Just wondering --- Does anyone see the Dollar-Baht rate finally breaking through 33 Baht?

topt · December 27, 2014

55555.... Another one of the mesmerized populace. The American economy is on it's last legs with no powder left in the magazine. Zero interest rates, QE finished (although wait for QE4?), 18 trillion in debt and no real growth to talk of and please don't expound the increased (lie) recent GDP figures. Many ,many American negative statistics I could quote here, but not enough space!! The markets are in for a massive correction soon and many people will feel the effects. However, in a roundabout way, your assumption about the US dollar is correct. the world is awash with US dollar-denominated debt and payback time is fast approaching. There are massive repayments (in a strenghthened dollar) due and also defaults (due to zero interest loans) are just around the corner, all around the world. Therefore a 'demand' for US dollars, at an affordable price will lead to a 'shortage' = strengthening US dollar. With respect to the baht against other currencies, China has to devalue the yuan (already happening) to stay competitive in the export market, other regional currencies will have to do likewise to remain competitive. Ever hear the term 'currency wars', it's fast approaching. So, yes, my outlook for virtually all currencies against the Thai baht is,( especially for us ex-pats) it's on the up and up!

Oh my , facts can be depressing. Better to scare others with your fantasy.

Hey elgenon, sorry to have depressed you, that was not my intention. Maybe you are one of these people who believe in the US government-sponsored mass media who are still spewing lies about the 'real' state of the US economy. I don't want to get too technical here but can I just say that the junk bond market associated particularly with the US oil fracking industry(worth trillions of dollars) is already cracking (and has been since June). Now that oil has plunged 50%, the whole industry is unraveling fast, only the very strongest will be left standing. But it's the collapse of the bonds associated with that industry which will soon bring about a massive exodus of money (starting already) from that market and of course history tells us that when the bond market collapses, the stock market certainly follows.

I am a private investor. I do all my own fundamental and technical analysis. I have no axe to grind whether the market is going up or down. The reason I don't care is I make money either way, rising or falling markets. But every indicator I possess tells me a substantial market correction (crash) is imminent. So that's my fantasy and I apologise for that. IMHO the only hope for the markets of the world (as whatever happens in the US market will obviously impact everywhere else) is QE4 which Obama may instigate to try and stave off a market collapse on 'his watch' but even that will only be a sticking plaster on a water dyke (unless QE5 ha-ha) because ultimately the market will drown in it's own debt.

I promise elgenon, if all this does not come to pass, I will publicly apologise to you here on TV. Are you prepared to do the same?

You want to put a time frame on that so we can revisit at the appropriate point?

elgenon · December 27, 2014

55555.... Another one of the mesmerized populace. The American economy is on it's last legs with no powder left in the magazine. Zero interest rates, QE finished (although wait for QE4?), 18 trillion in debt and no real growth to talk of and please don't expound the increased (lie) recent GDP figures. Many ,many American negative statistics I could quote here, but not enough space!! The markets are in for a massive correction soon and many people will feel the effects. However, in a roundabout way, your assumption about the US dollar is correct. the world is awash with US dollar-denominated debt and payback time is fast approaching. There are massive repayments (in a strenghthened dollar) due and also defaults (due to zero interest loans) are just around the corner, all around the world. Therefore a 'demand' for US dollars, at an affordable price will lead to a 'shortage' = strengthening US dollar. With respect to the baht against other currencies, China has to devalue the yuan (already happening) to stay competitive in the export market, other regional currencies will have to do likewise to remain competitive. Ever hear the term 'currency wars', it's fast approaching. So, yes, my outlook for virtually all currencies against the Thai baht is,( especially for us ex-pats) it's on the up and up!

Oh my , facts can be depressing. Better to scare others with your fantasy.

Hey elgenon, sorry to have depressed you, that was not my intention. Maybe you are one of these people who believe in the US government-sponsored mass media who are still spewing lies about the 'real' state of the US economy. I don't want to get too technical here but can I just say that the junk bond market associated particularly with the US oil fracking industry(worth trillions of dollars) is already cracking (and has been since June). Now that oil has plunged 50%, the whole industry is unraveling fast, only the very strongest will be left standing. But it's the collapse of the bonds associated with that industry which will soon bring about a massive exodus of money (starting already) from that market and of course history tells us that when the bond market collapses, the stock market certainly follows.

I am a private investor. I do all my own fundamental and technical analysis. I have no axe to grind whether the market is going up or down. The reason I don't care is I make money either way, rising or falling markets. But every indicator I possess tells me a substantial market correction (crash) is imminent. So that's my fantasy and I apologise for that. IMHO the only hope for the markets of the world (as whatever happens in the US market will obviously impact everywhere else) is QE4 which Obama may instigate to try and stave off a market collapse on 'his watch' but even that will only be a sticking plaster on a water dyke (unless QE5 ha-ha) because ultimately the market will drown in it's own debt.

I promise elgenon, if all this does not come to pass, I will publicly apologise to you here on TV. Are you prepared to do the same?

Today T Boone Pickens said oil will be $100 in a year. What do you think?

elgenon · December 27, 2014

Why ask a question like that here ?

Do you think the TV readers are currency traders ? Of course not, most here don't have a clue what is going on about anything (although most like to THINK they do).

What a place to ask a question like that !! It's laughable.

Why not go ask someone that knows what they are "talking" about ?

Even then nobody can ever be sure otherwise we would all be multi-billionaires

Any Suggestions?? Inquiring minds want to know.........I'm about to transfer in about 100K USD any ideas when would be the best approx time to pull the trigger??

Typical advice for investing is to do it gradually for cost averaging.

UDONJIM · December 27, 2014

55555.... Another one of the mesmerized populace. The American economy is on it's last legs with no powder left in the magazine. Zero interest rates, QE finished (although wait for QE4?), 18 trillion in debt and no real growth to talk of and please don't expound the increased (lie) recent GDP figures. Many ,many American negative statistics I could quote here, but not enough space!! The markets are in for a massive correction soon and many people will feel the effects. However, in a roundabout way, your assumption about the US dollar is correct. the world is awash with US dollar-denominated debt and payback time is fast approaching. There are massive repayments (in a strenghthened dollar) due and also defaults (due to zero interest loans) are just around the corner, all around the world. Therefore a 'demand' for US dollars, at an affordable price will lead to a 'shortage' = strengthening US dollar. With respect to the baht against other currencies, China has to devalue the yuan (already happening) to stay competitive in the export market, other regional currencies will have to do likewise to remain competitive. Ever hear the term 'currency wars', it's fast approaching. So, yes, my outlook for virtually all currencies against the Thai baht is,( especially for us ex-pats) it's on the up and up!

Oh my , facts can be depressing. Better to scare others with your fantasy.

Hey elgenon, sorry to have depressed you, that was not my intention. Maybe you are one of these people who believe in the US government-sponsored mass media who are still spewing lies about the 'real' state of the US economy. I don't want to get too technical here but can I just say that the junk bond market associated particularly with the US oil fracking industry(worth trillions of dollars) is already cracking (and has been since June). Now that oil has plunged 50%, the whole industry is unraveling fast, only the very strongest will be left standing. But it's the collapse of the bonds associated with that industry which will soon bring about a massive exodus of money (starting already) from that market and of course history tells us that when the bond market collapses, the stock market certainly follows.

I am a private investor. I do all my own fundamental and technical analysis. I have no axe to grind whether the market is going up or down. The reason I don't care is I make money either way, rising or falling markets. But every indicator I possess tells me a substantial market correction (crash) is imminent. So that's my fantasy and I apologise for that. IMHO the only hope for the markets of the world (as whatever happens in the US market will obviously impact everywhere else) is QE4 which Obama may instigate to try and stave off a market collapse on 'his watch' but even that will only be a sticking plaster on a water dyke (unless QE5 ha-ha) because ultimately the market will drown in it's own debt.

I promise elgenon, if all this does not come to pass, I will publicly apologise to you here on TV. Are you prepared to do the same?

Today T Boone Pickens said oil will be $100 in a year. What do you think?

Hi again elgenon. Good on you for taking on the challenge! Let's say by 1st April 2015. Hey, that's April Fool's day - hope it's not me, ha-ha. Personally, I think that gives me about 2 months grace but I'm playing it 'safe'.

On the subject of oil prices, I am not an investor in commodities but my reading of the situation is this. Opec have drawn a line (in the sand? ha-ha) which says that they will stop at nothing to retain their market share and they have very deep pockets indeed. Currently, there is a global over-supply of oil (about 1.1m barrels/day) and many fracking ventures in the US are projecting increased production next year and some still to come on-stream?? So, all things being equal, the over-supply will just get larger and prices will fall further, got to. The only hope for oil prices in the foreseeable future is if either Opec cuts their output (very doubtful) or if the fracking industry goes belly up. The fracking industry will take a massive hit as I mentioned in a previous post but strategically, I don't think the US government can let the whole industry grind to a shutdown (reasons for QE4?). I think the industry will consolidate over maybe a year or so and buy-outs will be the order of the day and during that phase of consolidation, oil may move up 10 dollars but 100 dollars within 1 year?. I just can't see it. Many so-called market pundits are only peddling their own favoured products. I think T Boone Pickens is a classic example. There's a lot of very good free information on the internet about what's really happening in the global economy, it isn't really hard to find.

Another poster asked about transferring $100,000 to Thailand. If it was me and I didn't need the money now then I'd definitely wait. There are many reasons why IMHO the US dollar will strengthen considerably in the next six months, I touched on some of them in a previous post. Here, http://www.investing.com/quotes/us-dollar-index-advanced-chart, you can check the dollar index daily, it's already moving up against a basket of world currencies.

MyFriend You · December 28, 2014

Why ask a question like that here ?

Do you think the TV readers are currency traders ? Of course not, most here don't have a clue what is going on about anything (although most like to THINK they do).

What a place to ask a question like that !! It's laughable.

Why not go ask someone that knows what they are "talking" about ?

Even then nobody can ever be sure otherwise we would all be multi-billionaires

Any Suggestions?? Inquiring minds want to know.........I'm about to transfer in about 100K USD any ideas when would be the best approx time to pull the trigger??

Typical advice for investing is to do it gradually for cost averaging.

Thanx elegnon - think I'll do just that after the New Year is rolling along nicely - as long as it doesn't dip below 32 I think I'll be fine Happy New Year.

Edited December 28, 2014 by TunnelRat69

Nowisee · December 28, 2014

55555.... Another one of the mesmerized populace. The American economy is on it's last legs with no powder left in the magazine. Zero interest rates, QE finished (although wait for QE4?), 18 trillion in debt and no real growth to talk of and please don't expound the increased (lie) recent GDP figures. Many ,many American negative statistics I could quote here, but not enough space!! The markets are in for a massive correction soon and many people will feel the effects. However, in a roundabout way, your assumption about the US dollar is correct. the world is awash with US dollar-denominated debt and payback time is fast approaching. There are massive repayments (in a strenghthened dollar) due and also defaults (due to zero interest loans) are just around the corner, all around the world. Therefore a 'demand' for US dollars, at an affordable price will lead to a 'shortage' = strengthening US dollar. With respect to the baht against other currencies, China has to devalue the yuan (already happening) to stay competitive in the export market, other regional currencies will have to do likewise to remain competitive. Ever hear the term 'currency wars', it's fast approaching. So, yes, my outlook for virtually all currencies against the Thai baht is,( especially for us ex-pats) it's on the up and up!

It's no powder left in the keg or no rounds left in the magazine...5555

zero interest rate?

please, quote away...

a massive correction?

China has to devalue the yuan because they inflate it

55555.... Another one of the mesmerized populace. The American economy is on it's last legs with no powder left in the magazine. Zero interest rates, QE finished (although wait for QE4?), 18 trillion in debt and no real growth to talk of and please don't expound the increased (lie) recent GDP figures. Many ,many American negative statistics I could quote here, but not enough space!! The markets are in for a massive correction soon and many people will feel the effects. However, in a roundabout way, your assumption about the US dollar is correct. the world is awash with US dollar-denominated debt and payback time is fast approaching. There are massive repayments (in a strenghthened dollar) due and also defaults (due to zero interest loans) are just around the corner, all around the world. Therefore a 'demand' for US dollars, at an affordable price will lead to a 'shortage' = strengthening US dollar. With respect to the baht against other currencies, China has to devalue the yuan (already happening) to stay competitive in the export market, other regional currencies will have to do likewise to remain competitive. Ever hear the term 'currency wars', it's fast approaching. So, yes, my outlook for virtually all currencies against the Thai baht is,( especially for us ex-pats) it's on the up and up!

Oh my , facts can be depressing. Better to scare others with your fantasy.

Hey elgenon, sorry to have depressed you, that was not my intention. Maybe you are one of these people who believe in the US government-sponsored mass media who are still spewing lies about the 'real' state of the US economy. I don't want to get too technical here but can I just say that the junk bond market associated particularly with the US oil fracking industry(worth trillions of dollars) is already cracking (and has been since June). Now that oil has plunged 50%, the whole industry is unraveling fast, only the very strongest will be left standing. But it's the collapse of the bonds associated with that industry which will soon bring about a massive exodus of money (starting already) from that market and of course history tells us that when the bond market collapses, the stock market certainly follows.

I am a private investor. I do all my own fundamental and technical analysis. I have no axe to grind whether the market is going up or down. The reason I don't care is I make money either way, rising or falling markets. But every indicator I possess tells me a substantial market correction (crash) is imminent. So that's my fantasy and I apologise for that. IMHO the only hope for the markets of the world (as whatever happens in the US market will obviously impact everywhere else) is QE4 which Obama may instigate to try and stave off a market collapse on 'his watch' but even that will only be a sticking plaster on a water dyke (unless QE5 ha-ha) because ultimately the market will drown in it's own debt.

I promise elgenon, if all this does not come to pass, I will publicly apologise to you here on TV. Are you prepared to do the same?

junk bond market? are you serious?

you need to explain why (as you put it 'oil') has plunged 50%.

bonds have not collapsed, they are down, but when they rise (the rate), that will be the catalyst that drives the market down, not what you prescribe.

you do all your own fundamental/tech analysis?... and you make money whether the market goes up or down? wow.. you are super trader.
EVERY indicator tells you the market crash is imminent?
you are a legend in your own mind...5555

I am waiting for the public apology...

SheungWan · December 29, 2014

55555.... Another one of the mesmerized populace. The American economy is on it's last legs with no powder left in the magazine. Zero interest rates, QE finished (although wait for QE4?), 18 trillion in debt and no real growth to talk of and please don't expound the increased (lie) recent GDP figures. Many ,many American negative statistics I could quote here, but not enough space!! The markets are in for a massive correction soon and many people will feel the effects. However, in a roundabout way, your assumption about the US dollar is correct. the world is awash with US dollar-denominated debt and payback time is fast approaching. There are massive repayments (in a strenghthened dollar) due and also defaults (due to zero interest loans) are just around the corner, all around the world. Therefore a 'demand' for US dollars, at an affordable price will lead to a 'shortage' = strengthening US dollar. With respect to the baht against other currencies, China has to devalue the yuan (already happening) to stay competitive in the export market, other regional currencies will have to do likewise to remain competitive. Ever hear the term 'currency wars', it's fast approaching. So, yes, my outlook for virtually all currencies against the Thai baht is,( especially for us ex-pats) it's on the up and up!

Yes, soon, virtually imminent! Any day now! All the indicators are showing red!

Edited December 29, 2014 by SheungWan

Naam · December 29, 2014

55555.... Another one of the mesmerized populace. The American economy is on it's last legs with no powder left in the magazine. Zero interest rates, QE finished (although wait for QE4?), 18 trillion in debt and no real growth to talk of and please don't expound the increased (lie) recent GDP figures. Many ,many American negative statistics I could quote here, but not enough space!! The markets are in for a massive correction soon and many people will feel the effects. However, in a roundabout way, your assumption about the US dollar is correct. the world is awash with US dollar-denominated debt and payback time is fast approaching. There are massive repayments (in a strenghthened dollar) due and also defaults (due to zero interest loans) are just around the corner, all around the world. Therefore a 'demand' for US dollars, at an affordable price will lead to a 'shortage' = strengthening US dollar. With respect to the baht against other currencies, China has to devalue the yuan (already happening) to stay competitive in the export market, other regional currencies will have to do likewise to remain competitive. Ever hear the term 'currency wars', it's fast approaching. So, yes, my outlook for virtually all currencies against the Thai baht is,( especially for us ex-pats) it's on the up and up!

Yes, soon, virtually imminent! Any day now! All the indicators are showing red!

flashing red lights.gif flashing red lights.gif

UDONJIM · December 29, 2014

Hi Nowisee. I don't know if you expected or even wanted a reply to your post but here goes anyway. You've made basically three points which I'll answer thus:

Oil price - June 2014 - American crude trading above $115, today trading at $55.19. Now when I went to school......................

Bonds - 90% of the money used to finance the expansion of the US oil fracking industry was raised by issuing bonds. Because of the perceived level of risk, these bonds were issued with higher coupon rates (.ie. annual percentage interest paid) than 'safer' type bonds (i.e US government bonds). The term 'Junk bonds' is a loose market term for higher risk bonds and of course does not necessarily mean they are worthless or anything like that, just terminology. The problem is the money that poured into the fracking industry came from 'cheap' borrowed government money during the three phases of QE (Fed interest rates 0 -.25%). That easy money has now dried up. In order to remain in production, fracking companies need not only fresh investment but existing bondholders to stay on board and not redeem their bonds at expiry. Neither of those two scenarios is playing out and money is rapidly being withdrawn from the bond market and this has only been exacerbated by the fall of crude oil prices. Some bonds are currently only paying out 60 cents on the dollar and investors are getting edgy. The bond market is vastly bigger than the stock market and I hope you can understand that a panic in the bond market will naturally affect the stock market. Herd mentality and stampede are two words that come to mind.

With respect to my method of trading, I wasn't trying to sound smart. I should have qualified that statement by saying that because I don't have money invested through a large investment vehicle who by their very size pretty well have to stay in the market, up or down, I can take better advantage of shifts in market direction. Over 20 years ago, I found myself in possession a small amount of money which I wished to invest in the stock market. Looking at investment management fees, I rather opted to spend half my capital on a stock market training course and invested the remaining 50% in the market. Since then I've always managed my own investments and, as surely you can understand, consistently out-performed the 'market'. Back when I started investing very little info. was available on the internet (or none!!), nowadays it's all pretty well out there for free. Anyone wishing to take a few hours every day to learn how the market works and then put that into practice would easily be able to trade the market trends just as I do, it really isn't rocket science.

elgenon · December 29, 2014

Hi Nowisee. I don't know if you expected or even wanted a reply to your post but here goes anyway. You've made basically three points which I'll answer thus:

Oil price - June 2014 - American crude trading above $115, today trading at $55.19. Now when I went to school......................

Bonds - 90% of the money used to finance the expansion of the US oil fracking industry was raised by issuing bonds. Because of the perceived level of risk, these bonds were issued with higher coupon rates (.ie. annual percentage interest paid) than 'safer' type bonds (i.e US government bonds). The term 'Junk bonds' is a loose market term for higher risk bonds and of course does not necessarily mean they are worthless or anything like that, just terminology. The problem is the money that poured into the fracking industry came from 'cheap' borrowed government money during the three phases of QE (Fed interest rates 0 -.25%). That easy money has now dried up. In order to remain in production, fracking companies need not only fresh investment but existing bondholders to stay on board and not redeem their bonds at expiry. Neither of those two scenarios is playing out and money is rapidly being withdrawn from the bond market and this has only been exacerbated by the fall of crude oil prices. Some bonds are currently only paying out 60 cents on the dollar and investors are getting edgy. The bond market is vastly bigger than the stock market and I hope you can understand that a panic in the bond market will naturally affect the stock market. Herd mentality and stampede are two words that come to mind.

With respect to my method of trading, I wasn't trying to sound smart. I should have qualified that statement by saying that because I don't have money invested through a large investment vehicle who by their very size pretty well have to stay in the market, up or down, I can take better advantage of shifts in market direction. Over 20 years ago, I found myself in possession a small amount of money which I wished to invest in the stock market. Looking at investment management fees, I rather opted to spend half my capital on a stock market training course and invested the remaining 50% in the market. Since then I've always managed my own investments and, as surely you can understand, consistently out-performed the 'market'. Back when I started investing very little info. was available on the internet (or none!!), nowadays it's all pretty well out there for free. Anyone wishing to take a few hours every day to learn how the market works and then put that into practice would easily be able to trade the market trends just as I do, it really isn't rocket science.

Aren't bonds going to eat it anyway when the Fed raises rates? I am hoping that the Fed can create the inflation that many have been predicting for years.

UDONJIM · December 29, 2014

Hi elgenon,

Let me deal with inflation first. The idea of printing money (i.e. QE) and feeding it into the economy seems, at face value, to be a sensible option i.e. to stimulate economic growth. Unfortunately in the US, 90% of that zero interest rate money has found it's way into the bond and stock markets, hence the massive buying of bonds and the meteoric rise in the stock market. You can understand this, in a way, as savers/investors in trying to 'chase' a reasonable return have turned their backs on banks because they would only currently receive 0-.25% deposit interest. Little, if any, has gone to US industry to stimulate economic growth which is why the US economy refuses to take off (the Fracking industry aside). Business interests in America can't sense any uplift and are therefore putting little if anything into capital growth. Income levels are stagnant and therefore, if you strip out the money now being paid by millions of people for Medicare, disposable income has actually shrunk. Inflation can only happen when, basically, wages go up a little bit then prices go up a little bit, wages go up a little bit etc. etc. But that is not happening and IMHO, it won't ever happen. Japan has been doing this (QE) for many years, their debt/GDP ratio is now 250%. The country is basically bankrupt, sad to say.

About bonds. The junk bonds associated with the fracking industry have been set at a spread (percentage points above Fed rated bonds) of anywhere between 5-9% in order to attract funds. Therefore, if the Fed raised interest rates tomorrow to say 2%, the fracking industry in order to attract investment would have to also pay an extra 2% points to attract funds at the same spread and that would bring about their demise even quicker than is currently happening. Cut a long story short, I think the Fed are just stalling at the moment, pretty clueless really, hoping that something will improve but I can't see a way out without a market correction.

SheungWan · December 30, 2014

Hi elgenon,

Let me deal with inflation first. The idea of printing money (i.e. QE) and feeding it into the economy seems, at face value, to be a sensible option i.e. to stimulate economic growth. Unfortunately in the US, 90% of that zero interest rate money has found it's way into the bond and stock markets, hence the massive buying of bonds and the meteoric rise in the stock market. You can understand this, in a way, as savers/investors in trying to 'chase' a reasonable return have turned their backs on banks because they would only currently receive 0-.25% deposit interest. Little, if any, has gone to US industry to stimulate economic growth which is why the US economy refuses to take off (the Fracking industry aside). Business interests in America can't sense any uplift and are therefore putting little if anything into capital growth. Income levels are stagnant and therefore, if you strip out the money now being paid by millions of people for Medicare, disposable income has actually shrunk. Inflation can only happen when, basically, wages go up a little bit then prices go up a little bit, wages go up a little bit etc. etc. But that is not happening and IMHO, it won't ever happen. Japan has been doing this (QE) for many years, their debt/GDP ratio is now 250%. The country is basically bankrupt, sad to say.

About bonds. The junk bonds associated with the fracking industry have been set at a spread (percentage points above Fed rated bonds) of anywhere between 5-9% in order to attract funds. Therefore, if the Fed raised interest rates tomorrow to say 2%, the fracking industry in order to attract investment would have to also pay an extra 2% points to attract funds at the same spread and that would bring about their demise even quicker than is currently happening. Cut a long story short, I think the Fed are just stalling at the moment, pretty clueless really, hoping that something will improve but I can't see a way out without a market correction.

Some people spend their lives regurgitating nonsense from Zerohedge et al and think its gospel.

elgenon · December 30, 2014

Hi elgenon,

Let me deal with inflation first. The idea of printing money (i.e. QE) and feeding it into the economy seems, at face value, to be a sensible option i.e. to stimulate economic growth. Unfortunately in the US, 90% of that zero interest rate money has found it's way into the bond and stock markets, hence the massive buying of bonds and the meteoric rise in the stock market. You can understand this, in a way, as savers/investors in trying to 'chase' a reasonable return have turned their backs on banks because they would only currently receive 0-.25% deposit interest. Little, if any, has gone to US industry to stimulate economic growth which is why the US economy refuses to take off (the Fracking industry aside). Business interests in America can't sense any uplift and are therefore putting little if anything into capital growth. Income levels are stagnant and therefore, if you strip out the money now being paid by millions of people for Medicare, disposable income has actually shrunk. Inflation can only happen when, basically, wages go up a little bit then prices go up a little bit, wages go up a little bit etc. etc. But that is not happening and IMHO, it won't ever happen. Japan has been doing this (QE) for many years, their debt/GDP ratio is now 250%. The country is basically bankrupt, sad to say.

About bonds. The junk bonds associated with the fracking industry have been set at a spread (percentage points above Fed rated bonds) of anywhere between 5-9% in order to attract funds. Therefore, if the Fed raised interest rates tomorrow to say 2%, the fracking industry in order to attract investment would have to also pay an extra 2% points to attract funds at the same spread and that would bring about their demise even quicker than is currently happening. Cut a long story short, I think the Fed are just stalling at the moment, pretty clueless really, hoping that something will improve but I can't see a way out without a market correction.

Sorry I find this very vague. For one thing, corrections happen all the time. If this is your prediction before April 1, what is the amount of the correction you predict?

Obviously if interest rates rise, bonds will be less desirable. Nothing knew there.

I was amazed that you think we should believe your denial of the GDP numbers. I do not believe the Republicans would be complicit in helping the black president. Do you really believe the Demos and Repubs are working together to delude us? The tea partyers too? Ha ha ha

UDONJIM · December 31, 2014

Hi elgenon,

Let me deal with inflation first. The idea of printing money (i.e. QE) and feeding it into the economy seems, at face value, to be a sensible option i.e. to stimulate economic growth. Unfortunately in the US, 90% of that zero interest rate money has found it's way into the bond and stock markets, hence the massive buying of bonds and the meteoric rise in the stock market. You can understand this, in a way, as savers/investors in trying to 'chase' a reasonable return have turned their backs on banks because they would only currently receive 0-.25% deposit interest. Little, if any, has gone to US industry to stimulate economic growth which is why the US economy refuses to take off (the Fracking industry aside). Business interests in America can't sense any uplift and are therefore putting little if anything into capital growth. Income levels are stagnant and therefore, if you strip out the money now being paid by millions of people for Medicare, disposable income has actually shrunk. Inflation can only happen when, basically, wages go up a little bit then prices go up a little bit, wages go up a little bit etc. etc. But that is not happening and IMHO, it won't ever happen. Japan has been doing this (QE) for many years, their debt/GDP ratio is now 250%. The country is basically bankrupt, sad to say.

About bonds. The junk bonds associated with the fracking industry have been set at a spread (percentage points above Fed rated bonds) of anywhere between 5-9% in order to attract funds. Therefore, if the Fed raised interest rates tomorrow to say 2%, the fracking industry in order to attract investment would have to also pay an extra 2% points to attract funds at the same spread and that would bring about their demise even quicker than is currently happening. Cut a long story short, I think the Fed are just stalling at the moment, pretty clueless really, hoping that something will improve but I can't see a way out without a market correction.

Sorry I find this very vague. For one thing, corrections happen all the time. If this is your prediction before April 1, what is the amount of the correction you predict?

Obviously if interest rates rise, bonds will be less desirable. Nothing knew there.

I was amazed that you think we should believe your denial of the GDP numbers. I do not believe the Republicans would be complicit in helping the black president. Do you really believe the Demos and Repubs are working together to delude us? The tea partyers too? Ha ha ha

You say you find this very vague but you don't say exactly what! You seem to have some knowledge of the bond market, probably much greater than mine (I'm not a 'bond guy') and I suspect you are a 'finance' guy. I am not, in the sense that apart from a number of years running my own portfolio management company, I now stay on the sidelines but try to stay reasonably 'informed' about markets in general. I assume you are not 'vague' about the junk bond market and how I believe it may be the catalyst for a correction (crash)?

With respect to a market correction sometime before April 1. If it starts, I can't see less than 30% maybe much worse. So long as American citizens have the 'feel good' factor put out by the US government-sponsored media (even if they don't see it in their pockets), hey they may push the markets on and up next year then I'll look a bit foolish, but it's OK. Again, it's a stampede in the bond market that worries me. Ain't no feel good factor going to stop that rush for the exit doors if it starts IMHO.

GDP numbers. You see, sometimes you put something out on a site like this but in an effort to get it out it doesn't quite square with what you really meant and I apologise for that. The stated GDP figures are, of course what they are, correct. What I really meant to say was that the Wall Street Journal headline 'US economy posts strongest growth in more than a decade' is basically a fudge (lie?) if you look at what's behind the figures. If GDP has risen 5%, then surely that means people have more disposable income, measured officially as 'Personal Consumption Expenditures' and indeed that government figure did take a small uptick in the last quarter (about .5%) but from official analysis of this figure, it shows 69% of that figure went towards healthcare (new members - 'Affordable Health Care Act'?), another 10% went to Financial Services. So very little of that GDP rise went to 'productive' use. Are retailers reporting increased sales of 5% or 10% this festive period over last year, I don't think so, down 10% more like. The 'money' went somewhere else. Also, significantly, figures in the last quarter showed that the 'US personal savings rate' took a dive.Less money saved? Where did it go? Sadly, it will probably continue to erode. So yes, GDP is up 5% but it's what's really happening in the US economy that is so frightening. I'm a Brit (Scottish actually) but keep a weather eye on the US economy for obvious reasons. I may have no right to say it but I fear for the American economy and ordinary American people and their children/grand-children. Debt/GDP ratio about 102% - manageable. A more accurate assessment of the American economy is Debt/income ratio - 660% and rising (put that into a family concept). In the last quarter the US government issued bonds to pay for previous debt obligations! More debt added to the debt! Where can it end? If the US government cannot service debt at 0 -.25% interest then what the heck are they going to do if interest rates rise to something approaching 'normal'market rates i.e. 5%.

I withdrew professionally from the 'market' after the dot-com bubble, it's really all speculation now, not always based on 'real' value. Doesn't mean you (and I) can't make money, but it's a different type of investing. Dot-com bubble, sub-prime bubble and now I believe bond bubble. Crazy P/E and debt ratios, even for companies with no earnings!! History certainly repeats itself.

Incidentally, I'm still 'long' the market but I suspect, not for much longer.

elgenon · January 1, 2015

Hi elgenon,

Let me deal with inflation first. The idea of printing money (i.e. QE) and feeding it into the economy seems, at face value, to be a sensible option i.e. to stimulate economic growth. Unfortunately in the US, 90% of that zero interest rate money has found it's way into the bond and stock markets, hence the massive buying of bonds and the meteoric rise in the stock market. You can understand this, in a way, as savers/investors in trying to 'chase' a reasonable return have turned their backs on banks because they would only currently receive 0-.25% deposit interest. Little, if any, has gone to US industry to stimulate economic growth which is why the US economy refuses to take off (the Fracking industry aside). Business interests in America can't sense any uplift and are therefore putting little if anything into capital growth. Income levels are stagnant and therefore, if you strip out the money now being paid by millions of people for Medicare, disposable income has actually shrunk. Inflation can only happen when, basically, wages go up a little bit then prices go up a little bit, wages go up a little bit etc. etc. But that is not happening and IMHO, it won't ever happen. Japan has been doing this (QE) for many years, their debt/GDP ratio is now 250%. The country is basically bankrupt, sad to say.

About bonds. The junk bonds associated with the fracking industry have been set at a spread (percentage points above Fed rated bonds) of anywhere between 5-9% in order to attract funds. Therefore, if the Fed raised interest rates tomorrow to say 2%, the fracking industry in order to attract investment would have to also pay an extra 2% points to attract funds at the same spread and that would bring about their demise even quicker than is currently happening. Cut a long story short, I think the Fed are just stalling at the moment, pretty clueless really, hoping that something will improve but I can't see a way out without a market correction.

Sorry I find this very vague. For one thing, corrections happen all the time. If this is your prediction before April 1, what is the amount of the correction you predict?

Obviously if interest rates rise, bonds will be less desirable. Nothing knew there.

I was amazed that you think we should believe your denial of the GDP numbers. I do not believe the Republicans would be complicit in helping the black president. Do you really believe the Demos and Repubs are working together to delude us? The tea partyers too? Ha ha ha

You say you find this very vague but you don't say exactly what! You seem to have some knowledge of the bond market, probably much greater than mine (I'm not a 'bond guy') and I suspect you are a 'finance' guy. I am not, in the sense that apart from a number of years running my own portfolio management company, I now stay on the sidelines but try to stay reasonably 'informed' about markets in general. I assume you are not 'vague' about the junk bond market and how I believe it may be the catalyst for a correction (crash)?

With respect to a market correction sometime before April 1. If it starts, I can't see less than 30% maybe much worse. So long as American citizens have the 'feel good' factor put out by the US government-sponsored media (even if they don't see it in their pockets), hey they may push the markets on and up next year then I'll look a bit foolish, but it's OK. Again, it's a stampede in the bond market that worries me. Ain't no feel good factor going to stop that rush for the exit doors if it starts IMHO.

GDP numbers. You see, sometimes you put something out on a site like this but in an effort to get it out it doesn't quite square with what you really meant and I apologise for that. The stated GDP figures are, of course what they are, correct. What I really meant to say was that the Wall Street Journal headline 'US economy posts strongest growth in more than a decade' is basically a fudge (lie?) if you look at what's behind the figures. If GDP has risen 5%, then surely that means people have more disposable income, measured officially as 'Personal Consumption Expenditures' and indeed that government figure did take a small uptick in the last quarter (about .5%) but from official analysis of this figure, it shows 69% of that figure went towards healthcare (new members - 'Affordable Health Care Act'?), another 10% went to Financial Services. So very little of that GDP rise went to 'productive' use. Are retailers reporting increased sales of 5% or 10% this festive period over last year, I don't think so, down 10% more like. The 'money' went somewhere else. Also, significantly, figures in the last quarter showed that the 'US personal savings rate' took a dive.Less money saved? Where did it go? Sadly, it will probably continue to erode. So yes, GDP is up 5% but it's what's really happening in the US economy that is so frightening. I'm a Brit (Scottish actually) but keep a weather eye on the US economy for obvious reasons. I may have no right to say it but I fear for the American economy and ordinary American people and their children/grand-children. Debt/GDP ratio about 102% - manageable. A more accurate assessment of the American economy is Debt/income ratio - 660% and rising (put that into a family concept). In the last quarter the US government issued bonds to pay for previous debt obligations! More debt added to the debt! Where can it end? If the US government cannot service debt at 0 -.25% interest then what the heck are they going to do if interest rates rise to something approaching 'normal'market rates i.e. 5%.

I withdrew professionally from the 'market' after the dot-com bubble, it's really all speculation now, not always based on 'real' value. Doesn't mean you (and I) can't make money, but it's a different type of investing. Dot-com bubble, sub-prime bubble and now I believe bond bubble. Crazy P/E and debt ratios, even for companies with no earnings!! History certainly repeats itself.

Incidentally, I'm still 'long' the market but I suspect, not for much longer.

You are correct in that I was asking for a more definitive reading of what will happen before fool's day. I think you are predicting a >30% correction in the stock market. I will take that bet and offer you a free night at my beach house on April 2 if it happens. : )

What is interesting is that, if the Fed raises rates, the effect may be to lower borrowing costs as the US sucks up money sloshing around the world as people look for a safe haven. IMHO this could well spur the market and the economy. But I don't presume to know for sure. The economy has become a world economy so it is subject to many forces we are not looking at. I look with jaundiced eyes at people who KNOW. Nothing personal.

It is VERY possible there is a bond bubble. It looks that way.

Diplomatico · January 1, 2015

Dollar closed at 33.02 thb today. Not long into 2015.

UDONJIM · January 1, 2015

Hi elgenon,

Let me deal with inflation first. The idea of printing money (i.e. QE) and feeding it into the economy seems, at face value, to be a sensible option i.e. to stimulate economic growth. Unfortunately in the US, 90% of that zero interest rate money has found it's way into the bond and stock markets, hence the massive buying of bonds and the meteoric rise in the stock market. You can understand this, in a way, as savers/investors in trying to 'chase' a reasonable return have turned their backs on banks because they would only currently receive 0-.25% deposit interest. Little, if any, has gone to US industry to stimulate economic growth which is why the US economy refuses to take off (the Fracking industry aside). Business interests in America can't sense any uplift and are therefore putting little if anything into capital growth. Income levels are stagnant and therefore, if you strip out the money now being paid by millions of people for Medicare, disposable income has actually shrunk. Inflation can only happen when, basically, wages go up a little bit then prices go up a little bit, wages go up a little bit etc. etc. But that is not happening and IMHO, it won't ever happen. Japan has been doing this (QE) for many years, their debt/GDP ratio is now 250%. The country is basically bankrupt, sad to say.

About bonds. The junk bonds associated with the fracking industry have been set at a spread (percentage points above Fed rated bonds) of anywhere between 5-9% in order to attract funds. Therefore, if the Fed raised interest rates tomorrow to say 2%, the fracking industry in order to attract investment would have to also pay an extra 2% points to attract funds at the same spread and that would bring about their demise even quicker than is currently happening. Cut a long story short, I think the Fed are just stalling at the moment, pretty clueless really, hoping that something will improve but I can't see a way out without a market correction.

Sorry I find this very vague. For one thing, corrections happen all the time. If this is your prediction before April 1, what is the amount of the correction you predict?

Obviously if interest rates rise, bonds will be less desirable. Nothing knew there.

I was amazed that you think we should believe your denial of the GDP numbers. I do not believe the Republicans would be complicit in helping the black president. Do you really believe the Demos and Repubs are working together to delude us? The tea partyers too? Ha ha ha

You say you find this very vague but you don't say exactly what! You seem to have some knowledge of the bond market, probably much greater than mine (I'm not a 'bond guy') and I suspect you are a 'finance' guy. I am not, in the sense that apart from a number of years running my own portfolio management company, I now stay on the sidelines but try to stay reasonably 'informed' about markets in general. I assume you are not 'vague' about the junk bond market and how I believe it may be the catalyst for a correction (crash)?

With respect to a market correction sometime before April 1. If it starts, I can't see less than 30% maybe much worse. So long as American citizens have the 'feel good' factor put out by the US government-sponsored media (even if they don't see it in their pockets), hey they may push the markets on and up next year then I'll look a bit foolish, but it's OK. Again, it's a stampede in the bond market that worries me. Ain't no feel good factor going to stop that rush for the exit doors if it starts IMHO.

GDP numbers. You see, sometimes you put something out on a site like this but in an effort to get it out it doesn't quite square with what you really meant and I apologise for that. The stated GDP figures are, of course what they are, correct. What I really meant to say was that the Wall Street Journal headline 'US economy posts strongest growth in more than a decade' is basically a fudge (lie?) if you look at what's behind the figures. If GDP has risen 5%, then surely that means people have more disposable income, measured officially as 'Personal Consumption Expenditures' and indeed that government figure did take a small uptick in the last quarter (about .5%) but from official analysis of this figure, it shows 69% of that figure went towards healthcare (new members - 'Affordable Health Care Act'?), another 10% went to Financial Services. So very little of that GDP rise went to 'productive' use. Are retailers reporting increased sales of 5% or 10% this festive period over last year, I don't think so, down 10% more like. The 'money' went somewhere else. Also, significantly, figures in the last quarter showed that the 'US personal savings rate' took a dive.Less money saved? Where did it go? Sadly, it will probably continue to erode. So yes, GDP is up 5% but it's what's really happening in the US economy that is so frightening. I'm a Brit (Scottish actually) but keep a weather eye on the US economy for obvious reasons. I may have no right to say it but I fear for the American economy and ordinary American people and their children/grand-children. Debt/GDP ratio about 102% - manageable. A more accurate assessment of the American economy is Debt/income ratio - 660% and rising (put that into a family concept). In the last quarter the US government issued bonds to pay for previous debt obligations! More debt added to the debt! Where can it end? If the US government cannot service debt at 0 -.25% interest then what the heck are they going to do if interest rates rise to something approaching 'normal'market rates i.e. 5%.

I withdrew professionally from the 'market' after the dot-com bubble, it's really all speculation now, not always based on 'real' value. Doesn't mean you (and I) can't make money, but it's a different type of investing. Dot-com bubble, sub-prime bubble and now I believe bond bubble. Crazy P/E and debt ratios, even for companies with no earnings!! History certainly repeats itself.

Incidentally, I'm still 'long' the market but I suspect, not for much longer.

You are correct in that I was asking for a more definitive reading of what will happen before fool's day. I think you are predicting a >30% correction in the stock market. I will take that bet and offer you a free night at my beach house on April 2 if it happens. : )

What is interesting is that, if the Fed raises rates, the effect may be to lower borrowing costs as the US sucks up money sloshing around the world as people look for a safe haven. IMHO this could well spur the market and the economy. But I don't presume to know for sure. The economy has become a world economy so it is subject to many forces we are not looking at. I look with jaundiced eyes at people who KNOW. Nothing personal.

It is VERY possible there is a bond bubble. It looks that way.

UDONJIM · January 1, 2015

Hi elgenon,

I wrote you a fairly long reply but lost it as my internet crashed. So I'll try and condense things here.

Yes I am predicting a >30% fall in markets by 1st April. Thanks for the accommodation offer, let's see how the markets pan out.

IMHO the Fed cannot afford to raise interest rates anytime soon. As i said already it would only exacerbate the collapse of the bond and stock markets. The collapse in oil prices is a massive and rapid game changer. The US cannot currently service it's existing debt at almost zero interest rates so what chance at normal market rates.

The U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money(creating more debt) to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that. IMHO, the Fed can only watch while markets burn then maybe raise interest rates and try to 'fix' the US economy hopefully without QE.

The economies of the world are saturated in debt. Europe, Japan, Russia, Brazil and even China are all in a very deep debt much of it dollar-denominated. Commodity based economies like Australia, Venezuela, Canada are all suffering badly as demand has slumped. What happens if the appetite for US debt dries up? . Strengthening US dollar doesn't help the US economy either.

That's about the gist of what I wrote previously.

Lastly, I received my final indicator showing a down-turning market yesterday and am now officially 'short' the market, so am putting my money literally where my mouth is!

Hope this year is a happy and prosperous one for both of us.

elgenon · January 2, 2015

Hi elgenon,

I wrote you a fairly long reply but lost it as my internet crashed. So I'll try and condense things here.

Yes I am predicting a >30% fall in markets by 1st April. Thanks for the accommodation offer, let's see how the markets pan out.

IMHO the Fed cannot afford to raise interest rates anytime soon. As i said already it would only exacerbate the collapse of the bond and stock markets. The collapse in oil prices is a massive and rapid game changer. The US cannot currently service it's existing debt at almost zero interest rates so what chance at normal market rates.

The U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money(creating more debt) to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that. IMHO, the Fed can only watch while markets burn then maybe raise interest rates and try to 'fix' the US economy hopefully without QE.

The economies of the world are saturated in debt. Europe, Japan, Russia, Brazil and even China are all in a very deep debt much of it dollar-denominated. Commodity based economies like Australia, Venezuela, Canada are all suffering badly as demand has slumped. What happens if the appetite for US debt dries up? . Strengthening US dollar doesn't help the US economy either.

That's about the gist of what I wrote previously.

Lastly, I received my final indicator showing a down-turning market yesterday and am now officially 'short' the market, so am putting my money literally where my mouth is!

Hope this year is a happy and prosperous one for both of us.

I am happy our discussion has stayed civilized. Sorry about your crash. But you didn't tell me my prize. : ( Or did I miss it?

Yes, the strong dollar is bad for US exports but because most of the recovery is due to domestic factors (what China is striving for) that is not as bad as it would be for other economies. Obama is also allowing more oil exports. How this will play out has yet to be seen. America will continue to suck in investment from the emerging economis and Europe. Where will that money go? Manufacturing will continue to increase with lower energy costs.

Getting back to the OPs question, as America makes investing in other economies look worse it is up to the BoT to decide if it is worth maintaining the exchange rate with the $. The rate with other currencies will follow that. The other major factor with Thailand is the ASEAN community happens this year. There will be disruptions. e.g. If I had a business that interfaces with farangs I would hire the plentiful, English speaking Filipinos.

Again, the demise of the American economy has been predicted since the economic collapse. It is the only major economy whose growth is increasing and is perceived as safe. I may be a glass half full kind of guy but what other economy would you bet on? If the country tanks I guess my property would be worthless. So I guess I am making a long term bet.

Yes! Prosperity for both of us ! I don't need to "win".

UDONJIM · January 2, 2015

Hi elgenon,

I wrote you a fairly long reply but lost it as my internet crashed. So I'll try and condense things here.

Yes I am predicting a >30% fall in markets by 1st April. Thanks for the accommodation offer, let's see how the markets pan out.

IMHO the Fed cannot afford to raise interest rates anytime soon. As i said already it would only exacerbate the collapse of the bond and stock markets. The collapse in oil prices is a massive and rapid game changer. The US cannot currently service it's existing debt at almost zero interest rates so what chance at normal market rates.

The U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money(creating more debt) to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that. IMHO, the Fed can only watch while markets burn then maybe raise interest rates and try to 'fix' the US economy hopefully without QE.

The economies of the world are saturated in debt. Europe, Japan, Russia, Brazil and even China are all in a very deep debt much of it dollar-denominated. Commodity based economies like Australia, Venezuela, Canada are all suffering badly as demand has slumped. What happens if the appetite for US debt dries up? . Strengthening US dollar doesn't help the US economy either.

That's about the gist of what I wrote previously.

Lastly, I received my final indicator showing a down-turning market yesterday and am now officially 'short' the market, so am putting my money literally where my mouth is!

Hope this year is a happy and prosperous one for both of us.

I am happy our discussion has stayed civilized. Sorry about your crash. But you didn't tell me my prize. : ( Or did I miss it?

Yes, the strong dollar is bad for US exports but because most of the recovery is due to domestic factors (what China is striving for) that is not as bad as it would be for other economies. Obama is also allowing more oil exports. How this will play out has yet to be seen. America will continue to suck in investment from the emerging economis and Europe. Where will that money go? Manufacturing will continue to increase with lower energy costs.

Getting back to the OPs question, as America makes investing in other economies look worse it is up to the BoT to decide if it is worth maintaining the exchange rate with the $. The rate with other currencies will follow that. The other major factor with Thailand is the ASEAN community happens this year. There will be disruptions. e.g. If I had a business that interfaces with farangs I would hire the plentiful, English speaking Filipinos.

Again, the demise of the American economy has been predicted since the economic collapse. It is the only major economy whose growth is increasing and is perceived as safe. I may be a glass half full kind of guy but what other economy would you bet on? If the country tanks I guess my property would be worthless. So I guess I am making a long term bet.

Yes! Prosperity for both of us ! I don't need to "win".

You know elgenon, when I first replied to the OP, it was more about my opinion that the dollar would continue to strengthen but of course I went on a bit of a rant about the US economy leading to some posters questioning my sanity, ha-ha. You hold yourself open to ridicule when you go 'public' with personal opinions, I accept that. Having had a few beers on the evening of my original post, I saw it like a few friends having a drink in a bar. Someone says 'Ah, the market will be down 30% by 1st April'. His friend says' BS, I bet you it won't'. And they bet a beer on the outcome. Therefore, in the unlikely event we ever meet, someone will owe someone else a beer (or your preference). Your beach house is safe, but many thanks for that offer.

You've raised some interesting points but I think it could lead off in so many tangents that you and I could still be debating on here by 1st April!! I think we should both sit back and let the markets take their course.

However, let me touch briefly on 3 points you raised.

Firstly, any property you own IMHO should be seen as the ultimate long-term investment. Never sell it unless (as a speculator) you buy low and sell high or in good times raise equity in order to buy another property.

Secondly, my original post was about my belief that the US dollar would continue to strengthen and I still believe it will. All things being equal, I see B35/B36 within 3 months. But if markets crash, then B37/B40, I believe, is not out of the question.

Lastly, and I want you to understand this is not patriotism entering the discussion here but you asked what other economy would anyone invest in as the US is the only major economy that is growing? Another country immediately popped into my mind and I quote this article here recently in the Guardian newspaper:

'Nonetheless, Britain is expected to be the fastest-growing economy among the G7 nations this year, with the International Monetary Fund (IMF) predicting a GDP increase of 3.2%, compared with the US at 2.2% in second place.' These figures are probably inflation adjusted but still they are quite interesting. Britain, with a large financial market in London and very stable socially, I think is still seen as a 'safe' haven. Britain is slowly but steadily pulling itself out of the 2008 crisis unlike most other EU economies now mired in debt spirals.

I think you're right, none of us has to be winners. But I've found in life, that generally speaking, being a winner is preferable to being a loser although I've been on the canvas many times. As 'Ole blue eyes' said, 'That's life'.

elgenon · January 2, 2015

Hi elgenon,

I wrote you a fairly long reply but lost it as my internet crashed. So I'll try and condense things here.

Yes I am predicting a >30% fall in markets by 1st April. Thanks for the accommodation offer, let's see how the markets pan out.

IMHO the Fed cannot afford to raise interest rates anytime soon. As i said already it would only exacerbate the collapse of the bond and stock markets. The collapse in oil prices is a massive and rapid game changer. The US cannot currently service it's existing debt at almost zero interest rates so what chance at normal market rates.

The U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money(creating more debt) to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that. IMHO, the Fed can only watch while markets burn then maybe raise interest rates and try to 'fix' the US economy hopefully without QE.

The economies of the world are saturated in debt. Europe, Japan, Russia, Brazil and even China are all in a very deep debt much of it dollar-denominated. Commodity based economies like Australia, Venezuela, Canada are all suffering badly as demand has slumped. What happens if the appetite for US debt dries up? . Strengthening US dollar doesn't help the US economy either.

That's about the gist of what I wrote previously.

Lastly, I received my final indicator showing a down-turning market yesterday and am now officially 'short' the market, so am putting my money literally where my mouth is!

Hope this year is a happy and prosperous one for both of us.

I am happy our discussion has stayed civilized. Sorry about your crash. But you didn't tell me my prize. : ( Or did I miss it?

Yes, the strong dollar is bad for US exports but because most of the recovery is due to domestic factors (what China is striving for) that is not as bad as it would be for other economies. Obama is also allowing more oil exports. How this will play out has yet to be seen. America will continue to suck in investment from the emerging economis and Europe. Where will that money go? Manufacturing will continue to increase with lower energy costs.

Getting back to the OPs question, as America makes investing in other economies look worse it is up to the BoT to decide if it is worth maintaining the exchange rate with the $. The rate with other currencies will follow that. The other major factor with Thailand is the ASEAN community happens this year. There will be disruptions. e.g. If I had a business that interfaces with farangs I would hire the plentiful, English speaking Filipinos.

Again, the demise of the American economy has been predicted since the economic collapse. It is the only major economy whose growth is increasing and is perceived as safe. I may be a glass half full kind of guy but what other economy would you bet on? If the country tanks I guess my property would be worthless. So I guess I am making a long term bet.

Yes! Prosperity for both of us ! I don't need to "win".

You know elgenon, when I first replied to the OP, it was more about my opinion that the dollar would continue to strengthen but of course I went on a bit of a rant about the US economy leading to some posters questioning my sanity, ha-ha. You hold yourself open to ridicule when you go 'public' with personal opinions, I accept that. Having had a few beers on the evening of my original post, I saw it like a few friends having a drink in a bar. Someone says 'Ah, the market will be down 30% by 1st April'. His friend says' BS, I bet you it won't'. And they bet a beer on the outcome. Therefore, in the unlikely event we ever meet, someone will owe someone else a beer (or your preference). Your beach house is safe, but many thanks for that offer.

You've raised some interesting points but I think it could lead off in so many tangents that you and I could still be debating on here by 1st April!! I think we should both sit back and let the markets take their course.

However, let me touch briefly on 3 points you raised.

Firstly, any property you own IMHO should be seen as the ultimate long-term investment. Never sell it unless (as a speculator) you buy low and sell high or in good times raise equity in order to buy another property.

Secondly, my original post was about my belief that the US dollar would continue to strengthen and I still believe it will. All things being equal, I see B35/B36 within 3 months. But if markets crash, then B37/B40, I believe, is not out of the question.

Lastly, and I want you to understand this is not patriotism entering the discussion here but you asked what other economy would anyone invest in as the US is the only major economy that is growing? Another country immediately popped into my mind and I quote this article here recently in the Guardian newspaper:

'Nonetheless, Britain is expected to be the fastest-growing economy among the G7 nations this year, with the International Monetary Fund (IMF) predicting a GDP increase of 3.2%, compared with the US at 2.2% in second place.' These figures are probably inflation adjusted but still they are quite interesting. Britain, with a large financial market in London and very stable socially, I think is still seen as a 'safe' haven. Britain is slowly but steadily pulling itself out of the 2008 crisis unlike most other EU economies now mired in debt spirals.

I think you're right, none of us has to be winners. But I've found in life, that generally speaking, being a winner is preferable to being a loser although I've been on the canvas many times. As 'Ole blue eyes' said, 'That's life'.

Just one more comment. I don't understand those that hate the black president and anything he does. It's not logical, You mentioned Britain. Britain and the US (along with China) are the only 2 that did a quick QE. Obama was piloried for it. Yet these 2 economies are the ones that have revived. China is attempting major structural changes.

Happy April Fool's Day!

sanuk711 · January 2, 2015

Thanks for sharing that with us. Until I read your post I believed that everything experts said was correct and that they always got everything right and that the world was perfectly certain. But now I have been enlightened by your profoundly wise advice and I understand that 90% of the predictions of experts are wrong and now I also know there are no certainties. Thanks again.

Yes Paddy...one thing you can be absolutely certain of .......is that there is no certainties.................

UDONJIM · January 2, 2015

Hi elgenon,

I wrote you a fairly long reply but lost it as my internet crashed. So I'll try and condense things here.

Yes I am predicting a >30% fall in markets by 1st April. Thanks for the accommodation offer, let's see how the markets pan out.

IMHO the Fed cannot afford to raise interest rates anytime soon. As i said already it would only exacerbate the collapse of the bond and stock markets. The collapse in oil prices is a massive and rapid game changer. The US cannot currently service it's existing debt at almost zero interest rates so what chance at normal market rates.

The U.S. national debt has increased by more than a trillion dollars in fiscal year 2014.But that does not count the huge amounts of U.S. Treasury securities that the federal government must redeem each year. When these debt instruments hit their maturity date, the U.S. government must pay them off. This is done by borrowing more money(creating more debt) to pay off the previous debts. In fiscal year 2013, redemptions of U.S. Treasury securities totaled $7,546,726,000,000 and new debt totaling $8,323,949,000,000 was issued. The final numbers for fiscal year 2014 are likely to be significantly higher than that. IMHO, the Fed can only watch while markets burn then maybe raise interest rates and try to 'fix' the US economy hopefully without QE.

The economies of the world are saturated in debt. Europe, Japan, Russia, Brazil and even China are all in a very deep debt much of it dollar-denominated. Commodity based economies like Australia, Venezuela, Canada are all suffering badly as demand has slumped. What happens if the appetite for US debt dries up? . Strengthening US dollar doesn't help the US economy either.

That's about the gist of what I wrote previously.

Lastly, I received my final indicator showing a down-turning market yesterday and am now officially 'short' the market, so am putting my money literally where my mouth is!

Hope this year is a happy and prosperous one for both of us.

I am happy our discussion has stayed civilized. Sorry about your crash. But you didn't tell me my prize. : ( Or did I miss it?

Yes, the strong dollar is bad for US exports but because most of the recovery is due to domestic factors (what China is striving for) that is not as bad as it would be for other economies. Obama is also allowing more oil exports. How this will play out has yet to be seen. America will continue to suck in investment from the emerging economis and Europe. Where will that money go? Manufacturing will continue to increase with lower energy costs.

Getting back to the OPs question, as America makes investing in other economies look worse it is up to the BoT to decide if it is worth maintaining the exchange rate with the $. The rate with other currencies will follow that. The other major factor with Thailand is the ASEAN community happens this year. There will be disruptions. e.g. If I had a business that interfaces with farangs I would hire the plentiful, English speaking Filipinos.

Again, the demise of the American economy has been predicted since the economic collapse. It is the only major economy whose growth is increasing and is perceived as safe. I may be a glass half full kind of guy but what other economy would you bet on? If the country tanks I guess my property would be worthless. So I guess I am making a long term bet.

Yes! Prosperity for both of us ! I don't need to "win".

You know elgenon, when I first replied to the OP, it was more about my opinion that the dollar would continue to strengthen but of course I went on a bit of a rant about the US economy leading to some posters questioning my sanity, ha-ha. You hold yourself open to ridicule when you go 'public' with personal opinions, I accept that. Having had a few beers on the evening of my original post, I saw it like a few friends having a drink in a bar. Someone says 'Ah, the market will be down 30% by 1st April'. His friend says' BS, I bet you it won't'. And they bet a beer on the outcome. Therefore, in the unlikely event we ever meet, someone will owe someone else a beer (or your preference). Your beach house is safe, but many thanks for that offer.

You've raised some interesting points but I think it could lead off in so many tangents that you and I could still be debating on here by 1st April!! I think we should both sit back and let the markets take their course.

However, let me touch briefly on 3 points you raised.

Firstly, any property you own IMHO should be seen as the ultimate long-term investment. Never sell it unless (as a speculator) you buy low and sell high or in good times raise equity in order to buy another property.

Secondly, my original post was about my belief that the US dollar would continue to strengthen and I still believe it will. All things being equal, I see B35/B36 within 3 months. But if markets crash, then B37/B40, I believe, is not out of the question.

Lastly, and I want you to understand this is not patriotism entering the discussion here but you asked what other economy would anyone invest in as the US is the only major economy that is growing? Another country immediately popped into my mind and I quote this article here recently in the Guardian newspaper:

'Nonetheless, Britain is expected to be the fastest-growing economy among the G7 nations this year, with the International Monetary Fund (IMF) predicting a GDP increase of 3.2%, compared with the US at 2.2% in second place.' These figures are probably inflation adjusted but still they are quite interesting. Britain, with a large financial market in London and very stable socially, I think is still seen as a 'safe' haven. Britain is slowly but steadily pulling itself out of the 2008 crisis unlike most other EU economies now mired in debt spirals.

I think you're right, none of us has to be winners. But I've found in life, that generally speaking, being a winner is preferable to being a loser although I've been on the canvas many times. As 'Ole blue eyes' said, 'That's life'.

Just one more comment. I don't understand those that hate the black president and anything he does. It's not logical, You mentioned Britain. Britain and the US (along with China) are the only 2 that did a quick QE. Obama was piloried for it. Yet these 2 economies are the ones that have revived. China is attempting major structural changes.

Happy April Fool's Day!

I can't understand the pillorying of Obama either, I think hes'e done most things right including not jumping into Iraq again. China, wow, that's a really interesting play now. There's a lot that could 'blow up' there also IMHO.

Here's, what I believe is an interesting and balanced article regarding QE. Saying really that maybe we've enjoyed too much of a good thing.

http://www.telegraph.co.uk/finance/comment/liamhalligan/11203147/History-will-surely-see-QE-as-a-major-mistake.html

Cheers.

SheungWan · January 2, 2015

Dollar closed at 33.02 thb today. Not long into 2015.

Is that a cash rate on the street? .....

Diplomatico · January 3, 2015

Dollar closed at 33.02 thb today. Not long into 2015.

Is that a cash rate on the street? .....

That was basically the interbank rate....would translate to somewhere around 32.80/32.85 at the best currency exchange venues "on the street" in Thailand.

Naam · January 3, 2015

Dollar closed at 33.02 thb today. Not long into 2015.

Is that a cash rate on the street? .....

That was basically the interbank rate....would translate to somewhere around 32.80/32.85 at the best currency exchange venues "on the street" in Thailand.

interbank rate was also slightly above 33 on dec5 (33.025) and dec7 (33.010), 2014 for a couple of hours.

elgenon · January 3, 2015

Who knows the unintended consequences? I don't. I do know it has helped. Do you really think letting the banks go under was a possible option? Even though the Republicans railed against Obama's actions they are also against reining in the banks. If anybody is serious about bank reform they would vote for Elizabeth Warren.

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Just wondering --- Does anyone see the Dollar-Baht rate finally breaking through 33 Baht?

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