What's Up With The Thai Baht?

[JDGRUEN]

A simple answer. The very liberal socialists have broken the Western economies. They simply can no longer afford to provide for people who have no desire to work. Thailand hasn't gotten to that point, YET.

This might be true in the case of Europe, but in the US the problem is the opposite. Too many giveaways to the corporations and drastic reduction of the government oversight led to the excesses on Wall street and in the real estate markets. US could have used more liberal thinking not less.

HOGWASH ... this was only a small factor - it is just hyped hate of the rich ... not near the entire cause. It was LIBERAL thinking that lead to the U.S. Real Estate crisis - the crux of the 2008-2009 meltdown. The on going Liberal legislation requiring banks and mortgage companies to lend to people who had no probability of paying off the loan was the greater cause of the problem. The Sub Prime Loans FAILED when borrowers could not pay off the loans. Mortgage securities (resold bundled loans) failed because of this stupid liberal idea - millions of defaulted loans mean worthless securities. This is what led to the crisis. There were billions - then trillions of dollars of loan defaults by people who should have never been granted a home mortgage in the first place EXCEPT that the government Forced banks to lend money by law to high risk borrowers. Socialism is great until you run out of other people's money.

Edited January 31, 2013 by JDGRUEN

[Saan]

i think its time a few expats pulled their heads out of the dark hole and looked around ... trying to predict what the baht is going to do is a waste of time ..perhaps spend the time analyzing what is happening in the country you came from ..

1/ America ? its bankrupt and may recover in 25 years

2/ Japan ..basket case beyond help

3/ Europe ..( greece , portugal ,italy , spain , ireland, and soon the UK one step behind the states ..not pretty reading) and the germans are getting ready to jump ship

4/ Aussie ... over cooked economy, but strong commodity base may save it the same fate as others .. interest rates continue to drop

so the Thai economy to me does not fall into the same boat as many of the above ..keep on hoping for a correction in value but it wont happen in the short term ..

All Australia needs is a new government which understands money and trading. They have an abundance of natural resources including new found oil deposits.

Where are they going to find one. There is nothing on offer in that department from either side of parliament.

[StreetCowboy]

A simple answer. The very liberal socialists have broken the Western economies. They simply can no longer afford to provide for people who have no desire to work. Thailand hasn't gotten to that point, YET.

This might be true in the case of Europe, but in the US the problem is the opposite. Too many giveaways to the corporations and drastic reduction of the government oversight led to the excesses on Wall street and in the real estate markets. US could have used more liberal thinking not less.

HOGWASH ... this was only a small factor - it is just hyped hate of the rich ... not near the entire cause. It was LIBERAL thinking that lead to the U.S. Real Estate crisis - the crux of the 2008-2009 meltdown. The on going Liberal legislation requiring banks and mortgage companies to lend to people who had no probability of paying off the loan was the greater cause of the problem. The Sub Prime Loans FAILED when borrowers could not pay off the loans. Mortgage securities (resold bundled loans) failed because of this stupid liberal idea - millions of defaulted loans mean worthless securities. This is what led to the crisis. There were billions - then trillions of dollars of loan defaults by people who should have never been granted a home mortgage in the first place EXCEPT that the government Forced banks to lend money by law to high risk borrowers. Socialism is great until you run out of other people's money.

I'm really surprised that the banks were forced to lend money. In my country, it was the wild overarching ambition and greed of the banks that led to their high risk lending backed by inadequately diversified American mortgages.

SC

[Thongkorn]

Nothing is up with the baht. The rise of the Baht is not sharper than that of for instance the Euro. The world has been fooled by the americans and British for too long that the Euro was the problem and that while the Uk and the US has debts far exceeding that of most troubled Euro countries. Would you keep on borrowing money to the US? Embrace yourself for another rise of 10% -15% to those currencies and cross your fingers that the Chinese do not play "repo-man" and recall their money.

How has the British fooled anyone. I think you should go and do a bit of learning, the British pound is strong, The British can Quantitative ease but the Euro cannot. France Italy Portugal, Ireland, Spain ,Greece, all bankrupt. And for this privalage the UK pays £500, 000,000, to the EU. every day, The British Economy is forecast to be the fastest rising Economy in the next two years. the baht is to strong and it will effect Thailand, no one will buy when there is Vietnam and the Philippians with better work forces. and cheaper labour.

Edited January 31, 2013 by Thongkorn

[Anon999]

My wife said the government are talking about doing something about it. With the Baht getting stronger and the 300 Baht minimum wage, how long do you think the foreign business owners will stay here.

England done the same with the pound at one stage, because the pound was getting strong against the Euro and that is bad as most of are exports/imports are from Europe. It won't last.

It has recently been announced that UK exports to other markets other than the EU are >50%. Looks like things are beginning to turn around with Europe being very poorly.

[StreetCowboy]

Nothing is up with the baht. The rise of the Baht is not sharper than that of for instance the Euro. The world has been fooled by the americans and British for too long that the Euro was the problem and that while the Uk and the US has debts far exceeding that of most troubled Euro countries. Would you keep on borrowing money to the US? Embrace yourself for another rise of 10% -15% to those currencies and cross your fingers that the Chinese do not play "repo-man" and recall their money.

How has the British fooled anyone. I think you should go and do a bit of learning, the British pound is strong, The British can Quantitative ease but the Euro cannot. France Italy Portugal, Ireland, Spain ,Greece, all bankrupt. And for this privalage the UK pays £500, 000,000, to the EU. every day, The British Economy is forecast to be the fastest rising Economy in the next two years. the baht is to strong and it will effect Thailand, no one will buy when there is Vietnam and the Philippians with better work forces. and cheaper labour.

We're not buying anything from Vietnam or the Philippines, though I suppose some of the Contractors might have sub-contracted some software work to the Philippines without us knowing. My friends in Hong Kong are just beginning to buy stuff from Chinese suppliers; we're still relying on Western brands, although manufacture might take place in China.

I don't think that the pound is strong, by the way. It's down below US$ 1.60, at a time when the US has been printing money like Andrex - hence the historic lows against the baht. The US monetary policy is causing severe inflation in places like Hong Kong, where the dollar is pegged to the US, and allowing UAE to hide their own recession, since they are tied to the devaluing dollar as well (IMO).

SC

EDIT: Re the comparison with Vietnam and Philippines, one of our multinational contractors is running their work from their Thailand office.

Edited January 31, 2013 by StreetCowboy

[blazes]

A simple answer. The very liberal socialists have broken the Western economies. They simply can no longer afford to provide for people who have no desire to work. Thailand hasn't gotten to that point, YET.

No, not simple, but simplistic. In other words, moronic. Do you count, among the many "socialists" who have been in charge of European economies in the last 30 years: Margaret Thatcher, John Major, Helmut Kohl, Angela Merkel, Jacques Chirac, Sarkozy, Tony Liar, and all the rest of the right-wing wingnuts who have been attacking the workers of Europe??? Attacking yes, cos all the unemployment in Europe is a deliberate strategy to reduce wages and increase profits.

[vijer]

Concerning the United States... The U.S. Government is buying a significant portion of its own debt in order to issue more money - and has been for quite a while now. This 'monetizing' of the debt is extremely risky business. To my knowledge the United States has never done this before in its history. Countries that have monetized their own debt have crashed quite catastrophically. The only reason it has not crashed so far is the extraordinary nature of the transaction relationships between the U.S. Treasury and the Federal Reserve (much is secretive and slight of hand). Sooner or later the House of Cards will fall. In light of this - how the U.S. Dollar keeps its value again any world currency is baffling. It should be 300 Baht to the dollar - on the way to 3000.

Note: Aside from being 16 Trillion is debt... the U.S. Government has over 100 TRILLION in unfunded liabilities (mostly off the books - Social Security, Medicade, Medicare, now Obamacare). Yes Folks - OVER 100 TRILLION... Socialism is great until you run out of other people's money...

It's amazing how many kooks there are in the world. These are the kooks that listen to these Internet preachers that make up statistics to fill their soft deluded minds. These same kooks that think the problem is with the crazy people not taking their drugs. The same kooks that themselves should be taking some heavy doses of Prozac.

But frankly I think you are right, the welfare state needs to stop. So all those old people that paid into Social Security should only get the value of what they paid in and what that money earned. Then it should be cold turkey. So I suspect there would be millions upon millions of old white republicans that have been sucking at the teat of Social Security well past the amount they paid in that would be cut off. These are some of the same kooks that are complaining about welfare. Some of the biggest abusers of Social Security welfare, old white people.

[blazes]

Buy a little gold every month

Keeping your savings in gold is, without a doubt, the most effective solution.

If I would have money I would prefer farm land. I recall the stories of my grandparents, how the rich people went to the countryside and bought a chicken with a golden ring. Everyone was hungry beside the farmer. You can't eat gold, but having 10 natural chicken that produces maybe 3-5 eggs per day is easy.

Maybe you would not die of starvation, but maybe have a bit of a cholesterol build-up?

[StreetCowboy]

Buy a little gold every month

Keeping your savings in gold is, without a doubt, the most effective solution.

If I would have money I would prefer farm land. I recall the stories of my grandparents, how the rich people went to the countryside and bought a chicken with a golden ring. Everyone was hungry beside the farmer. You can't eat gold, but having 10 natural chicken that produces maybe 3-5 eggs per day is easy.

Maybe you would not die of starvation, but maybe have a bit of a cholesterol build-up?

He'd want to be careful when he went to light a cigarette, as well

[JDGRUEN]

Concerning the United States... The U.S. Government is buying a significant portion of its own debt in order to issue more money - and has been for quite a while now. This 'monetizing' of the debt is extremely risky business. To my knowledge the United States has never done this before in its history. Countries that have monetized their own debt have crashed quite catastrophically. The only reason it has not crashed so far is the extraordinary nature of the transaction relationships between the U.S. Treasury and the Federal Reserve (much is secretive and slight of hand). Sooner or later the House of Cards will fall. In light of this - how the U.S. Dollar keeps its value again any world currency is baffling. It should be 300 Baht to the dollar - on the way to 3000.

Note: Aside from being 16 Trillion is debt... the U.S. Government has over 100 TRILLION in unfunded liabilities (mostly off the books - Social Security, Medicade, Medicare, now Obamacare). Yes Folks - OVER 100 TRILLION... Socialism is great until you run out of other people's money...

It's amazing how many kooks there are in the world. These are the kooks that listen to these Internet preachers that make up statistics to fill their soft deluded minds. These same kooks that think the problem is with the crazy people not taking their drugs. The same kooks that themselves should be taking some heavy doses of Prozac.

But frankly I think you are right, the welfare state needs to stop. So all those old people that paid into Social Security should only get the value of what they paid in and what that money earned. Then it should be cold turkey. So I suspect there would be millions upon millions of old white republicans that have been sucking at the teat of Social Security well past the amount they paid in that would be cut off. These are some of the same kooks that are complaining about welfare. Some of the biggest abusers of Social Security welfare, old white people.

This is what is so much fun about TV... People jumping to conclusions. I said nothing about taking peoples social security away or even reducing it. I am a social security recipient myself. I was only pointing out the DEBT my country is in and the insane manner in which my government operates. My point was about Monetizing the Debt - nothing was said about what you commented upon. I consider Social Security a TRUE entitlement because WE contributed real money. The entitlement that need to be examined and greatly reduced are the WELFARE benefits that have become 'entitlements' in the minds of those who are not entitled to anything because they paid nothing in to the system. And these numbers - 100Trillion in unfunded entitlements are REAL ... if you don't think they are real - then you are the KOOK. Just because the Government, the Congress, the Administration ignores this staggering debt - does not make it fantasy. Go look it up Mr. KNOW IT ALL. And the U.S. is monetizing the country's debt. and this kind of craziness cannot last without catastrophe. Any American who is retired on Social Security Benefits as their major source of funds and are living in Thailand had best be looking for a way to procure additional income in Thailand - because if a big crash comes - the checks from home will stop coming. Bottom line - No Country can continue to mount debt by the Trillions of Dollars each year and survive - a time to pay the piper will come.

[StreetCowboy]

Concerning the United States... The U.S. Government is buying a significant portion of its own debt in order to issue more money - and has been for quite a while now. This 'monetizing' of the debt is extremely risky business. To my knowledge the United States has never done this before in its history. Countries that have monetized their own debt have crashed quite catastrophically. The only reason it has not crashed so far is the extraordinary nature of the transaction relationships between the U.S. Treasury and the Federal Reserve (much is secretive and slight of hand). Sooner or later the House of Cards will fall. In light of this - how the U.S. Dollar keeps its value again any world currency is baffling. It should be 300 Baht to the dollar - on the way to 3000.

Note: Aside from being 16 Trillion is debt... the U.S. Government has over 100 TRILLION in unfunded liabilities (mostly off the books - Social Security, Medicade, Medicare, now Obamacare). Yes Folks - OVER 100 TRILLION... Socialism is great until you run out of other people's money...

It's amazing how many kooks there are in the world. These are the kooks that listen to these Internet preachers that make up statistics to fill their soft deluded minds. These same kooks that think the problem is with the crazy people not taking their drugs. The same kooks that themselves should be taking some heavy doses of Prozac.

But frankly I think you are right, the welfare state needs to stop. So all those old people that paid into Social Security should only get the value of what they paid in and what that money earned. Then it should be cold turkey. So I suspect there would be millions upon millions of old white republicans that have been sucking at the teat of Social Security well past the amount they paid in that would be cut off. These are some of the same kooks that are complaining about welfare. Some of the biggest abusers of Social Security welfare, old white people.

This is what is so much fun about TV... People jumping to conclusions. I said nothing about taking peoples social security away or even reducing it. I am a social security recipient myself. I was only pointing out the DEBT my country is in and the insane manner in which my government operates. My point was about Monetizing the Debt - nothing was said about what you commented upon. I consider Social Security a TRUE entitlement because WE contributed real money. The entitlement that need to be examined and greatly reduced are the WELFARE benefits that have become 'entitlements' in the minds of those who are not entitled to anything because they paid nothing in to the system. And these numbers - 100Trillion in unfunded entitlements are REAL ... if you don't think they are real - then you are the KOOK. Just because the Government, the Congress, the Administration ignores this staggering debt - does not make it fantasy. Go look it up Mr. KNOW IT ALL. And the U.S. is monetizing the country's debt. and this kind of craziness cannot last without catastrophe. Any American who is retired on Social Security Benefits as their major source of funds and are living in Thailand had best be looking for a way to procure additional income in Thailand - because if a big crash comes - the checks from home will stop coming. Bottom line - No Country can continue to mount debt by the Trillions of Dollars each year and survive - a time to pay the piper will come.

You highlight another systematic failing of the Western economies - a reliance on outdated actuarial principles established in Scotland over two hundred years ago, at a time when it was reasonable to assume that people would die according to existing statistics.... and, perhaps, to assume that people woudl continue to work according to existing statistics, this was an error of far greater magnitude than the assumption that a variety of mortgages represented a diversified portfolio of investments....

Anyway, c'est la vie, as they say in England. I'm lucky that I enjoy my job, as I will probably need to work till I'm 70

SC

[vijer]

A simple answer. The very liberal socialists have broken the Western economies. They simply can no longer afford to provide for people who have no desire to work. Thailand hasn't gotten to that point, YET.

This might be true in the case of Europe, but in the US the problem is the opposite. Too many giveaways to the corporations and drastic reduction of the government oversight led to the excesses on Wall street and in the real estate markets. US could have used more liberal thinking not less.

HOGWASH ... this was only a small factor - it is just hyped hate of the rich ... not near the entire cause. It was LIBERAL thinking that lead to the U.S. Real Estate crisis - the crux of the 2008-2009 meltdown. The on going Liberal legislation requiring banks and mortgage companies to lend to people who had no probability of paying off the loan was the greater cause of the problem. The Sub Prime Loans FAILED when borrowers could not pay off the loans. Mortgage securities (resold bundled loans) failed because of this stupid liberal idea - millions of defaulted loans mean worthless securities. This is what led to the crisis. There were billions - then trillions of dollars of loan defaults by people who should have never been granted a home mortgage in the first place EXCEPT that the government Forced banks to lend money by law to high risk borrowers. Socialism is great until you run out of other people's money.

Bull do do, the banks were not forced to lend money to anyone. The only change was that previously the banks required a borrower to put a down payment of 20% on a house. In addition to having a steady income and low debt to equity.

So let's say you are a low income earner, you go to work every day and you pay your bills. You pay rent to some schmuck to the tune of $500 a month and you're never late. But it is impossible for you to save up a 20% down payment. You live in apartments your whole life because you can't save up the 20%.

The government decides that they will guarantee the loans for low income earners that qualify based on credit history and ability to pay but have a zero (0) down payment. So the banks make the loans, what do they have to loose, the government is insuring the loans.

Now you the low income earner buys a house, not expensive mind you, maybe $50 - $100K, and your monthly payment is still about the same as your rent was. You are happy. You go to work, you pay your bills, and life is good. You do this for 5, or more years. You are a good citizen.

Now comes the greedy banks and get rich quick guys. Joe Blow decides he is going to renovate houses and flip them. So he starts out small and buys a house with 20% down and flips it and makes some decent money. He figures if only I could buy bigger houses, but dang it there is that 20% down payment problem. So he's complaining to his banker and his banker says, you know you aren't going to keep this house for more than 6 months so you should just go for a zero down payment loan. The interest will be higher but it is only for a few months so no big deal. You are a happy camper and you buy a bigger house and flip it. Next thing you know, you are bragging to all your friends and relatives how you bought a house without using any of your money and you flipped it and made some serious money.

Next thing you know all you a_holes are doing this. They aren't living in these houses they are flipping them. They are buying houses above market value because they don't care, they are flipping and making money. All of a sudden there are a couple hurricanes and some other problems and then the people that are buying houses to live in come to their senses and realize all these houses are overpriced and the insurance went through the roof along with the property taxes. And what do you know people stopped buying houses. These get rich quick people then were sitting on houses they could not sell, some of them had 5 or more houses, all with zero down payment loans. All to borrowers that could not afford one of the extra houses let alone 5. The economy started to slip and then these upright people started defaulting on their loans and eventually went bankrupt.

So what happens? Oh the economy starts to decline and next thing you know the low income earner no longer has his low income job. So now he can't pay his mortgage. The mortgage he has been paying perfectly every month for 5 or more years. So he loses his house. HE DIDN'T LOSE HIS HOUSE BECAUSE THE BANK WAS FORCED TO GIVE HIM A LOAN. HE LOST HIS HOUSE BECAUSE OF GREEDY PEOPLE.

[JDGRUEN]

TO: vijer and outre99 and anyone else... I am going to decline further comment on posts here on this thread that have gone afield from the OP's Topic Thread Subject... "What's Up With The Thai Baht?" ...

If either of you or others wish to discuss what was the core cause of the U.S. Financial Melt Down of 2008-2009 then please open a thread on that subject and I'll be happy to join in to point out the errors and omissions of your stated positions of this subject. The facts of law that have bearing upon this subject are there to be viewed... I'll be glad to dig them up and post them on a thread of that topic. My post about 'Monetizing' the U.S. Debt and the astronomical size of the U.S. Debt was in relationship to the exchange rate of the Baht versus the Dollar and on topic with the original OP. My future comments will be in that same vein.

[MrHammer]

Since I have an almost finished degree in economics (before quiting to open my biz), perhaps I can contribute my two cents.

1) Western currencies losing value

It's not so much the Thai baht increasing in value as the western currencies losing. This is directly correlated to the fact that the US and Eurozone has been printing money like it's going out of fashion. More paper money means less purchasing power. USD and EUR has been losing against all kinds of currencies, even the shitty Philipine Peso, over the last years. The reason this insane money printing hasn't resulted in much higher prices is largely because the money does not enter the consumer market. It stays as collateral and debt payments with near bankrupt banks and governments, yet the result is the same. For every dollar the US prints, the population gets poorer. Another reason is the fact that both the US and Euro zone is in on the money printing game AND China pegging their currency. This means that purchasing power within this zone stays constant.

2) Wealth transfer from west to east

The west, and particularly Europe, is in bad shape. In Europe, there is little production, an aging population, way too many public employees and people receiving their livelyhood from the tax base. This has meant too high wages and production costs. The Asians are getting richer by the day, including Thais. Don't tell me that you haven't noticed the increased wealth in Bangkok.

3) Chinese housing bubble

There is a housing bubble in China and particularly Hong Kong. Some of the money from that bubble has likely spilled over into Thailand, driving the demand for Thai baht up.

All in all, there are several forced driving the Asian currencies up. As mentioned, Thailand and China has no interest in a strong currency, but the drive up is probably too strong for the Thai bank to counter. However, as China and Thailand develops, there will be a larger internal demand which will offset some of the current supply.

The simple fact though is that the west will lose wealth and the east will gain until at some point in the future, the gap between wealth between west and east won't be as great. The west can keep it's advantage only by taking swift action and slashing taxes, entitlements and wages to better be able to compete.

[JDGRUEN]

Since I have an almost finished degree in economics (before quiting to open my biz), perhaps I can contribute my two cents.

1) Western currencies losing value

It's not so much the Thai baht increasing in value as the western currencies losing. This is directly correlated to the fact that the US and Eurozone has been printing money like it's going out of fashion. More paper money means less purchasing power. USD and EUR has been losing against all kinds of currencies, even the shitty Philipine Peso, over the last years. The reason this insane money printing hasn't resulted in much higher prices is largely because the money does not enter the consumer market. It stays as collateral and debt payments with near bankrupt banks and governments, yet the result is the same. For every dollar the US prints, the population gets poorer. Another reason is the fact that both the US and Euro zone is in on the money printing game AND China pegging their currency. This means that purchasing power within this zone stays constant.

2) Wealth transfer from west to east

The west, and particularly Europe, is in bad shape. In Europe, there is little production, an aging population, way too many public employees and people receiving their livelyhood from the tax base. This has meant too high wages and production costs. The Asians are getting richer by the day, including Thais. Don't tell me that you haven't noticed the increased wealth in Bangkok.

3) Chinese housing bubble

There is a housing bubble in China and particularly Hong Kong. Some of the money from that bubble has likely spilled over into Thailand, driving the demand for Thai baht up.

All in all, there are several forced driving the Asian currencies up. As mentioned, Thailand and China has no interest in a strong currency, but the drive up is probably too strong for the Thai bank to counter. However, as China and Thailand develops, there will be a larger internal demand which will offset some of the current supply.

The simple fact though is that the west will lose wealth and the east will gain until at some point in the future, the gap between wealth between west and east won't be as great. The west can keep it's advantage only by taking swift action and slashing taxes, entitlements and wages to better be able to compete.

Thank you for saying in a very scholarly fashion what I was saying in a much less scholarly fashion in my earlier post. I just hope the day of reckoning is not too sharp nor too deep.

[koh kae]

Devalued Aussie dollar? Bugger! looks like I'll have to stop buying Singha beer... and start buying Chang... or worse still... Archa :-(

[Naam]

Nothing is up with the baht. The rise of the Baht is not sharper than that of for instance the Euro. The world has been fooled by the americans and British for too long that the Euro was the problem and that while the Uk and the US has debts far exceeding that of most troubled Euro countries. Would you keep on borrowing money to the US? Embrace yourself for another rise of 10% -15% to those currencies and cross your fingers that the Chinese do not play "repo-man" and recall their money.

How has the British fooled anyone. I think you should go and do a bit of learning, the British pound is strong, The British can Quantitative ease but the Euro cannot. France Italy Portugal, Ireland, Spain ,Greece, all bankrupt. And for this privalage the UK pays £500, 000,000, to the EU. every day, The British Economy is forecast to be the fastest rising Economy in the next two years. the baht is to strong and it will effect Thailand, no one will buy when there is Vietnam and the Philippians with better work forces. and cheaper labour.

[roamer]

I think it,s not about the Thai baht. The British pound and the U.S. dollare are doomed, and both for the same reason. How can a financial state be expected to survive when there are 5 generations of families who have never worked and have no intention of working, purely because the system is set up such that there is no need to work. The whole system is set up so that these parasites will vote for whoever will give them the most for zero input and, since there are much more poor people than rich, their votes will keep the politicians who make the promises in power. In mathematics it,s called an unstable equation, and the politicians will prosper while the country they pretend to represent goes down the tubes. Try going into any government office in Thailand and see if you can get housing or food assistance !

" In mathematics it,s called an unstable equation,"

No such term, so your math ain't really that great to be lecturing on economic theory is it

[avalonmick]

Exactly. Don't whinge about moving exchange rates and then do nothing to minimise the risk.

You've had it easy for half a decade while Europe and the US slowly imploded giving you, on average, continuing gains in value.

Now its going the other way you'll have to think and actually manage your money.

If you hold most of your savings in pounds but spend in another currency, there are ways of protecting yourself from devaluation of the pound by holding GBP-denominated funds that in turn hold assets in other currencies like government bonds. Very easy to manage from a computer terminal anywhere in the world just using any of the UK asset management/ discount broker/ stockbroker firms.

[NeverSure]

Relative to its size, Thailand has big deficits,

Yup, that 1.5% budget overun against GDP was a real show stopper last year!

http://www.tradingec...vernment-budget

And what about those foriegn reserves, all the hundred billion plus of funny money, what are they dollars or something or worthless!!

Big sigh.

And for the OP: indeed THB has strengthened, mostly as a function of quantattive easing in Japan and also the US to some degree, it's foriegn funds looking for a decent yield that they can't find at home, unfortunately for the BOT it costs too much to try and throw large ammounts of baht at the problem to try and keep the baht artificially weak.

Big sigh. I said relative to its size. Do you realize the Thailand's GDP is only about $US2,700 per capita? The UK's is about $39,000 and the US is about $48,000, Canada about 50,000 and Australia about 60,000. Link Relative.

[Naam]

Relative to its size, Thailand has big deficits,

Yup, that 1.5% budget overun against GDP was a real show stopper last year!

http://www.tradingec...vernment-budget

And what about those foriegn reserves, all the hundred billion plus of funny money, what are they dollars or something or worthless!!

Big sigh.

And for the OP: indeed THB has strengthened, mostly as a function of quantattive easing in Japan and also the US to some degree, it's foriegn funds looking for a decent yield that they can't find at home, unfortunately for the BOT it costs too much to try and throw large ammounts of baht at the problem to try and keep the baht artificially weak.

Big sigh. I said relative to its size. Do you realize the Thailand's GDP is only about $US2,700 per capita? The UK's is about $39,000 and the US is about $48,000, Canada about 50,000 and Australia about 60,000. Link Relative.

i [not so] humbly beg to mention that any "per capita" ratio is unsuitable to measure a country's financial health or currency. if that was the case then rather insignificant countries with a small number of inhabitants like Liechtenstein or Luxembourg would be immensely rich compared to other countries. the reason for their high nominal ratio are the financial services rendered by several dozen financial institutions with only a miniscule involvement of the local population.

p.s. i endorse Chiang Mai's arguments!

[JDGRUEN]

I think it,s not about the Thai baht. The British pound and the U.S. dollare are doomed, and both for the same reason. How can a financial state be expected to survive when there are 5 generations of families who have never worked and have no intention of working, purely because the system is set up such that there is no need to work. The whole system is set up so that these parasites will vote for whoever will give them the most for zero input and, since there are much more poor people than rich, their votes will keep the politicians who make the promises in power. In mathematics it,s called an unstable equation, and the politicians will prosper while the country they pretend to represent goes down the tubes. Try going into any government office in Thailand and see if you can get housing or food assistance !

" In mathematics it,s called an unstable equation,"

No such term, so your math ain't really that great to be lecturing on economic theory is it

So there is no such thing as an unstable differential equation. Really Now? Or could you be nit picking about the word 'differential' being left out?

[brianP]

I saw the writing on the wall in the USA, where all the foreigners are pulling out their investments to plant in greener pastures,SEA is the most popular by far and it's both new and old money. I am fully vested here in Thailand and with 3-4% no tax on 12 months fixed accounts. I say swim away from sinking ships or they will pull you down to oblivion with them!

[crazykopite]

Relative to its size, Thailand has big deficits, and it also prints money to pay bills. I know some think that Thailand's economy is booming and that it has "no" unemployment and no debt and... Link

I personally know three Thais who were laid off work last week in Udonthani because of the increase in the minimum wage. I don't think we've begun to see the fallout from that. I think it will also affect decisions of multi-nationals to expand into Thailand because wages and other costs are now cheaper elsewhere.

Let's see how this all washes out. Thailand has a habit of borrowing money, or setting aside budget money for something and then spending it on something else. Look at the money earmarked for flood damage that got siphoned off.

I believe, and don't ask anyone to agree with me, that Thailand is way overbuilt in housing, that real estate has skyrocketed into a bubble, and that the new minimum wage will actually be the straw the breaks the camel's back.

Housing, land, medical care, food - it's all rising which means the Baht buys less.

Inflation is just another term for deflation of the value of money. If it takes more baht to buy something then the baht is worth less.

If the West wasn't being so imprudent with currencies, I'd hold a belief about the future of the baht. As it is, I'm just sitting back and watching. Something out there is unsustainable. Maybe many things.

Have to agree with you would not be surprised to see uprisings on the streets again this year as the poor get poorer and the wealthy get even more wealthy on top of this most items are imported which should make things cheaper but this is not the case Gasoline is the same as it was a couple of months ago.

[chiang mai]

Relative to its size, Thailand has big deficits, and it also prints money to pay bills. I know some think that Thailand's economy is booming and that it has "no" unemployment and no debt and... Link

I personally know three Thais who were laid off work last week in Udonthani because of the increase in the minimum wage. I don't think we've begun to see the fallout from that. I think it will also affect decisions of multi-nationals to expand into Thailand because wages and other costs are now cheaper elsewhere.

Let's see how this all washes out. Thailand has a habit of borrowing money, or setting aside budget money for something and then spending it on something else. Look at the money earmarked for flood damage that got siphoned off.

I believe, and don't ask anyone to agree with me, that Thailand is way overbuilt in housing, that real estate has skyrocketed into a bubble, and that the new minimum wage will actually be the straw the breaks the camel's back.

Housing, land, medical care, food - it's all rising which means the Baht buys less.

Inflation is just another term for deflation of the value of money. If it takes more baht to buy something then the baht is worth less.

If the West wasn't being so imprudent with currencies, I'd hold a belief about the future of the baht. As it is, I'm just sitting back and watching. Something out there is unsustainable. Maybe many things.

Have to agree with you would not be surprised to see uprisings on the streets again this year as the poor get poorer and the wealthy get even more wealthy on top of this most items are imported which should make things cheaper but this is not the case Gasoline is the same as it was a couple of months ago.

Where do you guys get this stuff from, uprisings on the streets, again, when was the previous time the poor people of Thailand rose up and rioted?

BTW gasoline stocks are priced in USD and when the existing supply is used up we should expect to see prices fall. Or perhaps not, it may be that any price reduction will simply reduce the current government subsidy by an equal amount.

[chiangmaikelly]

I saw the writing on the wall in the USA, where all the foreigners are pulling out their investments to plant in greener pastures,SEA is the most popular by far and it's both new and old money. I am fully vested here in Thailand and with 3-4% no tax on 12 months fixed accounts. I say swim away from sinking ships or they will pull you down to oblivion with them!

The smart folks did this 10 years ago. You can hear the rest moaning on Thai Visa about never feeling at home in Thailand.

[JDGRUEN]

A simple answer. The very liberal socialists have broken the Western economies. They simply can no longer afford to provide for people who have no desire to work. Thailand hasn't gotten to that point, YET.

This might be true in the case of Europe, but in the US the problem is the opposite. Too many giveaways to the corporations and drastic reduction of the government oversight led to the excesses on Wall street and in the real estate markets. US could have used more liberal thinking not less.

HOGWASH ... this was only a small factor - it is just hyped hate of the rich ... not near the entire cause. It was LIBERAL thinking that lead to the U.S. Real Estate crisis - the crux of the 2008-2009 meltdown. The on going Liberal legislation requiring banks and mortgage companies to lend to people who had no probability of paying off the loan was the greater cause of the problem. The Sub Prime Loans FAILED when borrowers could not pay off the loans. Mortgage securities (resold bundled loans) failed because of this stupid liberal idea - millions of defaulted loans mean worthless securities. This is what led to the crisis. There were billions - then trillions of dollars of loan defaults by people who should have never been granted a home mortgage in the first place EXCEPT that the government Forced banks to lend money by law to high risk borrowers. Socialism is great until you run out of other people's money.

I'm really surprised that the banks were forced to lend money. In my country, it was the wild overarching ambition and greed of the banks that led to their high risk lending backed by inadequately diversified American mortgages.

SC

If you are surprised then you should do some real research and read about the Community Reinvestment Act and subsequent revisons.

[JDGRUEN]

Chiangmaikelly posted "As of the end of calendar year 2010, the accumulated surplus in the Social Security Trust Fund stood at just over $2.6 trillion"

Social Security contributions (FICA) collected from American employees and a matching amounts from the employers are sent to the Federal Government. Benefit payments to current S.S. recipients are paid each month from the collected FICA payments... Any excess of FICA collected for a given period is tallied - a promissory note in form of a bond is created in that amount and noted as an 'asset' entry in the Social Security Trust Fund Ledger. The actual money is deposited in the General Fund - not kept in a trust fund. No mechanism is in place to redeem the Bond with real money and send it to Social Security Benefit recipients. The figure you cite is the total of the promissory bond notes that have accumulated over the years. The Social Security Fund is not real money and cannot be converted to real money. Rather, It is a financial accounting representation of 'excess FICA collected and money owed to the S.S. 'Trust' Fund. One really big I.O.U.

[chiangmaikelly]

Chiangmaikelly posted "As of the end of calendar year 2010, the accumulated surplus in the Social Security Trust Fund stood at just over $2.6 trillion"

Social Security contributions (FICA) collected from American employees and a matching amounts from the employers are sent to the Federal Government. Benefit payments to current S.S. recipients are paid each month from the collected FICA payments... Any excess of FICA collected for a given period is tallied - a promissory note in form of a bond is created in that amount and noted as an 'asset' entry in the Social Security Trust Fund Ledger. The actual money is deposited in the General Fund - not kept in a trust fund. No mechanism is in place to redeem the Bond with real money and send it to Social Security Benefit recipients. The figure you cite is the total of the promissory bond notes that have accumulated over the years. The Social Security Fund is not real money and cannot be converted to real money. Rather, It is a financial accounting representation of 'excess FICA collected and money owed to the S.S. 'Trust' Fund. One really big I.O.U.

Of course I don't agree and I do think it is an interesting debate but to engage in it would really go off topic. Sorry I don't think American SS has much to do with the Thai baht. I guess the point could be made that the Thai baht is strong because the US dollar is week but the baht is strong against many other currencies so I don't know how valid that is.