America declares war on world currencies: Thai opinion

[yoshiwara]

Thanong is a moron if he believes this. Currencies float. If the central bank tries to control the baht, then they are just betting against financial markets, and inevitably, they'll lose.

Eh.......wrong. I've posted a report twice on Thaivisa that the incoming Governor of the Bank of England is likely to try to devalue the GBP by up to 15%.

Currency manipulation has long been a nefarious weapon, there would be no shock if the Fed was quietly attempting it while protesting at others ( China ) doing the same thing.

England, like Thailand isn't a big enough player to control the value of their own currency.

So Kittirat got what he wanted, now watch inflation start to move, and then, oooops, can we slow down the construction market please, we are stoking more of a bubble. The bloke is an absolute bull in a China shop with his actions.

I am pretty much convinced that Kittirat like the other ministers is just into making pronouncements depending on whatever story is in the headlines this week. Its all about the announcements. The BOT on the other hand tries to keep the show on the road but have committed the ultimate sin of not responding 1:1 with whatever nonsense emanates from the Thaksin camp.

[yoshiwara]

??

where to begin...

"hints" that QE "might" ease = Global Currency War?

"If there are signs of US recovery..." The US economy is entering it's 4th straight year of growth.

US inflation is low so the Fed helps US exports with QE. This is not Global Currency War. If inflation picks up the Fed will cut QE.

what's funny is that since these rumors are out, the USD lost ground fast.

personally, I can't concile the available information with the USD's moves, something else is probably going on that we don't know

Would that be a known unknown or an unknown unknown?

it is easier to eat soup with a fork than to make money in foreign exchange

It doesn't have to be done directly or short term. The guys who bought Thai property with foreign currency eg sterling 10 or so years ago have done very well currency-wise if they sold recently or even around now.

[Anon999]

Thanong is a moron if he believes this. Currencies float. If the central bank tries to control the baht, then they are just betting against financial markets, and inevitably, they'll lose.

Eh.......wrong. I've posted a report twice on Thaivisa that the incoming Governor of the Bank of England is likely to try to devalue the GBP by up to 15%.

Currency manipulation has long been a nefarious weapon, there would be no shock if the Fed was quietly attempting it while protesting at others ( China ) doing the same thing.

Where did you get your 'likely to devalue the GBP by up to 15%' from? From my understanding the new Governor is not in favour of more QE and reducing GBP to US$1.30/£ would make oil imports ridiculously expensive and push the pump price up to about £1.60.litre. The exchange rate with the baht would drop to 40 and against the euro it would be 1:1.

Edited June 14, 2013 by Anon999

[upena]

fully confirmed by who?

Edited June 14, 2013 by metisdead
Bold font removed.

[kamahele]

There is no US conspiracy to drive the value of the baht down. The economy is improving and the government isn't printing money like it is going out of style anymore. The US has actually been keeping the dollar artificially low (what we've accused the Chinese of doing) for decades in order to drive overseas sales of US made products. With the rise in the dollar, it makes it harder on Americans to purchase products made overseas and to travel overseas as it becomes too expensive and the US consumers depend too much on products made overseas. It also drives down purchases of US made products both in the US and overseas.

[realenglish1]

Why is it that they blame the U. S for their problems and say they have no control That is a load of crap. Last week when they lowered interest rates the baht moved a lot.

Adjusting interest rates and buying or selling the baht gives them a lot of control This is economics 101

Blame it on someone else so they do not take the heat.

Take the heat and do a good job that is what it is all about

Edited June 14, 2013 by realenglish1

[billd766]

??

where to begin...

"hints" that QE "might" ease = Global Currency War?

"If there are signs of US recovery..." The US economy is entering it's 4th straight year of growth.

US inflation is low so the Fed helps US exports with QE. This is not Global Currency War. If inflation picks up the Fed will cut QE.

what's funny is that since these rumors are out, the USD lost ground fast.

personally, I can't concile the available information with the USD's moves, something else is probably going on that we don't know

Would that be a known unknown or an unknown unknown?

I can't comment on that properly as I am not sure if what I know is what I really know or if it is what I don't know.

Edited June 14, 2013 by billd766

[berg1666]

Be careful what you wish for guys. A falling THB will affect a lot of the things we farang purchase a lot of in a bad way; imported foods and booze, fuel, airfares etc.

And no-one really believe the central banks can really control their exchange rates do they? Its is a USD$4 Trillion A DAY market! Look at Japan; talked the big talk for a while, got a decent depreciation, but then the buzz wore off and it has appreciated rapidly over the last month. To think that the Thai Central Bank could actually control the exchange rate on a sustained basis is ludicrous.

[yoshiwara]

??

where to begin...

"hints" that QE "might" ease = Global Currency War?

"If there are signs of US recovery..." The US economy is entering it's 4th straight year of growth.

US inflation is low so the Fed helps US exports with QE. This is not Global Currency War. If inflation picks up the Fed will cut QE.

what's funny is that since these rumors are out, the USD lost ground fast.

personally, I can't concile the available information with the USD's moves, something else is probably going on that we don't know

Would that be a known unknown or an unknown unknown?

I can't comment on that properly as I am not sure if what I know is what I really know or if it is what I don't know.

That would be a known known.

[stoffel45]

Last month I received 36.7 baht for 1 euro.

This month it is 40.49 baht for 1 euro.

One thing for absolute certain, the euro is so pathetic it cannot influence the US$, nor the baht.

I think, like the baht it is a cork on the peaks and troughs of the dollar ocean.

[yoshiwara]

Last month I received 36.7 baht for 1 euro.

This month it is 40.49 baht for 1 euro.

One thing for absolute certain, the euro is so pathetic it cannot influence the US$, nor the baht.

I think, like the baht it is a cork on the peaks and troughs of the dollar ocean.

FX traders have lost a fortune betting against the euro. Some cork.

[12DrinkMore]

Thanong is a moron if he believes this. Currencies float. If the central bank tries to control the baht, then they are just betting against financial markets, and inevitably, they'll lose.

Eh.......wrong. I've posted a report twice on Thaivisa that the incoming Governor of the Bank of England is likely to try to devalue the GBP by up to 15%.

Currency manipulation has long been a nefarious weapon, there would be no shock if the Fed was quietly attempting it while protesting at others ( China ) doing the same thing.

England, like Thailand isn't a big enough player to control the value of their own currency.

<deleted>.

Any country that issues its own currency can devalue the currency.

It only needs a credible threat, such as the Swiss made, to sell limitless quantities of their currency into the market.

Conversely it is almost impossible to raise the value of a currency against the "market", it would require limitless quantities of forex to buy up the sovereign currency. This proved impossible in the Asian crisis and would do again.

Bernanke will not stop QE, not ever.

First of all his stated priority is to reduce the numbers of the unemployable. IMO this should not be his responsibility, congress have passed the buck, so to speak. In the current zero interest rate times, only fiscal measures can sort out unemployment. Congress need to come up with a few ideas. Bernanke has pulled all his levers, but he has to be seen as doing something.

Secondly it would collapse the bond market, further impairing the balance sheets of all those holding treasuries.

Nope, zero interest rates in the US. UK and EU area are here to stay for the long term. The Japanese disease has arrived, and they can't all devalue against each other.

Bernanke, I would guess, would prefer to have a weak USD, but IMO he doesn't really care too much, as it is FED policy to remove 2% of the value of the USD every year through inflation.

IMO all the voices moaning about whether a particular currency is getting stronger or weaker should apply a bit of brain power before making the knee jerk. Going into the future I can confidently predict that the THB will be constantly either stronger, weaker or the same against the USD. Sometimes the importers and holders of THB will benefit and sometimes the exporters will benefit. How a change affects the economy and GDP is massively complex.

So just plan and live with change.

[rshoemake]

It's not just the US by the way. Is that just the author's favorite scapegoat?

The truth is that China started the currency wars, and have been actively keeping their currency artificially low for quite a long time. Let's not forget that China is doing their own form of QE, and Japan, England, and Europe. So, yes there is a global currency war, but it didnt start with the USA.

Anti-western bias anyone?

[BradinAsia]

??

where to begin...

"hints" that QE "might" ease = Global Currency War?

"If there are signs of US recovery..." The US economy is entering it's 4th straight year of growth.

US inflation is low so the Fed helps US exports with QE. This is not Global Currency War. If inflation picks up the Fed will cut QE.

what's funny is that since these rumors are out, the USD lost ground fast.

personally, I can't concile the available information with the USD's moves, something else is probably going on that we don't know

Would that be a known unknown or an unknown unknown?

it is easier to eat soup with a fork than to make money in foreign exchange

That must be the reason the Japanese never say "eat" soup.

They "drink" soup.

Maybe a bit off topic, but I just couldn't resist...

[DerekMarshall]

Just as long as the € gains value against the Baht..I could nt give a cahuna!

[bkk_mike]

There's actually a story about it in The Economist this week.

http://www.economist.com/news/finance-and-economics/21579461-prospect-less-quantitative-easing-america-has-rocked-currency-and-bond

Not about Thailand, but about how Bernanke suggesting that QE might be coming to end "soon", has pushed up the dollar against emerging market currencies.

But the whole issue of a wave of invested money flowing away from the US originally because of the lack of decent returns, and now flowing back to try and beat the exchange rate rise that would occur when Quantitative Easing ends... can't be a surprise to anyone.

QE can't go on forever. It had to end eventually. Just imagine the move when they actually do end it.

[i claudius]

You can all argue as much as you like but lets face it at the end of the day none of them ,politicians ,bankers or uncle tom coble give a fairys fart what happens ,as long as their ok.

[yoshiwara]

You can all argue as much as you like but lets face it at the end of the day none of them ,politicians ,bankers or uncle tom coble give a fairys fart what happens ,as long as their ok.

...whereas you are a regular Mary Poppins.

[hawthorne]

I am more conerned with so much world QE that all currencies will be floated/bloated to the point of hyperinflation since economies are picking up but not at the pace required to battle back inflation. Granted once you flood the markets with paper and no appreciable increase in jobs how the heck can you tighten the money supply without causing even more of a catastrophy? I certainly see more unstable currency wars leading to large fluctuations across the globe as all try to value the sea of paper. Having paper does not seem like a good place for my money. I would prefer something more tangible like stocks or realestate, if a doomsday theorist get a few baht of gold also.

[Thighlander]

The bursting of the emerging market bond bubbles may be the next significant economic event. The emerging market currencies are clearly at risk, too.

A lot of us Americans have been waiting for four years to get our 4% , 1 year CDs back. I too have been chasing after yields in equities, and that too would come to a screeching halt. Even after making 100% on tobacco in three years, it still may be the safest currency around. Seems like every person on public assistance has at least a pack a day habit.

[kblaze]

The bursting of the emerging market bond bubbles may be the next significant economic event. The emerging market currencies are clearly at risk, too.

A lot of us Americans have been waiting for four years to get our 4% , 1 year CDs back. I too have been chasing after yields in equities, and that too would come to a screeching halt. Even after making 100% on tobacco in three years, it still may be the safest currency around. Seems like every person on public assistance has at least a pack a day habit.

that made me chuckle, thanks. and that is an interesting point; the best investments for the future may be those that have the most exposure to the "socially supported" segment

[12DrinkMore]

"There's actually a story about it in The Economist this week.

QE can't go on forever. It had to end eventually. Just imagine the move when they actually do end it."

Why can't it go on forever and ever?

The FED owns some 70% of Geithner's debt, and has a humongous amount of mortgage backed toilet paper, totaling well over three trillion. How on earth is he going to flog that lot into the market on top of the new issues of Geithner's debt? And who would buy any of it anyway? If the Bernank stated he was going to "taper", then interest rates would move back to where they should be and bond price would plummet. Nobody would be buying either Geithner's debt or Bernanke's bits and bobs until there was a clear expectation about where interest rates could rise to before the Bernank hits another lever.

IMO

1. Zero interest rates are here for the next decade.

2. The FED will be running a massively expanded and expanding balance sheet for ever.

Japan has failed to ignite any inflation for twenty years. Bernanke has demonstrated that he can force money out of safer assets into riskier assets and blow up asset bubbles across the globe. But no-one has managed to persuade Joe Public to rush off to the shops and max out the debt cards again. Unemployment is too high, there is a now a perception that debt, both private and public, is very bad and has to be reduced.

Anything other than low inflation or deflation is not coming your way soon.

Hyperinflation??? Give me a break. It would require either a shortage of goods, and Big C was very well stocked today, or a massive amount of cash injection with a "get rid" by date of two days, and no central bank is heading that way.

[Thai at Heart]

https://en.wikipedia.org/wiki/List_of_country_subdivisions_by_GDP_over_100_billion_US_dollars

This is an interesting comparison. The whole of Thailand has a GDP that is around Ontario. As though Thailand is supposed to be able to control completely how it's currency appreciates or depreciates.

[Thighlander]

The cost of US Social Programs is about 1.7 trillion, that by itself would be about equal to the GDP of S. Korea at about #16. California, by itself, would be 6th or 7th. The county pf a million, that I grew up in, would be in the top 50.

[rijb]

The bursting of the emerging market bond bubbles may be the next significant economic event. The emerging market currencies are clearly at risk, too.

A lot of us Americans have been waiting for four years to get our 4% , 1 year CDs back. I too have been chasing after yields in equities, and that too would come to a screeching halt. Even after making 100% on tobacco in three years, it still may be the safest currency around. Seems like every person on public assistance has at least a pack a day habit.

According to Morgan Stanley, Thailand is 'moderately exposed' to the sudden stop.

[rbrooks]

Nice try to blame Thailand's woes on the Fed. Poor little Thailand. But then The Nation in its pro-gold bug guise has a distinct weakness here.

It seems they always tend to blame the Farang for their problems.

[Thighlander]

The last really bad recession of approx 1979-1980 ended with a collapse of gold prices and a very strong Dollar. It was maybe the only time in my life that Europe was cheap. Gold dropped possibly faster than real estate did in 2009. A friend of mine went to Germany and bought a nice leather coat for 60 USD. Sex with prossies in Paris was cheaper than Mexico----not that I would ever pay for it, yeah right.

[12DrinkMore]

The last really bad recession of approx 1979-1980 ended with a collapse of gold prices and a very strong Dollar. It was maybe the only time in my life that Europe was cheap. Gold dropped possibly faster than real estate did in 2009. A friend of mine went to Germany and bought a nice leather coat for 60 USD. Sex with prossies in Paris was cheaper than Mexico----not that I would ever pay for it, yeah right.

This time its different.

The gold price won't collapse, far too much interest in Asia in buying physical gold.

The USD won't become massively strong, nobody wants a strong USD.

However, sex is now cheaper in the UK than Thailand.

http://www.economist.com/news/britain/21578434-old-industry-deep-recession-sex-doesnt-sell

Poor old Brits, having no money for luxuries after paying for food, mortgage and petrol..

[smotherb]

??

where to begin...

"hints" that QE "might" ease = Global Currency War?

"If there are signs of US recovery..." The US economy is entering it's 4th straight year of growth.

US inflation is low so the Fed helps US exports with QE. This is not Global Currency War. If inflation picks up the Fed will cut QE.

what's funny is that since these rumors are out, the USD lost ground fast.

personally, I can't concile the available information with the USD's moves, something else is probably going on that we don't know

Would that be a known unknown or an unknown unknown?

perhaps an unexpected unknown

[Naam]

The last really bad recession of approx 1979-1980 ended with a collapse of gold prices and a very strong Dollar. It was maybe the only time in my life that Europe was cheap. Gold dropped possibly faster than real estate did in 2009. A friend of mine went to Germany and bought a nice leather coat for 60 USD. Sex with prossies in Paris was cheaper than Mexico----not that I would ever pay for it, yeah right.

end of 1980 the Dollar was not particularly strong vs. Deutsche Mark. in fact is was weaker than in the mid/late 1970s. actual Dollar strength started in 1982 and peaked in spring 1985.