read properly or interpret whats written?

Despite lowering taxes Reagonomics and Bushonomics involved spending money the state doesnt have, such as your military and public sector (inc pensions) aswell as the banking sector which Bush started giving money to before Obama got into power, both of these tax cutting so called right wing capitalists were spendaholics and spent more then the country could afford, which at some point will invariably lead to higher taxes or money printing... ie they were socialists and their actions would lead to bigger govt. Comprende?

Now please on anything that ive written such as Obama giving jobs to Clintons friends (At Sachs) who deregulated the banking, or that the European Union is a slightly larger market then America, or that Reagan actually done something about the ever growing public sector and cut military spending then please correct me, or my final personal opinion the the DEMS/REPS are 2 sides of the same coin.

[Englander]

Actually large scale quantitative easing and/or increasing government debt should make the dollar stronger, not weaker. See Japan.

At which point in the last 15yrs should we look at the Japanese currency to see it strengthening their currency?

Shouldnt we look at Zimbabwe or 1920s Germany for a alternative view?

[Chunky1]

Actually large scale quantitative easing and/or increasing government debt should make the dollar stronger, not weaker. See Japan.

The Cleveland Cavs are going to win an NBA title before the Miami Heat.

[ClareQuilty]

Sorry I didn't get the sports reference.

Actually large scale quantitative easing and/or increasing government debt should make the dollar stronger, not weaker. See Japan.

At which point in the last 15yrs should we look at the Japanese currency to see it strengthening their currency?

I never suggested you look at a 'point'. The currency has been remaining quite strong vis-a-vis the dollar throughout the last 15+ years, despite several periods of quantitative easing and sustained high government debt and borrowing throughout that period.

Shouldnt we look at Zimbabwe or 1920s Germany for a alternative view?

No. Clearly the Japanese case is more apropos - a large modern industrial economy locked in the downward spiral of deflation, lack of demand, excess capacity, and 'austerity' - inadequate government spending.

[Chunky1]

no, from 1995 on the yen declined when the government started cutting interest rates. when money is being brought home, it strengthens your currency. all those dollar investments got turned back into yen.

[ClareQuilty]

From about 80 to around 130, and now back to around 85... and it was around 200 something back in the 80s when the country was doing well.

The point being that the value is generally very high since the collapse of the Japanese economy, and has not been dramatically changed by the quantitative easing or borrowing. Perhaps more to the point, said easing and borrowing has never been able to create any inflation in Japan.

In any case fearing inflation in the present world collapse is really bizarre.. 'we should be so lucky'.

[Chunky1]

http://en.wikipedia.org/wiki/Plaza_Accord

[loong]

AS my wife earns most our money, it's great the strong baht. May it fall below 25B to the $ which it was when I moved here.

Why is a strong Baht good for you? If the Thai economy suffers, your wife's income may be at risk.

I could understand the attitude if imported goods got cheaper, but they don't!

[saraburioz]

AS my wife earns most our money, it's great the strong baht. May it fall below 25B to the $ which it was when I moved here.

Why is a strong Baht good for you? If the Thai economy suffers, your wife's income may be at risk.

I could understand the attitude if imported goods got cheaper, but they don't!

Because we go abroad often with 3 kids and a maid.

[tijnebijn]

Actually large scale quantitative easing and/or increasing government debt should make the dollar stronger, not weaker. See Japan.

Only if you have a massive trade surplus .

Thats also the reason why the baht is so strong at the moment , they've got massive national reserves . The U.S.of A has lost massive competitiveness so has Europe to Asia , Thailand

has its house in order , cause they have gone through the depression in '97 and learned from their mistakes .

But I'm waiting till Thailand sees its revenue slink , how higher the Baht how lower their revenues , so doesn't take long time before major exporters say enough is enough , I think its not strange Thailand is going good , but are they really ? after collapsing in '09 35% or something in exports , its not strange Thailands exports are growing that fast , so many was lost , Thailand is not going that great its just normalizing but number wise its looking great , Thailand is an export country .

Just wait and see , don't think Thailand can cope much under 30 to the dollar at this point . Next year it will not be easy to see their numbers grow as fast , they will start to complain then , the baht will not collapse but stabilise somewhat imho , depends ofcourse how the West will cope in the meantime , we wait and see .

Edited August 30, 2010 by tijnebijn

[Chunky1]

Thailand's house is in order because they have factory workers making 20 baht an hour instead of 600 baht an hour and factories owners don't get sued when employees die and they don't get sued by the government for not hiring enough tall/short/white/black employees and factory workers aren't unionized.

It will be interesting to see if Thailand can defend the baht.

[Chunky1]

i remember vaguely the Thais tried to defend the baht a few times on the way down and it was like throwing buckets of water at The Zen Mall.

[JPPR2]

Why worry about things you cannot control? It shaves years off your life. It is quite interesting how people react when they might have to slow down their excessive spending or curtail buying things they do not need.

I say this; if you make more you should save more, not spend more. Most tend to fall into the trap of buying more and more because they make more. All of a sudden they feel like the life they had before was poor. They take on greater debt then a market dip hits and they are under water scrambling for their lives. Clearly understanding what makes you happy, living within your means will ensure that a market swing is simply a blip on the life radar screen. In the end your health is your best friend. people that worry all the time age quicker and suffer from ailments. I see people all the time 5 to 10 years younger then me that look 10 years older. They live in extreme debt. > 75% D to I ratio.

I have seen all of this before. I see some people in their posts gripped with fear. Not a good place to be.

[jazzbo]

Some posts are the way they are because some persons have an overwhelming need bordering on GAD (Generalized Anxiety Disorder -- ICD-10: F41.1) to believe that they are smarter than everyone else and can anticipate and/or turn economic negatives (real or otherwise) to their advantage.

It reminds me of the lines from the movie Broadcast News (Holly Hunter as Jane Craig):

Paul Moore: It must be nice to always believe you know better, to always think you're the smartest person in the room.

Jane Craig: No. It's awful

[Forethat]

Some posts are the way they are because some persons have an overwhelming need bordering on GAD (Generalized Anxiety Disorder -- ICD-10: F41.1) to believe that they are smarter than everyone else and can anticipate and/or turn economic negatives (real or otherwise) to their advantage.

It reminds me of the lines from the movie Broadcast News (Holly Hunter as Jane Craig):

Paul Moore: It must be nice to always believe you know better, to always think you're the smartest person in the room.

Jane Craig: No. It's awful

Dont worry about this, trust me - just employ the number of trilingual gardener required and you're all good to go.

[Hakuchi]

It reminds me of the lines from the movie Broadcast News (Holly Hunter as Jane Craig):

Paul Moore: It must be nice to always believe you know better, to always think you're the smartest person in the room.

Jane Craig: No. It's awful

I like that line.

[ClareQuilty]

Thailand's house is in order because they have factory workers making 20 baht an hour instead of 600 baht an hour and factories owners don't get sued when employees die and they don't get sued by the government for not hiring enough tall/short/white/black employees and factory workers aren't unionized.

Are you late for your tea party?

[jazzbo]

today's Bangkok Bank Baht to $US rate 30.78 ... I think it has to break 30 before it can race to 20 ...

... and for the GAD 'Financial Crisis'-of-the-day club on the Business Forum another cinematic allusion

this time from Citizen Kane: (Kane: Orson Wells):

Charles Foster Kane: Read the cable.

Bernstein: "Girls delightful in Cuba. Stop. Could send you prose poems about scenery, but don't feel right spending your money.

Stop. There is no war in Cuba, signed Wheeler." Any answer?

Charles Foster Kane: Yes. "Dear Wheeler: you provide the prose poems. I'll provide the war.

[bermondburi]

Seeing how I earn my money in Baht it doesn't make the slightest difference to me. In fact with the pound being so low as well I have recently been sending Thai Baht back to England because it has been buying so many pounds. Swings and roundabouts. Keep on falling !

[jazzbo]

Swings and roundabouts. Keep on falling! ... but sooner or later there will be roundabouts and swings.

[Genericnic]

As the baht strengthens, the fundamental question become one of what does Thailand export now at approx. 31 baht/$ that people will still by in sufficient quantities at 20 baht/$ or even at 25 baht/$?

There is not much in the way of non-essentials that I would continue to buy in the same quantities, if at all, if the price went up 15% much less 30%. I think that would be true in the international marketplace as well.

[bermondburi]

Swings and roundabouts. Keep on falling! ... but sooner or later there will be roundabouts and swings.

And that's when I will send the pounds back into Baht. You've got to cover yourself in two currencies. Instead of losing from the monetary system , try to make it work for you. Use your own judgement on when to change money to the other. A judgement hopefully based on experience as in " it can't go much higher " or " it can't go much lower. In the nineties the dollar was twenty-five which is still lower than it is now. Like I said, swings and roundabouts.

[thomo]

Earning Thai baht has never seemed better.

[phuketrichard]

20 thb/$... 3 sunrise tacos would cost $11.

What would it cost in the USA?

was back in the states in July and u can get two tacos and or burrito with chips and drink for $2.00 at Taco Bell

and that was a meal!!

[laurentbkk]

Easy : Tourists will not see Thailand as heaven anymore as prices will be as high as many other tourists spots ,export will fall as other countries will be more competitive such as Vietnam,Cambodia etc ... Investments will drop as opening a factory here will be more expensive than many neighboring countries. See how the country growth tremendously during the high USD/Thai baht starting 1997. my company can stop exporting and dismiss half of the workers. This is the possible scenario if the bath continue to raise and the USD to fall . Import product will flow from China and other places etc .... I dont see where the figures of Export showing a growth of 30%is coming from. Thailand already export much less rice than before because of the price.

[bermondburi]

Earning Thai baht has never seemed better.

Nothing wrong with a bit of baht.

[thomo]

In fact with the pound being so low as well I have recently been sending Thai Baht back to England because it has been buying so many pounds.

How do you send it back?

I'm thinking of sending 100-200,000thb back to Ireland. Will probably be using it here again in a few years but as 100k is = 2,500e now, as opposed to 2,000, it probably worth sending a few 100k home.

What's the best way to minimize costs and exchange rate losses?