Survivors of Hiroshima and Nagasaki Awarded Nobel Peace Prize for Nuclear Disarmament

[ludditeman]

As a new person to Thailand, I did notice the government has just started reducing its protection to bank account holders.

The Thai government used to guarantee all money in private bank accounts, they are in the process of reducing this to 1,000,000bht per account holder.

Makes me wonder about the stability of some Thai banks.

Makes me wonder about keeping money in Thai banks.

[fletchsmile]

fletchsmile, on Yesterday, 21:50 , said:

For people with the mantra "don't bring money into Thailand", unless they're in the HNW or UHNW brackets, they need to be asking "can they afford not to bring money into Thailand if they want to continue living here?"

you don't have to bring money to Thailand and deal with an archaic banking system, trust a broker and pay income tax if you want to hedge your THB expenses. that can be done easily offshore.

Naam, Didn't you yourself bring money into Thailand and buy a house? Just one example of a way to hedge currency exposures. Like me you've probably seen the value of your home rise in value in THB terms over the years as well as gain from currency appreciation vs a western currency. On the other hand rents will have gone up for those funding in a western currency out of income.

In terms of mechanical hedges, THB onshore is usually a more favourable rate than THO rates. There are also plenty of onshore investments in Thailand that don't require you to pay tax. A couple of quick questions:

1) Out of curiosity what is the max term you are obtaining on your offshore hedges, and what are the minimum transaction amounts. These will also incur transaction costs. These aren't necessarily an option for your average Joe.

2) I realise equities are not your investment of choice. I'd be interested tho' if you can recommend anywhere that works out cheaper to by THB equities or Thai mutual funds offshore than here onshore. Particularly if they gave tax benefits such as LTFs.

BTW I think we both know you're in the HNW category

[wordchild]

my guess is that the pound will hold its own against the Baht and may even gently appreciate. Having been one of the most overvalued major currencies 2003-2007 it now looks better placed esp agst the dollar and the euro. it could do better than that if the UK,s economic growth starts to pick up more strongly than expectations next year, ( FWIW my gut feel is that it will). On the other side, I see Thailand having a fair number of challenges over the next 3/4 years eg Asean risks , further political strife etc

A very simple and inexpensive way to (at least partially) hedge future Baht expenses without bringing funds into Thailand is to hold investments,offshore, in Sing dollars. I see the Sing dollar as a better quality Baht and the two tend to move reasonably in tandem (over the medium term), and also to behave in a similar way directionally agst other major currencies.

Edited August 16, 2011 by wordchild

[fletchsmile]

my guess is that the pound will hold its own against the Baht and may even gently appreciate. Having been one of the most overvalued major currencies 2003-2007 it now looks better placed esp agst the dollar and the euro. it could do better than that if the UK,s economic growth starts to pick up more strongly than expectations next year, ( FWIW my gut feel is that it will).

A very simple and inexpensive way to (at least partially) hedge future Baht expenses without bringing funds into Thailand is to hold investments,offshore, in Sing dollars. I see the Sing dollar as a better quality Baht and the two tend to move reasonably in tandem (over the medium term), and also to behave in a similar way directionally agst other major currencies.

Agree GBP should do better than USD and EUR, but I think THB will fare better still.

Interesting comment on SGD, and interesting description of it as a "better quality baht". I've been a fan of SGD for a decade or so, when looking for a decent (SE) Asian currency. In addition it avoids the capital controls which THB is subjected to from time to time. In addition Bank of Thailand have an interest in THB remaining competitive regionally, which again supports your case re SGD. I track SGD/THB for similar reasons, and the attached file illustrates quite well what you're saying. {Edit: see post below for chart}

Edited August 16, 2011 by fletchsmile

[fletchsmile]

Tried to upload the pic but struggled... SGD/THB compared with USD/THB and GBP/THB which supports Wordchild's comments of a better quality baht and partial hedge

Edited August 16, 2011 by fletchsmile

[cheeryble]

A few years back, I used to have 1/3 of my wealth in THB, 1/3 where I come from and 1/3 in others (SGD being largest). These days, I feel more comfortable with 40-50% THB, 25% where I come from, and the balance in other currencies and some exposure to gold.

Very similar here Fletch.

1/3 THB 2/3 others for a couple of years.

Now it looks like I'm here for the duration moving up to 60% THB including residence and all (ONLY held in non-cash assets).

Edited August 16, 2011 by cheeryble

[wordchild]

my guess is that the pound will hold its own against the Baht and may even gently appreciate. Having been one of the most overvalued major currencies 2003-2007 it now looks better placed esp agst the dollar and the euro. it could do better than that if the UK,s economic growth starts to pick up more strongly than expectations next year, ( FWIW my gut feel is that it will).

A very simple and inexpensive way to (at least partially) hedge future Baht expenses without bringing funds into Thailand is to hold investments,offshore, in Sing dollars. I see the Sing dollar as a better quality Baht and the two tend to move reasonably in tandem (over the medium term), and also to behave in a similar way directionally agst other major currencies.

Agree GBP should do better than USD and EUR, but I think THB will fare better still.

Interesting comment on SGD, and interesting description of it as a "better quality baht". I've been a fan of SGD for a decade or so, when looking for a decent (SE) Asian currency. In addition it avoids the capital controls which THB is subjected to from time to time. In addition Bank of Thailand have an interest in THB remaining competitive regionally, which again supports your case re SGD. I track SGD/THB for similar reasons, and the attached file illustrates quite well what you're saying. {Edit: see post below for chart}

yes one govt (singapore) is happy to see its currency appreciate the other would definitley not be. More or less sgd/thb has traded between 23 and 25 since the end of the Asian crisis (aside 2007 when it traded down to 21). I must say i am slightly surprised that the Sing dollar has not had a stronger relative performance over that time; its hard to think of many (likely) scenarios for the world in which one would see sustained outperformance by the Baht over the Sing dollar .(apart from say a global trade war and a surge in agri prices?) Since the start of 2011 the Sing D has started to do somewhat better than the baht and my guess is that will continue.

Edited August 16, 2011 by wordchild

[cloudhopper]

As a new person to Thailand, I did notice the government has just started reducing its protection to bank account holders.

The Thai government used to guarantee all money in private bank accounts, they are in the process of reducing this to 1,000,000bht per account holder.

Makes me wonder about the stability of some Thai banks.

Makes me wonder about keeping money in Thai banks.

I understand your concern but consider that banks also know this and they will take far fewer risks than banks with higher government guarantees, as in Ireland e.g.

I think it's a good move by the Thai gov't and indicates soundness rather than weakness in their banks.

IMO the THB will strengthen against the GBP over time but regardless it makes sense for anyone living here to have a substantial amount of THB no matter what your home currency is.

[ExpatJ]

THe Head of the Bank of england has said he is considering a UK round of QE - which is basically printing lots of money. So the the UKP is heading down for sure versus baht- guaranteed.

[Naam]

fletchsmile, on Yesterday, 21:50 , said:

For people with the mantra "don't bring money into Thailand", unless they're in the HNW or UHNW brackets, they need to be asking "can they afford not to bring money into Thailand if they want to continue living here?"

you don't have to bring money to Thailand and deal with an archaic banking system, trust a broker and pay income tax if you want to hedge your THB expenses. that can be done easily offshore.

1. Naam, Didn't you yourself bring money into Thailand and buy a house? Just one example of a way to hedge currency exposures.

2. Like me you've probably seen the value of your home rise in value in THB terms over the years as well as gain from currency appreciation vs a western currency. On the other hand rents will have gone up for those funding in a western currency out of income.

In terms of mechanical hedges, THB onshore is usually a more favourable rate than THO rates. There are also plenty of onshore investments in Thailand that don't require you to pay tax. A couple of quick questions:

1.1) Out of curiosity what is the max term you are obtaining on your offshore hedges, and what are the minimum transaction amounts. These will also incur transaction costs. These aren't necessarily an option for your average Joe.

2.1) I realise equities are not your investment of choice. I'd be interested tho' if you can recommend anywhere that works out cheaper to by THB equities or Thai mutual funds offshore than here onshore. Particularly if they gave tax benefits such as LTFs.

3.1 BTW I think we both know you're in the HNW category

1. i never considered the house and that i don't pay rent as a hedge, BUT i admit you are right. it is indeed some sort of hedge.

2. i don't see any rise in the value of my home. au contraire! luxury homes which the owners have planned to fit their individual demands and where money was not a [primary] concern must have lost considerably market value during the last five years. i agree, taking exchange rates into consideration real rents must have gone up.

1.1) per se i don't hedge my THB exposure but do (actually did) some offshore trading THB vs. various (changing) other currencies. presently i am not trading at all but hold THB cash offshore as well as onshore covering ~three years of expenses. when trading my cost are bid/ask spreads plus 10 bps fees. minimum transaction is value USD 100k. below that fees rise exponentially.

2.1) i have no idea about trading cost of THB equities/mutual funds and of course there are no tax benefits offshore.

3.1) HNW is a relative attribute

summary: i am repeating myself most probably ad nauseam when i emphasize "for me no bloody way to deal with any Thai bank except for keeping cash and have a debit card". when i tell one of the bankers i deal with on the phone "jump!" i expect him to jump and perhaps tolerate the question "how high Sir?" if i phone my Thai banker(ess) and tell her to jump she will tell me "UP YOURS!" and hang up.

[Bizz]

fletchsmile, on Yesterday, 21:50 , said:

For people with the mantra "don't bring money into Thailand", unless they're in the HNW or UHNW brackets, they need to be asking "can they afford not to bring money into Thailand if they want to continue living here?"

you don't have to bring money to Thailand and deal with an archaic banking system, trust a broker and pay income tax if you want to hedge your THB expenses. that can be done easily offshore.

1. Naam, Didn't you yourself bring money into Thailand and buy a house? Just one example of a way to hedge currency exposures.

2. Like me you've probably seen the value of your home rise in value in THB terms over the years as well as gain from currency appreciation vs a western currency. On the other hand rents will have gone up for those funding in a western currency out of income.

In terms of mechanical hedges, THB onshore is usually a more favourable rate than THO rates. There are also plenty of onshore investments in Thailand that don't require you to pay tax. A couple of quick questions:

1.1) Out of curiosity what is the max term you are obtaining on your offshore hedges, and what are the minimum transaction amounts. These will also incur transaction costs. These aren't necessarily an option for your average Joe.

2.1) I realise equities are not your investment of choice. I'd be interested tho' if you can recommend anywhere that works out cheaper to by THB equities or Thai mutual funds offshore than here onshore. Particularly if they gave tax benefits such as LTFs.

3.1 BTW I think we both know you're in the HNW category

1. i never considered the house and that i don't pay rent as a hedge, BUT i admit you are right. it is indeed some sort of hedge.

2. i don't see any rise in the value of my home. au contraire! luxury homes which the owners have planned to fit their individual demands and where money was not a [primary] concern must have lost considerably market value during the last five years. i agree, taking exchange rates into consideration real rents must have gone up.

1.1) per se i don't hedge my THB exposure but do (actually did) some offshore trading THB vs. various (changing) other currencies. presently i am not trading at all but hold THB cash offshore as well as onshore covering ~three years of expenses. when trading my cost are bid/ask spreads plus 10 bps fees. minimum transaction is value USD 100k. below that fees rise exponentially.

2.1) i have no idea about trading cost of THB equities/mutual funds and of course there are no tax benefits offshore.

3.1) HNW is a relative attribute

summary: i am repeating myself most probably ad nauseam when i emphasize "for me no bloody way to deal with any Thai bank except for keeping cash and have a debit card". when i tell one of the bankers i deal with on the phone "jump!" i expect him to jump and perhaps tolerate the question "how high Sir?" if i phone my Thai banker(ess) and tell her to jump she will tell me "UP YOURS!" and hang up.

OH how beautiful, I'm a fool

[Naam]

OH how beautiful, I'm a fool

please state the reasons why you think you are a fool

[wandrinstar]

The GBP must be worth something, stands to reason, we give Billions of it away.

[theoldgit]

The GBP must be worth something, stands to reason, we give Billions of it away.

Best answer yet.

[Bizz]

OH how beautiful, I'm a fool

please state the reasons why you think you are a fool

Most of my bobs left outside of Thailand in Euro and Dollars.

I got hit hard in 2007 lost 68% of what I worked for and more I guess and speaking plainly, pension.

Was not the only one in hindsight, at first I was the only one to admit my losses with bank shares falling from €20 to 29P but the bullet fell we all know it was everywhere and had hit every part of society and has gripped every part of society.

So I gave myself a kick up the ass in 2008 and started back offshore. as was in. "Ya in 1984"

What has struck me the most is when you are down you cannot let yourself believe this, yes it is kick yourself in the ass and get up and get the <deleted>**on with it.

There are a fair few guys here who are down, lift yourself up and try once more.

I did go back on the fags temporarily.

Bizz

[Naam]

What has struck me the most is when you are down you cannot let yourself believe this, yes it is kick yourself in the ass and get up and get the <deleted>**on with it.

There are a fair few guys here who are down, lift yourself up and try once more.

Bizz

bravo! that's the spirit Bizz. i encountered a similar situation many rainy seasons ago. but it was the Mrs who kicked my ass and said "get the fàck on with it!"... which i did.