Interest Rates are going to soar - what will it mean for us here in Thailand and Worldwide?

[ThaiHerbs]

I have no idea where interest rates are going. As a GATA spokesman stated a few years ago "~there are no markets anymore, just interventions" (manipulations) http://www.gata.org/node/6242

What Is Going To Happen If Interest Rates Continue To Rise Rapidly?

August 19, 2013 By The Doc 1 Comment

If you want to track how close we are to the next financial collapse, there is one number that you need to be watching above all others. The number that I am talking about is the yield on 10 year U.S. Treasuries, because it affects thousands of other interest rates in our financial system.

http://www.silverdoctors.com/what-is-going-to-happen-if-interest-rates-continue-to-rise-rapidly/

[KittenKong]

All these finance gurus. Why arent they living in the Carribean rather than a third world country with their millions of dollars from investment. The saying "Empty barrels make the most noise" springs to mind.

I cant speak for any of the other empty barrels, but I live here rather than in the Caribbean for two main reasons:

1) The food is tastier here

and

2) By living here I can legally pay no tax at all, anywhere in the world, which saves me quite a lot on my millions.

[stoli]

Would finally like to get some decent rates on those fixed deposits... Bring it on!

Yes, those of us living on our investment portfolios have been getting screwed long enough. Shoot up the interest rates up and let me live on the earnings, instead of the principal. The banks will fight this. Right now in the states the banks can borrow money from the fed for 0% interest, and loan it out as a car loan for 9.5%, or small business loan at 12%. The banks would not get the kind of return if they were paying the fed 6% for money. People would stop borrowing. And yes, free investment advisers are tending to their portfolios, and not yours. They use the public as a tool to make more for themselves. Pump & Dump is not new.

[garyk]

Yea, I stopped looking and reading the doom and gloom stuff. What for? I bought in when the market was down in 2008 made a few bucks. But it could disappear tomorrow. I am another one that long term invests. Hoping to never touch it. Unless emergency priority one.

Gold and doomsday Sayers are there. Personally I just pick a long term steady investment stock. 20 years + and let it ride. Screw the thinking about!

[diggledunc]

Can I add my two penneth as a UK born expat.

What I see are the following:

-Thai central bank reducing interest rates

-Thai GDP estimates being reduced

-Everybody warning Yingluck about the rice pledging scheme and debt

-Foreign money flows to Thailand changing

-Warnings about how US QE tapering and ending could weaken Asian currencies because of currency outflows.

-More political instability from a foreign perspective in Thailand

All good to weaken the baht so more for my UK£

-US QE going to reduce and end

-US economy seems to be picking up

All good to strengthen the $ against the baht which dictates the rate of exchange for other currencies

-UK QE looking less necessary

-UK GDP improving and future estimates being revised upwards by everybody including OECD

-UK jobless falling

-UK inflation not to high even if still worrisome

All good to maintain strength against US$ and therefore our rate against the baht

If interest rates in UK rose and it might be some time but the markets anticipate in the first instance this will help maintain or increase the value of the £. Of course as long as there are no other skeletons in the cupboard and a housing bubble doesn't cause mortgage instability which could happen if interest rates rise to quick. The exchange rate I get should improve.

When interest rates start to move up I should get more income which will increase the amount I have to live on here and hopefully this would lead to a further strengthening of the pound which I hope would give me more baht for more pounds.

I could be totally wrong but for the first time in years I am getting more confident about the £-Baht rates longer term.

Ok TV pundits I have my parachute on if you wish to shoot me down just let me buckle the harness.

[fobuff]

"He is predicting, that Interest Rates will soar sooner or later"

Wow great insight....

[ozyjon]

The bit I can never understand about financial gurus is that they are free with their advice.

To me, IF they were any good they would ALL be billionaires and wouldn't "give" any advice at all.

Yes that's how one financial guru who has now passed away made millions with his investment newsletter,, he would advise people to buy this stock and that stock, it wasn't until he was investigated and sent to jail that it was discovered that the guru was buying junk stocks and making a killing when he advised his followers to buy the stock (he owned) so you are right my friend, so true.

[CPH]

Rising interest rates would be an indication of rising activity in the economy. Not bad for stocks, but bad for housing. The tapering of the QE will be a slow balancing act to avoid the interest rates rising too fast. I think the FED had an expected 10 Year interest rate of 3 % by mid 2014. We are already nearly there why we could expect the FED to talk down interest rates at the next meeting. A too strong dollar will also hit the big multinationals in US, and thereby employment. Thats why the FED will taper slowly and try to balance things for a slow development in the economy. They want the banks to make these big profits from the low interest rates for as long as possible in order for them to repair their balance sheets. The big question is of course if they will succeed.

[UbonOz]

Interesting light reading in the link below, compliments of "tonika" @ http://www.thaivisa.com/forum/topic/662070-how-worried-should-i-be/

http://moneyweek.com/endofbritain/

[donmuang37]

Wow, some wild economic theories out there! Seriously doubt that interest rates 'will soar' in the near future, but sooner or later they will begin to rise as they are at historic lows. There are expectations that the US Federal Reserve will begin to scale back the Quantitative Easing policy this fall. The US dollar is likely to begin to get stronger; however, the Federal debt and the balance of payments deficit will limit how much and how fast. Balance of payments should also begin to improve because of the massive shale oil and gas reserves now being developed in the US which means less money going out to buy oil. If the dollar becomes stronger, you will be able to buy more Thai baht per dollar. (The baht is not tied to the dollar.)

Investing in gold and silver may appear attractive now, but, historically, it is essentially like gambling because these assets don't pay interest so gains are dependent on appreciation - and prices are very high right now.

For long term investments, the best choice is now and has been to buy high quality equities (company stocks). Even though I am a former stockbroker, I buy high quality mutual funds because I don't have the time or inclination to do the research to pick individual stocks. The best way to invest is using a technique called Dollar Cost Averaging. Check it out with a reputable investment advisor. Good luck.

[diggledunc]

Wow, some wild economic theories out there! Seriously doubt that interest rates 'will soar' in the near future, but sooner or later they will begin to rise as they are at historic lows. There are expectations that the US Federal Reserve will begin to scale back the Quantitative Easing policy this fall. The US dollar is likely to begin to get stronger; however, the Federal debt and the balance of payments deficit will limit how much and how fast. Balance of payments should also begin to improve because of the massive shale oil and gas reserves now being developed in the US which means less money going out to buy oil. If the dollar becomes stronger, you will be able to buy more Thai baht per dollar. (The baht is not tied to the dollar.)

Investing in gold and silver may appear attractive now, but, historically, it is essentially like gambling because these assets don't pay interest so gains are dependent on appreciation - and prices are very high right now.

For long term investments, the best choice is now and has been to buy high quality equities (company stocks). Even though I am a former stockbroker, I buy high quality mutual funds because I don't have the time or inclination to do the research to pick individual stocks. The best way to invest is using a technique called Dollar Cost Averaging. Check it out with a reputable investment advisor. Good luck.

Agree with everything you say but look at the Baht/US$/£ ratios. If they are not tied (Thaid ha ha)they are as good as