Pound/Baht

[chiang mai]

http://metro.co.uk/2014/03/28/30-years-of-uk-house-prices-examined-4672198/

versus

http://observationsandnotes.blogspot.com/2011/06/us-housing-prices-since-1900.html

or this, all on the same page:

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices

Edited June 21, 2014 by chiang mai

[chiang mai]

OK cool, but let's look at the elements involved:

UK GDP - is based on what, here's a clue, the value of real estate represents what percentage of?

Investments - rule of law etc, all true, BUT, have you asked yourself why people are investing in the UK, given that its GDP is based on property values to such a huge degree? Could it be that GBP and the UK is really that safe or is it just a temporary safe haven/bolt hole whilst uncertainty and turmoil exists in Europe, the US and elsewhere, dunno! And, what happens when that turmoil ends, where will those imported funds go, will they remain in a country that has no manufacturing to speak of and where the currency is so overvalued? The analogy here is with the Fed Q.E/ tapering program.

Interest rates - when they rise, what will happen to mortgage holders and what will happen to bank loan books as a result, remember, UK property prices never really corrected so what do we expect, that mortgage holders will borrow even more. Remember also that UK banks need a further ten years to rid themselves of their bad debt overhang, hmm!

Thailand - "one step away from civil war"! With all due respect, Thailand has never been on a better course in the past ten years, it's palatable and hugely exciting.

All those things having been said there is space between our views, great, at least you're looking forward rather than back and I'm happy to contribute to understanding and agreeing the differences.

I see "some" progress but as you are well aware - that doesn't answer my question.

When "you know who" goes - what happens then?

Thailand is still 50-100 years away from "Western Style Democracy™" - if ever.

I don't think the UK is doing too bad...

http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom

RAZZ

Given that we are not allowed to discuss that subject it makes it difficult to reply, perhaps suffice to say that succession is not guaranteed.

And yes, Thailand is a long way away from the UK in terms of democracy although that in itself may not be a such a bad thing - personally I'm of a mind that democracy is very over rated and not suitable for all countries/people!

But I'm not sure that democracy is relevant to economic stability and growth, you don't need one to have the other, as we have already seen.

Again, I don't disagree necessarily with your guesstimate of 60, if it does happen though I think it will be a fluke of timing resulting from the UK economy being falsely inflated (foreign capital inflows/property prices) and will be short lived.

Finally, using historic averages to determine the future value of a currency is not reliable and never has been, it doesn't take into account the economic changes that have taken place in either country and in Thailand those things have been substantial, post '97.

Edited June 21, 2014 by chiang mai

[PattayaPhom]

After 5 years of sub 50, am suprised any Brit has any money left so the thread is kind of a moot point

[i claudius]

After 5 years of sub 50, am suprised any Brit has any money left so the thread is kind of a moot point

Well i for one had to dig into my capitol ,but at least i was one of the lucky ones who had capitol to dig into .

[chiang mai]

After 5 years of sub 50, am suprised any Brit has any money left so the thread is kind of a moot point

Well i for one had to dig into my capitol ,but at least i was one of the lucky ones who had capitol to dig into .

Washington!

Edited June 22, 2014 by chiang mai

[ldnguy]

After 5 years of sub 50, am suprised any Brit has any money left so the thread is kind of a moot point

Brits are among the richest people in the world, so why shouldn't they have any money left? I got 46 baht to the GBP when I first arrived here, so things have got better, not worse. I'd have enough money at £1=10 baht, and so would most other Brits I know.

[chiang mai]

After 5 years of sub 50, am suprised any Brit has any money left so the thread is kind of a moot point

Brits are among the richest people in the world, so why shouldn't they have any money left? I got 46 baht to the GBP when I first arrived here, so things have got better, not worse. I'd have enough money at £1=10 baht, and so would most other Brits I know.

Unfortunately the several hundred thousand expat retirees, those on pensions and fixed incomes, are not always as fortunate as the younger newer arrivees, especially those who have made large profits from the recent property boom. Many of those people started out fifteen or twenty years ago in sound financial health only to see their income streams decimated by zero interest rate policies and a Pound that was devalued by up to 40%, as a result many had to return to the UK. Those circumstances are likely to be repeated, I like to think that threads such as this one might help a few people think about and try to do something to reduce their risk.

[i claudius]

After 5 years of sub 50, am suprised any Brit has any money left so the thread is kind of a moot point

Well i for one had to dig into my capitol ,but at least i was one of the lucky ones who had capitol to dig into .

Washington!

ok so sometimes i do not check my spooling ,bite me capital times 100

[chiang mai]

Don't be upset if I pass on your kind offer.

[PattayaPhom]

After 5 years of sub 50, am suprised any Brit has any money left so the thread is kind of a moot point

Brits are among the richest people in the world, so why shouldn't they have any money left? I got 46 baht to the GBP when I first arrived here, so things have got better, not worse. I'd have enough money at £1=10 baht, and so would most other Brits I know.

Youd be getting through 5,000 Sterling a month at that rate.....really, 60K a year so you are a millionaire then...met loadsa of them, they hang out with the retired Mi5 and SAS guys in Cheap Charlies Soi15....

[chiang mai]

The debate is about economics and forex, not dik length, move on!

[alfieconn]

It would be good to take a stab at possible future scenario's and the likelihood of them rather than reminisce about what happened ten years ago.

Ok boss

My prediction. It will rise to 60 at some point

RAZZ

You may well be right and given the weakness of the US and European economies it appears as though the UK is the poster boy of good economies currently. But it's all relative, the UK only appears strong because the other economies are weaker, the question I keep asking myself is, what happens when the hot money reverses and flows back into Europe and the US, that could be ugly for GBP.

The other point that always occurs to me when I start to compare those economies is how nimble the Thai.economy can be versus the lumbering, slow and difficult to turn monoliths in the West. Many of the fundamentals remain in Thailand, all that's needed now is for confidence to return and given the job that's being done by the junta currently, that confidence may not be that far away.

Nothing like stating the obvious is there !

[chiang mai]

It would be good to take a stab at possible future scenario's and the likelihood of them rather than reminisce about what happened ten years ago.

Ok boss

My prediction. It will rise to 60 at some point

RAZZ

You may well be right and given the weakness of the US and European economies it appears as though the UK is the poster boy of good economies currently. But it's all relative, the UK only appears strong because the other economies are weaker, the question I keep asking myself is, what happens when the hot money reverses and flows back into Europe and the US, that could be ugly for GBP.

The other point that always occurs to me when I start to compare those economies is how nimble the Thai.economy can be versus the lumbering, slow and difficult to turn monoliths in the West. Many of the fundamentals remain in Thailand, all that's needed now is for confidence to return and given the job that's being done by the junta currently, that confidence may not be that far away.

Nothing like stating the obvious is there !

Apart from stating nothing that is - just so that one can sit back and toss turds at those who actually have an opinion of their own rather than those who couldn't formulate one of their own, without having to resort to the Beano or the Dandy!

Goodness I love threads such as this, it brings out the absolute best intellectual economic minds, honed in proficient debate and absolutely pushes the limits of academic debate with comments such as, " Nothing like stating the obvious is there", I am wowed, have you met naam!

Edited June 22, 2014 by chiang mai

[mccw]

I don't think the chaos in the rest of the world will be ending anytime soon. Look at it- total mess. If anything I see it getting worse rather than better. That might be good for the £ and UK property / London property; but it doesn't stop west falling over again either.

[RAZZELL]

I don't think the chaos in the rest of the world will be ending anytime soon. Look at it- total mess. If anything I see it getting worse rather than better. That might be good for the £ and UK property / London property; but it doesn't stop west falling over again either.

Although I think the Tories are going to have to go some to get back in at the next election.

When Juncker gets elected (very likely) and starts going on about the EU Financial Transaction Tax by 2016 things are going to get interesting!

RAZZ

Edited June 22, 2014 by RAZZELL

[SheungWan]

I don't think the chaos in the rest of the world will be ending anytime soon. Look at it- total mess. If anything I see it getting worse rather than better. That might be good for the £ and UK property / London property; but it doesn't stop west falling over again either.

Total mess of an analysis.

[chiang mai]

I came across the following and thought it was a fairly accurate and concise list of key threats:

UK Economic Risks

• Economy highly dependent on financial services and property market
• Disagreement within the government coalition over European question
• High public debt and deficit levels
• High private debt
• Fragility of banking system
• Significant share of young people in the unemployment figures, possible source of social tensions

If you put the above in the context of interest rate rises it becomes easy to see how things could unravel, rates go up, bank loan books get stressed, mortgage holders can't pay so GDP slumps and civil unrest follows. The same end could be achieved by a European financial transaction tax or indeed by a UK based 9/11 style event where confidence erodes - it's a precarious tightrope walk.

Note: this post is solely about UK economic risks, nothing more.

Edited June 23, 2014 by chiang mai

[i claudius]

I came across the following and thought it was a fairly accurate and concise list of key threats:

UK Economic Risks

• Economy highly dependent on financial services and property market
• Disagreement within the government coalition over European question
• High public debt and deficit levels
• High private debt
• Fragility of banking system
• Significant share of young people in the unemployment figures, possible source of social tensions

If you put the above in the context of interest rate rises it becomes easy to see how things could unravel, rates go up, bank loan books get stressed, mortgage holders can't pay so GDP slumps and civil unrest follows. The same end could be achieved by a European financial transaction tax or indeed by a UK based 9/11 style event where confidence erodes - it's a precarious tightrope walk.

Note: this post is solely about UK economic risks, nothing more.

Your glass is always half empty ,isn't it mate ,must be so depresing for you

[mccw]

I don't think the chaos in the rest of the world will be ending anytime soon. Look at it- total mess. If anything I see it getting worse rather than better. That might be good for the £ and UK property / London property; but it doesn't stop west falling over again either.

Although I think the Tories are going to have to go some to get back in at the next election.

When Juncker gets elected (very likely) and starts going on about the EU Financial Transaction Tax by 2016 things are going to get interesting!

RAZZ

It would get interesting indeed.

My dream scenario would be Tory UKIP coalition majority at next ellection. Junker commission president and zero mean full negotiation- so UK leaves the EU at referendum

[chiang mai]

We could of course take the opposite approach and instead of trying to identify areas of risk and the likelihood that they might be realized, we could sit around instead and talk about how well everything's going and how wonderful the weather is to boot and how sure we are that if we do nothing, everything will be OK eventually! That's pretty much what governments used to do until somebody realized that such thinking did nothing to stop economies from driving off a cliff and finally risk management was invented, the flat earth types didn't like that because they found it hard to adjust and there are still some of them around today, cross breeding will I'm sure see them become extinct soon.

Edited June 23, 2014 by chiang mai

[AnotherOneAmerican]

We could of course take the opposite approach and instead of trying to identify areas of risk and the likelihood that they might be realized, we could sit around instead and talk about how well everything's going and how wonderful the weather is to boot and how sure we are that if we do nothing, everything will be OK eventually! That's pretty much what governments used to do until somebody realized that such thinking did nothing to stop economies from driving off a cliff and finally risk management was invented, the flat earth types didn't like that because they found it hard to adjust and there are still some of them around today, cross breeding will I'm sure see them become extinct soon.

You must really hate your home country.

You desperately want the British currency to fail, but no matter what you post, it just keeps picking itself up again.

How does it feel to be wrong all the time?

Edited June 23, 2014 by AnotherOneAmerican

[chiang mai]

We could of course take the opposite approach and instead of trying to identify areas of risk and the likelihood that they might be realized, we could sit around instead and talk about how well everything's going and how wonderful the weather is to boot and how sure we are that if we do nothing, everything will be OK eventually! That's pretty much what governments used to do until somebody realized that such thinking did nothing to stop economies from driving off a cliff and finally risk management was invented, the flat earth types didn't like that because they found it hard to adjust and there are still some of them around today, cross breeding will I'm sure see them become extinct soon.

You must really hate your home country.

You desperately want the British currency to fail, but no matter what you post, it just keeps picking itself up again.

How does it feel to be wrong all the time?

Indeed I want so badly for it to fail that I keep 50% of my assets in that currency and 50% of my time in that country! What part of risk analysis and debate do you not understand!!

[AnotherOneAmerican]

We could of course take the opposite approach and instead of trying to identify areas of risk and the likelihood that they might be realized, we could sit around instead and talk about how well everything's going and how wonderful the weather is to boot and how sure we are that if we do nothing, everything will be OK eventually! That's pretty much what governments used to do until somebody realized that such thinking did nothing to stop economies from driving off a cliff and finally risk management was invented, the flat earth types didn't like that because they found it hard to adjust and there are still some of them around today, cross breeding will I'm sure see them become extinct soon.

You must really hate your home country.

You desperately want the British currency to fail, but no matter what you post, it just keeps picking itself up again.

How does it feel to be wrong all the time?

Indeed I want so badly for it to fail that I keep 50% of my assets in that currency and 50% of my time in that country! What part of risk analysis and debate do you not understand!!

The part where you keep predicting a fall in value, yet it keeps rising.

[chiang mai]

We could of course take the opposite approach and instead of trying to identify areas of risk and the likelihood that they might be realized, we could sit around instead and talk about how well everything's going and how wonderful the weather is to boot and how sure we are that if we do nothing, everything will be OK eventually! That's pretty much what governments used to do until somebody realized that such thinking did nothing to stop economies from driving off a cliff and finally risk management was invented, the flat earth types didn't like that because they found it hard to adjust and there are still some of them around today, cross breeding will I'm sure see them become extinct soon.

You must really hate your home country.

You desperately want the British currency to fail, but no matter what you post, it just keeps picking itself up again.

How does it feel to be wrong all the time?

Indeed I want so badly for it to fail that I keep 50% of my assets in that currency and 50% of my time in that country! What part of risk analysis and debate do you not understand!!

The part where you keep predicting a fall in value, yet it keeps rising.

Reading and comprehension appear not to be your strengths, if you look closely at the start of this thread you'll see that I agree with Razzel that THB will fall and may well reach 60, any discussion on potential future risks to the UK economy is exactly that, a discussion on potential future economic risks, no more, no less.

[RAZZELL]

Haven't you been saying for the last couple of years the £ is going to tank?

RAZZ

Edited June 23, 2014 by RAZZELL

[chiang mai]

Haven't you been saying for the last couple of years the £ is going to tank?

RAZZ

I have been saying for about the past year that the Pound is over valued and that the state of the UK economy alone does not justify its current value - it's apparent strength comes by virtue of the weakness of other economies, especially the US.

Support for the Pound comes from two places, inflows of hot money and the value of real estate, not from the economy itself per se. When we look at say Thailands economy for example we can see that Thailand actually makes things and exports them for sale overseas, that is the Thai economy. The UK economy on the other hand now relies on overseas money invested in real estate and on consumer spending. I haven't said GBP will tank but I have said that at some point it will correct, simply because hot money and property values are finite.

EDIT: Just an after thought: I'm OK if a few posters here want to make me the subject of the debate but honestly, the discussion is about GBP/THB and the associated economies, attacking me instead of the arguments that are made doesn't actually help folks understand the currency exchange issues or the likely future direction nor the factors involved.

Edited June 23, 2014 by chiang mai

[johnnybgood]

Very entertaining.

Are you Clarkson or Paxman?

[chiang mai]

Very entertaining.

Are you Clarkson or Paxman?

That's funny. Neither of course, just someone with an interest in economics and forex who enjoys a debate. BTW I can't stand Clarkson, never could.

[watso63]

There are many good signs, well better than the Eurozone and good ol' US of A right now. Some good investment coming our way from China and Japan recently and a pick up in manufacturing and exports. The reliance on property isn't such a bad thing, even though I personally believe it is overvalued already because as long as there is a housing shortage, under supply and over demand will keep that sector healthy. Increasing interest rates will strengthen the pound. The downside is overstretched mortgage borrowers curtailing spending or defaulting. I can't see any positives for Thailand as domestic consumption has fell off a cliff as families are having to come to terms with high peronal debt, manufacturing is in the doldrums and infrastructure spending is in crisis.

Oops being dragged out by TGF! Bye for now :-)

[chiang mai]

There are many good signs, well better than the Eurozone and good ol' US of A right now.

I rest my case, current UK economic strength is relative to the very weak strength of other major economies, it's akin to one ugly guy going drinking with three super ugly mates and all the girls think he's the good looking one!

Edited June 24, 2014 by chiang mai