Korn Rejects Thaksin's Claim On Bot

[Thai at Heart]

I am confused now. Do the resident Thai visers think the baht is manipulated over valued or do they want it to plummet because Thaksin says it should?

Personally I believe the baht currently hurts exports. One of the reasons Thailand lost it's number one position a rice exporter. From what I have seen they are actually exporting rice below what the Government paid for it.

So I guess it depends on what role your in as an Importer great news. Buying for less. not that I see them passing on the reduction of costs to the consumer.

If your an exporter the cost of your product is up, which could make you less competetive.

What is driving it is where the danger is foreign money invested in the market and bonds. Most on a short term basis, In today's world that can be sold of in seconds Not hours, day, weeks or months.

If that were to happen Thailand it would be put it into a major tail spin. In Forex trading that is exactly how it's done. Hedge funds treat stocks in the same manner. So there is a clear danger at the moment. Will it actually happen I have no idea,

Looks to me like a real bubble exists. But I have been wrong before, There are stocks currently trading at 40 x P/E not something I would get involved in.

Even the major exporting businesses like automotive import a very large portion of foreign inputs. Then consider that with boi there are tax breaks, then throw in transfer pricing and you see why they aren't all falling over themselves about the baht.

In terms of rice, they are at least 20% over market price at purchase, so dreaming of 38 to the USD is fanciful.

[whybother]

I am confused now. Do the resident Thai visers think the baht is manipulated over valued or do they want it to plummet because Thaksin says it should?

Personally I believe the baht currently hurts exports. One of the reasons Thailand lost it's number one position a rice exporter. From what I have seen they are actually exporting rice below what the Government paid for it.

So I guess it depends on what role your in as an Importer great news. Buying for less. not that I see them passing on the reduction of costs to the consumer.

If your an exporter the cost of your product is up, which could make you less competetive.

What is driving it is where the danger is foreign money invested in the market and bonds. Most on a short term basis, In today's world that can be sold of in seconds Not hours, day, weeks or months.

If that were to happen Thailand it would be put it into a major tail spin. In Forex trading that is exactly how it's done. Hedge funds treat stocks in the same manner. So there is a clear danger at the moment. Will it actually happen I have no idea,

Looks to me like a real bubble exists. But I have been wrong before, There are stocks currently trading at 40 x P/E not something I would get involved in.

Thailand lost its number one position as a rice exporter before the baht started appreciating.

They are exporting rice at below the price that the government paid for it because the government paid over market price for it ... and then the baht appreciated.

[ray23]

Baht started appreciating, just about five years ago, so this is not something new. I came here in Oct. 2002 the baht was 46 to one.

I believe they lost their number one place as the baht appreciated.

[khunken]

Baht started appreciating, just about five years ago, so this is not something new. I came here in Oct. 2002 the baht was 46 to one.

I believe they lost their number one place as the baht appreciated.

Taking one specific time in history one can make any claim about the Baht. I can remember a rate of c25 in the late eighties or early ninties. So am I correct in saying that the Baht has depreciated in 25 years? No

It went to over 50 after the 1997 crash, so yes it has been slowly appreciating in 15/16 years.

The rising Baht is blamed for lack of rice sales but that's only a recent excuse. The huge subsidy has been the reason that the PTP can only sell rice at a loss. Just look at the billions of financing that has been needed to pay for the subsidy.

If the Baht was the real problem, then why were rice sales in 2011 so high?

[Chao Lao Beach]

In the long run chasing a cheap baht is not a solution.

But since when has Thailand ever been interest in long term gains. As far as I have seen it has all been about a quick buck.

[whybother]

Baht started appreciating, just about five years ago, so this is not something new. I came here in Oct. 2002 the baht was 46 to one.

I believe they lost their number one place as the baht appreciated.

January 4, 2013

Thailand lost its three-decades-old title as the world's top rice exporter last year, falling behind India and Vietnam, industry sources said Friday.

http://www.nationmultimedia.com/national/Thailands-loses-top-rice-exporter-title-30197275.html

..

[SOTIRIOS]

....at what point does anybody put their foot down against treasonous words and acts.....meddling in government affairs...etc....

[whybother]

....at what point does anybody put their foot down against treasonous words and acts.....meddling in government affairs...etc....

They have plenty of them IN the government.

[how241]

Lots of talk but almost impossible to control the baht.

[LuckyLew]

"Ah, but, government debt in Thailand was only last week tabled at 44% of GDP."

And what will it b after they borrow 2 trillion?

[Thai at Heart]

"Ah, but, government debt in Thailand was only last week tabled at 44% of GDP."

And what will it b after they borrow 2 trillion?

Reportedly it may push the level over 50%. And?

[bkkgriz]

Korn thinks he is so smart. Try getting an overseas masters degree in a language that you can't speak at all. Now that's clever.

Awww bless you think he's clever that's nice. Do you think he is handsome and funny as well??

It's great when irony goes over one's head.

[Baerboxer]

Korn thinks he is so smart. Try getting an overseas masters degree in a language that you can't speak at all. Now that's clever.

Excellent piece of irony jaidam.

Indeed Khun Korn does think he is smart and has every right to. But as you say, getting a Masters in the United States in a language you can hardly speak is beyond clever, it is quite brilliant.

Khun Korn is doing exactly the same as Yingluck, is he not? I hope that he isn't studying under the auspices of some hill billy university as some Thai notables did.

Khun Korn's academic studies are long since over. (Winchester & Oxford)

His career history also speaks volumes about his ability regarding economics and financial matters.

I'm not quite sure what you mean by "Korn doing exactly the same as Yingluck"?

The Shinawatras, both Thaksin and Yingluck, studied at Kentucky Universities and I am sure both alumni would be offended to hear them referred to as "hill billy".

I'm sure you're right Ratcatcher. Although it would be interesting to here the university explain how a Master's can be awarded to someone who has such poor skill in the language the thesis, assignments, any exams, and any defenses would have been carried out in.

[Baerboxer]

Korn is missing the point. Thaksin's comments have nothing to do with his (lack of) knowledge about economics or fiscal issues. They are aimed at putting the idea in the uneducated masses heads that the problems of rice sales, falling exports etc are because the BOT is independant of government. If his government controlled the bank, then these problems would not not happen. It's political condtioning and obviously BOT is on the list to be taken into family control.

[paymaster]

I've heard of CPA but this new breed I am currently reading, TVA, must be new.

[ray23]

What has it been 6% growth since the first of the year.

Now Korn is on about the bank borrowing cheap dollars and then lending them at higher interest rates. If he is right smart move by the banks. ( Bangkok Post today) I believe a lot of hot money has came into the country in the past few years. With the fed holding it's rate at .25% pretty safe bet. Wish I could have done the same, others have. But it takes big money to pull this off.

One event not hardly, I started a thread on the subject roughly six years ago on a local forum and have followed it daily since. If the BOT actually does something to slow this it won't be the first time ( I don't think they will unless forced into it) They slowed things down by requiring money to stay for a specific time frame. That put the brakes on.

This is a Country of haves and have nots. Banks are have. So I see lots of talk and very little action. Things are just the way the haves want it. Banks were the root cause of the 97 crash. Will history repeat itself, usually does.

I don't believe anything will happen if the baht stays around it's current level. The small business is what is really being hit. They are not part of the haves.

I haven't really been hurt by this as I have an excellent retirement with an automatic 3% cola per year. Other don't have that, they are getting hot by both sides their money worth less and inflation takes it's toll as well.

I follow because it interests me, becoming an expat was the first time I eve thought of a rate of exchange. I got no axe to grind. But I think I have stayed in touch with the subject.

There have been times that the BOT did manipulate the baht and said so. I don't think that is what is happening now. The dollar made some gains. So I think what we hear now is no more then the proper stance to get reelected.

[NeverSure]

I think it would be wise to not put much emphasis on debt ratio to GDP. The GDP doesn't belong to the government but the debt does. The GDP can't be used to pay back debt. It isn't apples and apples because every country has a different internal structure, a different tax structured, and a different income level for individuals and companies who pay taxes. Each country has a different type of economic engine which drives its economy.

Throw out some numbers such as deficits or debt as a ratio of government income, or as a percentage of individual or family income, and it gets more relevant.

Next tell me how much of the GDP is produced by Thai owned companies, and how much is produced by foreign owned companies on Thai soil as compared to the West. At the extreme, if Ford and Toyota and Honda and others got sick of corruption, high taxes, relatively high wages and a strong baht, they could simply pull out. They have no loyalty to Thailand. I'm not predicting it, just making a point that Thailand doesn't own the means of production.

I would put Thailand's debt as tenuous at best, and so do the credit rating companies which give Thailand a bad credit rating of BBB-. That causes Thailand to have to pay a high interest rate to borrow that money. Interest can be a killer even when the ratio is "only" 50%.

As a comparison, the US pays only one tenth the rate of interest that Thailand does on every borrowed dollar. The US is paying about .25 percent, and Thailand is paying 2.5%. So definitely, those ratios aren't apples and apples.

Thailand is running deficits. This month the US is running a surplus for the first time in years, actually paying down debt. Thailand is even borrowing the money to pay interest. That can compound really fast.

I think Thailand is unique, and I see trouble. We used to call it getting too big for your britches.

[Thai at Heart]

I think it would be wise to not put much emphasis on debt ratio to GDP. The GDP doesn't belong to the government but the debt does. The GDP can't be used to pay back debt. It isn't apples and apples because every country has a different internal structure, a different tax structured, and a different income level for individuals and companies who pay taxes. Each country has a different type of economic engine which drives its economy.

Throw out some numbers such as deficits or debt as a ratio of government income, or as a percentage of individual or family income, and it gets more relevant.

Next tell me how much of the GDP is produced by Thai owned companies, and how much is produced by foreign owned companies on Thai soil as compared to the West. At the extreme, if Ford and Toyota and Honda and others got sick of corruption, high taxes, relatively high wages and a strong baht, they could simply pull out. They have no loyalty to Thailand. I'm not predicting it, just making a point that Thailand doesn't own the means of production.

I would put Thailand's debt as tenuous at best, and so do the credit rating companies which give Thailand a bad credit rating of BBB-. That causes Thailand to have to pay a high interest rate to borrow that money. Interest can be a killer even when the ratio is "only" 50%.

As a comparison, the US pays only one tenth the rate of interest that Thailand does on every borrowed dollar. The US is paying about .25 percent, and Thailand is paying 2.5%. So definitely, those ratios aren't apples and apples.

Thailand is running deficits. This month the US is running a surplus for the first time in years, actually paying down debt. Thailand is even borrowing the money to pay interest. That can compound really fast.

I think Thailand is unique, and I see trouble. We used to call it getting too big for your britches.

Well, ratios are useful in determining how effectively anyone can service the debt, and at less than 50% it is serviceable. You are right about the possiblity of anyone pulling out of the country, but I don't think that the big boys such as Toyota or the such are going anywhere anytime soon because they have committed, put the entire supply chain in place etc etc. FDI continues to increase in Thailand, not the other way around, despite all the political problems and even catastrophic natural disaster.

So, if Thailand continues to pootle along at 3 to 5% growth, it does enable them to maintain a reasonable amount of increased government spending in relation to GDP. Let us not forget that the markets to where these exports go, has probably not ever been in such terrible shape. Discretionary spending in the USA and EU is very bad, so to be sustaining 3 to 5% growth at this time is very good in reality. I do however, get very jumpy with reports of domestic banks availing themselves of cheap US dollars to lend in the Thai market.

To which sectors is this money going? To which companies? To which investment vehicles?

[SICHONSTEVE]

If Korn were as smart as everyone thinks he is, he would not give credence by debating any remarks that Thaksin has. He is merely empowering Thaksin and his importance by debating him in the press. Foolish Korn. Thais should all ignore both he and Thaksin and move on and find real leaders.

Don't agree!!!

Korn knows what he is talking about and Thaksin doesn't. All Korn is doing is simply pointing this out in a straghtforward manner so that everyone can see this is so.

Do you honestly not think that Thaksin has some ulterior motive for this that is not in Thailand's interest but purely for his own gain!!!

He should stick out of all of this as it will backfire on him as whatever he suggests and recommends is ultimately disastrous for the economy and (poor) Thai's - the self same people he conned and mugged in the first place in getting his puppet into power.

On second thoughts, maybe they SHOULD listen to him so that when it all goes pear-shaped they can all point an accusing finger at him.

[ray23]

Think about it Korn would not be where he is without Thaksin's blessing to his sister. Usually when things look clear here they are not.

[whybother]

Think about it Korn would not be where he is without Thaksin's blessing to his sister. Usually when things look clear here they are not.

Where would Korn have been if Thaksin didn't give blessing to his sister?

[SICHONSTEVE]

Think about it Korn would not be where he is without Thaksin's blessing to his sister. Usually when things look clear here they are not.

Where would Korn have been if Thaksin didn't give blessing to his sister?

Somewhere else clearly!!

[NeverSure]

I think it would be wise to not put much emphasis on debt ratio to GDP. The GDP doesn't belong to the government but the debt does. The GDP can't be used to pay back debt. It isn't apples and apples because every country has a different internal structure, a different tax structured, and a different income level for individuals and companies who pay taxes. Each country has a different type of economic engine which drives its economy.

Throw out some numbers such as deficits or debt as a ratio of government income, or as a percentage of individual or family income, and it gets more relevant.

Next tell me how much of the GDP is produced by Thai owned companies, and how much is produced by foreign owned companies on Thai soil as compared to the West. At the extreme, if Ford and Toyota and Honda and others got sick of corruption, high taxes, relatively high wages and a strong baht, they could simply pull out. They have no loyalty to Thailand. I'm not predicting it, just making a point that Thailand doesn't own the means of production.

I would put Thailand's debt as tenuous at best, and so do the credit rating companies which give Thailand a bad credit rating of BBB-. That causes Thailand to have to pay a high interest rate to borrow that money. Interest can be a killer even when the ratio is "only" 50%.

As a comparison, the US pays only one tenth the rate of interest that Thailand does on every borrowed dollar. The US is paying about .25 percent, and Thailand is paying 2.5%. So definitely, those ratios aren't apples and apples.

Thailand is running deficits. This month the US is running a surplus for the first time in years, actually paying down debt. Thailand is even borrowing the money to pay interest. That can compound really fast.

I think Thailand is unique, and I see trouble. We used to call it getting too big for your britches.

Well, ratios are useful in determining how effectively anyone can service the debt, and at less than 50% it is serviceable. You are right about the possiblity of anyone pulling out of the country, but I don't think that the big boys such as Toyota or the such are going anywhere anytime soon because they have committed, put the entire supply chain in place etc etc. FDI continues to increase in Thailand, not the other way around, despite all the political problems and even catastrophic natural disaster.

So, if Thailand continues to pootle along at 3 to 5% growth, it does enable them to maintain a reasonable amount of increased government spending in relation to GDP. Let us not forget that the markets to where these exports go, has probably not ever been in such terrible shape. Discretionary spending in the USA and EU is very bad, so to be sustaining 3 to 5% growth at this time is very good in reality. I do however, get very jumpy with reports of domestic banks availing themselves of cheap US dollars to lend in the Thai market.

To which sectors is this money going? To which companies? To which investment vehicles?

Thank you. Now please explain to me how the GDP which belongs to the private sector, can in anyway be used to pay off government debt?

It is only a number and doesn't mean the same thing in every country. It really doesn't work to compare any country's debt to GDP ratio to any other.

Thailand has to pay 2.5% interest on its debt. How can that compare, GDP to GDP to a country which has to pay only 1/5th that interest rate? The US for instance pays .5%.

Worse, Thai banks, some of which are owned by the government, are borrowing money from the West at low interest rates and lending to who knows who at much higher rates. Shades of 1997.

The Agricultural Bank which belongs to the government is upside down 700 billion baht in the rice scheme "revolving" fund. They never have said where they got that money after announcing they were having problems funding it. All we know is that the government bought rice for twice the world market value, and didn't sell it, and got the money from the Agricultural Bank. How did the Agricultural Bank get the money unless they borrowed it in foreign funds, exchanging into baht, and lending to the government for the rice scheme?

Who pays that back since we know the stock of rice won't nearly cover it? Is Thailand admitting to this debt in the national debt figures, or are they showing as an asset (money owed to) of the Ag. Bank?

[Thai at Heart]

NeverSure, on 20 May 2013 - 13:14, said:

Thai at Heart, on 20 May 2013 - 09:42, said:

NeverSure, on 20 May 2013 - 08:57, said:

I think it would be wise to not put much emphasis on debt ratio to GDP. The GDP doesn't belong to the government but the debt does. The GDP can't be used to pay back debt. It isn't apples and apples because every country has a different internal structure, a different tax structured, and a different income level for individuals and companies who pay taxes. Each country has a different type of economic engine which drives its economy.

Throw out some numbers such as deficits or debt as a ratio of government income, or as a percentage of individual or family income, and it gets more relevant.

Next tell me how much of the GDP is produced by Thai owned companies, and how much is produced by foreign owned companies on Thai soil as compared to the West. At the extreme, if Ford and Toyota and Honda and others got sick of corruption, high taxes, relatively high wages and a strong baht, they could simply pull out. They have no loyalty to Thailand. I'm not predicting it, just making a point that Thailand doesn't own the means of production.

I would put Thailand's debt as tenuous at best, and so do the credit rating companies which give Thailand a bad credit rating of BBB-. That causes Thailand to have to pay a high interest rate to borrow that money. Interest can be a killer even when the ratio is "only" 50%.

As a comparison, the US pays only one tenth the rate of interest that Thailand does on every borrowed dollar. The US is paying about .25 percent, and Thailand is paying 2.5%. So definitely, those ratios aren't apples and apples.

Thailand is running deficits. This month the US is running a surplus for the first time in years, actually paying down debt. Thailand is even borrowing the money to pay interest. That can compound really fast.

I think Thailand is unique, and I see trouble. We used to call it getting too big for your britches.

Well, ratios are useful in determining how effectively anyone can service the debt, and at less than 50% it is serviceable. You are right about the possiblity of anyone pulling out of the country, but I don't think that the big boys such as Toyota or the such are going anywhere anytime soon because they have committed, put the entire supply chain in place etc etc. FDI continues to increase in Thailand, not the other way around, despite all the political problems and even catastrophic natural disaster.

So, if Thailand continues to pootle along at 3 to 5% growth, it does enable them to maintain a reasonable amount of increased government spending in relation to GDP. Let us not forget that the markets to where these exports go, has probably not ever been in such terrible shape. Discretionary spending in the USA and EU is very bad, so to be sustaining 3 to 5% growth at this time is very good in reality. I do however, get very jumpy with reports of domestic banks availing themselves of cheap US dollars to lend in the Thai market.

To which sectors is this money going? To which companies? To which investment vehicles?

Thank you. Now please explain to me how the GDP which belongs to the private sector, can in anyway be used to pay off government debt?

It is only a number and doesn't mean the same thing in every country. It really doesn't work to compare any country's debt to GDP ratio to any other.

Thailand has to pay 2.5% interest on its debt. How can that compare, GDP to GDP to a country which has to pay only 1/5th that interest rate? The US for instance pays .5%.

Worse, Thai banks, some of which are owned by the government, are borrowing money from the West at low interest rates and lending to who knows who at much higher rates. Shades of 1997.

The Agricultural Bank which belongs to the government is upside down 700 billion baht in the rice scheme "revolving" fund. They never have said where they got that money after announcing they were having problems funding it. All we know is that the government bought rice for twice the world market value, and didn't sell it, and got the money from the Agricultural Bank. How did the Agricultural Bank get the money unless they borrowed it in foreign funds, exchanging into baht, and lending to the government for the rice scheme?

Who pays that back since we know the stock of rice won't nearly cover it? Is Thailand admitting to this debt in the national debt figures, or are they showing as an asset (money owed to) of the Ag. Bank?

Ummmm, how about taxes? And believe me, when a financial analyst is looking at the solvency of any country, this ratio, as broad as it might me, is right at the top of the list in terms of how anyone does even the most basic analysis.

Who would you rather lend money to at the moment, and how much would charge? Greece or Thailand?

Edited May 20, 2013 by Thai at Heart