You Got Hurt By The Strong Baht, But Are You Ready For The Next Surprise…Inflation?

[Joe Mamma]

I figure if i wait long enough and the baht gets stronger, in 10 years i could return to the good ole USA. By then it will be a genuine third world country too, so i wont have trouble adjusting. And i am used to the foreign speaking jabberers. Oh the crappy food though.

[Robert2006]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

You’re kidding right? Either that or you’ve seriously damaged your brain with too much drinking. Every major economic power is

creating money at a pace never before seen in world history. There is no question there is inflation and it is going to get worse.

You joke of gold buyers, are you daft? Gold was $427 in 2005 but I guess in your world that’s not considered inflation. Maybe if I could find an 8 year chart detailing the price of Chang beer you’d better be able to comprehend the concept of inflation.

Better informed minds will be thinking about the obvious outcome of all this money creation and make plans to deal with it the best way they can.

[meom]

The on-line Wall Street Journal had an interesting graphic today. It showed Chinese labor costs rising from just under $2.00 per hour in 2008 to about $3.50 per hour in 2013 and almost $4.00 per hour in 2014. Thailand's labor costs were about the same as China's in 2008 and had rose to about $2.75 per hour in 2013. They were projected to reach $3.00 per hour in 2014. In the meantime Indonesia and Sri Lanka were pretty well constant at about $1.00 per hour. The gist of the article was that China's low cost industries were moving off-shore, but not to Thailand. For us, they were projecting a 10% increase in labor costs in Thailand in the next year. That, folks, is called cost-push inflation.

did the WSJ specify what kind of Thai labourers make 80 Baht an hour?

Must be the ones that make 16-20 thou a month.

[ExpatOilWorker]

The on-line Wall Street Journal had an interesting graphic today. It showed Chinese labor costs rising from just under $2.00 per hour in 2008 to about $3.50 per hour in 2013 and almost $4.00 per hour in 2014. Thailand's labor costs were about the same as China's in 2008 and had rose to about $2.75 per hour in 2013. They were projected to reach $3.00 per hour in 2014. In the meantime Indonesia and Sri Lanka were pretty well constant at about $1.00 per hour. The gist of the article was that China's low cost industries were moving off-shore, but not to Thailand. For us, they were projecting a 10% increase in labor costs in Thailand in the next year. That, folks, is called cost-push inflation.

China has been the driver of low inflation for many years, by flooding the West with cheap consumer goods. If cheap labor is a thing of the past, China could very well be an "exporter" of inflation.

[how241]

Cigarettes are cheap, beers not expensive, who cares about the rest?

You forgot women

+1...+1...Yes

[davejones]

The on-line Wall Street Journal had an interesting graphic today. It showed Chinese labor costs rising from just under $2.00 per hour in 2008 to about $3.50 per hour in 2013 and almost $4.00 per hour in 2014. Thailand's labor costs were about the same as China's in 2008 and had rose to about $2.75 per hour in 2013. They were projected to reach $3.00 per hour in 2014. In the meantime Indonesia and Sri Lanka were pretty well constant at about $1.00 per hour. The gist of the article was that China's low cost industries were moving off-shore, but not to Thailand. For us, they were projecting a 10% increase in labor costs in Thailand in the next year. That, folks, is called cost-push inflation.

did the WSJ specify what kind of Thai labourers make 80 Baht an hour?

Must be the ones that make 16-20 thou a month.

When they talk of the cost of labor, they aren't talking about the salary of individual workers, but the total cost to the employer. I don't know what that includes in Thailand, but in other places it includes office/factory space, recruitment costs, employer tax, sick pay, etc. There are a whole host of costs other than salary. They're all lumped together so that costs can easily be compared.

[Naam]

The on-line Wall Street Journal had an interesting graphic today. It showed Chinese labor costs rising from just under $2.00 per hour in 2008 to about $3.50 per hour in 2013 and almost $4.00 per hour in 2014. Thailand's labor costs were about the same as China's in 2008 and had rose to about $2.75 per hour in 2013. They were projected to reach $3.00 per hour in 2014. In the meantime Indonesia and Sri Lanka were pretty well constant at about $1.00 per hour. The gist of the article was that China's low cost industries were moving off-shore, but not to Thailand. For us, they were projecting a 10% increase in labor costs in Thailand in the next year. That, folks, is called cost-push inflation.

did the WSJ specify what kind of Thai labourers make 80 Baht an hour?

Must be the ones that make 16-20 thou a month.

When they talk of the cost of labor, they aren't talking about the salary of individual workers, but the total cost to the employer. I don't know what that includes in Thailand, but in other places it includes office/factory space, recruitment costs, employer tax, sick pay, etc. There are a whole host of costs other than salary. They're all lumped together so that costs can easily be compared.

even adding overheads does not justify the figure of THB80/an hour = 200% overhead cost.

[Thailand1977]

Bring it on, my next house in the UK just got cheaper.

Post #7,

Also, put your money into assets that are more likely to rise with

inflation. I think property is a good bet at the moment, especially in

the UK and USA.

Me too, hence my intent to buy another property in the Uk this summer, anyone got any better ideas, I am all ears.

This is Thaivisa where the most financially savvy people on the planet who only ever make profitable investment congregate .... no doubt someone will be along in a moment to give you a minimum 25%PA growth tip.

IMHO Property maybe OK if you're in it for the long haul, ie 20 years, as it used to be, but with QE and 0.5% interest rates for almost 5 years along with First Buy and the endless other govt props prices have stagnated or dropped in all parts of Britain except certain parts of the South.

What happens when one of these props is no longer viable?

Also its an illiquid asset that is easily taxed, or could easily have its tax exemptions removed.

[Pacificperson]

The article was about China's off-shoring its low wage jobs, mainly in the garment industry, to lower cost Asian countries. By doing this, it will help hold down inflation in the West.

The costs in the figure were listed as average wage and non-wage costs. I would assume that they were for the manufacturing sector.

Edited May 1, 2013 by Pacificperson

[davejones]

Bring it on, my next house in the UK just got cheaper.

Post #7,

Also, put your money into assets that are more likely to rise with

inflation. I think property is a good bet at the moment, especially in

the UK and USA.

Me too, hence my intent to buy another property in the Uk this summer, anyone got any better ideas, I am all ears.

This is Thaivisa where the most financially savvy people on the planet who only ever make profitable investment congregate .... no doubt someone will be along in a moment to give you a minimum 25%PA growth tip.

IMHO Property maybe OK if you're in it for the long haul, ie 20 years, as it used to be, but with QE and 0.5% interest rates for almost 5 years along with First Buy and the endless other govt props prices have stagnated or dropped in all parts of Britain except certain parts of the South.

What happens when one of these props is no longer viable?

Also its an illiquid asset that is easily taxed, or could easily have its tax exemptions removed.

So, you can't afford to buy property. Some can, and now is a great time to invest in property in the UK. Of course, you have to pick a good location. Prime London up over 50% in 3 years. Sounds like a pretty good return to me.

There are always people like you saying why now is the wrong time, blah, blah, blah. But there are always people like you saying that. In the meantime, others are making money. Property is as good an investment as any at the moment. Certainly better than holding cash. Property tends to rise with inflation, but cash just disappears into nothing.

What tax exemptions are you talking about that could be removed? UK property doesn't have any that I can think off.

Where would you invest? Don't knock others if you can't make any sensible suggestions yourself. Sitting scared and holding cash isn't really an option.

Edited May 1, 2013 by davejones

[BlackPuddingBertha]

The comment was tongue in cheek and meant that people can choose what they wish to spend their money on over here as (in my belief) things are much cheaper. In Europe you need to be more selective due to cost! Beer for example, who in their right mind, would buy a can from 7/11 when you can buy a large bottle for about the same price (bottled water is much cheaper if you prefer). Cigarettes are a fraction of the price as in the UK and the money saved on said cigarettes can buy you a reasonable meal over here. Incidentally if you think one pound is expensive when was the last time you bought a pint in the UK?

It wasnt too clear from your post that it was tongue in cheek. I know people here who do think that way about those two items and for them their cost is very important.

I have no idea what the cost of a pint in the UK is. I do know that when I last bought cans of lager in a UK supermarket (last year) they cost me less than the same can would cost me in 7/11 here, and they used to cost me half that where I lived in Europe. So as far as I'm concerned beer is not cheap here. But as I said, not the end of the world.

As for the cost of cans and bottles, there's only a couple of Baht in it, if that. The can of lager I buy in 7/11 costs 39B for 500ml. I could indeed buy a large bottle (about 640ml) for a few Baht more but the bottles are heavy to carry and I normally dont actually want to drink so much beer. 500ml is just about right.

[yoshiwara]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

You’re kidding right? Either that or you’ve seriously damaged your brain with too much drinking. Every major economic power is

creating money at a pace never before seen in world history. There is no question there is inflation and it is going to get worse.

You joke of gold buyers, are you daft? Gold was $427 in 2005 but I guess in your world that’s not considered inflation. Maybe if I could find an 8 year chart detailing the price of Chang beer you’d better be able to comprehend the concept of inflation.

Better informed minds will be thinking about the obvious outcome of all this money creation and make plans to deal with it the best way they can.

I'm glad you mentioned gold in 2005 because in $US it was exactly the same as it was 25 years earlier in 1980. And if anybody had held gold during those 25 years it would have been a disaster both for inflation and decline in real value (given that gold produces zero returns). Moral of that story? Do not believe any charlatan selling the story that gold is a permanent place of safety. They are either slyly selective with their periods or blindly copying junk from websites they barely understand. Edited May 1, 2013 by yoshiwara

[Robert2006]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

You’re kidding right? Either that or you’ve seriously damaged your brain with too much drinking. Every major economic power is

creating money at a pace never before seen in world history. There is no question there is inflation and it is going to get worse.

You joke of gold buyers, are you daft? Gold was $427 in 2005 but I guess in your world that’s not considered inflation. Maybe if I could find an 8 year chart detailing the price of Chang beer you’d better be able to comprehend the concept of inflation.

Better informed minds will be thinking about the obvious outcome of all this money creation and make plans to deal with it the best way they can.

I'm glad you mentioned gold in 2005 because in $US it was exactly the same as it was 25 years earlier in 1980. And if anybody had held gold during those 25 years it would have been a disaster both for inflation and decline in real value (given that gold produces zero returns). Moral of that story? Do not believe any charlatan selling the story that gold is a permanent place of safety. They are either slyly selective with their periods or blindly copying junk from websites they barely understand.

What is your beef with gold? Gold’s like any other commodity/investment the trend now is currency debasement so commodities will benefit, commodity cycles usually last 15-20 years.

We live in Asia and gold is traditionally how the east saves their money, I’ll bet you wish you bought some in 2005; can you divide $427 by $1,455? Oh I forgot gold does not produce a return, go back and drink another beer.

[yoshiwara]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

You’re kidding right? Either that or you’ve seriously damaged your brain with too much drinking. Every major economic power is

creating money at a pace never before seen in world history. There is no question there is inflation and it is going to get worse.

You joke of gold buyers, are you daft? Gold was $427 in 2005 but I guess in your world that’s not considered inflation. Maybe if I could find an 8 year chart detailing the price of Chang beer you’d better be able to comprehend the concept of inflation.

Better informed minds will be thinking about the obvious outcome of all this money creation and make plans to deal with it the best way they can.

I'm glad you mentioned gold in 2005 because in $US it was exactly the same as it was 25 years earlier in 1980. And if anybody had held gold during those 25 years it would have been a disaster both for inflation and decline in real value (given that gold produces zero returns). Moral of that story? Do not believe any charlatan selling the story that gold is a permanent place of safety. They are either slyly selective with their periods or blindly copying junk from websites they barely understand.

What is your beef with gold? Gold’s like any other commodity/investment the trend now is currency debasement so commodities will benefit, commodity cycles usually last 15-20 years.

We live in Asia and gold is traditionally how the east saves their money, I’ll bet you wish you bought some in 2005; can you divide $427 by $1,455? Oh I forgot gold does not produce a return, go back and drink another beer.

Gold is not like any other commodity/investment. Even the gold bugs don't argue that one. No industrial use and no price based on 'usage'. I will say it again. Gold was a dead loss for over 25 years between 1980 and 2005. A total dead loss which lost over 50% of its value. The real value of a dollar at the end of that period. The argument against gold is not that one shouldn't trade it. Buy, sell, no problem. Some guys did very well indeed selling before the current heavy, very heavy drop and maybe they are trading back in right now. Good work. No the argument is fundamentally against the charlatans who are selling the myth to buy gold at all times at all levels. The same charlatans saying buy all the way down from 1930. It is a broken record of fraudulent claims epitomised by your and others studied refusal to respond to the 1980-2005 data. Heads in the sand. There is no better place than Thailand for a gathering of gold bug wise-guys telling the newbies how it really is. Or rather isn't. Bottoms Up!

[davejones]

yoshiwara - very well said.

[rshoemake]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

It's much more than that my friend. The supply is actually drying up. Before you call something fear mongering you should truly investigate it. It could be that the fears are well founded, and in fact they are. Gold should already be 12k usd per ounce. It's being manipulated by the exchanges in London and Chicago not to mention possibly other ways buy printing "paper gold" (100 to 1 btw). Once people realize supply is drying up there is going to be a panic. Germany already asked for their gold back from the US Fed and they said "no". Then they asked to "see" the gold and again were told "no". Now they are trying to negotiate a way to transfer them the gold over something like three years. Ecuador made the same request as well. Is there really any gold at the fed? There have been serious suggestions that there might not be.

As a currency trader I follow these issues constantly. Believe me when I say that we are in for a mell of a hess, and may very well hit this year.

[BahBahBoBo]

Yeah this strong baht is sure scary...I hate the way it helps lower my electricity costs

From the "other paper";

"The fuel tariff (Ft) for electricity will be slashed by 9.8% or 5.12 satang per kilowatt-hour from May to August thanks to the appreciation of the baht and lower gas prices, says an energy regulator."

Inflation isn't rising and even at the worst time of the financial crisis it didn't touch 10%; take a look

Most people may not agree with me but I think the behind-the-scenes Thai government is a hell of alot smarter than people give them credit for.

[Robert2006]

yoshiwara

Head in the sand, I would imagine you’re so blinded by your psychological gold-bug mental block you missed the move up on this investment class. I didn’t read anyone expressing here that buying gold at any price level was a wise move.

Gold might have been a dead loss for 25 years but it’s sure done well over the last 10 years or am I wrong? What’s the matter don’t you like to make money? I guess not if it has anything to do with gold. These are different economic conditions this isn’t 1980 its 2013.

You’ve got some perverse chip on your shoulder about gold, I’m no gold-bug I follow trends I don’t give a hoot what the investment class is, you would have to be hopeless not to recognize commodity prices were going to rise in the face
of all this money creation.

[m_j_d]

Hi

I have never spoken on this site.

I find much valuable information but on this topic I would like to add something

in m opinion on the economic fundamentals (real) of the Thai economy the Thai baht shouls have WEAKEND.

Speaking to some people there is a syndical view-

Keep Baht strong to get money out of country until the inevitable happens.

[m_j_d]

Hi

I am currently in UK returning soon to thailand where I have lived for last 7.5 years.

Prices-

well I have been to many supermarkets here now

lets give an example

Waitrose -tops in Thailand part of the John Lewis Partnership

-

with the exeption re. food-of some meet products and fresh herbs and spices the UK is a massivive 30-70 percent cheaper

and

for electricals same

the savings re, thai Baht appriciation are not being passed on

and the bottom line is IMport tax HUGE but 2015 will change as EU negotiating a FREE TRADE agreement with Thailand as its SPECIAL developing nation status is NOT likely to be renewed as it as a country is regarded as a mature developing nation and should it seems NOT have the same trading priveleges as Cambodia for example.

[HarryMilton]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

You’re kidding right? Either that or you’ve seriously damaged your brain with too much drinking. Every major economic power is

creating money at a pace never before seen in world history. There is no question there is inflation and it is going to get worse.

You joke of gold buyers, are you daft? Gold was $427 in 2005 but I guess in your world that’s not considered inflation. Maybe if I could find an 8 year chart detailing the price of Chang beer you’d better be able to comprehend the concept of inflation.

Better informed minds will be thinking about the obvious outcome of all this money creation and make plans to deal with it the best way they can.

I'm glad you mentioned gold in 2005 because in $US it was exactly the same as it was 25 years earlier in 1980. And if anybody had held gold during those 25 years it would have been a disaster both for inflation and decline in real value (given that gold produces zero returns). Moral of that story? Do not believe any charlatan selling the story that gold is a permanent place of safety. They are either slyly selective with their periods or blindly copying junk from websites they barely understand.

Aren't you being slyly selective with the period you chose also?

[IrishIvan]

Cigarettes are cheap, beers not expensive, who cares about the rest?

You forgot entertaining women

[ExpatOilWorker]

I think the world will see deflation first, then followed by inflation. But, not everywhere at once. Some parts of the world will be deflating while others will inflate (Asia). Bad for holders of precious metals, or is it? I would look at any deflation in the price of metals to build up a large position, so that when the inevitable inflation hits, or hyper inflation, one already has a position. No point trying to buy something when the rest of the world wants it too. Buy the asset when its out of favor, and looked down upon. Easy to say, difficult to do.

I think you are right. The Euro zone, Japan and the US are all reporting record low inflations numbers, but also actively pushing for higher inflation. Once they get the train rolling, it can be hard to stop again and as usual the market will probably over shoot the target.

Despite a stronger baht (which put a damper on inflation) Thailand have reported CPI numbers at 2-5% the past 7-8 years. The feel on the street that most of us have, is that true inflation is actually a bit higher.

I am surprised no more people remember the high interest years in the 70' and 80', where you could get 20% bond yield, but hardly anybody had any savings.

[yoshiwara]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

It's much more than that my friend. The supply is actually drying up. Before you call something fear mongering you should truly investigate it. It could be that the fears are well founded, and in fact they are. Gold should already be 12k usd per ounce. It's being manipulated by the exchanges in London and Chicago not to mention possibly other ways buy printing "paper gold" (100 to 1 btw). Once people realize supply is drying up there is going to be a panic. Germany already asked for their gold back from the US Fed and they said "no". Then they asked to "see" the gold and again were told "no". Now they are trying to negotiate a way to transfer them the gold over something like three years. Ecuador made the same request as well. Is there really any gold at the fed? There have been serious suggestions that there might not be.

As a currency trader I follow these issues constantly. Believe me when I say that we are in for a mell of a hess, and may very well hit this year.

...and all the old rubbish gets dredged up and recycled yet again. Germany being refused its gold, gold should be $12000 an ounce, there is no gold at the Fed and so on. Probably telling all your mates that gold was going to 12k when it was at 1900 and buy now! They will have loved you for that. 'As a currency trader....' Pip! Pip!

[yoshiwara]

I just love these fear-mongering wind-up headlines all a variation on the 'If the world ends tomorrow have you got enough tins of spam in the larder?' They are all without exception the standard junk purloined from websites flogging the buy gold narrative. Thinly disguised advertising. Be warned.

You’re kidding right? Either that or you’ve seriously damaged your brain with too much drinking. Every major economic power is

creating money at a pace never before seen in world history. There is no question there is inflation and it is going to get worse.

You joke of gold buyers, are you daft? Gold was $427 in 2005 but I guess in your world that’s not considered inflation. Maybe if I could find an 8 year chart detailing the price of Chang beer you’d better be able to comprehend the concept of inflation.

Better informed minds will be thinking about the obvious outcome of all this money creation and make plans to deal with it the best way they can.

I'm glad you mentioned gold in 2005 because in $US it was exactly the same as it was 25 years earlier in 1980. And if anybody had held gold during those 25 years it would have been a disaster both for inflation and decline in real value (given that gold produces zero returns). Moral of that story? Do not believe any charlatan selling the story that gold is a permanent place of safety. They are either slyly selective with their periods or blindly copying junk from websites they barely understand.

Aren't you being slyly selective with the period you chose also?

No. There are periods when gold goes up and goes down. The argument is with the gold bugs who are selling the total myth that gold is a place of safety at all times and in all periods. The necessity to point this out requires attention to the 1980-2005 (actually longer) period to show the essential premise. There is not one gold bug on this forum who has been prepared to deal with it. It is the dead skeleton in their cupboard.

[yoshiwara]

Robert2006, on 02 May 2013 - 01:16, said:

yoshiwara

Head in the sand, I would imagine you’re so blinded by your psychological gold-bug mental block you missed the move up on this investment class. I didn’t read anyone expressing here that buying gold at any price level was a wise move.

Gold might have been a dead loss for 25 years but it’s sure done well over the last 10 years or am I wrong? What’s the matter don’t you like to make money? I guess not if it has anything to do with gold. These are different economic conditions this isn’t 1980 its 2013.

You’ve got some perverse chip on your shoulder about gold, I’m no gold-bug I follow trends I don’t give a hoot what the investment class is, you would have to be hopeless not to recognize commodity prices were going to rise in the face

of all this money creation.

Once you have acknowledged that gold goes up and gold goes down then it is another asset to be traded. That is a reasonable place to be (ie trading ETFs and so on). And that is to be distinguished from the gold bugs going all in because the end of the world is approaching and all other assets are doomed and thinking gold coins are the way to protect against a cruel, cruel, world. Personally I don't like any asset that doesn't generate income (except art) and particularly one whose price doesn't rest on fundamentals and subject to wild swings. Yes its 2013. Me? My poison of choice has been Hong Kong property and some would argue that that has had its wild swings and dodgy fundamentals as well. But I do like the income so I go along for the ride and life is a little interesting there. Edited May 2, 2013 by yoshiwara

[Naam]

I think the world will see deflation first, then followed by inflation. But, not everywhere at once. Some parts of the world will be deflating while others will inflate (Asia). Bad for holders of precious metals, or is it? I would look at any deflation in the price of metals to build up a large position, so that when the inevitable inflation hits, or hyper inflation, one already has a position. No point trying to buy something when the rest of the world wants it too. Buy the asset when its out of favor, and looked down upon. Easy to say, difficult to do.

I think you are right. The Euro zone, Japan and the US are all reporting record low inflations numbers, but also actively pushing for higher inflation. Once they get the train rolling, it can be hard to stop again and as usual the market will probably over shoot the target.

Despite a stronger baht (which put a damper on inflation) Thailand have reported CPI numbers at 2-5% the past 7-8 years. The feel on the street that most of us have, is that true inflation is actually a bit higher.

I am surprised no more people remember the high interest years in the 70' and 80', where you could get 20% bond yield, but hardly anybody had any savings.

20% bond yields were available not only in the 70s and 80s but also in the 90s (Brady restructuring) and even till 2003 (Brazil crisis "Lula ante portas!") coupled with rather moderate risks.

end of 2008 there was a short window of 3-4 months when bonds of even sound emerging sovereign debtors yielded 16-20% and of course march till october 2009 when subordinated bonds of "top" financial institutions yielded 30-40% plus several hundred percent capital gains.

achieving double digit yields nowadays is still possible but the risks are considerably high and not suitable for weak hearts.

[yoshiwara]

I think the world will see deflation first, then followed by inflation. But, not everywhere at once. Some parts of the world will be deflating while others will inflate (Asia). Bad for holders of precious metals, or is it? I would look at any deflation in the price of metals to build up a large position, so that when the inevitable inflation hits, or hyper inflation, one already has a position. No point trying to buy something when the rest of the world wants it too. Buy the asset when its out of favor, and looked down upon. Easy to say, difficult to do.

I think you are right. The Euro zone, Japan and the US are all reporting record low inflations numbers, but also actively pushing for higher inflation. Once they get the train rolling, it can be hard to stop again and as usual the market will probably over shoot the target.

Despite a stronger baht (which put a damper on inflation) Thailand have reported CPI numbers at 2-5% the past 7-8 years. The feel on the street that most of us have, is that true inflation is actually a bit higher.

I am surprised no more people remember the high interest years in the 70' and 80', where you could get 20% bond yield, but hardly anybody had any savings.

20% bond yields were available not only in the 70s and 80s but also in the 90s (Brady restructuring) and even till 2003 (Brazil crisis "Lula ante portas!") coupled with rather moderate risks.

end of 2008 there was a short window of 3-4 months when bonds of even sound emerging sovereign debtors yielded 16-20% and of course march till october 2009 when subordinated bonds of "top" financial institutions yielded 30-40% plus several hundred percent capital gains.

achieving double digit yields nowadays is still possible but the risks are considerably high and not suitable for weak hearts.

I know one Swiss guy who has been playing the Latin American bond market for many years. I asked him whether he ever got worried about losing his capital given the relative instability of the region. He said no as the returns in a number cases had now totalled more than 100% of the original investment and so it was now 'free money'.

[Naam]

I think the world will see deflation first, then followed by inflation. But, not everywhere at once. Some parts of the world will be deflating while others will inflate (Asia). Bad for holders of precious metals, or is it? I would look at any deflation in the price of metals to build up a large position, so that when the inevitable inflation hits, or hyper inflation, one already has a position. No point trying to buy something when the rest of the world wants it too. Buy the asset when its out of favor, and looked down upon. Easy to say, difficult to do.

I think you are right. The Euro zone, Japan and the US are all reporting record low inflations numbers, but also actively pushing for higher inflation. Once they get the train rolling, it can be hard to stop again and as usual the market will probably over shoot the target.

Despite a stronger baht (which put a damper on inflation) Thailand have reported CPI numbers at 2-5% the past 7-8 years. The feel on the street that most of us have, is that true inflation is actually a bit higher.

I am surprised no more people remember the high interest years in the 70' and 80', where you could get 20% bond yield, but hardly anybody had any savings.

20% bond yields were available not only in the 70s and 80s but also in the 90s (Brady restructuring) and even till 2003 (Brazil crisis "Lula ante portas!") coupled with rather moderate risks.

end of 2008 there was a short window of 3-4 months when bonds of even sound emerging sovereign debtors yielded 16-20% and of course march till october 2009 when subordinated bonds of "top" financial institutions yielded 30-40% plus several hundred percent capital gains.

achieving double digit yields nowadays is still possible but the risks are considerably high and not suitable for weak hearts.

I know one Swiss guy who has been playing the Latin American bond market for many years. I asked him whether he ever got worried about losing his capital given the relative instability of the region. He said no as the returns in a number cases had now totalled more than 100% of the original investment and so it was now 'free money'.

100% means a rather cautious approach. i hold latinam bonds since >30 years, till 2003 nearly exclusively, nowadays something like 30% of my liquid assets. but there are only two sovereign and a fistful of corporate debtors left yielding double digits. one is Venezuela, the other one is Argentina. the yield of other sovereigns make you weep. mid 2003 a USD denominated Brazil longbond paid in excess of 25%, today a 10-Y bond yields 2.682%

[Krataiboy]

Cigarettes are cheap, beers not expensive, who cares about the rest?

You forgot women

And so, if you are smart, will you.