Weak US Dollar Is A Big Threat To The Baht And Thai Economy

[SkyHigh]

Expect to hit 28 Baht/USD.

It's not possible to stop $$$ influx. Thai stock P/E is relatively low compared to others. Thai national debt is only 48-55(58-62 max)% GDP which is again highly secure.

The only concern is color-code protest which lead to instability. If Thais stop political mess, the country can benefit from strong Baht, reforming infrastructure, increasing productivity etc.

[Englander]

If it were just the big 6 in the Euro then sure it would be stable, however there are far too many weak economies within it and Germany and France will tire of pumping more and more of their citizens potential wealth to keep other nations afloat.

You are joking right, the Socialist Republic of France with the biggest public sector in the Eurozone, with the joint lowest age for receiving a state pension in the Eurozone (Same as Greece), whose farming industry is subsidised by the European Union to the tune of 8 billion Euro, with the lowest rate of start up companies due to bundles of red tape and where unions are abundantly powerful and strike at the drop of a hat.

In one way or another Ireland and Greece whose economies i know a little about will default as they cant afford the repayments, its a case of how theyll do it as to whether they can stay in the club thats on the quick march to totalitarianism.

But i think the Euro will continue to exist in some form, but maybe without the Nations who have the courage to default.

Edited September 27, 2010 by Englander

[rubl]

But i think the Euro will continue to exist in some form, but maybe without the Nations who have the courage to default.

Courage? More like economical suicide which ain't painless. Even with economies entwined Greece would be broke and in grave problems if she 'dared' to default. Same for Ireland. The other Euro Zone countries might not like to loose 100 billion Euro, but can still afford it rather than be blackmailed. The French are a different case (as English you should know ), but even they will soon come to the conclusion that trees don't grow to Heaven any more. A Europe with pension ages of 65+ will have no patience for them.

All in all it is to be hoped the European countries realize they no longer can do things alone, or without the others. Thank God for that, we don't need another war with European countries fighting against each other. The Yugoslavian Affair was a deep disgrace and only possible because of years of suppression, but luckily contained. Now if some talk about Army atrocities in May here, start reading about those in the former Yugoslavia.

(edit: needs a correction / update, will do separately)

Edited September 27, 2010 by rubl

[Englander]

Expect to hit 28 Baht/USD.

It's not possible to stop $$ influx. Thai stock P/E is relatively low compared to others. Thai national debt is only 48-55(58-62 max)% GDP which is again highly secure.

The only concern is color-code protest which lead to instability. If Thais stop political mess, the country can benefit from strong Baht, reforming infrastructure, increasing productivity etc.

Id say the trade wars that are starting are the biggest factor that could affect Thailand, as their one way trade agreements with the West arent going to last forever.

[Englander]

But i think the Euro will continue to exist in some form, but maybe without the Nations who have the courage to default.

Courage? More like economical suicide which ain't painless. Even with economies entwined Greece would be broke and in grave problems if she 'dared' to default. Same for Ireland. The other Euro Zone countries might not like to loose 100 billion Euro, but can still afford it rather than be blackmailed. The French are a different case (as English you should know ), but even they will soon come to the conclusion that trees don't grow to Heaven any more. A Europe with pension ages of 65+ will have no patience for them.

All in all it is to be hoped the European countries realize they no longer can do things alone, or without the others. Thank God for that, we don't need another war with European countries fighting against each other. The Yugoslavian Affair was a deep disgrace and only possible because of years of suppression, but luckily contained. Now if some talk about Army atrocities in May here, start reading about those in the former Yugoslavia.

We, Britain already have 2 wars we cant win or afford or 1.5 now, there isnt going to be a Euro WW3 so no need to even talk one up, we can still have free trade, but the EU is an unaffordable, bureaucrat , business stifling, corrupt regime that is only interested in control in its fascist manner.

As for defaulting that means not paying the debt telling whoever to clear off thus means getting kicked out the Eurozone (presumably) At which point theyll go back to their former currencies (debt free) which will be very weak as all nations are aiming for at the moment and theyll get plenty of inward investment as theyll have a cheap and fairly well educated labour force, economic suicide is to stay in the Euro with its expensive labour force for these countries.

The IMF have already stated Ireland are insolvent and cant afford to pay their debt which amounts to 200K Euro per person born in 2015.

http://www.independe...ef-2325378.html

Interesting times, i look forward to the outcome within a few years.

Edited September 27, 2010 by Englander

[rubl]

But i think the Euro will continue to exist in some form, but maybe without the Nations who have the courage to default.

Trying again.

In January and end April / begin May there were many speculations on a default by Greece, followed by Ireland, Portugal, Spain and what you have. Main conclusion none in Europe can offered that, it would be an economical disaster for ALL. That may be the reason it has been more quiet around this subject. It doesn't help any to even speculate on this, although that will not stop 'enterprising' people to use any financial instrument possible to make a profit. Like those in America who invented highly imaginative schemes copied by others and which led to the banking disaster and global downturn in 2008.

[roamer]

Expect to hit 28 Baht/USD.

It's not possible to stop $$ influx. Thai stock P/E is relatively low compared to others. Thai national debt is only 48-55(58-62 max)% GDP which is again highly secure.

The only concern is color-code protest which lead to instability. If Thais stop political mess, the country can benefit from strong Baht, reforming infrastructure, increasing productivity etc.

Id say the trade wars that are starting are the biggest factor that could affect Thailand, as their one way trade agreements with the West arent going to last forever.

"The only concern is color-code protest which lead to instability." Hmmm, I think many of us would say that there is a far bigger concern that is waiting in the wings. That aside I also feel the time when the EU & US start to take seriously the trade gap with Asia can't be too far off.

[Johpa]

If Thai companies don't take advantage of its strengthened baht by improving productivity and by hedging smartly and stop hoping for intervention.....

That is not what happens in Thailand. The strengthened baat will only serve as further motivation to take profits out of Thailand and invest elsewhere.

[Englander]

But i think the Euro will continue to exist in some form, but maybe without the Nations who have the courage to default.

Trying again.

In January and end April / begin May there were many speculations on a default by Greece, followed by Ireland, Portugal, Spain and what you have. Main conclusion none in Europe can offered that, it would be an economical disaster for ALL. That may be the reason it has been more quiet around this subject. It doesn't help any to even speculate on this, although that will not stop 'enterprising' people to use any financial instrument possible to make a profit. Like those in America who invented highly imaginative schemes copied by others and which led to the banking disaster and global downturn in 2008.

Im unsure why youve highlighted that quote, but i do think the Euro will exist but in a different form to its current state, unless Germans wish to bail out all these countries, which im sure their electorate doesnt.

But this isnt a manufactured financial instrument concocted by bankers thats all in the past, this is the here and now and its nothing more complicated then a huge debt they cant afford to pay back.

If Ireland were on its own in this position as Argentina were in 2001 this would be best option but with a definite domino effect should they default then people like me and you can only speculate on the outcome.

Anyway Argentina have thrived since defaulting, scroll to the bottom of the page to see their GDP growth.

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

Anyway read this, theyre fcuked and the domino effect is frightening.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/09/why_ireland_cant_afford_to_pun.html

And then read this about Anglo Irish

http://uk.reuters.com/article/idUKTRE68Q27D20100927

[rubl]

.. begin removed ..

we can still have free trade, but the EU is an unaffordable, bureaucrat , business stifling, corrupt regime that is only interested in control in its fascist manner.

As for defaulting that means not paying the debt telling whoever to clear off thus means getting kicked out the Eurozone (presumably) At which point theyll go back to their former currencies (debt free) which will be very weak as all nations are aiming for at the moment and theyll get plenty of inward investment as theyll have a cheap and fairly well educated labour force, economic suicide is to stay in the Euro with its expensive labour force for these countries.

The IMF have already stated Ireland are insolvent and cant afford to pay their debt which amounts to 200K Euro per person born in 2015.

http://www.independe...ef-2325378.html

Interesting times, i look forward to the outcome within a few years.

Looking at economical statistics from the EC website it seems in the period of Jan - May 2010 of Britain's import/export 127 billion Euro is from/to extra-EC27, 148 billion Euro intra-EC27 and a total negative trade balance of 48 billion. This suggest that co-operation is not only important for the EC26 (i.e. EC27 - UK), but also for the United kingdom.

Defaulting causing half of your market to lay in ruins gives no comfort to feeling righteous.

[SkyHigh]

Expect to hit 28 Baht/USD.

It's not possible to stop $$ influx. Thai stock P/E is relatively low compared to others. Thai national debt is only 48-55(58-62 max)% GDP which is again highly secure.

The only concern is color-code protest which lead to instability. If Thais stop political mess, the country can benefit from strong Baht, reforming infrastructure, increasing productivity etc.

Id say the trade wars that are starting are the biggest factor that could affect Thailand, as their one way trade agreements with the West arent going to last forever.

Yeah that would be one crutial factor.

But still, Not much volume between US-Thai or EU-Thai trade such that it'll trigger trade war directly with Thai anyway.

It'll be more like US-China, apparently.

It couldn't be any better than this time when Thailand need a complete infrastructure revamp - highspeed train, new aircraft fleet, new factory etc. All this import stuff will balance out cash inflow - buy sometime for those in exports to adapt.

Just sad it seems Thai is likely to miss this golden shot as always.

[nikster]

Uhm, I don't get the thread title, how is the USD weak now? The baht is strong because the Chinese Yuan is strong and only getting stronger. Why does that make ASEAN currencies go up because they're the second tier countries to move manufacturing to, and in some regions in China labor costs have doubled last year. If it all stays on trajectory China will soon be expensive to produce in, so alternatives are needed + ASEAN countries could benefit. Compared to the other venerable members of ASEAN, Thailand isn't all bad - I'd say it's pretty good really, it may be a huge mess, but many other ASEAN members are in even worse shape.

I don't think anyone cares about tourism, BTW, except those in the tourism industry. It's what, 7% of Thai GDP? Not shabby but by no means the sole or even most important source of income... a world economic crisis and high travel costs will influence tourist arrivals more than anything the AOT or TAT do or not do. My feeling is tourism is in pretty good shape, all things considered. The TAT specifically found that it should attract many more asian tourists - a very good plan IMO.

[Englander]

.. begin removed ..

we can still have free trade, but the EU is an unaffordable, bureaucrat , business stifling, corrupt regime that is only interested in control in its fascist manner.

As for defaulting that means not paying the debt telling whoever to clear off thus means getting kicked out the Eurozone (presumably) At which point theyll go back to their former currencies (debt free) which will be very weak as all nations are aiming for at the moment and theyll get plenty of inward investment as theyll have a cheap and fairly well educated labour force, economic suicide is to stay in the Euro with its expensive labour force for these countries.

The IMF have already stated Ireland are insolvent and cant afford to pay their debt which amounts to 200K Euro per person born in 2015.

http://www.independe...ef-2325378.html

Interesting times, i look forward to the outcome within a few years.

Looking at economical statistics from the EC website it seems in the period of Jan - May 2010 of Britain's import/export 127 billion Euro is from/to extra-EC27, 148 billion Euro intra-EC27 and a total negative trade balance of 48 billion. This suggest that co-operation is not only important for the EC26 (i.e. EC27 - UK), but also for the United kingdom.

Defaulting causing half of your market to lay in ruins gives no comfort to feeling righteous.

Maybe i am righteous as i despise controlling govt and the EU, and im aware that it'll be very bad for the UK, but we can print more money and devalue our currency to write such a debt off, Ireland with it being in the Euro cant. (Young Irish will at least afford to buy a home in the coming years)

The credit farce of the last 10-15 yrs has priced my generation out the property market ... IMHO a crash of this kind will enable your average guy to buy a home to live in and raise a family with an average wage without the need to be in debt to the banks forever, he/she can then live a nicer life to the one the banksters and UK/US/EU govts have created over the last 15 years.

Anyway im paid in US Dollars and have a job where i can go to wherever the currency is strong hence a sterling fall is good for me.

[rubl]

.. begin removed ..

we can still have free trade, but the EU is an unaffordable, bureaucrat , business stifling, corrupt regime that is only interested in control in its fascist manner.

As for defaulting that means not paying the debt telling whoever to clear off thus means getting kicked out the Eurozone (presumably) At which point theyll go back to their former currencies (debt free) which will be very weak as all nations are aiming for at the moment and theyll get plenty of inward investment as theyll have a cheap and fairly well educated labour force, economic suicide is to stay in the Euro with its expensive labour force for these countries.

The IMF have already stated Ireland are insolvent and cant afford to pay their debt which amounts to 200K Euro per person born in 2015.

http://www.independe...ef-2325378.html

Interesting times, i look forward to the outcome within a few years.

Looking at economical statistics from the EC website it seems in the period of Jan - May 2010 of Britain's import/export 127 billion Euro is from/to extra-EC27, 148 billion Euro intra-EC27 and a total negative trade balance of 48 billion. This suggest that co-operation is not only important for the EC26 (i.e. EC27 - UK), but also for the United kingdom.

Defaulting causing half of your market to lay in ruins gives no comfort to feeling righteous.

Maybe i am righteous as i despise controlling govt and the EU, and im aware that it'll be very bad for the UK, but we can print more money and devalue our currency to write such a debt off, Ireland with it being in the Euro cant. (Young Irish will at least afford to buy a home in the coming years)

The credit farce of the last 10-15 yrs has priced my generation out the property market ... IMHO a crash of this kind will enable your average guy to buy a home to live in and raise a family with an average wage without the need to be in debt to the banks forever, he/she can then live a nicer life to the one the banksters and UK/US/EU govts have created over the last 15 years.

Anyway im paid in US Dollars and have a job where i can go to wherever the currency is strong hence a sterling fall is good for me.

Some I agree with, some not. Personally I think it's less the government and more a few rich, powerful groups which are in control. I would almost say 'as usual'.

The young Irish may have a choice of cheaper homes, but without a job and heavily curtailed lending practices it won't help them. Nor will it help the average guy. Some with sufficient 'fluency' may just pick up the lot as better investment than just plain old stocks, or complicated financial instruments for now.

[Englander]

.. begin removed ..

we can still have free trade, but the EU is an unaffordable, bureaucrat , business stifling, corrupt regime that is only interested in control in its fascist manner.

As for defaulting that means not paying the debt telling whoever to clear off thus means getting kicked out the Eurozone (presumably) At which point theyll go back to their former currencies (debt free) which will be very weak as all nations are aiming for at the moment and theyll get plenty of inward investment as theyll have a cheap and fairly well educated labour force, economic suicide is to stay in the Euro with its expensive labour force for these countries.

The IMF have already stated Ireland are insolvent and cant afford to pay their debt which amounts to 200K Euro per person born in 2015.

http://www.independe...ef-2325378.html

Interesting times, i look forward to the outcome within a few years.

Looking at economical statistics from the EC website it seems in the period of Jan - May 2010 of Britain's import/export 127 billion Euro is from/to extra-EC27, 148 billion Euro intra-EC27 and a total negative trade balance of 48 billion. This suggest that co-operation is not only important for the EC26 (i.e. EC27 - UK), but also for the United kingdom.

Defaulting causing half of your market to lay in ruins gives no comfort to feeling righteous.

Maybe i am righteous as i despise controlling govt and the EU, and im aware that it'll be very bad for the UK, but we can print more money and devalue our currency to write such a debt off, Ireland with it being in the Euro cant. (Young Irish will at least afford to buy a home in the coming years)

The credit farce of the last 10-15 yrs has priced my generation out the property market ... IMHO a crash of this kind will enable your average guy to buy a home to live in and raise a family with an average wage without the need to be in debt to the banks forever, he/she can then live a nicer life to the one the banksters and UK/US/EU govts have created over the last 15 years.

Anyway im paid in US Dollars and have a job where i can go to wherever the currency is strong hence a sterling fall is good for me.

Some I agree with, some not. Personally I think it's less the government and more a few rich, powerful groups which are in control. I would almost say 'as usual'.

The young Irish may have a choice of cheaper homes, but without a job and heavily curtailed lending practices it won't help them. Nor will it help the average guy. Some with sufficient 'fluency' may just pick up the lot as better investment than just plain old stocks, or complicated financial instruments for now.

OK but in the mid term 5 years or so im blindly optimistic for western economies, and i believe we'll be nicer places to live after this, but one thing that will enable your average man to buy a home is we arent going to see a property bubble of this proportion in our lifetimes, hence the wealthy investor will have to invest in something more productive then property to make above average returns... plus there is talk of taxing land/multiple property owners in the UK.

Edited September 27, 2010 by Englander

[Hardie]

Just as Thailand's first boom had as much to do with Japan's ascendance as it did with Thailand's own rise, the second may have as much to do with China. Regardless of the why's and wherefore's, Thailand should take advantage of the situation and spend on infrastructure, like maybe... education, health, rural development? It may help the war of the primary colors also. It's hard to fight when you're fat.

[Xircal]

Fridays close. 30.34 USD 47.50 GBP 40.59 EUR

Those are rates for the exchange of banknotes which is always lower than the rate maintained by the central banks. For example, the market rate for the Euro is currently 41.192 Baht

Still abysmal compared to 2009, but at least it's following an upward trend at the moment. The Thai interest rate hike planned for December which will take the rate from its current level of 1.75% to 2% will knock the bottom out of that though, and right in the middle of the peak season holiday period.

[Spee]

With all the discussion of weak dollar, strong baht and gold prices, this column today by the preeminent socio-economic-political sage of this generation, Dr. Thomas Sowell, is both on the mark and quite sobering. Dr. Sowell has been called many things in his life, but illogical, irrational and wrong are not among them. The dollar is in the toilet already because of government mismanagement. What happens when inflation kicks in and people look for places other than gold in which to invest their property? Scary stuff, IMHO.

http://jewishworldreview.com/cols/sowell092810.php3

Edit:

Not suggest tax advice or illegal activities, but this new regulation would seem to encourage US citizens with overseas gold resources to keep them overseas. Here are some of the gorey details:

http://www.infiniteunknown.net/2010/07/21/obamacare-gold-coin-sellers-angered-by-new-tax-law/

Edited September 29, 2010 by Spee

[cloudhopper]

^^^That new law is not really directed at gold per se IMO but at the wider spectrum of underground economy, rapidly increasing due to the tax and regulatory burdens incrementally placed on small business (the major remaining employer ever since Nixon took the US off the gold standard thereby facilitating the international outsourcing of major manufacturing and some services). As the US economy collapses the effect on economies revolving around exporting stuff there should not be underestimated.

[cloudhopper]

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/28_Ben_Davies_-_The_World_Monetary_Earthquake.html

[Spee]

.... ever since Nixon took the US off the gold standard thereby facilitating the international outsourcing ....

Ummm ... as I said, Dr. Sowell is rarely if ever wrong on these matters.

It was Roosevelt who took the US off the gold standard in 1933, almost immediately after becoming president, when he outlawed the private ownership of gold in the United States.

http://www.wellsfargonevadagold.com/confiscation-order.pdf

Nixon terminated the Bretton Woods Agreement in 1971 which ended the trading of gold at a fixed rate of $35/ounce.

Just two of many facts that many historical references seem to skew in an effort to deify Roosevelt and condemn Nixon.

As for facilitating international outsourcing, people in private business have always looked for ways to reduce overhead and increase profits. This has happened repeatedly throughout history. There is no rational correlation between Nixon's ending of Bretton Woods and international outsourcing.

[cloudhopper]

.... ever since Nixon took the US off the gold standard thereby facilitating the international outsourcing ....

Ummm ... as I said, Dr. Sowell is rarely if ever wrong on these matters.

It was Roosevelt who took the US off the gold standard in 1933, almost immediately after becoming president, when he outlawed the private ownership of gold in the United States.

http://www.wellsfarg...ation-order.pdf

Nixon terminated the Bretton Woods Agreement in 1971 which ended the trading of gold at a fixed rate of $35/ounce.

Just two of many facts that many historical references seem to skew in an effort to deify Roosevelt and condemn Nixon.

As for facilitating international outsourcing, people in private business have always looked for ways to reduce overhead and increase profits. This has happened repeatedly throughout history. There is no rational correlation between Nixon's ending of Bretton Woods and international outsourcing.

Yes thanks for the correction re Nixon. Well it seems to me that when BW was terminated that allowed international wage arbitrage to become effective and huge trade imbalances to build up as the US funded it's over consumption with easy credit. This would not have happened had not the world been forced by the Nixon administration in 71 to settle their trade surpluses in USD/UST instead of gold. Nixon's Sectreas Connolly joked "it's our debt but it's your problem". The Chinese should never have let tricky dick in to play ping pong because now the US still has most of the gold and everyone else traded their manufactured goods for soon to be worthless paper.