Is The Thai Baht Going To Collapse Due To The Ongoing Mess

[livinthailandos]

Being that this situation has gone more downhill, and now most likely well have the anti -red protest come out or so it seems, I am curious to know how the thai baht will fare as Im sure its only a matter of time before we have anti -red protesters vs red protestors boxing it out. I only ask this because I have thai baht in the bank and I really dont want to risk having a worthless currency if worse case scenario happens. I've read in various postings, newspaper it seems only a few possible scenario's are likely

a. Civil War (

b. Government decides to take back the street

c. government dissolves and new elections are held only to have more protests again

I do realize it takes a lot for a currency to collapse but on a serious question is my currency safe in the bank here or is it time to transfer all my money back home.

[Soutpeel]

All I can say to you, if you can get someone answer that question, said person would be very rich indeed, you are asking for someone to predict the future and what a currency is going to do...

As with most investments dont keep all your eggs in one basket, if you feel the current political situation is uncomfortable for you with regard your Thai Baht, then I suggest you move it.

[fredob43]

Collapse. The Thai Baht please Buddha that it dose. But I think your got more chance of winning spot the ball (Lotto) than that happening. I will make a prediction now. In six month's time. Or less. The Baht will be 31/50 to the $ The way the euro and pound are at the moment, they will be down a few Baht as well. To day the Baht stand's at 32.16 that's up yet again from last week. Trouble with the red shirt's dosen't seem to matter. Im thinking of bringing more over!!! If the election's go pair shaped in the UK then the pound could fall through the floor.

[basjke]

The red s_hit trouble is going on for months already.Did you see it collapse in the past month?What make you think that it would change direction now.

[oliver66]

NO!

rowdy rice farmers are just that. rowdy rice farmers!

though personally id like to se 4o bahts to the dollar again.

[vicco]

Thailand has it's political upheavals on a regular basis, but the under laying economy is not that bad. Thailands debt to GDP ration and balance of trade, is actually far better than US or UK etc. The Asian economies in general are in much better shape than most western economies and most "experts" are predicting that most of the economic growth in the coming years will be from these Asian economies. It's not so much a question of the baht being strong, it's the weakness of some other currencies against it. There are currencies that have risen significantly against the baht (Canadian Dollar is up 15% over the last year...Australian $ similar situation) So viewing the baht against a few weak currencies does not tell the story. All currencies move relative to each other....so it just depends on where you come from that determines if you are better or worse off in terms of your spending power.

[Berkshire]

The strength of the THB is based upon many factors, one of which is the strength of other currencies. Thailand may have its problems, but so does the US, Europe, Japan, etc. The US in particular has enormous underlying issues, not the least of which is its national debt. There's also artificial stimulation which the Thai central bank has been engaged in, allowing the baht to defy gravity for the past several months/years. I would like to see the THB:US$ settle at around 40:1, but alas, I don't see that happening for awhile. So the chances of the THB collapsing in the near term is close to zero.

[PeaceBlondie]

No. The strength of the Thai baht depends on their somtam recipes and the hairdos of their staff.

[Loz]

No. The strength of the Thai baht depends on their somtam recipes and the hairdos of their staff.

Saucy!

[chiang mai]

The Baht is not going to collapse, all the indicators are that it will continue to strengthen, despite BOT's best efforts to keep a lid on the currency. I would not recommend you transfer your funds out of Thailand into USD or GBP since the global currency flows currently are from those currencies into THB! If you continue to feel unsettled by the troubles is Bangkok and really feel uncomfortable keeping your funds in THB, consider SGD as a proxy, it's performing well against THB and is forecast to strengthen - the Baht however remains quite safe, IMO.

[wintermute]

There's going to be a lot of expats crying into their beers if they expect a collapse. Asian government banks are trying to quietly reduce their western debt instrument & securities holding due to the recent banking debacle. This means the dollar, GBP, and EU will be weak for the foreseeable future. There's literally trillions of western debt that needs to be resolved before you see the boom decades of the past to return. Not to mention that oil producing countries are going to stop using the dollar as a peg and move towards a mixed basket of currencies further reducing economic clout of America and the west in particular.

[robblok]

I dont expect the baht to go down. Maybe a lil again like it does every year so its back to 45 to the euro. The baht could crash if the problems that are now minor turn serious.

The euro countries should get their spending under control then things will be well again. The problem is that is hard and many of the southern countries don't like to cut in their spending.

[wintermute]

I dont expect the baht to go down. Maybe a lil again like it does every year so its back to 45 to the euro. The baht could crash if the problems that are now minor turn serious.

The euro countries should get their spending under control then things will be well again. The problem is that is hard and many of the southern countries don't like to cut in their spending.

It's not going to happen because western nations are entirely reliant on the low cost manufacturing and unsustainable leisurely middle class existence model. The rich feed this lifestyle and get rich off of it because they prosper from the advantages of owning trans-national corporations. It's a cycle of spending that just increases debt ratios that do not favor western countries..especially the U.S. This in turn effects long term currency values.

The writing is on the wall. Like I said..gonna be lots of expat tears in the beer bars.

Edited April 26, 2010 by wintermute

[BigWheelMan]

For us Brits it`s bad news.

George Brown has announced that there maybe a hung parliament.

This news will certainly make the money markets shaky. Now you will see the £ weaken again and the exchange rates go down even more.

As for the baht and what`s going to happen in Thailand in the foreseeable future, at this time, no one can predict.

So it`s a case of living on a hope and a prayer.

Edited April 26, 2010 by BigWheelMan

[flying]

The Baht is not going to collapse, all the indicators are that it will continue to strengthen

Agreed

If my expenses were mainly in Baht I would convert a lot more USD/GBP/Euro now rather than later for less.

At least 1 or 2 years living expenses

Edited April 26, 2010 by flying

[naklang]

The Baht is not going to collapse, all the indicators are that it will continue to strengthen

Agreed

If my expenses were mainly in Baht I would convert a lot more USD/GBP/Euro now rather than later for less.

At least 1 or 2 years living expenses

I think the currency market has vastly underestimated the seriousness of the rift in Thai society. We are seeing the beginnings of a major shift in direction with the potential for decades of "progress" to come undone. If the playing field is not leveled with more social safety nets (as in the West) and more even distribution of wealth, this will not be ending quickly or peacefully.

Either way it goes, it will not be Baht positive. More turmoil, lawlessness, ineffective govt. = less tourism, less GDP, less investment. Or.......... Conflict resolution due to concessions and greater social spending = More debt and need for govt. funding and taxation (more "Western")

Don't believe that the macro view of Asian growth lifting all boats will apply to Thailand. It will not. My bets are that the Baht has peaked. Not saying it will collapse, but as the Western economies regain their mojo, the kingdom will begin to look less attractive.

[TheKingfisher]

Here is what you can do.

Withdraw enough cash for the next 2 months and have it in a draw at home.

With the rest of your cash but australian dollars ( Asutrlia has not only faired the best in the GFC but its dollar is rising, although slowly) you will get 2.5 AUD you your PND then if every thing goes to shit, you a: have $ in a strong currency and b:have invested in a way awesome country.

if you then buy back THB then you get at the moment 28-29THB to 1 AUD it the THB dropps you will only get a better rate, adn you dont have to worry about the drop inthe PND with your election.

I will take 15% thanks.

[flying]

but as the Western economies regain their mojo

There in lies the rub

The west has not even given full disclosure yet. When the propping stops the popping will start..

It is not so much about how strong the Asian currencies are it is about how insurmountable the western debt is.

[Heng]

Interest is a mean b|tch. Much better to have her working for you than against you.

[IMA_FARANG]

I live in Greece, and the dollar/euro rate has been improving (for the dollar). The Greek debt situation is affecting the Euro/dollar rate.

If it was just political....the Baht would be dropping also...more Baht to a dollar.

But it obviously isn't. So why is the Baht not losing value also?

I've been watching the Baht and everytime it goes up (in Baht per dollar) it drops back down within a few days at most.

That can only mean that someone with enough money to influence the Baht rate is either selling dollars or buying Baht. And I believe that is the Thai government.

Why they wouild want an stronger baht, since that hurts Thai exports by raising their costs in the outside world, I don't know. Maybe they have their economic reasons. Possibly the government needs the stability of a stronger Baht now, at this time of political crises.

Anyhow, the Baht will not be devalued until it stops being controlled by the Thai government. Forget the "economics of the dollar", that's just a smoke screen. Someone's betting against the dollar and with the Baht for their own profit.

That's my opinion.

[naklang]

but as the Western economies regain their mojo

There in lies the rub

The west has not even given full disclosure yet. When the propping stops the popping will start..

It is not so much about how strong the Asian currencies are it is about how insurmountable the western debt is.

Debt is only a problem if you have to pay it back. And you are correct, it is insurmountable and it will NEVER be paid back. A sovereign debt default is inevitable but paradoxically, a sovereign debt default by the US or the EU will not be inflationary, but will be deflationary as are all debt defaults. Even though the currency may be devalued (inflationary), the impact will be blunted or even completely negated by effectively lower prices (deflationary) due to severely reduced global demand and the shafting of the debt holders who were counting on that capital to consume and invest.

Now if it really gets deflationary for extended periods and "they" can no longer print or monetize their way out, then war is a distinct possibility to blow the heck out of all that unused capacity and labor, and funneling of capital to no productive use (death and destruction) to re-start the inflationary cycle again. Andrew Ryan: "Unable to provide for itself, the need of the parasite grows until war is made to justify it."

Will be interesting to see how Thailand would fare in the cross-fire. Not much resources except rice, tourism/quim and not enough military to take anything by force. I guess it will just have to take what it is given or scrounge around for the scraps.

Edited April 27, 2010 by naklang

[flying]

Debt is only a problem if you have to pay it back.

can no longer print or monetize their way out, then war is a distinct possibility

Andrew Ryan: "Unable to provide for itself, the need of the parasite grows until war is made to justify it."

Will be interesting to see how Thailand would fare in the cross-fire. Not much resources except rice, tourism/quim and not enough military to take anything by force. I guess it will just have to take what it is given or scrounge around for the scraps.

Tis true but the West relies on others buying that debt ...Those IOU's/ T Bills/Bonds based on the West's ability to tax an ever increasing unemployed population.

Those who are in fact buying this debt & allowing it to grow are the customers like China/Japan that buy the debt which gives this printed fiat power. ( of course it is a two way street & they benefit too ) But it would lose that power it it lost the faith of those customers to get something in exchange for their risk.

Yes war is always possibility/distraction...

How will Thailand fare? Probably the same as they fared in all the other wars that swirled around them.

It will be far easier for a poor nation to remain poor than for a population raised on instant gratification/credit to suddenly be made to live on the same scraps.

Interesting times we live in that is for sure.

Edited April 27, 2010 by flying

[bangon04]

I live in Greece, and the dollar/euro rate has been improving (for the dollar). The Greek debt situation is affecting the Euro/dollar rate.

If it was just political....the Baht would be dropping also...more Baht to a dollar.

But it obviously isn't. So why is the Baht not losing value also?

I've been watching the Baht and everytime it goes up (in Baht per dollar) it drops back down within a few days at most.

That can only mean that someone with enough money to influence the Baht rate is either selling dollars or buying Baht. And I believe that is the Thai government.

Why they wouild want an stronger baht, since that hurts Thai exports by raising their costs in the outside world, I don't know. Maybe they have their economic reasons. Possibly the government needs the stability of a stronger Baht now, at this time of political crises.

Anyhow, the Baht will not be devalued until it stops being controlled by the Thai government. Forget the "economics of the dollar", that's just a smoke screen. Someone's betting against the dollar and with the Baht for their own profit.

That's my opinion.

It is difficult to believe that Thailand has enough influence in the world economy to make a huge difference to exchange rates.

However it is not at all difficult to believe that a select group would try to manipulate the Thai currency short term, knowing that they would one day soon allow it to crash and make a quick profit for themselves......

[Naam]

war = yada yada and war = yakety-yak Thailand cross fire =

[robblok]

I dont expect the baht to go down. Maybe a lil again like it does every year so its back to 45 to the euro. The baht could crash if the problems that are now minor turn serious.

The euro countries should get their spending under control then things will be well again. The problem is that is hard and many of the southern countries don't like to cut in their spending.

It's not going to happen because western nations are entirely reliant on the low cost manufacturing and unsustainable leisurely middle class existence model. The rich feed this lifestyle and get rich off of it because they prosper from the advantages of owning trans-national corporations. It's a cycle of spending that just increases debt ratios that do not favor western countries..especially the U.S. This in turn effects long term currency values.

The writing is on the wall. Like I said..gonna be lots of expat tears in the beer bars.

You look at things a bit one sided, low cost countries will develop too and will get the same problems as developing countries. if Thailand goes on and the poor get more money the country will loose out on a lot of things too. Even china once the workers get rights and more money then they loose their edge.

You are a bit gloomy but your interests are probably here. I think the governments will learn from this and get a tighter lid on their spending. This is not the first crisis the west has survived.

[wintermute]

You look at things a bit one sided, low cost countries will develop too and will get the same problems as developing countries. if Thailand goes on and the poor get more money the country will loose out on a lot of things too. Even china once the workers get rights and more money then they loose their edge.

Low cost countries developing just means more competition at the higher developed "comparative advantage" industries that the western world has at the moment. Listen, much of the west's development was due to a 100 year head start in industrialization bolstered with gunboat diplomacy. Now that the playing field is evening things are just going to get much more difficult for most of the west. I imagine smaller western countries that have been very prudent in their development (ie. much of scandinavian countries, smaller EU countries) will probably be much less effected by this.

The larger countries such as the U.S., U.K., Germany, etc.. are going to have issues down the road.

[robblok]

You look at things a bit one sided, low cost countries will develop too and will get the same problems as developing countries. if Thailand goes on and the poor get more money the country will loose out on a lot of things too. Even china once the workers get rights and more money then they loose their edge.

Low cost countries developing just means more competition at the higher developed "comparative advantage" industries that the western world has at the moment. Listen, much of the west's development was due to a 100 year head start in industrialization bolstered with gunboat diplomacy. Now that the playing field is evening things are just going to get much more difficult for most of the west. I imagine smaller western countries that have been very prudent in their development (ie. much of scandinavian countries, smaller EU countries) will probably be much less effected by this.

The larger countries such as the U.S., U.K., Germany, etc.. are going to have issues down the road.

Sure but the west is light years ahead in many things. The country is build already lots of developing countries are going to have growing pains and then cant compete anymore.

I think just agree to disagree im sure you can come up with reasons and i can come up with it. If it was all a done deal then you could get rich speculating on it.

[chiang mai]

That can only mean that someone with enough money to influence the Baht rate is either selling dollars or buying Baht. And I believe that is the Thai government.

If your theory was correct, surely there should be evidence in the BOT accounts such as a reduction in their holdings of USD and not an increase each month as we see currently?

[wintermute]

Sure but the west is light years ahead in many things.

Go look at the products on the department store shelf and pay attention to where they are made from and who the parent companies are sometime.

I work with pan-asian companies I have a pretty good idea as to what their competitiveness is. It's much higher than you probably think. There's this general arrogance from most westerners that the honey pot will just last forever and ever and most of it is based on false misconceptions of what developing world countries and people are capable (or incapable) of.

The country is build already lots of developing countries are going to have growing pains and then cant compete anymore.

Growing pains doesn't mean they suddenly drop everything and can't compete. Growth slows but this just gives the growing middle class time to catch up in fields that require higher education.

If it was all a done deal then you could get rich speculating on it.

Actually you could too. If you have that much faith in it you could hold some short indexes on Asia and then watch yourself go bankrupt in a year.

[wintermute]

That can only mean that someone with enough money to influence the Baht rate is either selling dollars or buying Baht. And I believe that is the Thai government.

If your theory was correct, surely there should be evidence in the BOT accounts such as a reduction in their holdings of USD and not an increase each month as we see currently?

You don't have the inside track on liquidation of debt or U.S. securities which is the major foreign assets held by commercial institutions and the government. These instruments are being dumped at a higher rate due to fear of default or foreign policies to "reduce" debt.

Holding actual currency could be for any number of reasons that has nothing to do with speculation.