Prices In Los

[Darrel]

The baht is at its natural rate now; by definition, it has to be because the market is dictating it. Expats themselves contribute to this, by buying baht using currency from their originating country.

There is nothing natural about the value of the Baht. It is manipulated by the Thai government to suit their own needs (which of course isn't to say that other countries don't also do the same thing).

But the main difference between a currency like the Baht and ones like the USD, EUR, GBP, SFR, JPY etc is that the Baht has no value outside of its home country. No one trades it, there is no market for it, no one wants it (with the possible exception of one or two neighbouring countries). So the value of the Baht is decided mostly internally and not by any free external market effect.

[mjnaus]

But the main difference between a currency like the Baht and ones like the USD, EUR, GBP, SFR, JPY etc is that the Baht has no value outside of its home country. No one trades it, there is no market for it, no one wants it (with the possible exception of one or two neighbouring countries). So the value of the Baht is decided mostly internally and not by any free external market effect.

That's a rather strange statement. Of course there is a market for Thai baht, just as there is a market for any currency needed for foreign investment. When foreigners invest in Thailand, which they do, they will need to purchase Thai baht to make those investments.

[bendix]

Utter utter rubbish.

Tens of millions of dollars of overseas money floods into Thailand to buy bonds, Thai stocks, invest in Thai companies, pay Thai salaries in Japanese companies everyday.

The freeflow of that money into and out of the country dictates the value of the Baht - the simple old rule of supply and demand.

Do you think its a coincidence that the baht weakened in the aftermath of the Thai floods? Why do you think that is? Less FDI, less tourists, less overseas investors / banks etc wanting to take a risk on Thai assets, do you think, so leading to less demand for Thai baht assets?

Unless you can point to some shadowy Thai government organisation that sets exchange rates, let's just assume you don't have a f*****g clue what you're talking about, shall we?

[inthepink]

The baht is at its natural rate now; by definition, it has to be because the market is dictating it. Expats themselves contribute to this, by buying baht using currency from their originating country.

There is nothing natural about the value of the Baht. It is manipulated by the Thai government to suit their own needs (which of course isn't to say that other countries don't also do the same thing).

But the main difference between a currency like the Baht and ones like the USD, EUR, GBP, SFR, JPY etc is that the Baht has no value outside of its home country. No one trades it, there is no market for it, no one wants it (with the possible exception of one or two neighbouring countries). So the value of the Baht is decided mostly internally and not by any free external market effect.

If you believe that the Thai government is manipulating the value of the baht and keeping it artificially high, how do you explain the increase in foreign reserves held by the BOT?

[Forkinhades]

The baht is at its natural rate now; by definition, it has to be because the market is dictating it. Expats themselves contribute to this, by buying baht using currency from their originating country.

There is nothing natural about the value of the Baht. It is manipulated by the Thai government to suit their own needs (which of course isn't to say that other countries don't also do the same thing).

But the main difference between a currency like the Baht and ones like the USD, EUR, GBP, SFR, JPY etc is that the Baht has no value outside of its home country. No one trades it, there is no market for it, no one wants it (with the possible exception of one or two neighbouring countries). So the value of the Baht is decided mostly internally and not by any free external market effect.

If you believe that the Thai government is manipulating the value of the baht and keeping it artificially high, how do you explain the increase in foreign reserves held by the BOT?

Which I believe is second only to China!!

[bendix]

Now don't get all technical on him, inthepink.

I love these kinds of threads. They always seem like a howl of moral outrage, screamed in angst by expats who simply can't accept that their beloved home currency can be worth less against (their view) a tin pot currency like the baht.

The fact is that virtually all Asian currencies have soared in the last few years, and it's not hard to work out why. As the west has lived beyond its means and as investment money is more reluctant to head there, so it heads east. The more people wanting to invest in Asia the stronger those currencies.

Thailand - despite what our Pattaya afficionads like to think - has many problems, but it's economy is growing at a much higher rate than every western advanced economy. That attracts investments; that enhances the value of the baht.

It's all very simple.

[h90]

Please tell me a country where prices do not go up. Of course it is more expensive here than it use to be, but one can live very cheaply compared to the West - if one is willing to compromise on less comfortable lodging is careful about buying too many imported foods.

North Korea?

[bendix]

North Korea?

Actually, prices in North Korea went ballistic when the regime effectively wiped out the entire population's savings by replacing it with a new currency 3-4 years ago. It caused what seems to have been the closest thing to civil disobedience and unrest they have ever faced and quickly lead to the execution of the minister who was blamed for proposing it.

Plus, North Korea has a thriving (and just about tolerated) private market system. The regime hates it, but know it's essential to keep people fed. Prices there are very high and subject to the normal price rises that affect the rest of the world.

[metisdead]

One post has been removed as the wording in the quoted post had been altered.

30) Do not modify someone else's post in your quoted reply, either with font or color changes, added emoticons, or altered wording.

[Naam]

1976/1978 six good sized grilled rock lobsters 60 Baht (coffe shop Nana Hotel)

[Naam]

The baht is at its natural rate now; by definition, it has to be because the market is dictating it. Expats themselves contribute to this, by buying baht using currency from their originating country.

There is nothing natural about the value of the Baht. It is manipulated by the Thai government to suit their own needs (which of course isn't to say that other countries don't also do the same thing).

But the main difference between a currency like the Baht and ones like the USD, EUR, GBP, SFR, JPY etc is that the Baht has no value outside of its home country. No one trades it, there is no market for it, no one wants it (with the possible exception of one or two neighbouring countries). So the value of the Baht is decided mostly internally and not by any free external market effect.

ignorance² !

[Hooters]

Now don't get all technical on him, inthepink.

I love these kinds of threads. They always seem like a howl of moral outrage, screamed in angst by expats who simply can't accept that their beloved home currency can be worth less against (their view) a tin pot currency like the baht.

The fact is that virtually all Asian currencies have soared in the last few years, and it's not hard to work out why. As the west has lived beyond its means and as investment money is more reluctant to head there, so it heads east. The more people wanting to invest in Asia the stronger those currencies.

Thailand - despite what our Pattaya afficionads like to think - has many problems, but it's economy is growing at a much higher rate than every western advanced economy. That attracts investments; that enhances the value of the baht.

It's all very simple.

Excellent post. What is your opinion regarding the property scene? seem to be a ton of posters non stop predicting a total collapse however I cant see why that would be the case considering the strength of the economy.

I have 2 good friends that desperately want to live here and defiantly want property but are convinced the bht will implode and they will buy at a 50% discount, this has been going on for about 8 years and they still haven't bought, in fact they are 50% worse off.

[bendix]

Now don't get all technical on him, inthepink.

I love these kinds of threads. They always seem like a howl of moral outrage, screamed in angst by expats who simply can't accept that their beloved home currency can be worth less against (their view) a tin pot currency like the baht.

The fact is that virtually all Asian currencies have soared in the last few years, and it's not hard to work out why. As the west has lived beyond its means and as investment money is more reluctant to head there, so it heads east. The more people wanting to invest in Asia the stronger those currencies.

Thailand - despite what our Pattaya afficionads like to think - has many problems, but it's economy is growing at a much higher rate than every western advanced economy. That attracts investments; that enhances the value of the baht.

It's all very simple.

Excellent post. What is your opinion regarding the property scene? seem to be a ton of posters non stop predicting a total collapse however I cant see why that would be the case considering the strength of the economy.

I have 2 good friends that desperately want to live here and defiantly want property but are convinced the bht will implode and they will buy at a 50% discount, this has been going on for about 8 years and they still haven't bought, in fact they are 50% worse off.

The people who think the property market simply don't understand the dynamic of the Thai property market. They point to unlit windows in Sukhumvit highrises and say noone owns them so how can the market sustain itself.

Utter nonsense. What they don't understand is that Thais will buy these places - many of them with no mortgage at all - and simply prefer to have them empty rather than sell at a loss. There are exceptions of course, but it is a totally different market dynamic to the west where people are more highly leveraged.

It won't collapse. Not a chance. But neither will it soar. I predict a stable market for the next decade or so. The only prompt for any kind of decline would be the catastrophic scenario of 97, but Asia and Thailand are very different places today from a financial perspective.

50% collapse of the Baht. Not a snowball's chance in Silom.

[Darrel]

Tens of millions of dollars of overseas money floods into Thailand to buy bonds, Thai stocks, invest in Thai companies, pay Thai salaries in Japanese companies everyday.

So? Does that have any bearing on anything happening in the world apart from in Thailand? No.

Do you think its a coincidence that the baht weakened in the aftermath of the Thai floods? Why do you think that is? Less FDI, less tourists, less overseas investors / banks etc wanting to take a risk on Thai assets, do you think, so leading to less demand for Thai baht assets?

Just look at the way the THB tracks the USD.

Unless you can point to some shadowy Thai government organisation that sets exchange rates, let's just assume you don't have a f*****g clue what you're talking about, shall we?

Nah. Let's just assume that you cant read.

I said that the value of the Baht is manipulated by the government and that the market is restricted to Thailand. The other countries I mentioned also manipulate the value of their currencies but not in the same way, as those countries have currency that is freely traded outside their borders and for which there is a proper and open market.

[Darrel]

If you believe that the Thai government is manipulating the value of the baht and keeping it artificially high, how do you explain the increase in foreign reserves held by the BOT?

That's just the balance of payments. No big surprise there for an exporting country that has high tariff barriers on imports and a population that has relatively little disposable income. The same happens in China.

[zzaa09]

I find it laughable that people are complaining that prices have gone up in the last decade. Of course they have - that's what prices do, unless you're in an extended depression such as that which has hit Japan for the last decade or more.

Similarly, incomes would have gone up too.

As Ulysses rightly says, it's happened all over the world and it's perfectly natural. That most of the expats get their incomes from overseas and that the Baht is one of the strongest currencies over that last 5-8 years is why people are griping. Tough luck - it's one of the unintended risks of living in one country and deriving income from another.

As for people saying exchange rates are 'silly' or out of synch and that the natural rate for the Baht is 50 Euros or whatever, utter dross. The baht is at its natural rate now; by definition, it has to be because the market is dictating it. Expats themselves contribute to this, by buying baht using currency from their originating country.

There is nothing more natural in the world.

Goes without saying, Bendix.

We should give it a go in their shoes - might have a different perspective.

Or moreover, use the comparative with contemporary Western industrial models.....where the truer cost of living is outta sight and has become quite unreasonable. Fanciful, at that.

Nope. It much easier and safer to conduct these comparatives cast upon definitive examples: Thailand, et al.

[StreetCowboy]

But the main difference between a currency like the Baht and ones like the USD, EUR, GBP, SFR, JPY etc is that the Baht has no value outside of its home country. No one trades it, there is no market for it, no one wants it (with the possible exception of one or two neighbouring countries). So the value of the Baht is decided mostly internally and not by any free external market effect.

That's a rather strange statement. Of course there is a market for Thai baht, just as there is a market for any currency needed for foreign investment. When foreigners invest in Thailand, which they do, they will need to purchase Thai baht to make those investments.

I don't think that there are good overseas markets for Thai Baht. I get a better exchange rate bringing in dollars and exchanging for baht in Thailand, than I do buying baht overseas.

That seems to be the case for a variety of currencies that are not widely traded - Taiwanese dollars, UAE dirhams, Malaysian ringgit all spring to mind; all currencies that I would not particularly recommend for the purposes of foreign transactions, along with the Thai baht.

SC

[zzaa09]

Now don't get all technical on him, inthepink.

I love these kinds of threads. They always seem like a howl of moral outrage, screamed in angst by expats who simply can't accept that their beloved home currency can be worth less against (their view) a tin pot currency like the baht.

The fact is that virtually all Asian currencies have soared in the last few years, and it's not hard to work out why. As the west has lived beyond its means and as investment money is more reluctant to head there, so it heads east. The more people wanting to invest in Asia the stronger those currencies.

Thailand - despite what our Pattaya afficionads like to think - has many problems, but it's economy is growing at a much higher rate than every western advanced economy. That attracts investments; that enhances the value of the baht.

It's all very simple.

It's obviously not that simple when resting and relying on a repetitive and subjective Euro-centric mindset.....most in these circles will never get it or accept.

[bendix]

Tens of millions of dollars of overseas money floods into Thailand to buy bonds, Thai stocks, invest in Thai companies, pay Thai salaries in Japanese companies everyday.

So? Does that have any bearing on anything happening in the world apart from in Thailand? No.

Do you think its a coincidence that the baht weakened in the aftermath of the Thai floods? Why do you think that is? Less FDI, less tourists, less overseas investors / banks etc wanting to take a risk on Thai assets, do you think, so leading to less demand for Thai baht assets?

Just look at the way the THB tracks the USD.

Unless you can point to some shadowy Thai government organisation that sets exchange rates, let's just assume you don't have a f*****g clue what you're talking about, shall we?

Nah. Let's just assume that you cant read.

I said that the value of the Baht is manipulated by the government and that the market is restricted to Thailand. The other countries I mentioned also manipulate the value of their currencies but not in the same way, as those countries have currency that is freely traded outside their borders and for which there is a proper and open market.

OK, I'll bite . .

Could you explain how the Thai Government manipulates the value of its currency. And, also while you're at it, why?

Many thanks. I am looking forward to learning.

[janverbeem]

I think the Thai baht is currently pegged to a basket of currencies, same as it prior to 1997 was pegged to the US$. At that time the Thai Baht would rise together with the $, irrespective of the fact if the rise was warranted.

That was also the reason of the devaluation.

Maybe a similar scenario is developing currently since I think that the overvalued Yuan represents a big chunk in the current basket of currencies.

[inthepink]

If you believe that the Thai government is manipulating the value of the baht and keeping it artificially high, how do you explain the increase in foreign reserves held by the BOT?

That's just the balance of payments. No big surprise there for an exporting country that has high tariff barriers on imports and a population that has relatively little disposable income. The same happens in China.

But why would the BOT be intervening in the market to sterilise foreign currency inflows if they wanted to keep the value of the baht high? All they would need to do would be to sit back and let the market do its work. You are not making any sense.

[inthepink]

I think the Thai baht is currently pegged to a basket of currencies, same as it prior to 1997 was pegged to the US$. At that time the Thai Baht would rise together with the $, irrespective of the fact if the rise was warranted.

That was also the reason of the devaluation.

Maybe a similar scenario is developing currently since I think that the overvalued Yuan represents a big chunk in the current basket of currencies.

It's a managed float. Edited January 30, 2012 by inthepink

[Naam]

If you believe that the Thai government is manipulating the value of the baht and keeping it artificially high, how do you explain the increase in foreign reserves held by the BOT?

That's just the balance of payments. No big surprise there for an exporting country that has high tariff barriers on imports and a population that has relatively little disposable income. The same happens in China.

the balance of payments which was a decade long rather stable but suddenly exploded with the strengthening of the Baht? if you are not willing to do a little research just look at the facts (trade balance and foreign currency reserves) and do a simple comparison to reach at a logical conclusion.

[Naam]

If you believe that the Thai government is manipulating the value of the baht and keeping it artificially high, how do you explain the increase in foreign reserves held by the BOT?

That's just the balance of payments. No big surprise there for an exporting country that has high tariff barriers on imports and a population that has relatively little disposable income. The same happens in China.

But why would the BOT be intervening in the market to sterilise foreign currency inflows if they wanted to keep the value of the baht high? All they would need to do would be to sit back and let the market do its work. You are not making any sense.

the BoT is trying hard NOT to keep the Baht high!

[flying]

And then there's exchange rates of course; those should not be confused with 'LOS getting more expensive', but to many people who get their money from abroad, it has a similar effect.

Seems that is an important fact that many do not consider

While we stay in LOS 1-3 months a year...In recent years we have been there

when the USD/THB has been roughly 36/1 other times 30/1

That is a 20% in buying power variable right there.

And that was just these past 3 years

Edited January 31, 2012 by flying

[Forkinhades]

sterling was 75 to the baht just 5 years ago, and was 90 at one point, never saw that but keep hearing about it

[zzaa09]

sterling was 75 to the baht just 5 years ago, and was 90 at one point, never saw that but keep hearing about it

Never ever will you find the baht that high against all the important and infuential currencies again.

I understand folks dream and wish this to be so....but it ain't going to happen.

Recent history will tell you that the baht is manipulated domestically to benefit on behalf of Thailand. Which makes sense, doesn't it?

[steelepulse]

Yes, prices in Phuket have gone up quite a bit the last few years across the board due to landlords charging more for rent, higher petrol prices, recent "flooding"which many stores/shops still claim, greed, corruption, etc.( This is all baht on baht, discounting exchange rates). Prices have probably gone up more in Phuket than most all other provinces.

[thaiIand]

a streetside sumtam in phuket is on the verge of being 50baht now(current price is too low for the price of pappaya's).. was like 30baht a year or 2 ago

[bendix]

sterling was 75 to the baht just 5 years ago, and was 90 at one point, never saw that but keep hearing about it

Never ever will you find the baht that high against all the important and infuential currencies again.

I understand folks dream and wish this to be so....but it ain't going to happen.

Recent history will tell you that the baht is manipulated domestically to benefit on behalf of Thailand. Which makes sense, doesn't it?

GIven that you're confusing high with low, I suspect you're the same as Darrell in not knowing what you are talking about.

Let me ask you this, and please answer clearly so a simpleton like me can understand. HOW exactly is the baht manipulated domestically? And, if it is possible to do that, why didn't the Government or the BoT manipulate the baht when it crashed during the 97 Asia financial crisis?

People keep talking about this shady manipulation as if it's a reality, but noone backs it up with explanations. Nor do they explain why in a country so dependent on both FDI (Thailand being a manufacturing hub for numerous Japanese and Korean companies) and international tourism, what possible motive the Thai government has for keeping the Baht so strong?