Signs that another financial crisis coming to Thailand soon?

[sojourner007]

I've just returned to Thailand from an overseas trip and was surprised to see a such a huge concentration of luxury imported vehicles (Mercs, BMWs, Porshes, etc) tightly parked in the airport car park building, many with red registration plates. The number of luxury cars there has increased dramatically over the last few years. This sight immediately reminded me of 1997, just before the Asian financial crisis when I arrived in Bangkok from Australia and was shocked to see so many Mercs on the roads in Bangkok with much higher frequency than I saw them on the streets of Sydney, a supposedly much wealthier city. It looked like Thailand at the time took a giant leap in prosperity and had overtaken Australia.

I was also unpleasantly surprised then that girls in Pat Pong asked for thousands of baht for their services, totally unlike what I encountered a few years before that.

Also what seems to me a sort of anecdotal evidence of a sudden jump in local wealth was when I talked to my condo manager, who was wearing a gold watch and lots of gold rings, about a quote for a door mosquito screen mesh replacement and he mentioned 2000 baht. I said I expected only a few hundred and he just looked at me with a sort of indignation and said that 2000 was a just a "small money". So there you go, somehow I don't feel 2K is that small but to a Thai person now it seems like just a pocket change.

So on the basis of the similarity of the current impressions with what I remember from just before the crisis hit in 1997 and later when it turned out that most of those Mercs were leased, ended up repossessed by the dealers, and quickly disappeared from the roads, I feel that perhaps there might be another financial crisis coming to this country soon. We know that history tends to move in circles and after excessive wealth (on credit?) creation bad times usually come. I'm not sure though from what direction it may arrive. Currency devaluation seems unlikely, as the country has formidable foreign reserves. Rising interest rates may prick the bubble (if there is one) but the central bank is actually cutting rates now. Perhaps some serious problems in China?

[Lukecan]

Its not a big deal to own a Mercedes,BMW anymore like it was the case 20 years ago. These cars are getting cheaper and cheaper in real terms every year . I don't think theres a real bubble, cost of living is still very low compared to its western peers. A soapie costs 100$, similar service of the same quality in the west will set you back around 350-400 $ at least.

When SET reaches 4000-5000

When a soapie costs 200$

When your street vendor is leasing a Mercedes

Thats when we can talk of a possible correction.

Edited May 19, 2015 by Lukecan

[sanuk711]

I arrived in Bangkok from Australia-----sojourner007

You come from Oz ....Like me,..... now one of the most expensive countries in the world....& now running up an all time debt , with its $$ lossing nearly 27% against the $us in the last year........& you would like to warn us all about the imminent crash of Thailand financial situation , mainly because of the late model cars you have seen in BKK..

Thanks for the hot tip sojourner007, I will pull my 6,000 baht out immediately.................

Edited May 19, 2015 by sanuk711