Thread: Thai currency continues upward trend

Originally Posted by socal

Deflation is a good thing, in case you didn't know.

actually it's not a good thing, but thanks for playing

I suggest you study those topics a bit more

Originally Posted by socal

that was so true then why dont Thai stocks on the SET have way higher profit margins then anywhere else ? Its a market, its all relative and prices will come down or go up less. They have to.

you seem to be confusing a lot of topics here, priceless

This is beginning to hurt now. I'm gonna have to put my rates up!

I've learn't something after reading these posts...amazing how many budding Macroeconomic experts there are about.

Just one question...if thing's in Thailand are so great and the economic management is (supposed to be) so successful, why are many of educated Thais I've spoken with so concerned about the countries economy present and future?

As I understand it Thaillands economic continuing success depends largely on domestic consumption and in any country that's not a safe bet.

Anyway as long as the old rice whisky keeps flowing who really gives a shit? party, party, party

Originally Posted by StrontiumDog

You appear to be applying western logic to Thailand. A fatal flaw...

Applying any kind of logic to Thailand is probably a fatal flaw.

Originally Posted by Butterfly

Originally Posted by socal

Deflation is a good thing, in case you didn't know.

actually it's not a good thing, but thanks for playing

I suggest you study those topics a bit more

oh its not eh ?

So are you mad when something you want to buy goes on sale ?

Originally Posted by The Bold Rodney

I've learn't something after reading these posts...amazing how many budding Macroeconomic experts there are about.

Just one question...if thing's in Thailand are so great and the economic management is (supposed to be) so successful, why are many of educated Thais I've spoken with so concerned about the countries economy present and future?

As I understand it Thaillands economic continuing success depends largely on domestic consumption and in any country that's not a safe bet.

Anyway as long as the old rice whisky keeps flowing who really gives a shit? party, party, party

Because most educated Thai's don't know anything about economics. Most educated Americans don't either.

The whole worlds economy has been totally out of balance for the last 10 or 15 years. The US has over consumed, it is evident in their huge trade deficit. They have also borrowed too much money from creditor nations like China, Japan and Thailand. When the US is forced to stop consuming by a devalued dollar, then the Thai economy will automatically shift toward more consumption.

The worst part of it is, is that the real crisis has not happened yet. Things have been so out of balance that there will inevitably be a currency crisis. The reason things are so out of balance is because the US dollar is no longer backed by gold.

If the world reserve currency was backed by gold then this imbalance could have never happened.

I don't know how Thailand will do when the US has a currency crisis. The problem is, the Bank Of Thailand owns allot of US treasury debt denominated in dollars.(they bought them as an investment from proceeds of all their exports, China did too.) If Thailand does not diversify out of US treasury debt then they will have allot to lose. Thailand needs to buy more gold and resource country currencies. If they don't diversify out, then they will incur losses as the US dollar falls.

Most export creditor nations are in the same boat and its partly their fault. They should not have lent the US so much of their money. Russia is too, that is why they just bought more gold off of the IMF last week.

If the US dollar crashes and the US decides to go back to a partially gold backed currency then Thailand should have entitlement to some of the US's gold. If the US pays its debts to Thailand in the form of gold then Thailand will retain its wealth that it accumulated. If the US pays its debts to Thailand in a dollar that is worth half of what it was, then Thailand will lose half the value of their wealth. Thats not good.

Originally Posted by Butterfly

Originally Posted by socal

that was so true then why dont Thai stocks on the SET have way higher profit margins then anywhere else ? Its a market, its all relative and prices will come down or go up less. They have to.

you seem to be confusing a lot of topics here, priceless

we can stop insulting each other any time now. I know more then you about this and you probably know more then me about other shit, whatever.

If your just having fun being a jackass then carry on, I can handle it.

Originally Posted by socal

oh its not eh ?

So are you mad when something you want to buy goes on sale ?

going on sale isn't deflation, again you are exposing your complete ignorance on that topic

deflation is associated with economic depression, hardly something to rejoice over.

Originally Posted by socal

we can stop insulting each other any time now. I know more then you about this and you probably know more then me about other shit, whatever.

If your just having fun being a jackass then carry on, I can handle it.

you know fuck all, that's why it's hilarious. Inflation, deflation, gold standard, it's too many concept that apparently weren't addressed properly by your studies of Austrian Economics

Originally Posted by aging one

That kind of talk give you a chubby? Look the price of all foodstuffs is up over 25% in the last 2 years. Thats a lot for the average Thai. How much are eggs today in Thailand? Bet you cant tell me the price of pork, chicken, or rice just two years ago.

Ask yourself today what does 1,000 THB represent ? it was a lot of money a few years ago, now it goes in 1 day over nothing.

inflation has always been a problem in Thailand, like in most developing nation, it's associated with their high growth, a good thing. The problem is we are having slower growth these days, and inflation is still rampant, but manageable if caught early. The higher currency should technically slow down inflation, mostly because of Thailand dependence on oil, but the economic activity will also be affected. So the cheaper oil will help consumers and business alike, but not that much, and it might come at the expense of economic activity. Also keep in mind that higher export will import inflation, as local businesses activity overheat to meet the external demand.

But the discourse that is currently used to "help" the Amart and the rich like some have said here is ridiculous. Quite au contraire.

Originally Posted by Butterfly

Originally Posted by socal

oh its not eh ?

So are you mad when something you want to buy goes on sale ?

going on sale isn't deflation, again you are exposing your complete ignorance on that topic

deflation is associated with economic depression, hardly something to rejoice over.

You have been corrupted by flawed neo-keynesian mainstream economics. Here is Keynesian economics explained in under 30 seconds.

Originally Posted by Butterfly

Ask yourself today what does 1,000 THB represent ?

About 10% of Thai average monthly income.

Deflation is not a good thing.

Lower prices are a good thing, but only lower prices that are due to better factory efficiency, improved worker productivity, tech developments (eg those that make LCD televisions able to be mass produced cheaply)

Deflation is a much bigger beast, and a nasty one. Lower prices as symptom of deflation are dangerous.

Because the root cause number one of deflation is one of a supply/demand mismatch, in which prices are falling not because of technological, worker productivity or efficiency gains, but simply because nobody wants to buy them.

A spiral emerges resulting in joblessness and a reluctance to invest, on a prolonged basis. In fact those cheaper prices for assets don't even look so attractive anymore.

Anyway, there won't be deflation, because there is a money printer at the Fed. If there is any chance of deflation, the printing presses will run. The loser then is the person who saves money.



On the subject of the Baht, yes, exporters will be hit of course by a stronger Baht, but they frequently also benefit from their imported feedstocks/components being priced in Dollars.

Originally Posted by Mid

Originally Posted by aging one

How much are eggs today in Thailand?

5 baht ea

1 to 2 baht short of western prices whilst wages are 10's of thousands less .

We can see that the US dollar has fallen against the baht while the price of sugar went up. Sugar went up more for Americans and less for Thai's. Al Jazzera should scoot over to Detroit and see what they think of higher sugar prices there.

See socal here is where you blow it. You dont know that the price of sugar here is subsidized by the government. You cant talk about the economics of a place you dont know about.

Originally Posted by Norton

About 10% of Thai average monthly income.

for those who are lucky, more like 20% of their income for many

Originally Posted by The_Ghost_Of_The_Moog

A spiral emerges resulting in joblessness and a reluctance to invest, on a prolonged basis. In fact those cheaper prices for assets don't even look so attractive anymore.

even productive assets don't look attractive because they have poor cash flows resulting from the economic depression.

Originally Posted by The_Ghost_Of_The_Moog

The loser then is the person who saves money.

indeed, debt is cheap, borrowing is key. Never stop to borrow, too much cash around waiting. Debt is good in these days and age and might be again for the next 20 years

[quote=The_Ghost_Of_The_Moog;1545640]

Deflation is not a good thing.

It is always a good thing.

Lower prices are a good thing, but only lower prices that are due to better factory efficiency, improved worker productivity.

Deflation is a much bigger beast, and a nasty one.

Ask a 25 year old couple that cant find a house for under $400,000, if deflation is is a bad thing. House prices where bid up by a low interest rate environment to levels never seen in history. They must deflate to the point where they are affordable again.

Because the root cause number one of deflation is one of a supply/demand mismatch, in which prices are falling not because of technological, worker productivity or efficiency gains, but simply because nobody wants to buy them.

Nope, nobody can afford to buy them. Prices must come back down to liquefy the market again. Keeping them up does nobody any good.

A spiral emerges resulting in joblessness and a reluctance to invest, on a prolonged basis. In fact those cheaper prices for assets don't even look so attractive anymore.

Not for a prolonged basis if you let the market correct itself by bringing prices back to equilibrium.

Anyway, there won't be deflation, because there is a money printer at the Fed. If there is any chance of deflation, the printing presses will run. The loser then is the person who saves money.

The loser will be anyone who has no gold. Look at how well printing money worked for Germany in the 20's. They had hyperinflation and society collapsed. How is that a good thing ?

You know why the US has decided to print now and Germany has decided to implement austerity ? Because Germans remember the hyperinflation and the only reason the US didn't have hyperinflation was because the dollar was backed by gold.

On the subject of the Baht, yes, exporters will be hit of course by a stronger Baht, but they frequently also benefit from their imported feedstocks/components being priced in Dollars.

Thats right.

even productive assets don't look attractive because they have poor cash flows resulting from the economic depression.

There is no easy way out of a credit induced boom. Do you think printing money that is backed by nothing is going to help ?

Originally Posted by The_Ghost_Of_The_Moog

The loser then is the person who saves money.

indeed, debt is cheap, borrowing is key. Never stop to borrow, too much cash around waiting. Debt is good in these days and age and might be again for the next 20 years

This is the exact attitude that leads to hyperinflation, (which is a worse alternative then deflation) The velocity of money goes up because the faith in the value of the currency erodes. Nobody wants to hold the currency because they know it will buy less in the future, the next year,then month, then day, then hour. At that point society collapses.

...' lower prices' does not equal 'deflation'

Its not the case. Deflation is something different. Its a far wider economic phenomena.

Deflation is not just 'cheaper prices, hooray!'. It is an environment where nobody wants to invest, because of a downward spiral.

Cheaper prices for houses may seem nice for some (first time buyers), but if linked to a deflationary cause, its not good, it can become a runaway train. Those first time buyers find that not only has their new house fallen in value, but they've lost their jobs too !



If the point is, 'houses are overvalued, they should fall to a market clearance level of affordability", then thats fine. .........But that is not 'deflation'.

Has Driven to Win taken up economics now ?

Originally Posted by The_Ghost_Of_The_Moog

...' lower prices' does not equal 'deflation'

Its not the case. Deflation is something different. Its a far wider economic phenomena.

Deflation is not just 'cheaper prices, hooray!'. It is an environment where nobody wants to invest, because of a downward spiral.

Cheaper prices for houses may seem nice for some (first time buyers), but if linked to a deflationary cause, its not good, it can become a runaway train. Those first time buyers find that not only has their new house fallen in value, but they've lost their jobs too !



If the point is, 'houses are overvalued, they should fall to a market clearance level of affordability", then thats fine. .........But that is not 'deflation'.

Deflation is when the purchasing power of money goes up.

The low interest rate induced boom was the problem, the deflation is the correction that allows markets to clear and prices to reach equilibrium.

There is no easy way out of a low interest rate fueled boom. Interest rates should never have been that low in the first place. If deflation is so bad then what is your alternative ?