#  >  > Living And Legal Affairs In Thailand >  >  > Thailand and Asia News >  >  > Business, Finance & Economics in Thailand >  >  Offshore Baht hits new 11-year high

## chinthee

New York - The Thai baht was among the Top 10 most-traded currencies in the world on Wednesday, hitting the highest point since August, 1997.


At closing in the afternoon New York time, the currency was trading at exactly 30 baht per US dollar.


In Bangkok, the Bank of Thailand is under increasing fire for spending tens of billions of dollars in a futile attempt to weaken the baht against a world trend that weakens the dollar while boosting the baht value.


The street rate for the baht in Bangkok on Wednesday night was 32.06 baht per dollar - also a record since the 1997 Asian currency crisis.
Bangkok Post Main Entrance Page

----


Excuse me, while I slit my wrists.

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## buad hai

What wonderful news. Time to dig an even deeper hole....

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## chinthee

^I think we are near the break point for US retirees on fixed income monthly pensions.  Many did the math at 40 as the exchange rate.  If it goes as low as 25, I would expect to see a mass exodus of US retirees from Thailand, as they could live cheaper and better in the USA at that rate perhaps.

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## buad hai

> If it goes as low as 25, I would expect to see a mass exodus of US retirees from Thailand, as they could live cheaper and better in the USA at that rate perhaps.


Well, I'm in the US now and there's not a chance I could survive here on what my pension is.

Even if the dollar goes to 25 I'll be able to survive in Korat, but without any frills. It won't be much fun, but certainly easier than trying to eke out an existence in the US.

I've already given up dining and drinking out. I guess the next thing is to give up beer and move to lao khao.

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## John

Do they still change worthless $ paper into Baht? I am afraid it is not a Baht problem but one of the US only. ALL other currencies in the world have no problems. But not every country can have such a great government as the US ;-)

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## chinthee

^^Stroller has a very useful thread going now about bags of cheap white Thai liquor.  Guess we'll all have to stock up now, at least those of us getting paid in US dollar denominations.

I'm not retired, but because of the way my business is structured, all of my monthly earned income is in US dollars.  I use this money in Thailand.  I'm not a happy camper now as I am losing very big amounts monthly.

It's not only US citizens affected.  I know many executives elsewhere in Asia who are considering a second home in Thailand and eventually retiring.  Many of these have salaries denominated in US dollars as a baseline.  This affects many more people than just Americans.

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## buad hai

> Do they still change worthless $ paper into Baht?


How kind of you to make jest of our plight.

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## Bexar County Stud

Perhaps we'll see the dollar getting stronger next year, after the elections?

Certainly the worst presidential administration in my lifetime. I remember when Clinton left office, we had a big surplus and the question was how are we going to spend all of these riches?

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## buad hai

> Certainly the worst presidential administration in my lifetime.


But I'm not bitter about it. Really, I'm not....

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## John

> Originally Posted by &quot;John&quot;
> 
> Do they still change worthless $ paper into Baht?
> 
> 
> How kind of you to make jest of our plight.


I am sorry but you have to see the facts. The $ goes to next to nothing. It is not my fault. It is made by the US itself. Now you have Greenspan's WEALTH EFFECT. Hard to believe that this guy still can run around and the Americans still did not get the message what he did to them. But in any case - you still have your shoes as I can see on your photo. So not everything is lost.

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## buad hai

> Americans still did not get the message what he did to them.


Some of us did which is why I'm astounded that McCain will be the next US President....

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## John

> Originally Posted by &quot;John&quot;
> 
> Americans still did not get the message what he did to them.
> 
> 
> Some of us did which is why I'm astounded that McCain will be the next US President....


This coming election is the next sad and hopeless story. But we should not forget that Bush won the election 2 times. So the US got what they wanted. Perhaps GWB would even get a 3rd chance - if he could ;-)

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## buad hai

Perhaps this is why several of my family members have vowed to follow me offshore if the GWB surrogate wins.

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## njdesi

This link explains why the dollar collapsed under Greenspan's watch and will continue with this Bernake nitwit. 
Ron Paul mentions M3, which is basically the supply of money. PPI is the producer price index which is basically how much it costs manufacturers to buy their materials. When their prices go up, eventually they pass those cost on to the consumers. With that background, you should be able to follow this video.

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## buad hai

Another point of view:




> Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.

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## mrsquirrel

I'm getting stuffed on the Won, Pound and Baht.

Money that gets sent to Thailand has dropped dramatically.

My money to the Uk is being raped.

Starting to think that it's time to keep it in Euro for the time being,.

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## AntRobertson

Just had cash transferred from the UK, Bt15,000 less for the same amount than it was barely 3mths ago.

I don't even want to know what it is in comparison to 6mths or even 1yr ago - that would really start to get depressing.

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## chinthee

Yes, I've decided to keep all unneeded dollars completely out of Thailand from now on, until and unless the rate strengthens to over 35 again.  This means no buying toys, no more investing.  A belt tightening.

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## buad hai

> no buying toys, no more investing. A belt tightening.


Same here. Happy to have a house and no debt. But it will be neither fun nor easy. And, when things go, they won't be replaced for quite some time.

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## chinthee

^If it really does get disastrous and goes down to 25, I will quit converting any dollars.  I will sell something locally and live off the proceeds.

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## njdesi

Another quote from the cross of gold speech:



> Let me call your attention to two or three important things. The gentleman from New York says that he will propose an amendment to the platform providing that the proposed change in our monetary system shall not affect contracts already made. Let me remind you that there is no intention of affecting those contracts which according to present laws are made payable in gold, but if he means to say that we cannot change our monetary system without protecting those who have loaned money before the change was made, I desire to ask him where, in law or in morals, he can find justification for not protecting the debtors when the act of 1873 was passed, if he now insists that we must protect the creditors.


Basically, Jennings wanted to devalue the currency so that farmers could pay their creditors with cheap money by setting the value of silver to gold at 16 to 1, which is less than the true market price of gold at the time. He basically wanted to do what the Fed does today, which is inflate the currency.

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## AntRobertson

Times like these I wish I had more of an understanding about all this stuff.  My (very) limited understanding is a rudimentary: _'GBP exchange rate falls = not good'_.

Although that being said there is some measure of bliss to be taken from my ignorance as well.  :Smile:

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## mrsquirrel

> ^If it really does get disastrous and goes down to 25, I will quit converting any dollars. I will sell something locally and live off the proceeds.


How does your wife feel about that?

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## buad hai

> He basically wanted to do what the Fed does today, which is inflate the currency.


Of course. I was just showing that the debate is not a recent one....

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## njdesi

^
And in the end, it is the regular people who are screwed and the rich who laugh all the way to the bank (which they own).

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## chinthee

> Originally Posted by chinthee
> 
> ^If it really does get disastrous and goes down to 25, I will quit converting any dollars. I will sell something locally and live off the proceeds.
> 
> 
> How does your wife feel about that?


We divorced last year.  She already got taken care of.

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## Butterfly

yep, it is going to 30, and the BoT is unable to defend the THB against speculators because they are no smart enough and have no fucking idea how to run and defend a currency, again monkeys at the wheel, so again no surprise

That said, Thailand has been hit by a Demand shock for the last 5 years. Basically the weak THB have boosted export and created a huge migration of expats into Thailand. Since net export is part of Agreggate Demand, that curve has shifted greatly, bringing inflation, and upward pressure on the FX currency. This is basically what we are facing today. 

The massive influx of money in the country also from expats living here (a lot of them, probably tripled from what they were in 1998) is also adding to this pressure. Look at Pattaya, the expat community in Pattaya was ridiculously small in 2000, since then it has boomed 4 fold, with all the puters of the world retiring there or buying a house in Phuket.

Thailand is not cheap anymore for the "early" expats, it's changing, slowly but surely. Those who moved here with the 1997 devaluation in mind are being screwed again but that devaluation has reversed now. To make things worse, prices are going up everywhere, so the situation is the same everywhere and Thailand is still cheaper compared to those places.

Now the USD. Bush little war is proving to be costly, forcing the US government to get into massive and huge budget deficit crowding out businesses with their borrowing needs. Because interest rates should go up massively to pay for that little war, the Fed has been injecting cash in the system to compensate for the mess (and rightly so) and avoid a recession. But unfortunately that doesn't come without costs, and the cost is inflation and low dollar value, but at least full employment is there and so is large exports.

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## mrsquirrel

> We divorced last year. She already got taken care of.


Sorry, being cheeky suggesting you were going to sell her.

 :Sorry1:

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## chinthee

^No problem.  I have a good attitude as it's my third failed marriage, and we are still very good friends.  Can't say the same about the other two....

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## John

> yep, it is going to 30, and the BoT is unable to defend the THB against speculators because they are no smart enough and have no fucking idea how to run and defend a currency, again monkeys at the wheel, so again no surprise
> 
> Now the USD. Bush little war is proving to be costly, forcing the US government to get into massive and huge budget deficit crowding out businesses with their borrowing needs. Because interest rates should go up massively to pay for that little war, the Fed has been injecting cash in the system to compensate for the mess (and rightly so) and avoid a recession. But unfortunately that doesn't come without costs, and the cost is inflation and low dollar value, but at least full employment is there and so is large exports.


Compared to other currencies the Baht is still pretty low. The USD is simply getting worthless and no government wants to follow this with their currency I guess. In respect of the exports - great but you have to see what you get for every sold piece in value - almost nothing. Could be hard to pay for imports like oil in the future even if everyone works there like crazy. So the devaluation strategy seems to have limits. More than this - it will be very hard to get back to 'normal' currency levels again if ever possible.

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## mellow

Would like to sell our house, other plots of land we own, and convert it back to dollars, especially if it gets to 25 to one. But none of the Europeans around here seem to have much of a cash flow either. They like to wear nice shirts though.

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## Sir Burr

Non-Americans not living in the USA, but, earning dollars are now starting to refuse payment in them. The agency I work with paid US dollars exclusively up until a year ago. Now, we get paid in Sterling, or, Australian dollars.

When people stop accepting a currency as payment because they think it will go down in value, then, this becomes a self-fulfilling prophecy.

A devalued currency needs high interest rates to pursuade people to keep it. Since the Fed has used it's powers of changing interest rates to prop up the stock market, the interest rate is going the opposite direction than what it should.

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## chinthee

MARKET WATCH: Weak dollar advances record crude prices
*Sam Fletcher*
_Senior Writer_





> *HOUSTON, Feb. 27* -- Crude futures prices continued climbing to new intraday and closing highs Feb. 26 as the US dollar tumbled to a record low against the euro in currency markets. 
>                                                                                 US currency also lost ground against the yen, Swiss franc, and the British pound as US officials reported a continued slide in housing prices and consumer conference, compared with better-than-expected economic indicators in Germany. That seems to signal that a US recession may not negatively affect other economies.


MARKET WATCH: Weak dollar advances record crude prices - Oil & Gas Journal

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## lom

> That seems to signal that a US recession may not negatively affect other economies.


Then justice does exists.. :Smile:

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## Butterfly

> A devalued currency needs high interest rates to pursuade people to keep it. Since the Fed has used it's powers of changing interest rates to prop up the stock market, the interest rate is going the opposite direction than what it should.


Yes and No. The Feds is stuck and is making some hard choices. The sub-prime mess is about to get worse, I mean really worse and the only way to "stop" it, is to decrease those rates, so when they reset again for borrowers this year it won't trigger the massive default on payments we have seen last year. They are trying to stop the bleeding. Again the cost is going to be inflation and maybe stagflation as the price shock we are witnessing with oil will push all cost up (supply shock) and that always end up with a recession unless the Fed reacts accordingly.

There is also a credibility issue. If inflation picks up and the Fed lose credibility for controlling inflation, then we might go back to the 70s and early 80s.

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## Spin

> ALL other currencies in the world have no problems


Do you mean in terms of specific weakness against the baht?

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## sabang

I wonder if the AUD will go to parity against the USD? 

"*Aussie dollar surges to 23-year high* 

Australia's dollar is the best performer among the 16 most- active major currencies in the past month as the central bank this month increased borrowing costs to an 11-year high of 7&#37;. By contrast, traders are betting the Federal Reserve will cut rates in March as reports show US home prices and consumer confidence fell.

The Australian dollar rose as high as 94.34 US cents at 7.50am in Sydney, the most since March 1984. It recently traded at 94.27 US cents."

Aussie dollar surges to 23-year high | smh.com.au

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## Spin

> The sub-prime mess is about to get worse, I mean really worse and the only way to "stop" it, is to decrease those rates


Agree with that, during the fed speech yesterday, Bernanke made references to credtit card companies that have been targetting borrowers with offers they couldnt resist. Reading between the lines, I suspect that the fed knows that many folks are now paying for their expensive mortgages with credit cards, which to me is madder than fighting fire with gasoline.

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## Norton

> Yes and No. The Feds is stuck and is making some hard choices.


Indeed.  Between a rock and a hard place and forced to go with the lesser of two evils.  Lower interest rates which will further weaken the dollar is obviously the lesser of the evils as far as the Fed is concerned.  Reckon they figure they can fix the weak dollar situation later.  I certainly hope so but am very skeptical.

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## terry57

> ^I think we are near the break point for US retirees on fixed income monthly pensions. Many did the math at 40 as the exchange rate. If it goes as low as 25, I would expect to see a mass exodus of US retirees from Thailand, as they could live cheaper and better in the USA at that rate perhaps.


 


Wow,   thats a huge statement as if they find it hard to live here,  how could they possibly survive back home where things are 3 times as expensive. ?

Its the same retoric as when they changed the visa laws and the boys start saying there going to live in cambodia.

Dont think so mate.  :Roll Eyes (Sarcastic):

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## chinthee

I just had a chat with a friend today, and he knows of a couple that moved here in 2000, when the rate was 40.  They retired, with a modest income, and were at the lower limit already at 40.  He says they have decided to move home, as he just spoke to them this week.

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## Norton

> They retired, with a modest income, and were at the lower limit already at 40. He says they have decided to move home, as he just spoke to them this week.


Sounds as if they have little choice as they are now unable to meet the income requirement for visa.  I feel sorry for them but I can't see how they can live any cheaper in the US.  If they still own a home maybe but will really have to cut back on everything else compared to Thailand.

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## chinthee

^I think you hit the nail on the head with the monthly retirement visa income requirement.  I suspect they still have their family home back in the US.

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## Norton

> I think you hit the nail on the head with the monthly retirement visa income requirement.


SS payment @ 1700 per month.  40 baht $, 68,000 per month.  30 baht $, 51,000 per month.

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## AntRobertson

My friend here (American) is trying to convince his folks to move out here.  His rationale being the ludicrous cost of care he'd have to pay back in the US.

Bad timing for him.  He's fairly well off so would still be able to swing it but still...

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## chinthee

I forgot, what's the minimum?

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## Norton

> I forgot, what's the minimum?


65,000 per month or 800,000 per year in the bank.

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## John

> Originally Posted by &quot;John&quot;
> 
> ALL other currencies in the world have no problems
> 
> 
> Do you mean in terms of specific weakness against the baht?


 
I mean that the $ owners are punished. But I am worried. Other currencies went up a lot and despite this the economy of those countries is booming. The $ went down a lot and the US economy is in a very bad shape. It is not the economy alone. The US infrastructure is not in a good shape too. And there are endless debts. The only strategy seems to be to make more debts and to bring the $ down further. This concept scares me because it is extremely destructive.

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## terry57

I dont think you guys need to get to worried  as the $ US will surely recover some time in the future and all you need to do is tighten your belts for a while.

When I first come here in 1987  $ 1 AUD was 18 baht and the $ US was king. 

Things have changed somewhat but its taken a long time.

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## Norton

> My friend here (American) is trying to convince his folks to move out here. His rationale being the ludicrous cost of care he'd have to pay back in the US.


He is absolutely right.  Forget the value of the US dollar.  Moved my mom out here many years ago.  Cost of care in the US about $4,500 per month.  Better care here is $1,700 per month.

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## mellow

That's Thailand. They receive US military Aid, other free bees,from US government. Recently read some idiot in the Embassy wants to give a couple of million to restore some historically important buildings here in Thailand. Thailand throws out retired Americans. US government can't see what's wrong with this picture. All that money should be going to these retired people so they wouldn't even have to live here. That's what's wrong with the US. All the money they give away is needed at home. How smart you have to be to know that?

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## AntRobertson

> Cost of care in the US about $4,500 per month. Better care here is $1,700 per month.


You're right, exchange rate's neither here nor there with that comparison.  That's a hell of a lot of money!

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## John

> Things have changed somewhat but its taken a long time.


It does not take time but only some idiots destroying the economy of their country. The AUD went mainly up because the USD crashed and the Baht was kept close to the USD for a long time. But as the US gets less important for the world this might change pretty quick. In any case - I think it is very brave to believe that we will have our not so expensive stay here in 10 or 20 years. Some Americans have to leave now already. But I am afraid in the long run they will not be the only ones. The Baht is one danger the inflation here just an other. Dont want to talk about changes in visa rules.
The bad thing is that it might hit us when we are old and too helpless to start a new life in our home countries. This is still the ONLY place in the world where we can stay without a visa or anything similar like this. But at least we can say we had a good time...

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## Norton

> That's a hell of a lot of money!


She was in a nursing home.  High cost, bad environment.  Here low cost good environment.  A no brainer decision to have her here.

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## John

> Originally Posted by &quot;AntRobertson&quot;
> 
> That's a hell of a lot of money!
> 
> 
> She was in a nursing home.  High cost, bad environment.  Here low cost good environment.  A no brainer decision to have her here.


$ 1700 here in Thailand? Where and what is this?

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## Norton

> $ 1700 here in Thailand? Where and what is this?


Sorry don't understand your question? :Confused:

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## AntRobertson

^&^^Unless I'm mistaken John thinks you're referring to an actual nursing home?

And unless I'm doubly mistaken you'er actually talking about costs of general care here?

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## chinthee

I don't think there are any nursing homes for farangs in Thailand.  I know some guys have had this as a business idea, but it never had wings.

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## John

> Originally Posted by &quot;John&quot;
> 
> $ 1700 here in Thailand? Where and what is this?
> 
> 
> Sorry don't understand your question?


You wrote that you pay only $1700 here in Thailand. $ 1700 is still a lot of money here. That is in Baht terms about 51000 (took an exchange rate of 30 - perhaps too optimistic but did not check the rate the last hour...). So who takes care of her for this money here?

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## Norton

> I don't think there are any nursing homes for farangs in Thailand. I know some guys have had this as a business idea, but it never had wings.





> Unless I'm mistaken John thinks you're referring to an actual nursing home?  And unless I'm doubly mistaken you'er actually talking about costs of general care here?


Chintee correct I looked into nursing home and really couldn't find anything in Thailand for farangs.  My mum needs a lot of care being she is confined to a wheel chair but is relatively healthy.  The comparison between the $4,500 and the $1,700 is for the cost of care and housing.  She has a full time live in registered nurse and maid and lives in a large one bedroom condo.  Salaries and housing costs (rent) average about 55,000 per month.

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## Norton

> You wrote that you pay only $1700 here in Thailand. $ 1700 is still a lot of money here.


Yes, you are right she lives quite well but within her means.  As you can see in my above post she has a lot of care.  This is why I said the environment/living condition here is much better and the cost is less than comparable in the US.  She is far from a rich person but can live on her small Social Security payments and not have to deplete her meager savings.  If she had stayed in the US all her savings would be gone.

As mellow mentioned above, it is a bloody shame the US Government is spending all it's money on unjustifiable wars and other countries when it should be taking care of people like my mum who worked their entire lives, paid their taxes and now are being neglected by the very governments they supported and funded! :Sad:

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## John

> Originally Posted by &quot;John&quot;
> 
> You wrote that you pay only $1700 here in Thailand. $ 1700 is still a lot of money here.
> 
> 
> Yes, you are right she lives quite well but within her means.  As you can see in my above post she has a lot of care.  This is why I said the environment/living condition here is much better and the cost is less than comparable in the US.  She is far from a rich person but can live on her small Social Security payments and not have to deplete her meager savings.  If she had stayed in the US all her savings would be gone.
> 
> As mellow mentioned above, it is a bloody shame the US Government is spending all it's money on unjustifiable wars and other countries when it should be taking care of people like my mum who worked their entire lives, paid their taxes and now are being neglected by the very governments they supported and funded!


Now this all makes sense to me. I think it is a great idea. Perhaps the health insurance will be a problem. Does she have an international one? And do not overlook that the FED stays with their interest rates below the inflation - stealing money from everybody with savings in USD and the US.

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## Norton

> I think it is a great idea. Perhaps the health insurance will be a problem.


She has insurance from Thailand.  Covers major medical only (long term) hospital stay.  Can't remember exactly how much it is a year but think around 17,000 baht so still affordable.  As I said she is in good health aside from being unable to walk since her stroke so very little in the way of doctor visits other than the usual flu stuff.  As you are aware, this is all very cheap as well, so insurance not necessary.





> And do not overlook that the FED stays with their interest rates below the inflation - stealing money from everybody with savings in USD and the US.


Not to worry, I haven't forgotten.  As many members already know, my stance on the whole idea of economic growth based on irresponsible consumption inevitably leads to the very thing the US is now facing!

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## John

Thai Baht onshore at 31 to the USD. Starting March 3rd there will be no capital controls anymore. So perhaps a good idea to use this weekend to change the pretty worthless paper into hard Thai Baht before it gets more worthless.

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## Norton

> So perhaps a good idea to use this weekend to change the pretty worthless paper into hard Thai Baht before it gets more worthless.


Moved some last month.  Hopefully enough to ride the storm until it passes.  Here's hoping it does pass. :Sad:

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## Bluecat

Quite a few of the Asian currencies went back to the level they were before the crisis in 97 in terms of exchange rate with the US$.
Some like the S$ are even higher.
Why should it be different for the baht?
Expect it to go back to 25 or even higher...

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## Norton

> Why should it be different for the baht?


Suppose this will depend on how well the Thai economy does in comparison with other Asian and of course the US economy.  Thai economy still has some significant issues needing a fix.

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## Butterfly

> Quite a few of the Asian currencies went back to the level they were before the crisis in 97 in terms of exchange rate with the US$.
> Some like the S$ are even higher.
> Why should it be different for the baht?
> Expect it to go back to 25 or even higher...


That would only make sense if the state of economy in Thailand prior to the crash was in good health, and if a good economic health had been fully restored since the crash

This is hardly the case, even though the country is still financially stronger than it was prior to the 1997 crash,

Too many foreigners living here, maybe it's the Thai way to tell us to fuck off,

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## John

> Originally Posted by &quot;Bluecat&quot;
> 
> Why should it be different for the baht?
> 
> 
> Suppose this will depend on how well the Thai economy does in comparison with other Asian and of course the US economy.  Thai economy still has some significant issues needing a fix.


The US economy is dead. Perhaps the whole infrastructure sold will not be able to pay for the US debts. And worse - the people responsible for this shame will not be able to change the doom. Greed cannot replace brain. See the ships of the navy rust without maintenance already. It is a very sad story since many of us grew up with the picture of the great USA. But now the American dream got to an American nightmare. But as long as North Korea and Cuba does not have to support Americans this seems to be okay with them - but for how much longer?. Is there any bank account number to support them - of course not a US bank since they might collapse pretty soon as Bernanke says - this is a statement of Bernanke and not me. Do not want to be that negative.

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## Ivor Biggun

> Hopefully enough to ride the storm until it passes


I've no dislike for individual Americans and I hope your storm passes quickly. But as a nation it must be one hell of a kick to your ego's ?

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## Mid

*Thai Bahts to 1 USD*

_120 days_

*latest* (Feb 28)
29.53
*lowest* (Jan 10)
29.36
*highest* (Sep 17)
32.15

x-rates.com

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## Norton

> But as a nation it must be one hell of a kick to your ego's ?


For me it is not a question of ego but more a personal financial concern.  In my lifetime I have seen much worse economic conditions than those currently at play.  During these bad times many expressed the same doom and gloom statements predicting the demise of "America" we currently hear.  In every case they were wrong and the "crisis" passed with the economy  emerging as strong or stronger than it was pre-crisis.  This crisis too shall pass and be but a faint memory!

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## Butterfly

Do not underestimate the capacity of the US economy to recover,

The rest of the world is still third world, I mean China can't do shit without stealing or copying, no brain, Europe is still very dysfunctional economically, the UK is an island etc...

The US are a lot of bad things, but it's still a power house when it comes to the economy, and it has recovered from bad things before

This might take some times, but at least it will happen

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## John

> Do not underestimate the capacity of the US economy to recover,
> 
> The rest of the world is still third world, I mean China can't do shit without stealing or copying, no brain, Europe is still very dysfunctional economically, the UK is an island etc...
> 
> The US are a lot of bad things, but it's still a power house when it comes to the economy, and it has recovered from bad things before
> 
> This might take some times, but at least it will happen


You are funny. The US army just gave a multi billion order to EADS (Airbus). I guess they want to help the European economy. But is this brain? And in respect of copying and China. The same was said about Japan years ago. Is there still an American car industry - with profits? Good that Japan does not copy the US cars anymore ;-). But to be honest. Just spent some months in the USA. Had some US rental cars. They are not that bad. No idea why they do not want to export them. Same when I look at the big shopping centers here in Pattaya - they are all European. So we get back to the brain... The US system seems not to be able to survive. Greed and the use of brain seem to be 2 different things I am afraid. The US seems to be driven by greed more than by brain. This might not work in the long run.

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## Butterfly

^ no brain was targeted for China, Japanese were always "brain" of Asia, remember WW2 ? in terms of engineering, the Euros have the lead over the US, Germany and France leading. The Japanese are also in the leads in terms of engineering, again proving it during WW2, they are the germans of Asia.

But the Chinese ? give me a break

Leadership in technology doesn't resolve automatically in super economic dominance of the world, and that's where the US is still is, unfortunately

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## mellow

I'm surprised that so many European countries are in such good shape, considering the many problems most of them are facing. Or maybe the  real facts about their financial status is a well kept secret, which may cause great dismay once found out.

----------


## mikenot

as an aussie I can remember when our $ was in the low 20's, now it's almost 50&#37; higher, touching 30 .... so i can feel for those of you on US pensions. But after saying that, anybody who assumed the exchange rate would remain constant for the duration of their retirement is foolish to say the least. Personally I'm working on an exchange rate of around 25 baht/Aus $ for my retirement planning, anything over that is a bonus.

from what I've read here, I would n't be too confident about the US$ making a full recovery to around 40 unless there is a DRAMATIC change in your economy.
With the rise of the Chinese and Indian middle classes, and their new spending power, they are the economies to watch in the forseeable future according to at least some of the financial gurus here.

----------


## John

> ^ no brain was targeted for China, Japanese were always &quot;brain&quot; of Asia, remember WW2 ? in terms of engineering, the Euros have the lead over the US, Germany and France leading. The Japanese are also in the leads in terms of engineering, again proving it during WW2, they are the germans of Asia.
> 
> But the Chinese ? give me a break
> 
> Leadership in technology doesn't resolve automatically in super economic dominance of the world, and that's where the US is still is, unfortunately


The Chinese got the power everywhere in the long run - Thailand (Toxin is Chinese), Singapore, and many other countries. My brother still lives in the US. I always tell him - today you eat at the Chinese (he likes the fatty food so much) tomorrow you will work for them. China gave a huge amount of money to the US. Without this the US consumer might have to start to raise cattle in the backyard. It is like this - what the US people spend is money from China, Japan, and so on. If they spend only what they really earned - it is a too bad story... The personal savings quote in the US - negative again and again. Live like there will be no tomorrow. Today is tomorrow I am afraid. And if China stops wasting their money in the US... But they will not stop - they will simply buy the US and all the credit slaves. I would do the same.

----------


## mellow

> as an aussie I can remember when our $ was in the low 20's, now it's almost 50% higher, touching 30 .... so i can feel for those of you on US pensions.
> 
> from what I've read here, I would n't be too confident about the US$ making a full recovery to around 40 unless there is a DRAMATIC change in your economy.
> With the rise of the Chinese and Indian middle classes, and their new spending power, they are the economies to watch in the forseeable future according to at least some of the financial gurus here.


 What the % of these countries populations which still live in poverty? 70, 8o, 90%? Do you think that they have a long way to go

----------


## Butterfly

> I'm surprised that so many European countries are in such good shape, considering the many problems most of them are facing. Or maybe the real facts about their financial status is a well kept secret, which may cause great dismay once found out.


They are in good shape, because they are socially more stable than the US, that is "social" services, which are expensive, still provide a way to "weather" financial swings. It also proves that Socialism work despite all the negative ideas that the "free market" thinkers try to publicize.

----------


## Butterfly

> The Chinese got the power everywhere in the long run - Thailand (Toxin is Chinese), Singapore, and many other countries. My brother still lives in the US. I always tell him - today you eat at the Chinese (he likes the fatty food so much) tomorrow you will work for them. China gave a huge amount of money to the US. Without this the US consumer might have to start to raise cattle in the backyard. It is like this - what the US people spend is money from China, Japan, and so on. If they spend only what they really earned - it is a too bad story... The personal savings quote in the US - negative again and again. Live like there will be no tomorrow. Today is tomorrow I am afraid. And if China stops wasting their money in the US... But they will not stop - they will simply buy the US and all the credit slaves. I would do the same.


You are dreaming, China is nowhere close to a first rate economy. Buying a few buildings and companies doesn't make you the new king of the world.

China and the US holds each other at gun point, if one falls, the other follow.

----------


## buad hai

> Expect it to go back to 25 or even higher...


In which case suicide becomes a reasonable, even attractive option. After all, I've lived a long and interesting life. A future of penury seems rather unattractive.

----------


## Panda

The power of the $US  rests on the $US hegemony as the worlds trading currency.
Post WW2 the USA was a major exporter and grew rich as a result. 
Post Vietnam USA had turned into a consumer society was broke and couldn't pay its debts in the then gold denominated world currency. That was back in ,74 under Nixon.  The rest of the world foolishly decided to switch from gold to the $US as the worlds trading currency back then. The OPEC $petro  trading currency for oil cemented USAs dominance over the world financial markets. Most countries dumped gold and bought $USs to back their currencies purchasing power, especially for oil.  The whole thing seemed like a pretty good deal as long as the $US remained strong and all other countries had faith in its value. It has worked well for nearly 40 years. The Arabs invested their oil profits back into the USA and that propped up the US economy shortfall in production. All was good till the USA got too greedy and  started going too far deep into debt based on the (perceived) strength of the $US. Selling worthless home mortgages to international banks bundled up as something else was the final straw that broke the camels back and made the rest of the worlds investors realize that investing in the USA might not be as secure as once thought. Subsequently, international money is going elsewhere and the $US is faltering, having to rely on actual productivity and trade to balance the books rather than money coming in from international investors.

I think its the beginning of the end of an era myself. The beginning of the end of the $US as the default world trading currency that was forced on the world over 3 decades ago. When the USA looses its edge as the worlds trading currency, especially for oil, all the USA will have to back up its currency value is its balance of trade and ability to accrue debt on the world market. 

Reinvestment of the US negative trade balance back into US financial markets from places like OPEC and China will start to slow as the $US becomes an increasingly risky investment. Pretty soon the whole house of cards will come tumbling down and all the countries holding $USs as a hedge to back their own currencies will get burned as well as the USA.

I reckon that within 10 years there will be a strong move to drop the $US as the worlds major trading currency and adopt a basket of currencies balanced off against the price of  a pool of precious metals. Its not a new concept by any means. Its just that its never got off the ground before because the incredible bubble of the $US seemed like a much more attractive option.

If and when that actually happens the USA and the  $US would have to stand on its own two feet internationally and compete with the rest of the world on the basis of productivity rather than investment and debt. The USA is a resilient country with a lot going for it. They have excellent infrastructure and a lot of hi tech advantages over developing countries, so I couldn't imagine them sinking too low if and/or when they lose their world trading currency advantage. Over the next few decades I could see the $US sinking to 20 or at best 25 to the baht but not much lower. Of course there is bound to be some ups and downs over the next few years as things start to sort themselves out. One thing is for sure is that most other countries have so much invested in $USs that its in nobodies interests to see the $US crash completely and drive the world into another great depression. It will be a slow and gradual transition if managed properly.

----------


## Bluecat

Reminds me of what Jim Rogers (commodity trader who made a fortune and started the Quantum Fund with Soros) said quite a few years back when asked what he was recommending people to do in the years to come.

Teach Chinese to your children.
Sell the US$
Buy metals commodity

And it was many years ago.
I guess he's even richer now...

----------


## chinthee

All this hyperbole about this being the beginning of the end for the U.S. is just hilarious.  The US is still by far, the strongest economy in the world, with the greatest rate of investment, with the highest technology investment and R&D investment of anywhere in the world.

This is a rough patch, but you can't argue with fundamentals.

----------


## Bluecat

The fundamental is that the US is a country of over spenders financed by the rest of the world.
And yes, this could end.

----------


## chinthee

^The fundamental is that the US is the strongest, most proven economy in the world, with the strongest and clearest edge in high technology, which is where the world has to go.  Yes, consumers are overspenders, but the fundamental technological, engineering, industrial and financial strength is unmatched by any nation or even group of nations in the world.

----------


## Bluecat

Believe me on that, many companies having the best research, the best engineers,... went bankrupt because they were not financially sound.
Are countries different?
Maybe...

----------


## Panda

> All this hyperbole about this being the beginning of the end for the U.S. is just hilarious. The US is still by far, the strongest economy in the world, with the greatest rate of investment, with the highest technology investment and R&D investment of anywhere in the world.
> 
> This is a rough patch, but you can't argue with fundamentals.


The fundamentals of the US economy are good. 
Its not the end of the USA as a financial superpower.
But it may well be the end of an era where the $US rules the world.
The power of the $US is based on a lot of financial structures that have been solidly in place for decades. Those structures are now starting to crumble as they appear to hold the same value as the paper money the US puts around the world trying to convince them it represents actual, tradable  goods and services in any country. That works real well as long as everyone believes it, but right now not everyone believes the $US is worth what it says it is.

As long as the $US can maintain its status as the worlds main trading currency, and especially in oil, it will have an inflated value relative to other world currencies. This has only been a recent experiment in world trading mediums relative to historical events and one doomed to have a transient existence.

Take out investment back into the USA based on faith in the $US by other countries and GDP in the USA would below zero. I don't ever think the USA will become a basket case, but I do think the USA $ value will sink much lower over the next few decades as the world moves away from the $US as the worlds major trading currency. 

Basically, we are sick of buying your drinks. So get your own in future  bludger.

----------


## chinthee

^That's a well reasoned post.  Yes, oil denomination in Dollars means the US Dollar is still secured as the world currency for some time.  I agree a change is in the wind.

----------


## britmaveric

$ yet to hit its prime. The future is bright. Once oil is out of the equation, which I believe is coming sooner rather than later. We will be having a good laff about this.  :Smile:

----------


## bkkandrew

> $ yet to hit its prime. The future is bright. Once oil is out of the equation, which I believe is coming sooner rather than later. We will be having a good laff about this.


Do you want a bet on it?

----------


## britmaveric

think long term, most of u panic like muppets in the short term.  :Smile:

----------


## bkkandrew

> Once oil is out of the equation, which I believe is coming sooner rather than later.


And how, _exactly_, will oil become 'out of the equation'?

Deluded as usual...

----------


## bkkandrew

> think long term, most of u panic like muppets in the short term.


How long a term do you have in mind?

----------


## Butterfly

> The fundamental is that the US is a country of over spenders financed by the rest of the world.
> And yes, this could end.


A long recession will sort that one out, doesn't mean the country will sink. Remember 1997 ? the world was going to end in Asia, and yet 10 years later they have been doing great. I bet you wouldn't have bet a dime on Thailand in 1997.

----------


## mikenot

> And how, exactly, will oil become 'out of the equation'?


Well some people think that "peak oil" is not all that far off, and if that happens it certainly would n't do the US economy any good (and many other countries ditto!) That would take oil out of the equation.
Of course some people also say peak oil is a myth, and that we will always discover more oil resources.....yeah, right.

----------


## mikenot

> What the % of these countries populations which still live in poverty? 70, 8o, 90%? Do you think that they have a long way to go


 Even if the middle class is only 20% (conservative guess), 20% of the world's biggest populations is an awful lot of spending power !

----------


## chinthee

^That's been one of the biggest marketing myths on Earth.  Everybody Chasing the consumers in China, but they don't behave like consumers elsewhere.  

American purchasing, spending and investing power is still by far the largest single factor in driving global markets.

----------


## Driventowin

> Originally Posted by Bluecat
> 
> Why should it be different for the baht?
> 
> 
> Suppose this will depend on how well the Thai economy does in comparison with other Asian and of course the US economy. Thai economy still has some significant issues needing a fix.


Yeah like an uncorrupted and stable government for starters..

----------


## mellow

People in the UK are not in debt of course, they buy things with cash, especially homes and cars. They didn't spend any money on Iraq, or in Afghanistan. The social welfare extended to their vast immigrant problem, and the general use of the free health care system by all, must be leaving their books well balanced. The US is the only one with a deficit. Would be interesting to see what the figures are for many of these countries, and how much in the black they really are, as well as the ability to pay for it. Wonder how many stories will come out when the aftershock of the US economy settles.

----------


## Panda

> $ yet to hit its prime. The future is bright. Once oil is out of the equation, which I believe is coming sooner rather than later. We will be having a good laff about this.


Oil is certainly NOT out of the equation.
In fact oil is a major factor in the equation right now and will be for a long time.

One only has to look back at how the 1974 oil shock crippled the US economy to think how the new world oil shortage might affect things. Currently, world demand is outstripping supply and OPEC is reluctant to turn up the taps on their limited supply just to keep the west in cheap gasoline. This situation is hurting the worlds developed countries far more than developing nations. Just look at growth in places like China, India and all of SE Asia compared to the west.World demand for oil is increasing rapidly and the worlds biggest producer, Saudi Arabia will run out of easy to access good quality oil in 10 to 30 years. Luckily, :-), Iraq has huge reserves of oil that could keep the USA going for decades after their Saudi friends run out of the good stuff. I guess it was just a blessing in disguise that the US mistakenly thought Saddam had weapons of mass destruction to threaten the free world and incite an invasion.  :Wink: 

A world oil shortage will hit the developed countries much harder as their growth figures are much lower than the developing countries. I mean who cares if growth in China slows to only 3% growth. But I bet a lot of people here would care a lot if growth in the USA  dropped from 3% growth and went into minus figures dropping the country into recession.

I don't think the oil fields of Iraq are going to be the gold mines that Bush and Co thought they were going to be. I think the cost of protecting the oil there, politically and militarily, is going to be greater than the cost of doing without. But that's just me.

----------


## Butterfly

^ Panda, nice analysis

----------


## chinthee

Panda, you need to take a valium or Xanax pill.  Iraq is a very small blip on the radar of oil supply needed to fuel the American machine.  You should be more concerned about Venezuela or something if you're looking for the next victim....

----------


## Mid

oil ...smoil  :Smile: 


dkimages.com

----------


## Zavier38

> People in the UK are not in debt of course, they buy things with cash, especially homes and cars. They didn't spend any money on Iraq, or in Afghanistan. The social welfare extended to their vast immigrant problem, and the general use of the free health care system by all, must be leaving their books well balanced. The US is the only one with a deficit. Would be interesting to see what the figures are for many of these countries, and how much in the black they really are, as well as the ability to pay for it. Wonder how many stories will come out when the aftershock of the US economy settles.


In some ways the UK might be worse. 

The government is throwing billions away on unreformed education and health systems. Debt is at mad levels - I had a thai student staying in the Uk, he span the bank a cock and bull story about wanting money for "tuition" (read Ice, Ketamine, coke, nightclub admission fees) and trousered a £3000 loan. He then moved out  :rofl: ). The Northern Rock bail out exposes every man, woman and chid in the country to approx £12,000 of liabilities. House of cards.

Every penny I can liquidate is now being sent on a one way ticket to Malaysia and Thailand.

----------


## Panda

Way offtrack there Chinthee !
Iraq  has the second biggest reserves of oil after Saudi Arabia.
Venezuela is but a piss in the pond compared to what lies under Iraqi ground.

And as I said, the good quality Saudi oil is running out fast. Its going to get a lot more expensive to recover in the future.

Supply and demand. It really doesn't matter what country you buy your oil from in a world market. You pay for quality (which reduces refining costs) and transport costs. USA buys its oil from Venezuela, despite its low quality, because its cheaper overall considering transport costs. But Venezuela doesn't have long term reserves  to supply US needs over the next few decades like Iraq does. 
And anyhow, it doesn't matter which country the oil comes from, the thing that matters regarding price is supply onto the world market.

----------


## chinthee

^Actually, you're quite wrong on all counts.  The largest prospective reserves are in Kazakhstan, which Chevron and the US have been honed in on for years....The US will get most of this, along with China.

Venezuela oil has been customized to the American market.  That is, Venezulean oil is very heavy, and this requires specialized and very expensive refineries that can extract higher products from such sludge.

Do you have any idea what you are talking about?

----------


## Panda

> Originally Posted by mellow
> 
> 
> People in the UK are not in debt of course, they buy things with cash, especially homes and cars. They didn't spend any money on Iraq, or in Afghanistan. The social welfare extended to their vast immigrant problem, and the general use of the free health care system by all, must be leaving their books well balanced. The US is the only one with a deficit. Would be interesting to see what the figures are for many of these countries, and how much in the black they really are, as well as the ability to pay for it. Wonder how many stories will come out when the aftershock of the US economy settles.
> 
> 
> In some ways the UK might be worse. 
> 
> The government is throwing billions away on unreformed education and health systems. Debt is at mad levels - I had a thai student staying in the Uk, he span the bank a cock and bull story about wanting money for "tuition" (read Ice, Ketamine, coke, nightclub admission fees) and trousered a £3000 loan. He then moved out ). The Northern Rock bail out exposes every man, woman and chid in the country to approx £12,000 of liabilities. House of cards.
> ...


The UK has  massive DEBT and no way to pay for it. Not even reserves of $USs!
Buggered if I know how they will get out of it?

----------


## chinthee

Panda is a fraud.  He cannot argue issues on the merits.

----------


## Sakeopete

> I'm surprised that so many European countries are in such good shape, considering the many problems most of them are facing. Or maybe the real facts about their financial status is a well kept secret, which may cause great dismay once found out.


I don't know squat about economics but I do work in the UK so watch the telly. What I see is every second commercial offering ways of writing off debt. As far as the UK goes I think the people are massively in debt maybe so is the rest of Europe. Since much of the world has copied everything American post WWII it just may be the USA will be the first to go through this crisis with the rest of the world to follow. History has shown the USA to be remarkable resilient and it usually comes out smelling like a rose.

As for its huge spending on the military and Iraq keep in mind much of that money stays in America as it is paying for items made there plus salaries of American service men and contractors.

----------


## Panda

> ^Actually, you're quite wrong on all counts. The largest prospective reserves are in Kazakhstan, which Chevron and the US have been honed in on for years....The US will get most of this, along with China.
> 
> Venezuela oil has been customized to the American market. That is, Venezuelan oil is very heavy, and this requires specialized and very expensive refineries that can extract higher products from such sludge.
> 
> Do you have any idea what you are talking about?


Agree about the low quality of Venezuelan oil. 
As for playing down the Iraqi reserves of oil putting up Kazakhstan as a substitute, I have to inform you that you are a bit off track there. 

Kazakhstan doest even rate in the top ten when it comes to oil reserves.

Oil reserves - Wikipedia, the free encyclopedia

I guess I do have some idea what I am talking about . Do YOU?

Way, way off track there mate Im afraid. Lost the plot a bit I think.

----------


## Panda

> Panda is a fraud. He cannot argue issues on the merits.


Take it easy . Settle down and have another drink. Its only a an internet chat forum you idiot. :Wink:

----------


## chinthee

> Originally Posted by chinthee
> 
> 
> Panda is a fraud. He cannot argue issues on the merits.
> 
> 
> Take it easy . Settle down and have another drink. Its only a an internet chat forum you idiot.


Panda, my dear boy, you really don't know anything do you young boy?  When you want to play with the adults you let us know and we will certainly consider your application.

----------


## bkkandrew

> Originally Posted by bkkandrew
> 
> And how, exactly, will oil become 'out of the equation'?
> 
> 
> *Well some people think that "peak oil" is not all that far off, and if that happens it certainly would n't do the US economy any good* (and many other countries ditto!) That would take oil out of the equation.
> Of course some people also say peak oil is a myth, and that we will always discover more oil resources.....yeah, right.


Which is prescisely why oil is ever *closer* to the equation, rather that out of it! Peak oil = ever more expensive prices = ever more influence on world (inc. USA's) economies.

Britmaveric, on the other hand, gets further out of the equation of reality on a daily basis. I wonder if you are joining him...?

----------


## britmaveric

^^^ Hmmm ironic coming from someone who doesnt deal with reality himself.  :bunny3:

----------


## bkkandrew

> ^^^ Hmmm ironic coming from someone who doesnt deal with reality himself.


And how would you know?

Oh I forgot, just another of your baseless comments that ignores all facts...

----------


## britmaveric

^^^ Ahhh from the lad who speaks with fork tongue?? Now I am impressed...  :rofl:

----------


## smeden

lucky my savings is not in us dollars or gb pound the danish krown is one of the worlds strongest curensies  as well as the euro

----------


## bkkandrew

> ^^^ Ahhh from the lad who speaks with fork tongue?? Now I am impressed...


What are you on about now?

You are either:

Drunk;Wearing a white garment, distinguishable by 'fasten at the back' appendages;Final proof of the Pattaya effect...Either way, grow up.

----------


## Bexar County Stud

$4 a gallon gas? Predictions surprise Bush

Peter Maer of CBS News Radio asked: "What's your advice to the average American who is hurting now, facing the prospect of $4-a-gallon gasoline, a lot of people facing ... "  

"Wait, what did you just say?" the president interrupted. 
"You're predicting $4-a-gallon gasoline?"

Maer responded: "A number of analysts are predicting $4-a-gallon gasoline."

Bush's rejoinder: "Oh, yeah? That's interesting. I hadn't heard that."

----------


## mellow

Let's move across the channel now and look at France. They have a VERY large Arab immigrant population, with a very large unemployment problem. Yes, they had new elections, but the prior socialists, I assume have done a wonderful job in giving away or emptying the country's coffers, they must of course have some well balanced books, all in the black. They also buy their houses and cars with cash, wouldn't dream of using a credit card while on unemployment, after qualifying for it, for a year or more, by only working a couple of months. The constant social unrest by the poor unfortunates, with their burning and looting must not have an economic impact either, nor the free medical care for all. Another economy to be envied and copied. The small trader problem which surfaced, another small drop in this tiny bucket. Europe is big, there are a couple of other tiny economic problems as we move east or south yet to be discussed, how strong will the Euro be down the line when it all unravels.

----------


## Panda

> Originally Posted by Panda
> 
> 
> 
> 
> 
> 
> 
>  Originally Posted by chinthee
> ...


*Us* now is it?
Need some back up do we?

----------


## Panda

> $4 a gallon gas? Predictions surprise Bush
> 
> Peter Maer of CBS News Radio asked: "What's your advice to the average American who is hurting now, facing the prospect of $4-a-gallon gasoline, a lot of people facing ... " 
> 
> "Wait, what did you just say?" the president interrupted. 
> "You're predicting $4-a-gallon gasoline?"
> 
> Maer responded: "A number of analysts are predicting $4-a-gallon gasoline."
> 
> Bush's rejoinder: "Oh, yeah? That's interesting. I hadn't heard that."


If GW could have got the Iraqi oil pumping at full potential it would have flooded the market and driven the world price down for the worlds biggest oil consumer (USA). The original deal was to privatize the Iraqi oil industry under US  and British company management and get some bulk oil flowing onto the world market to compete with OPEC and drive down the price. The west boxed itself into a corner putting sanctions on Saddam and restricting Iraq's oil exploration and hence exports. But the Chinese and Russians started moving in and signing contracts with Saddam to develop the Iraqi oil industry. So Bush and Blair had to move in and take over to make sure that they had control of the Iraqi oil industry.

The problem is now twofold. The new democratic government in Iraq has decided to go with OPEC and ration out their oil reserves rather than to let the Brits and Yanks take control and rape the countries reserves by flooding the world market. And of course the Iraqi resistance keeps sabotaging the pipe lines. 

Now that world demand for oil from China and India is pushing up the world price higher and higher, its still crucial for the USA and UK to get the Iraqi reserves onto the market and hold the price down. Not quite the big drop in price to put OPEC on the back foot hoped for at the start, but at least a compromise solution to maintain the Status Quo and keep world oil prices stable.

It will be interesting to see if Obama still wants to pull out of Iraq if he becomes president and gets the full picture?

----------


## Mister Fixit

> OPEC on the back foot hoped for at the start, but at least a compromise solution to maintain the *Status Quo* and keep world oil prices stable.


Shit, I didn't realise that an aging rock band still had so much influence!  Or needed help from the States.  :Smile:

----------


## John

> Now that world demand for oil from China and India is pushing up the world price higher and higher, its still crucial for the USA and UK to get the Iraqi reserves onto the market and hold the price down. Not quite the big drop in price to put OPEC on the back foot hoped for at the start, but at least a compromise solution to maintain the Status Quo and keep world oil prices stable.


If a nation depends so much on oil - what will disappear anyway one day - the nation might disappear too. No oil for instance in the US for a while could mean... Perhaps this would be a good theme for a movie.

----------


## bkkandrew

BBC NEWS | Business | Some New York stores prefer euros

*European shoppers have been heading to New York in their droves to make the most of the low value of the dollar.* 


Now there are reports that some Manhattan shops are also cashing in on the favourable exchange rate - by accepting euros. 

Billy's Antiques & Props on East Houston Street is one shop that has been encouraging overseas shoppers to pay in the stronger currency. 

The dollar has recently been snubbed by rapper Jay-Z and India's Taj Mahal. In his latest music video, Jay-Z can be seen cruising round with a briefcase of 500 euros, while it had been reported that various tourist attractions in India, including the Taj-Mahal, had stopped accepting dollars.

----------


## Driventowin

> *European shoppers have been heading to New York in their droves to make the most of the low value of the dollar.* 
> 
> 
> Now there are reports that some Manhattan shops are also cashing in on the favourable exchange rate - by accepting euros.


Well that's just going to be good for the US. I don't see it harming the Chinese any to have made all of those US dollars over the years in spite of any recent short term drop in value..

So it certainly isn't going to hurt us to have a few pounds and Euros in our bank accounts..Until the dollar starts recovering that is..Besides the Yuan is pegged to the dollar anyway so it flexes with it...

It's only when they go outside of the US market that they are going to feel it more so..

----------


## blackgang

Just now on Bloomberg  ONS baht 31.62,,,OFS baht 31.60,, 2 satang ain't much..

----------


## Driventowin

All of this speculation about the US market and currency is all just knee jerk reaction. There have been numerous financial corrections and financial catastrophes through out history all over the world.

Economies and finances are not perpetual motion machines. the US machine, the European machine, the Japanese are all machines that work independently and symbiotically all at the same time. 

They slow down, some go into reverse and some just stay in neutral for a period of time. But eventually they all refuel and regain forward momentum and come back stronger than they were prior to the brakes being applied..

The reasons for the effect are varied usually it's some major natural disaster, war, or other financial mismanagement but they are always just temporary bumps in the road.. That actually serve as wake up calls, and the millions of Dollars, Yen, and Euros pumped into them always make the future far brighter than the past by creating jobs and other investment opportunity's if you have had the brass vision to position yourself correctly to take action when the opportunity arises..

Personally I see huge opportunites and ground to be gained whenever these types of corrections or back steps occur you just have to be brave and daring enough to thoroughly evaluate each opportunity for it's merits before throwing the baby out with the bathwater altogether... 

Credit companies are notoriously myopic memory wise and will loosen up the purse strings in short order since the money they make on interest is their bread and butter and is just too sweet a peach to say no to..When that happens there will be cheap credit and plenty of deals out there to take full advantage of from nice cheap houses and property to lucrative business opps and investments.

For example during all of this economic upheaval when numerous mid-range vehicle manufacturers are having difficulty even showing a profit including companies like Toyota. A company which caters to toy purchasers such as, Porsche is up 14% in sales last year. 

Just illustrating further what I have been saying and living by for years and that is those who can afford to play, will, and don't mind paying for top service as long as they also get top quality to go along with it.. When it comes to that there is always a market even in the toughest times, and actually in the toughest times people want to play even harder because it is stress relieving..

----------


## Bluecat

> Besides the Yuan is pegged to the dollar anyway.


Was pegged to the dollar actually.
Has been unpegged for quite some time and went up 10&#37; against the US$ since January last year.

----------


## Driventowin

> Originally Posted by Driventowin
> 
> 
> Besides the Yuan is pegged to the dollar anyway.
> 
> 
> Was pegged to the dollar actually.
> Has been unpegged for quite some time and went up 10% against the US$ since January last year.


That's the official stance anyway, but it's not the reality.. That's why the US has still been trying to persuade the Chinese to actually peg the Yuan to the dollar..

----------


## Norton

> That's the official stance anyway, but it's not the reality..


Huh? :Confused:

----------


## Driventowin

> Originally Posted by Driventowin
> 
> That's the official stance anyway, but it's not the reality..
> 
> 
> Huh?


They say they haven't pegged to the dollar anymore but they don't say what they have pegged to.. And their percentages of increase aren't relative to what the dollar has done..

----------


## bkkandrew

Pound smashes back through the $2 barrier...!



Graph didn't work. See:

BBC NEWS | Business | Market Data | Currencies | Sterling v US Dollar

----------


## Mid

*^*

*Pound Sterling - United States Dollar*

----------


## bkkandrew

^Thank you kind sir... That was the one I was after!

----------


## Driventowin

That's us foked!  :Sad:  There goes the neighborhood!! Time to move before all of those British types start moving in next door in even larger numbers..  :Smile:  But at least many Mercans will have someone to sell their houses to.. :Razz:   :Wink:

----------


## everglaze

> $4 a gallon gas? Predictions surprise Bush
> 
> Peter Maer of CBS News Radio asked: "What's your advice to the average American who is hurting now, facing the prospect of $4-a-gallon gasoline, a lot of people facing ... " 
> 
> "Wait, what did you just say?" the president interrupted. 
> "You're predicting $4-a-gallon gasoline?"
> 
> Maer responded: "A number of analysts are predicting $4-a-gallon gasoline."
> 
> Bush's rejoinder: "Oh, yeah? That's interesting. I hadn't heard that."


 
1 US gallon equals 16 cups divided by $4.00.... and still only 25 cents a Cup! :Smile:

----------


## Butterfly

it's still 1 USD per liter, which is cheap compared to the rest of europe

in Thailand now, it's 1.10 USD per liter

The majority of Americans wanted their little war with Iraq, they are going to pay for it, well deserved

----------


## Driventowin

> it's still 1 USD per liter, which is cheap compared to the rest of europe
> 
> in Thailand now, it's 1.10 USD per liter
> 
> The majority of Americans wanted their little war with Iraq, they are going to pay for it, well deserved


Just out of curiosity then.. Does that mean *IF* oil prices begin to drop because Iraq stabilises and pumps to full capacity then only we get to reap the benefits too?? Since we've fought the war and made the humanitarian sacrifices for their freedom....Or... I guess everyone who stood by and watched expects their fair share of the spoils if that's how one could characterize it?

----------


## Sir Burr

The US dollar has been in a downward trend against most other currencies for the last two and a half decades. Don't see anything that will reverse that trend.

----------


## Panda

> Originally Posted by Butterfly
> 
> 
> it's still 1 USD per liter, which is cheap compared to the rest of europe
> 
> in Thailand now, it's 1.10 USD per liter
> 
> The majority of Americans wanted their little war with Iraq, they are going to pay for it, well deserved
> 
> ...


Since the Russians and Chinese were signing oil development deals with Hussein before the invasion, the original post war game plan was for US and UK to develop the Iraq oil reserves under private joint ventures. Spoils of war so to speak. The Yanks even put Chalabi in charge of the Iraq oil ministry. (Chalabi was a political opponent of Hussein who fled to USA. Chalabi was also the principal source of US intelligence re WMDs  :Roll Eyes (Sarcastic):  )

Ahmed Chalabi - Wikipedia, the free encyclopedia

But the Iraqis gave Chalabi the boot because he was a crook. I guess that was another US blunder, -- using the establishment of democracy as an excuse when no WMDS found. And the then the ungrateful Iraqi government turned around and decided to go with OPEC rather than just let the invaders bleed the country dry.  :rofl: . They should have put Chalabi in charge of the whole country as a new dictator and paid him off with US military aid and protection. 

But all is not lost yet. Iraq is floating on a sea of oil and by the time the good stuff runs out in Saudi Arabia, in the next couple of decades, the Iraqi fields should be fully developed and secured. That will at least keep the world supply at around 2008 levels even though world demand (China, India) will have driven the price sky high by then. Next door to Iraq is Iran which also has huge reserves of good quality stuff too. And rumor has it that they too have WMDs that could threaten the west! Or at least they could be thinking about it. Maybe time soon for some regime change in Iran also, -- all in the name of freedom and democracy of course  :Wink: . After all we all know those Muslims are just a bunch of terrorists and dont know how to look after their national resourses properly. ITS UP TO US TO HELP THEM OUT HERE.

----------


## mrsquirrel

What will be the new dominant world currency or is it going to be split between the Euro and the Yuan?

----------


## Panda

> What will be the new dominant world currency or is it going to be split between the Euro and the Yuan?


There are a few ideas being kicked around. Up till now though none of them have been taken seriously because the $US hegemony seemed to be working quite well for everybody. Trouble is though that putting the whole worlds economy at the mercy of the value of one countries currency is a big step of FAITH!

The most likely outcome in the end I think, would be a world trading currency averaged out among a basket of major currencies AND the value of a basket of precious metals.
If that happens, the $US could loose up to 25% of its current value and the country would have to stand on its trade balance rather than the international reinvestment bubble back into the US and printing more paper money to sustain it.

It wont happen overnight, because if the USA tanks the rest of the world goes down with it. But I do think we will see a change in this direction within the next decade, and the establishment of a less vulnerable world trading currency within the next two decades.

----------


## mrsquirrel

I've been enjoying reading about the history of reserve currencies and how fickle it can be. I've read about how the eb and flow puts it on about a 100 year cycle or so (or at least that is what the academics predict). This would mean that we are due for a change around now since the sterling fell from grace 90 odd years ago.

----------


## GooMaiRoo

> Perhaps we'll see the dollar getting stronger next year, after the elections?


 Probably not. If McCain or Clinton are elected, the dollar is a doomed currency. McCain offers nothing more than vague populist fluff about vetoing 'pork barrel' legislation. He also has no problem with future US involvement in highly inflationary foreign ground wars. Clinton has a similar foreign policy outlook. She'll also bust the federal treasury by subsidizing Americans who will now be forced to buy health insurance from her friends in the medical insurance industry. Has anyone noticed her 'fiscal responsibility' in the mismanagement of her presidential campaign funds? No wonder that Obama has been endorsed by Paul Volcker, the last fiscally conservative chairman of the federal reserve (Reagan replaced him with Greenspan in 1987). The dollar _might_ recover is Obama is elected. Otherwise, holders of dollar-denominated assets should really head for the exits.

----------


## Butterfly

let's not forget that the USD devaluation is all due to Bush, it's the sign of trust the rest of the world is putting into America, that is no credibility and foolish policies,

as soon as he is gone, I will bet that the currency will shoot right up,

Remember the Carter years ? same same but different, USD in the shitter, and then all time high in less than 2 years, see how things go around in the financial markets, unpredictable and fast, you won't see it coming

----------


## Panda

> let's not forget that the USD devaluation is all due to Bush, it's the sign of trust the rest of the world is putting into America, that is no credibility and foolish policies,
> 
> as soon as he is gone, I will bet that the currency will shoot right up,
> 
> Remember the Carter years ? same same but different, USD in the shitter, and then all time high in less than 2 years, see how things go around in the financial markets, unpredictable and fast, you won't see it coming


Carter was just unlucky to be in the chair when the 1973 oil crisis hit. Same thing would have happened if the republicans were in charge. Most western countries suffered a recession with spiralling inflation, high interest rates and high unemployment as a result of the Arabs cutting off the supply of oil.

1973 oil crisis - Wikipedia, the free encyclopedia

Jimmy Carter - Wikipedia, the free encyclopedia

The long term prognosis for the $US depends more on the amount of faith the rest of the world has in US paper money than which party runs the country.
The US has been able to live above its means for decades simply because the rest of the world had FAITH in the strength and stability of the $US as the worlds default trading currency. As an American poster on another board said, -- " we send China little pieces of paper with George Washington's picture on them, and they send us television sets".

The US balance of trade has been falling for several decades and Its about even now. Whats been propping the US economy up is the reinvestment of $USs back into USA from their trading partners. But its only paper money and its real worth has been inflated because everyone has had FAITH in its invincibility. Its a bubble waiting to burst.

----------


## chinthee

Just listening to NPR public radio over the internet and they are interviewing the head of BMW North America.  He says their sales have been hurt badly by the US Dollar devaluation because the US is their biggest worldwide market.  As a result, they are stepping up local production at their USA plant and are very concerned about the long term devastation to their sales.  They said that importing the cars from Germany is 25% more expensive now so that US consumers are no longer choosing BMWs.

This devaluation will have ripple effects to many other producers in other countries.

----------


## Butterfly

and yet Germany is reporting record exports

BBC NEWS | Demand for German exports strong

----------


## Panda

> Just listening to NPR public radio over the internet and they are interviewing the head of BMW North America. He says their sales have been hurt badly by the US Dollar devaluation because the US is their biggest worldwide market. As a result, they are stepping up local production at their USA plant and are very concerned about the long term devastation to their sales. They said that importing the cars from Germany is 25% more expensive now so that US consumers are no longer choosing BMWs.
> 
> This devaluation will have ripple effects to many other producers in other countries.


Yep. As the worlds biggest consumer nation, any downturn in the US economy will be certain to have ripple effects far and wide all around the world.

The rest of the world has come to depend on the USA as the lynch pin of the world economy, not just as the worlds greatest consumer market, but also in the hegemony of the $US as the worlds default trading currency.

No-one, not even USAs enemies, want to see the US economy crash and burn abruptly. Everyone would lose.

The adjustment we are seeing now in the value of the $US is just the beginning of a shift in world economics that will continue over probably a decade. Its an uncertain future for all of us with the rapidly changing face of world economies, especially the recent rise of China and India, and their competition for limited oil resources which the west has come to depend on in the past.

As I have said before, I don't think the $US will crash too far. It will go up and down but find its real value in the end on the world market which will probably be about 25% less than what it is now. It wont happen overnight and I expect the $US to bounce back in a couple of years, but the overall trend will be downwards until things settle out over the next decade or so. The key to it all is the $US hegemony over world trade. That is slowly giving way to the $Euro which is not such a good idea for the world either. And I am sure the emerging economies of China and India will put a stop to individual countries/economies getting a monopoly on the world trading currency. So, most likely outcome is going to be a general world trading currency based on an average of all major currencies. 
That will cut out the current $US advantage and force the USA to compete with the rest of the world on an equal footing (balance of trade). But good news for working class Americans as it will make exports more competitive. But bad news for the big money trader people who have got rich on the recycling of inflated $USs back into the USA finance market.

The current experiment in world economics over the past 4 decades, replacing gold with $US paper money, has run its course and outlived its usefulness. It served the USA and the rest of the world well while USA was on the ascendancy with a growing balance of trade in real goods and services, but now its not such a good idea as USA goes into decline on the world trade market. 
Since all the big world contracts and especially oil are currently written in $USs, things wont change any time soon. Change will be slow, over years and decades. But change is certain.

----------


## Norton

> Its an uncertain future for all of us with the rapidly changing face of world economies, especially the recent rise of China and India, and their competition for limited oil resources which the west has come to depend on in the past.


While I agree China and India are going to major players, I feel Russia is being underestimated in comparison.  Granted they lag behind right now but once they get their political and business environment in order they surely are in a position vis a vis their natural resources to be one, if not the dominant player.

----------


## Panda

> Originally Posted by Panda
> 
> Its an uncertain future for all of us with the rapidly changing face of world economies, especially the recent rise of China and India, and their competition for limited oil resources which the west has come to depend on in the past.
> 
> 
> While I agree China and India are going to major players, I feel Russia is being underestimated in comparison. Granted they lag behind right now but once they get their political and business environment in order they surely are in a position vis a vis their natural resources to be one, if not the dominant player.


Russia is currently riding an oil boom that's going to run out in the next decade or two. When that cash flow cuts out its going to hit them hard.

----------


## Butterfly

^ I wouldn't worry about Russia, gas and distribution network is also their other play,

----------


## Norton

> Russia is currently riding an oil boom that's going to run out in the next decade or two. When that cash flow cuts out its going to hit them hard.





> I wouldn't worry about Russia, gas and distribution network is also their other play,


I agree but this is the current situation.  If we project 10 or 20 years Russia is currently in a much better situation than China or India was was 20 years ago.  If Russia can make the same turn around as China has in the last 20 years, they will emerge with a big advantage over both China and India.  Russia's natural resources go far beyond just oil and gas.   They have a significant population of about 150M to support a viable domestic market.  Relatively low labor cost to support low cost manufacturing.  Certainly have the military clout to protect their economic interests.  And as you say, many years of capital inflow from oil to use to retool the country.  Should Russia be able to make the necessary adjustments as I believe they may well do if they remain politically stable under the governance of what is essentially now a single party system, I don't see how they can fail to be a dominant economic power.  *The big question is, will the leadership of Russia make the changes needed?*

----------


## Driventowin

> Certainly have the military clout to protect their economic interests


This should have been in past tense honestly...

----------


## John

Here is a lot of talk about the US, the $ and hopes. But let's face the facts. The USD crashes and the end gets clearer and clearer. So I think it might be a good idea to get out of it AS LONG AS YOU CAN. Bernanke gives it for free to the people there already. Debts, debts and more debts... Free $ falling from the sky. The paper of the USD has the most value - if it can be recycled... And if you think I am wrong then look how the $ gets worthless day by day.

----------


## Driventowin

Gee John.. You must be the life of the party...Your a real "glass is half empty" kind of sort aren't you  :Sad: ?? I think your over stating and preaching quite a bit of panic and paranoia myself.. A real hopeless and negative sort as I don't think it's anywhere near as bad as your projecting..I don't see the evidence or hear a single expert espousing the level of implosion that you do..

You sound just like they did in the crash in the twenties and recovery from WWII, Vietnam, the fuel shortage of the 70's... All of those crisis's had the same sort of "sky is falling" types running around calling this the end of the world as we know it.. And....That part was true! Because in the end the world changed for the better financially and recovered just like it will this time..

What your obviously failing to account for is that while the dollar is dropping value all of that Gold sitting there in Fort Knox is growing rapidly in value, there's a counter balance in effect here and that's what is going to secure the value of the dollar as much as anything else..

It's clear that when it's value is at a premium and the dollar requires additional support the reserve will liquidate the necessary amount to counter any serious devaluation of the dollar.. So what you say is not true there is value behind it they just have no need to panic on liquidating it.. 

A devalued dollar is not as major a setback as many think. It will inspire investment back in the States which in turn inspires employment as well as making our exports more attractive to out side orders (case in point with BMW closing ranks) and it does bring other benefits like higher tourism numbers from foreign tourists and as well more Americans stay home and also tour home grown assets pouring billions of dollars back into the market domestically thus regaining the diluted dollars that have spread throughout the world.. It's not all as 'end of the world' as you portray..

It's actually an expected correction that happens every so often in every economy. As I said before economies are not 'perpetual motion machines', the slow down, go into neutral and sometimes even in reverse for a period of time before regaining their balance and momentum with the right corrections and guidance..

----------


## John

Just read. Even the US banks do not believe in the currency anymore...

Bloomberg.com: Currencies

----------


## John

> You sound just like they did in the crash in the twenties and recovery from WWII, Vietnam, the fuel shortage of the 70's... All of those crisis's had the same sort of "sky is falling" types running around calling this the end of the world as we know it.. And....That part was true! Because in end the world changed for the better financially and recovered just like it will this time..


Hope so much you are right. But in Europe they used the money to cook food and not to buy it - it was in Germany. Nobody really cares if the sky is falling. It will only crush the USA. As long as you do not have any financial connection to the then flat landscape be happy. Please do not forget to send CARE parcels to the US (avoid hamburgers and expensive coffee!!!!) Add some condoms so that the problems cannot get worse!!!

----------


## John

Just one more thing in respect of the condoms. Please inform them that they should not eat them nor feed their pets with them. They should not use them as shower cap pulling them down to the chest. They should not use them for boiling food. They should not use them to overtake other cars. They should not...forget it. Just send them.

----------


## Driventowin

> Originally Posted by Driventowin
> 
> You sound just like they did in the crash in the twenties and recovery from WWII, Vietnam, the fuel shortage of the 70's... All of those crisis's had the same sort of "sky is falling" types running around calling this the end of the world as we know it.. And....That part was true! Because in end the world changed for the better financially and recovered just like it will this time..
> 
> 
> Hope so much you are right. But in Europe they used the money to cook food and not to buy it - it was in Germany. Nobody really cares if the sky is falling. It will only crush the USA. As long as you do not have any financial connection to the then flat landscape be happy. Please do not forget to send CARE parcels to the US (avoid hamburgers and expensive coffee!!!!) Add some condoms so that the problems cannot get worse!!!


Oh jaysus!! Where do you get this information from? Show me a link where they are cooking food by burning dollars in Germany??  :Roll Eyes (Sarcastic):  And it's not a media ploy.....

Furthermore if you think that Europe is somehow isolated from what happens to the US in this 'new age' world economy than you are even more naive than you already appear..

I never thought hamburgers were all that expensive myself.. That's what we always ate when my family was on a grocery budget when I was little..My mom used to make us meatloaf (read; hated it very much) quite a bit so it couldn't be that expensive, could it??  :Roll Eyes (Sarcastic):

----------


## Driventowin

> Just one more thing in respect of the condoms. Please inform them that they should not eat them nor feed their pets with them. They should not use them as shower cap pulling them down to the chest. They should not use them for boiling food. They should not use them to overtake other cars. They should not...forget it. Just send them.


Would it be ok if we use them to blow up as balloons for party favors or fill them with water to throw off the roof at tourists??  :Smile:   :Razz:

----------


## John

As you can see there is still some happiness out there in the US. So send the parcels AND the condoms. Some of them do not know what happened to some currencies in history. It is not important since they will find it out pretty soon. Do not want to look for photos where the people put their currency into their oven.

In any case - those are the believers. I am not sure in what they believe. But my advice - believe in the end of the US. This is not really correct since the end has been reached long time ago already. Lets take the final end and so give them some more weeks.

The $ will reach 2 to the Euro pretty soon. Now we are at 1.55 already. So what we are talking here about??? But perhaps it will never reach that level - the US cannot even pay back their debts at this level. So the level of 1.55 is much to high already. Even a level of 1:1 would not enable the US to pay back any debts. The world will stop to finance such a country. :kma:

----------


## Driventowin

^  :rofl:  :rofl:  I see.....So you put us on par with, or even lower than Africa huh?? OK have your delusions all to yourself, there's a helluvalot more about an economy and what makes it fly than just your dollar reasoning.. That's all I'm gonna say... :Roll Eyes (Sarcastic):

----------


## John

> ^ I see.....So you put us on par with, or even lower than Africa huh?? OK have your delusions all to yourself, there's a helluvalot more about an economy and what makes it fly than just your dollar reasoning.. That's all I'm gonna say...


No, no. I would not put Africa at the same level. They have a future.

The USD is the stock value of your country. Not so long ago the stock was at almost 0.8 to the Euro. Now it is at 1.55 and still falling and falling (every minute...). But the falling stock value is only one problem. The bigger problem is the outlook for a country that cannot pay the debts anymore. What you spend today is money from other countries. Perhaps even from some African ones ;-) 

I admit - it is a sad story since the US was somehow the hero of western thinking. But as we can see now even communist countries like China are laughing. Worse - the US begs that the Chinese make their products more expensive otherwise they might kill the "mighty" US. But honestly - without the Chinese money support the lights would be switched off long time already in the US  :France:

----------


## Driventowin

^Now your really sounding quite entertaining.. They have a future with all of those billions of US dollars in foreign aid floating them but we don't??  :rofl:  :rofl: 




> Now it is at 1.55 and still falling and falling (every minute...).


Another complete crock of bollocks!! I went to Europe in 2002 and the exchange rate was around 1.30 to 1.35 to the dollar and it took a major war and oil prices to raise to over 100 dollars a barrel to even bring it this far in over 6 years.. So...Nice try .. :Roll Eyes (Sarcastic):

----------


## John

> ^Now your really sounding quite entertaining.. They have a future with all of those billions of US dollars in foreign aid floating them but we don't??


It is up to you to find this entertaining. US guys I know here in Thailand get more and more quiet since they have a problem to survive. And if countries like Japan or China take out their money of the US - the people in the US might not even have chairs to sit anymore. 

You can see that the world economy booms while the people in the US lose their homes and buy at Wal*Mart where they get more and more credit. At least they have something to eat... What happens in the US is a shame for the western world. :gw bush:

----------


## Sir Burr

> What your obviously failing to account for is that while the dollar is dropping value all of that Gold sitting there in Fort Knox is growing rapidly in value, there's a counter balance in effect here and that's what is going to secure the value of the dollar as much as anything else..


I think you'll find that there isn't as much gold sitting in Fort Knox as you think. A lot of it was sold off several years ago.

What you are implying, is that the dollar is gold-backed. It isn't. That's the problem.

----------


## Driventowin

OK...I'm owned :Speechless:  ....Your logic is impeccable.. I guess that's us foked because John says it's so  :Sad: !! I'm going to go find a nice gun with my last couple of baht now.. Good bye cruel world!!  :Sad:   :Roll Eyes (Sarcastic): 


 :Usa:

----------


## Driventowin

> Originally Posted by Driventowin
> 
> 
> What your obviously failing to account for is that while the dollar is dropping value all of that Gold sitting there in Fort Knox is growing rapidly in value, there's a counter balance in effect here and that's what is going to secure the value of the dollar as much as anything else..
> 
> 
> I think you'll find that there isn't as much gold sitting in Fort Knox as you think. A lot of it was sold off several years ago.
> 
> What you are implying, is that the dollar is gold-backed. It isn't. That's the problem.


No.... I'm not suggesting that in entirety nor does it need to be applied in entirety either, that's why they're called reserves... But are you suggesting that when gold prices were low and we had a budget surplus that such monetary reserves were not somewhat recuperated?? 

And besides whatever I might have suggested you can't seriously subscribe to the opposite point of view being displayed here can you? 

You always seem to look for a side issue to raise with me no matter how baseless the opposing opinion is.. why is that I wonder?

----------


## John

> I'm going to go find a nice gun with my last couple of baht now.. Good bye cruel world!!


Get one made in China. They are cheaper than the US ones. While I was writing those short lines the $ fell from 1.5350 to 1.5450 to the Euro. Hurry up!!!

----------


## Driventowin

Yeah but the bullets will probably missfire or the gun will blow up in my hand blowing off my trigger finger so I can't even try again.. That's the quality the world has to look forward to if the US tanks as you suggest.. :Roll Eyes (Sarcastic): 

That's why the Chinese will never let us tank they haven't pirated or learned enough from us yet..That'll take at least another 50 or so years cause we ain't standing still either... :Smile:

----------


## John

> Yeah but the bullets will probably missfire or the gun will blow up in my hand blowing off my trigger finger so I can't even try again.. That's the quality the world has to look forward to if the US tanks as you suggest..
> 
> That's why the Chinese will never let us tank they haven't pirated or learned enough from us yet..That'll take at least another 50 or so years cause we ain't standing still either...


In the meantime the Euro/$ rate went up to almost 1.56. Read this

CHRONOLOGY-Milestones in euro's history | Markets | Markets News | Reuters

The US strategy seems to have a global problem... Worse than this. They will have to ask not only China for mercy but cry for ANY help. It is such a shame. GWB and the people at the FED are STILL in control. If you make a mistake you should learn. 

I guess the US has reached what Osama Bin Laden was dreaming of. But the US will not stop there. Don't forget - there are people responsible for the US in the US. But look at the result! And nothing changes. The real danger for the US does not sit in the Middle East...

----------


## britmaveric

> Originally Posted by Driventowin
> 
> 
> What your obviously failing to account for is that while the dollar is dropping value all of that Gold sitting there in Fort Knox is growing rapidly in value, there's a counter balance in effect here and that's what is going to secure the value of the dollar as much as anything else..
> 
> 
> I think you'll find that there isn't as much gold sitting in Fort Knox as you think. A lot of it was sold off several years ago.
> 
> What you are implying, is that the dollar is gold-backed. It isn't. That's the problem.


147.3 million ounces

----------


## chinthee

The US has the largest Official Reported gold reserves of any country on earth with 8,134 tonnes, although the EU combined countries are greater.

A lot of it is held in the Federal Reserve in New York, underground.  Several Hollywood action movies have been made about fictional robberies, etc..

Sorry for the wiki reference:
Official gold reserves - Wikipedia, the free encyclopedia

----------


## chinthee

We need to bring this poster _John_ back to earth and the hysterical hyperbole crap he is spouting.

*Experts: Don't fear the weak dollar*




> NEW YORK (CNNMoney.com) -- Concerns about the weak dollar are mounting. But even as the greenback sinks to new lows against the euro and other global currencies, some experts say this is not necessarily a bad thing for the U.S. economy.





> Still, there are other reasons to be fearful of a weak dollar. If it declines further, it could erode interest by international investors in buying dollar-denominated securities.





> "Foreigners continue to buy U.S. securities," said Jay Bryson, global economist with Wachovia. "If there was a massive exodus, you would see a major impact on Treasurys."


But right now, the near-term outlook for the dollar is still troubling since some pretty ugly economic numbers likely lay ahead. 



> "You don't have to be a rocket scientist to see how many issues the domestic economy has right now," said Benedikt Germanier, currency strategist at UBS.





> *Even the most bearish currency experts suggest that the dollar should recover against the euro later in the year if the sluggish U.S. economy starts to pick up and the Fed winds down its rate-cutting campaign.*


Who's afraid of the declining dollar? - Mar. 12, 2008

Yes, the dollar will be sick for awhile longer, but failing a number of other unlikely events, it will not be a long term thing.

John, have you ever considered cutting back on the caffeine?  :Smile:

----------


## Driventowin

> John, have you ever considered cutting back on the caffeine?


And increasing his lithium dosage...Some how I don't think all of these "facts" you presented are going to temper his enthusiasm for the US financial downfall very much however.. :Roll Eyes (Sarcastic): 
He's sort of on his own little fantasy kick there...And your just blowing his fantasy....

Federal Reserve huh??? Yeah I sort of forgot about that little piggy bank.. :Sad:

----------


## John

> Yes, the dollar will be sick for awhile longer, but failing a number of other unlikely events, it will not be a long term thing. John, have you ever considered cutting back on the caffeine?


I remember when the $ moved from around 0.8 to the Euro to 1 - they said the same thing - it will not be a long term thing. Today with have 1.56 and they still say it will not be a long term thing. The day might not be so far away that we hit 2 and they still will say it will not be a long term thing.

What else can they say? The truth? Then we have 2.50 this week. The problem is that the US is completely broke. If other countries will not help them to fight the problems then this will end in a very bad situation for the US. This goes pretty quick. And if the infrastructure breaks down - many cities cannot pay the interest for their debts anymore - the rest will follow pretty soon.

Don't overlook the whole world is booming!!! Today Australia reported higher job gains than expected. Despite the high Australian $. But this is not really correct. The AUD is not high - the USD is low. I am afraid the only thing that can avoid a crashing USD is a system like Thailand uses for the Baht - intervention. But why not? Better than Bernankes strategy to fight debts with debts. This will end in a chaos if it is not stopped. Don't forget - it was Greenspan, Bernanke and the rest of the FED - they made this chaos we have now. They have to be stopped to avoid the final exodus. How can such idiots who created the crises find a way out of it??? Let them play like children and let them make their experience??? This is exactly what happens.

But lets look at GWB. Afghanistan is lost, Iraq is lost, the US economy is lost, the USD is lost - and this guy still does not get blamed much in the US media. So I am afraid - the US is lost. :Sorry1:

----------


## Driventowin

Well here you have it then! An mandated edict by John....erheemmm...Carey :Roll Eyes (Sarcastic):

----------


## Driventowin

> Don't forget - it was Greenspan, Bernanke and the rest of the FED - they made this chaos we have now.


I haven't forgotten that Greenspan was appointed under Reagan and ever since that time without a major disruptive influence such as a major war, (undeclared by us with the exception of Iraq) over all the economy has been just fine, the dollar strong and climbing, trade could have been improved but that's not been a major factor and just previous to this war we had a very significant growth rate and budget surplus..

So how you can pin all this on Greenspan and Bernanke who just got into office and has had several negative monetary lemons to juggle all at the same time is like blaming GWB for the worlds terrorism problem that existed long before he was even in office.. It just doesn't hold any credibility..

----------


## Norton

The Fed continues to pee on a raging fire.  All to free up more capital so banks can lend more money to irresponsible borrows and in turn stimulate the economy.  Other than fueling inflation and driving the dollar down, the result so far zilch.  I see Bernanke's name brought into the thread.  He fully understood the Fed could only make minor adjustments to the economy and many times after attempting these he just let the chips fall where they may.  Yes this caused economic downturns but always followed with a recovery.  It is time for the Fed to step aside and let the economy fix itself and if a few irresponsible lenders or borrowers take a loss so be it.  Further interference will only make the situation worse.

----------


## John

> So how you can pin all this on Greenspan and Bernanke who just got into office and has had several negative monetary lemons to juggle all at the same time is like blaming GWB for the worlds terrorism problem that existed long before he was even in office.. It just doesn't hold any credibility..


This is exactly the problem over there - no one is responsible for anything. So Greenspan did not cause it, Bernanke did not make it worse and GWB has nothing to do with it at all. 

So who was it??? :Smile:

----------


## Norton

> So who was it???


A ghost, so me missus says. :Smile:

----------


## Driventowin

Honestly it's small amounts of several problems that have added up to larger ones.. It's no one particular persons fault or one particular policy, that's just to simplistic a point of view..And unlike over in Europe where there is only finger pointing going on at least we recognize there is a problem and are dealing with it, but pointing fingers at individual persons when it is an entire world economy that has to share some blame is just scapegoating..

And if you doubt it is a world economy issue than just take a good long look at the British mortgage debacle and the French Societe General trading debacle to illustrate the depths of it's impact..

A bit off topic but somewhat relevant is the fact that I always get burned how these banks and various other "money management" firms can make such bone headed and irresponsible decisions that cost millions and sometimes billions of other peoples money and then turn around and borrow money or liquidate other capital to cover their incompetence. 

If you or I tried any such thing you can bet that they would laugh in our face and slam the door behind us over just few thousand dollars.. But yet they're considered the experts.... :Roll Eyes (Sarcastic):  Not because of what they know, but more because of who they blow...

----------


## John

> A ghost, so me missus says.


Perhaps it was Spitzer?!!! Some say he did not even use condoms...

----------


## John

> If you or I tried any such thing you can bet that they would laugh in our face and slam the door behind us over just few thousand dollars.. But yet they're considered the experts....


They would not laugh they might put you into jail because of fraud.

But this is not where the story ends. This is where it should begin. But it does not. Why? I don't expect any answer...

----------


## bkkandrew

*Dollar Falls to 12-Year Low of 100 Yen on Carlyle Fund Failure 
*

Bloomberg.com: Worldwide

March 13 (Bloomberg) -- The dollar fell below 100 yen earlier today for the first time since 1995 and to a record low against the euro after a Carlyle Group fund moved closer to collapse, triggering concern of more turmoil in financial markets. 

The dollar approached parity with the Swiss franc and slumped against the British pound after Carlyle said lenders will take over the assets of its mortgage-bond fund and President George W. Bush acknowledged the U.S. currency's decline was not ``good tidings.'' The dollar's drop may prompt Middle East central banks to reduce dollar holdings, Greg Gibbs, a strategist at ABN Amro Holding NV in Sydney, said in a report. 

Sub 30 for the USD to THB here we come!

----------


## Butterfly

Holly fucking shit !!!

----------


## chinthee

Carlyle was the best of the best of the PE groups.  Absolute top notch most prestigious place to spend some time if you were in PE.

My, my my....

----------


## Butterfly

^ Their Chairman is one of Bush big supporter if I am not mistaken, an insider to the neocon elite,

fucking poetic justice,

----------


## britmaveric

Dollar is King - all going as planned.  :Wink:

----------


## Butterfly

The Fed easing policy had actually the reverse effect it was supposed to have,

LOL !!! world going upside down, Fed losing control, banks asking for their money back, the end is near




> The irony of CCC's problems is that the measures brought in to help ease the global credit crunch, may actually have exacerbated the situation.
> 
> Earlier this week, the US Federal Reserve, the Bank of England, the European Central Bank and other central banks said they would pump $200bn into financial markets to stimulate lending.
> 
> As part of their plan, they would allow lenders to put up the problematic mortgage-backed securities as collateral for the new central bank-backed loans they were offering.
> 
> However, instead of underpinning the mortgage-backed securities market, it seems to have had the opposite effect, giving lenders an opportunity to dump the risky asset. 
> 
> "The Fed's new lending emergency lending facility allows the banks to swap mortgage-backed debt for Treasury Bills in a way that Carlyle could not do," said the BBC's business editor.
> ...

----------


## chinthee

Crap, do we dare say the "D word?"  Hello, 1929?

----------


## Norton

> Sub 30 for the USD to THB here we come!


Many think bottom will be 27 or 28 before gradual recovery to around stable 34/35

----------


## Norton

> Crap, do we dare say the "D word?" Hello, 1929?


Could be but one element missing as yet is severe crop failures.  Should this happen the big D will follow.

----------


## chinthee

^Actually, it happened in Rice crops in Vietnam and elsewhere.  Evidently, Thailand is sitting on a gold mine of rice right now.  Prices have doubled, and are expected to double again, up to $1000/ton.

The UN is severely cutting back its aid program to the poorest countries as a result.  Many at the UN are forecasting devastating consequences in some countries as a result.

----------


## Thetyim

> Thailand is sitting on a gold mine of rice right now. Prices have doubled, and are expected to double again, up to $1000/ton.


Over 10 thousand tons of rice has just gone missing from Chiang Mai and no-one knows where it went. :Roll Eyes (Sarcastic):

----------


## chinthee

^Yeah, I expect to see this now.  Though it's a little harder to smuggle 10 thousand tons of rice than a bagful of diamonds.

----------


## Driventowin

Yeah....About those diamonds>> Given they are undigestable, undetectable and won't cause any real digestive or infection disorders where I can find a good meal??  :Smile:  Anyone have any ideas??  :Wink:

----------


## bkkandrew

> Originally Posted by bkkandrew
> 
> Sub 30 for the USD to THB here we come!
> 
> 
> Many think bottom will be 27 or 28 before gradual recovery to around stable 34/35


I think that it would be political suicide for lower than 29.x (as I have said at USD:THB 35) as their would be mass layoffs here and economic chaos. This is a particulaly Thai problem, as historical trading and JV's mean that a disproportionate amount of export trade is US bound.

Although most of the FX forces here are outside of Thailand's control, it will largely be down to the deterimation of the Samak Govt to want to prevent economic chaos of a 27-28 exchange rate and cling on to power...

We will see!

----------


## Redneck

strong currencies are rarely political suicide in 3rd world context. In many ways weak currencies are more hazardous to the life of a government. Eg, SE Asia post crisis.

----------


## bkkandrew

> strong currencies are rarely political suicide in 3rd world context. In many ways weak currencies are more hazardous to the life of a government. Eg, SE Asia post crisis.


The majority of exporters surveyed last year stated that they were unprifitable sub 34, so a further 20% fall in income (reduction to 29.x) would mean mass closures, layoffs etc. Thats where the political suicide comes in. I don't think Samak would relish hoards of unemployed swarming around Government House with nothing to do other than waive banners and cause trouble...

----------


## Driventowin

I see an opportunity to do some high quality importing myself..
Specialty products that are higher quality than the one's available by Asian manufacturers (if they're available in the first place that is) and on par with European only much less expensive..Relatively speaking...

----------


## bkkandrew

Bloomberg.com: Worldwide

Dollar Falls to Record Versus Euro, Near Decade Low Against Yen 

By Kosuke Goto and Stanley White

March 14 (Bloomberg) -- The dollar fell to a record against the euro and approached a 12-year low versus the yen on concern widening credit-market losses will threaten hedge funds and other financial institutions. 

The currency headed for a fifth weekly decline against the euro before an industry report may show U.S. consumer confidence fell to a 16-year low, giving the Federal Reserve more reason to cut interest rates. The failure of a Carlyle Group fund this week and a slump in Bear Stearns Cos. shares yesterday renewed concerns about credit-market losses. 

``The dollar will keep hitting new lows against the euro and yen,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``The subprime problems are far from over.'' 

The dollar dropped as low as $1.5651 per euro, the weakest since the European currency's debut in 1999, before trading at $1.5609 as of 7:10 a.m. in London, from $1.5635 yesterday. The currency also slipped to 100.43 yen, after weakening to 99.85 yen, the second day it has traded below 100. The dollar traded at 1.0092 versus the Swiss franc from 1.0093 yesterday, when it slid to a record low of 1.0045 Swiss francs. The yen rose to 156.67 per euro from 157.35. 
The U.S. currency may decline to 99 yen and $1.57 a euro today, Ishikawa said. 
Hedge Funds 

The yen rose against all 16 of the most-active currencies as Asian stocks fell, prompting investors to pare investments in higher-yielding currencies funded with loans from Japan. 

The currency advanced the most against the South African rand and the Australian dollar, two favorites of the so-called carry trade. 

``With stocks falling, traders are rushing into yen- buying,'' said Takeshi Tokita, vice president of foreign- exchange sales at Mizuho Corporate Bank in Tokyo, a unit of Japan's second-largest publicly traded lender by assets. ``There are some rumors hedge funds and banks will go into bankruptcy.'' 

Japan's currency rose 0.6 percent to 94.73 against the Australian dollar and 0.5 percent to 12.6766 versus the rand. 

The yen may rise to 99.20 per dollar today, Tokita forecast. 

The dollar has declined 18 percent against the yen since July 17, when Bear Stearns told investors in one of its hedge funds they won't get any money back after creditors forced it to sell assets at depressed prices to repay loans, spurring concern that losses will widen. 

`Intervention Watch' 

The dollar's record-breaking drop may trigger the first coordinated effort to shore up the currency in 13 years, according to strategists at Morgan Stanley and Goldman Sachs Group Inc. 

U.S. President George W. Bush said this week in an interview with the U.S. Public Broadcasting Service that the dollar is ``adjusting'' and its decline isn't ``good tidings.'' 

European Central Bank President Jean-Claude Trichet and Japanese Finance Minister Fukushiro Nukaga have complained about the U.S. currency's slide, because it makes their nations' exports less competitive. 

``We're on an intervention watch,'' Stephen Jen, Morgan Stanley's London-based head of foreign-exchange research, said in a telephone interview. ``While I don't think we have reached the threshold yet, the argument in favor of it is gradually becoming compelling.'' 

Any losses for the dollar against the euro may be limited as some traders buy to protect options that would become worthless should the U.S. currency weaken beyond certain levels, said Seiichiro Muta, director of foreign exchange in Tokyo at UBS AG, the world's second-largest currency trader. 

...Cont...

----------


## John

> Any losses for the dollar against the euro may be limited as some traders buy to protect options that would become worthless should the U.S. currency weaken beyond certain levels, said Seiichiro Muta, director of foreign exchange in Tokyo at UBS AG, the world's second-largest currency trader.


They used this statement so often already. Always it was not correct - otherwise the $ would never have jumped over 1 to the Euro. So listen to the real driver of the market:  :gw bush:  The $??? Do we have the $? It goes down? Does it not have always to go somewhere! So better it goes down than up then it cannot fall so much - or??? But I support a strong $. Our economy is strong! The markets should determine the value of the $!

Too bad that they really do...

----------


## bkkandrew

*USD 'Down The Tubes' and in a 'Vicious Circle of Doom'*

*(My edit - don't you just love it when ananyists use such technical terms!)*

Bloomberg.com: Worldwide

March 17 (Bloomberg) -- Ben S. Bernanke's interest-rate cuts have touched off a vicious circle of doom for the dollar. 

The Federal Reserve reduced the rate on direct loans to commercial banks by a quarter-point to 3.25 percent before Asian financial markets opened today. It will likely lower its target rate for overnight loans between banks tomorrow to at least 2.25 percent from 3 percent, according to futures traded on the Chicago Board of Trade. Lower borrowing costs work against the dollar by making fixed-income securities issued by the government less appealing to global investors. 

``The relative return on U.S. assets is not attractive enough and we have moved back into looking for dollar weakness,'' said Robert Robis, a bond fund manager in New York at OppenheimerFunds Inc., which oversees $260 billion. Robis last month was betting the dollar would rally versus the euro. 

If that weren't enough to make bears out of bulls, the weakest dollar since at least 1971 based on a Fed trade-weighted index is helping push oil, grains and metals, which are priced in the U.S. currency, to record highs. That in turn is causing economists to lower growth forecasts for the U.S. and preventing central banks concerned that inflation is accelerating from cutting interest rates, further undermining the dollar. 

``The whole world feels there's inflation when a good part of that is the weak dollar itself,'' said Stephen Jen, head of global foreign-exchange research at Morgan Stanley in London. ``Watching the dollar plummet like this is very dangerous.'' 

Picking Up Steam 

The dollar tumbled 6 percent in the past month against a basket of six major trading partners, the fastest pace of decline since May 2006. It fell to a record low against the euro of $1.5903 today, before trading at $1.5837, and depreciated to 95.76 against the yen, the weakest since 1995. 

Barclays Capital Inc., BNP Paribas SA, Morgan Stanley, Standard Chartered Plc, Bank of America Corp. and Credit Suisse Group cut their forecasts for the dollar in the last two weeks. 

European Central Bank president Jean-Claude Trichet and Japanese Prime Minister Yasuo Fukuda said last week in interviews the plunge is ``concerning'' and ``undesirable'' for growth. Goldman Sachs Group Inc. and Morgan Stanley strategists say that coordinated action by policy makers to stem the currency's slide is increasingly likely. In intervention, central banks buy and sell currencies to influence exchange rates. 

`Down the Tubes' 

``It's hard to stimulate an economy when the currency is going down the tubes,'' said David Malpass, the chief economist at Bear Stearns & Co. The New York-based firm expects the dollar will fall to $1.60 per euro in 12 months.

----------


## Mid

*U.S. Chief Auditor Leaves*
By David S. Broader 

*Giving Dire Warning About National Debt* 

16/03/08 "Washington Post" -- -It was sheer coincidence that David M. Walker spent his last day Wednesday as comptroller general of the United States at the same time that the House and Senate were beginning to debate their budget resolutions for next year.

As the head of the Government Accountability Office, the auditing arm of Congress, Walker has been perhaps the most outspoken official in Washington warning of the fiscal train wreck that awaits this country unless it mends its ways.

The budget resolutions approved last week both envisage an increase in the deficit next year. The Senate predicts $366 billion, the House $340 billion. Meanwhile, over the next five years, independent estimates are that the national debt, already $9 trillion, will grow by $2 trillion more. Almost half the government debt owed to banks or individuals is held by foreign creditors, notably China, Japan and the OPEC nations, up from 13 percent five years ago.

Both resolutions forecast a balanced budget in 2012, but they use the same dubiously optimistic assumptions President Bush employed to make the same claim for his tax-and-spending proposal. Once again, the hard choices are being pushed off to some hazy future.

_snip_

informationclearinghouse.info

----------


## Mid

*Market Summary* 

 

Dow 11,901.34 -49.75 (-0.42%)

Nasdaq2,182.38 -30.11 (-1.36%)

S&P 5001,273.86 -14.28 (-1.11%)

google.com


hanging in there for now ...............

.

----------


## Norton

> hanging in there for now ...............


We'll see at closing but guessing it will wander around about where it is waiting for Fed announcement tomorrow.

----------


## britmaveric

+20 Dow is re-markedly resilient!!  :Very Happy:

----------


## Butterfly

it's always like that the next day, it's just in the coming weeks when there is no news, but it's brewing slowly, that the markets go down,

----------


## Spin

The ONLY reason the Dow finished up was due to folks piling on jpm shares because they know that jpm got a screamer of a deal. otherwise it would have been way down.

----------


## bkkandrew

UK CPI inflation rate jumps from 2.1% to 2.5%...

So even the fiddled figures are looking grim now.......

At least it will mean no further IR cuts and a higher pound to THB and USD...

BBC NEWS | Business | UK consumer inflation hits 2.5%

RPI 'stays' at 4.1%. They had to really cook the books to achieve that one suspects... :Roll Eyes (Sarcastic):

----------


## Norton

> RPI 'stays' at 4.1%. They had to really cook the books to achieve that one suspects...


Probably decided food, petrol and energy need not be in the equation. :Wink:

----------


## Butterfly

Europe inflation is about 3.5%, all time high

----------


## baldrick

not to forget the pension funds that are heavily invested into the market - many people will be getting screwed from multiple directions

----------


## Fabian

The Euro is at 48.55, that sounds good.

----------


## Norton

> The Euro is at 48.55, that sounds good.


Hey Fabian, I got a whole bunch of these attractive green bills with fantastic pictures of dead US Presidents.  For a short time only, these fine collectibles can be yours for the ridiculously low price of one Euro.  This is a once in a lifetime offer so please hurry with your order, supplies are not limited.

----------


## britmaveric

^^^ Keep them the euro will be taking major dive once the european banks fess up what cocks they were for getting involved with subprime mess.

----------


## John

They will bring out new $ notes. On them they will write:

This currency might damage your health. You might lose everything if changing from a different currency. People might not be willing to accept the notes. The end might be closer than it appears. Please dispose of them in a garbage bin if you were not able to use them.  :nerner:  :gw bush:  :rofl:  :Sad:

----------


## Bluecat

> ^^^ Keep them the euro will be taking major dive once the european banks fess up what cocks they were for getting involved with subprime mess.


Only American banks lend to people who have no money.  :Roll Eyes (Sarcastic): 
But I agree on the greenback, we should be close to the bottom.
On the short term, that is...

----------


## britmaveric

> Originally Posted by britmaveric
> 
> 
> ^^^ Keep them the euro will be taking major dive once the european banks fess up what cocks they were for getting involved with subprime mess.
> 
> 
> Only American banks lend to people who have no money. 
> But I agree on the greenback, we should be close to the bottom.
> On the short term, that is...


not exactly as simple as that Blue, european banks have invested in this mess, however they won't come clean on what they have lost.

----------


## Bluecat

> not exactly as simple as that Blue, european banks have invested in this mess, however they won't come clean on what they have lost.


They actually indeed have.
And quite a few not knowing in what they were investing exactly.
The strength of the Americans.
Making a lousy investment look good by "diluting" it through financial "reingeeniring".
And selling them to the rest of the world.
But well, I have to say, I sure do not pity them...

----------


## John

"I am closely watching and feel deeply worried about the global economic situation, especially the U.S. economy," Wen told reporters after the closing session of the National People's Congress, the largely ceremonial parliament.
"What concerns me now is the continuous depreciation of the U.S. dollar and when the dollar will hit bottom."

UPDATE 3-China wary of US subprime fallout, rising inflation | Markets | Markets News | Reuters

 :nerner:  :gw bush:  :Sad:

----------


## Norton

> "What concerns me now is the continuous depreciation of the U.S. dollar and when the dollar will hit bottom."


Yes.  Watched that myself.  Wen seemed very concerned.  I think this is really what it's all about not just in the US but worldwide, *"uncertainty"*.

----------


## Mid

*Dow Jumps 200 in Opening Minutes* 



google.com


bets on the size of the cut ???  0.75 for mine  :Smile:

----------


## Norton

> bets on the size of the cut ??? 0.75 for mine


1.25% for me.  Silly guess but maybe the last shot they have.

----------


## Mid

^

_yowsa_

----------


## Butterfly

it's going to be 1%

so be ready for a 2% interest rates, this is actually good news for the USD if you know what I mean  :Smile:

----------


## Norton

Wasn't it Japan that had some ridiculously low interest rates some years back?

----------


## Spin

> however they won't come clean on what they have lost.


I might be very wrong here, but i think they dont know how much they have lost. Banks around the world are holding complex financial assets based on mortgage debt whose values are this moment in time, really unknown?

----------


## Thetyim

^
I think you are correct there.
I remember reading about mutual funds and if one fund invests in another fund then the money is counted twice when assessing the size of the mutual industry.

----------


## Spin

^ uh huh, the more I read, the more i wanna stuff my money under me matress :Wink:

----------


## Panda

The world of finance seems crazy to me.
Banks are allowed to lend more money than they actually have. Don't know what the exact figure is but I think I remember reading something like 40%. Then they borrow more money from other banks and financial institutions to lend out. No money ever changes hands. Its all just numbers on a piece of paper.

Then the US government just keeps borrowing from other countries and printing more $s to cover the debt without actually producing real goods and services to match the flood of $USs going overseas. But the rest of the world is silly enough to take these $USs because they believe they can be cashed in for real goods and services later for their face value. Trouble is there's some many $s being held by other countries (which in turn finances US debt) that the only way the US could ever possibly buy back their $s is to devalue the currency by at least 25%.

Using the $US as the worlds default trading currency has been a great act of faith by the rest of the world, and may have been justified several decades ago when USA was a major growth country with a big surplus in balance of trade. That is, they were actually producing enough export stuff to back up the value of their paper money. But now the US is borrowing more, spending more, their balance of trade is about even. And they are still printing more money to buy stuff from overseas. Its like writing a cheque and telling the vendor not to cash it till you go to the bank and borrow some more money.  Its an endless cycle that cant go on unless you start earning more or spending less.

But the rest of the world is stuck in a financial bind too as their blind faith in the strength of the $US has led them to hoard $USs as a hedge to back up the values of their own currencies. As the worlds major trading currency, the $US seemed like a good investment, (and it was a few decades ago). But now its simply overvalued on the world market. 

Devaluing the $US is going to hurt just about every country as the USA is the worlds biggest consumer market, and when they reduce imports it hurts other economies and the chain reaction then flows down the line to more countries. 
So while this blind faith in the excessive value of the $US has kept the world at a level of unprecedented growth over the past few years, it now time to pay the piper. And we are all going to pay.

----------


## Fabian

> The world of finance seems crazy to me.
> Banks are allowed to lend more money than they actually have. Don't know what the exact figure is but I think I remember reading something like 40%. Then they borrow more money from other banks and financial institutions to lend out. No money ever changes hands. Its all just numbers on a piece of paper.


I think it is much less, 8 to 12% of the money lent.

----------


## Butterfly

> Wasn't it Japan that had some ridiculously low interest rates some years back?


Government bonds pay 0.50% or some other silly numbers

They have actually negative real interest rates, and they are stuck in a liquidity trap, 1930 style

----------


## Mid

well was only a guess  :Smile:  and .75 was it



*Stocks Rally as Fed Cuts Key Interest Rate* 
By EDMUND L. ANDREWS
Published: March 19, 2008

 
_Protesters have rallied in Washington recently urging more attention be given to the plight of homeowners facing foreclosure_. 
Chip Somodevilla/Getty Images

_snip_

The central bank lowered its federal funds rate — the rate it charges banks for overnight loans — by three-quarters of a percentage point, to 2.25 percent, and left the door open to additional rate cuts in the months ahead.

_snip_

nytimes.com

----------


## John

^ We have to accept that there is endless greed taking advantage of some idiots. It is really not more. People are greedy to get a nice house even if they cannot pay their credit card bills and people are greedy to get a nice commission. But let's face the facts - they have to get punished and not the other ones. So the government should stop to support those idiots. Or send them on holiday to Iraq or Afghanistan - including some people of the government. But poor people there. No - this we should not continue... Most of them did not do anything bad like the greedy ones in the US.  :kma:  :gw bush:  :kma:

----------


## Norton

> *Only American* banks lend to people who have no money.


Them merkins must be getting guidance from Thai banks. :Smile:

----------


## Mid

well that didn't last did it ?

whens the next rate cut ?

----------


## Panda

Looks like the $US has stabilized for the time being while the rest of the world wonders what the hell to do with it.

The days of the $US as the worlds trading currency are numbered. This sub-prime fiasco has highlighted the vulnerability of the world trading in a currency of a single nation. Especially a nation that now just keeps printing more money to cover international debt and cant produce exports to cover that debt.

Most countries are holding so much $USs as a reserve hedge that they cant bear the thought of dumping the $US. China and Japan must be particularly nervous as they own most of the US debt. No way they are going to start a sell off and start a run on the $US which would almost drop its value to almost zero on the world market. Rather, I think China and Japan will ease out of the $US gradually until it reaches its actual realistic value on the world market based on trade. That's going to knock about 25% off the current value of the $US. And this is a best case scenario. All be it the most likely one as no country can afford to see the $US go down too fast.

The big dilemma for the rest of the world is what to replace the $US with as the default world trading currency. That's once most countries have divested themselves of $USs to avoid the financial pain. Will they go down the same unwise path again and put their faith in $Euros? I don't think so. The world has seen what a terrible mess the world financial system gets into when the world financial system is based on a currency that is no longer productive.

Over the next decade the world will move away from the $US as the worlds default currency.  I don't know what its going to be but some suggestions bandied about indicate it might be a mixed bag of of the worlds strongest currencies balanced off against precious metals such as gold. If that happens the USA will have to stand on its balance of trade once again rather than going into debt with the rest of the world and paying with paper money of dubious value.

When the world dumps the $US as the trading medium (and it wont happen overnight), the $US is set to drop its value considerably. Probably around 25% to get in line with actual production of tangible goods and services.

As I see it this will be a gradual process over the next decade. Not because of anything the US might do, but because other countries will want to divest themselves of US dollars gradually.

Some big changes coming. Nothing stays the same forever.

----------


## britmaveric

^^^ Dreaming, perhaps in the next century, however by then we'll be using the same currency everywhere.  :Wink:

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## Driventowin

> Looks like the $US has stabilized for the time being while the rest of the world wonders what the hell to do with it.
> 
> The days of the $US as the worlds trading currency are numbered. This sub-prime fiasco has highlighted the vulnerability of the world trading in a currency of a single nation. Especially a nation that now just keeps printing more money to cover international debt and cant produce exports to cover that debt.
> 
> Most countries are holding so much $USs as a reserve hedge that they cant bear the thought of dumping the $US. China and Japan must be particularly nervous as they own most of the US debt. No way they are going to start a sell off and start a run on the $US which would almost drop its value to almost zero on the world market. Rather, I think China and Japan will ease out of the $US gradually until it reaches its actual realistic value on the world market based on trade. That's going to knock about 25% off the current value of the $US. And this is a best case scenario. All be it the most likely one as no country can afford to see the $US go down too fast.
> 
> The big dilemma for the rest of the world is what to replace the $US with as the default world trading currency. That's once most countries have divested themselves of $USs to avoid the financial pain. Will they go down the same unwise path again and put their faith in $Euros? I don't think so. The world has seen what a terrible mess the world financial system gets into when the world financial system is based on a currency that is no longer productive.
> 
> Over the next decade the world will move away from the $US as the worlds default currency. I don't know what its going to be but some suggestions bandied about indicate it might be a mixed bag of of the worlds strongest currencies balanced off against precious metals such as gold. If that happens the USA will have to stand on its balance of trade once again rather than going into debt with the rest of the world and paying with paper money of dubious value.
> ...


Yada,yada,yada, same same your really beginning to sound like a CD on loop mode.. :Roll Eyes (Sarcastic):  All gloom and doom..

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## Spin

This is worth a read...

Mike Whitney: Winding Up Bear

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## Spin

Now the dollar has rallied a bit in the last couple of days, so it should move back towards 32 baht to the $

Dollar Index

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## Panda

> Yada,yada,yada, same same your really beginning to sound like a CD on loop mode.. All gloom and doom..


 Better get used to it. You are going to be hearing a lot more about it over the coming years.

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## Driventowin

^Well...Funny how the stock market has actually gained over 3% in volume for the week.. I might point out that it eclipsed the 10,000 barrier way ahead of it's predictions and now it is comfortably over 12,000. It stands to reason that corrections were going to happen and the fact that the other financial factors came into play just exacerbated the issue, but it's not the end of the financial world as you predict..

Furthermore If credit was such a major issue why would investors have bought into Visa's IPO in record amounts?
The answer is...They wouldn't!! They wouldn't buy into a stock to such extremes, that was destined for the garbage bin..

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## baldrick

reality trumps optimism

and the reality is too many things are overpriced - especially land

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## Panda

[quote=Driventowin;569967]
stands to reason that corrections were going to happen and the fact that the other financial factors came into play just exacerbated the issue, but *it's not the end of the financial world as you predict..*

quote]

A bit of "poetic licence" there with your choice of words.
Probably a bit harsh to call it an outright lie, but you _have_ misrepresented my words.

Nevertheless, we do agree that a correction is in order. Nobody in their right mind would disagree. 
The future collapse of the $US hegemony is a separate issue and will unfold more slowly than the current financial crisis. Although the two are linked in a way. 
Don't go patting yourself on the back too much just yet.

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## Spin

> ^Well...Funny how the stock market has actually gained over 3% in volume for the week


Interest rate cut, short covering and possibly misplaced optimism from those buying financial stocks. Lets see how things look at the end of next week. I can only see it moving in one direction, personally.

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## Panda

> Originally Posted by Driventowin
> 
> ^Well...Funny how the stock market has actually gained over 3% in volume for the week
> 
> 
> Interest rate cut, short covering and possibly misplaced optimism from those buying financial stocks. Lets see how things look at the end of next week. I can only see it moving in one direction, personally.


If we knew where the bottom was we could all be rich. Buy low and sell high. 

We always hear from the "EXPERTS" who struck it lucky, but rarely from those who lost their shirt. A lot of good time share market experts out there.

I hope it turns the corner soon as my retirement fund is losing money at the moment.

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## britmaveric

> Originally Posted by Driventowin
> 
> ^Well...Funny how the stock market has actually gained over 3% in volume for the week
> 
> 
> Interest rate cut, short covering and possibly misplaced optimism from those buying financial stocks. Lets see how things look at the end of next week. I can only see it moving in one direction, personally.


I agree UP is the only direction I forsee in the long term.  :Smile:

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## Driventowin

> Originally Posted by Spin
> 
> 
> 
> 
> 
> 
> 
>  Originally Posted by Driventowin
> ...


I'm forced to agree with you here.. That is why I took my stock control away from my broker years ago as he watched IBM drop about 20 points while my wife was fighting cancer and we were living off that money, his delay only cost us about 20,000US at the time and his brainless answer was "it's not really lost it's still there it'll come back up and besides you bought it at next to nothing!" Do you think he would have still had his job if he made such an ignorant statement to one of his really wealthy clients??

To make matters worse, at the time that was money my wife and I were trying to enjoy her last months besides meet her medical bills with and that bastard took that away from us by not watching it and warning us.. He knew her circumstances but just didn't care probably because she was dying..That is until, I relieved him of his privileges to manage the account anymore by removing our money from his care..

The commission to sell was $90 frigging dollars and that's when I put it into an Ameritrade account and stopped the blood loss and turned it back around some months later when it began to come back up and I bought back in.. Had I not done that it would have lost another $10,000..

Bottom line is even the so called 'experts' really can't do anything more than guess and play their gut feelings most of the time no matter how many Bachelors degrees in finances they have..Unless they do like they are suspected of doing in the UK now and start rumors to effect the stock, which by my judgement goes on all the time anyway as does insider trading..

Basically they're all crooks and only make money off of your money and that's their only interest not based on any humanity, your just a number.. And if your number ain't large enough than your even less a number. Your expendable as a crash test dummy just to see how other stocks react so they can invest their real clients.. Big insurance companies, investment companies, etc..

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## Bluecat

[quote=Panda;570120]


> Buy low and sell high


Which does not mean the lowest point and the highest point, which nobody can predict.
But being good at riding the trend and getting out of it far before it is too late.
Actually Rockfeller said I got rich by buying too late and selling too early... :Smile:

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## Spin

> Which does not mean the lowest point and the highest point, which nobody can predict.


Absolutley, the bottom is totally unknown and the market right now is akin to a casino, its a 50/50 bet. The other day I was 100,000 baht down on a position and the next day is bounced to 20K profit. It aint for the faint hearted, thats for sure.

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## bkkandrew

*Dollars tough to sell on streets of Amsterdam* 

Dollars tough to sell on streets of Amsterdam - Yahoo! News

AMSTERDAM (Reuters) - The U.S. dollar's value is dropping so fast against the euro that small currency outlets in Amsterdam are turning away tourists seeking to sell their dollars for local money while on vacation in the Netherlands. 

"Our dollar is worth maybe zero over here," said Mary Kelly, an American tourist from Indianapolis, Indiana, in front of the Anne Frank house. "It's hard to find a place to exchange. We have to go downtown, to the central station or post office."

That's because the smaller currency exchanges -- despite buy/sell spreads that make it easier for them to make money by exchanging small amounts of currency -- don't want to be caught holding dollars that could be worth less by the time they can sell them.

The dollar hovered near record lows on Monday, with one euro worth around $1.58 versus $1.47 a month ago.

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## Driventowin

> *Dollars tough to sell on streets of Amsterdam* 
> 
> Dollars tough to sell on streets of Amsterdam - Yahoo! News
> 
> AMSTERDAM (Reuters) - The U.S. dollar's value is dropping so fast against the euro that small currency outlets in Amsterdam are turning away tourists seeking to sell their dollars for local money while on vacation in the Netherlands. 
> 
> "Our dollar is worth maybe zero over here," said Mary Kelly, an American tourist from Indianapolis, Indiana, in front of the Anne Frank house. "It's hard to find a place to exchange. We have to go downtown, to the central station or post office."
> 
> That's because the smaller currency exchanges -- despite buy/sell spreads that make it easier for them to make money by exchanging small amounts of currency -- don't want to be caught holding dollars that could be worth less by the time they can sell them.
> ...


Old news....heard about this a month ago already.. :Wink:

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## bkkandrew

Asian currencies now under pressure due to rice shortages and general inflation concerns:

http://www.bloomberg.com/apps/news?pid=20601109&sid=afqtc5CAJd80&refer=home

*Rupiah Weakens With Peso as Rice Feeds Asia Inflation* 

April 14 (Bloomberg) -- At the end of last year, rice was selling at $13.865 per 100 pounds, the Philippine central bank had met its inflation target for the first time since 2003 and the peso was the world's second best-performing currency. 
By April 1, rice was surging toward a record $21.60, the inflation rate had almost doubled, and the peso suffered its biggest monthly decline in seven years. 

Record prices for rice, wheat, milk and cooking oil are wreaking havoc with currencies in Southeast Asia, causing a slump in the peso and Indonesia's rupiah. Investors from Deutsche Asset Management to Fortis Investments are dumping their bondholdings on concern inflation will erode returns, putting further pressure on exchange rates. The region has come to depend on strong currencies to contain the rising cost of food and fuel imports. 

``You can't just rely on currencies to fight inflation, as there comes a time when they have no potential to appreciate further,'' said Nicolas Schlotthauer, a money manager who helps oversee $5 billion at Deutsche Asset Management, part of Germany's largest bank, in Frankfurt. ``Everyone is so complacent about the fact that if there's inflationary pressure, they will let their currencies appreciate. No one thought of potential currency weakness.'' 

*Currency Reversal* 

The Philippine peso tumbled 3.2 percent in March, the most since June 2001. It fell 0.3 percent to 41.710 as of 1:05 p.m. in Manila. That's a reversal for a currency that gained 9 percent in the fourth quarter, second only to the Armenian dram. In Indonesia, the central bank probably bought more than $2 billion of rupiah, limiting its decline since March 1 to 1.1 percent, according to Oversea-Chinese Banking Corp., Singapore's third-biggest bank. The rupiah slid 0.1 percent to 9,180 per dollar in Jakarta. 

International investors cut their holdings of Indonesian government bonds 3.2 percent in March to 80.7 trillion rupiah ($8.8 billion), according to finance ministry data. Foreign funds sold a net $154 million of stocks in the Philippines this year, helping drive the Philippine Stock Exchange Index down 19.5 percent. 

Deutsche Asset sold all its rupiah debt earlier this year and didn't buy peso bonds because of inflation, Schlotthauer said. Fortis Investments, a unit of Belgium's biggest financial group, expects the rupiah will weaken 3.2 percent to 9,500 per dollar within three months. The firm is ``short'' the rupiah, meaning it is betting the currency will depreciate. 

*`Bearish on Indonesia'* 

``I'm really bearish on Indonesia,'' said Didier Lambert, a London-based money manager who helps oversee $4 billion in emerging-market debt at Fortis. ``You will see investor outflows that should weaken the currency.'' 

The last time Indonesia's rupiah depreciated due to rising commodity costs was in August 2005, when a jump in global oil prices increased the cost of a state fuel-subsidy program. The rupiah slumped to a four-year low of 10,875. 

``Subsidies can be very disruptive and expensive for a government to maintain,'' billionaire investor George Soros said in a teleconference from Washington on April 9. Rising food prices may cause ``social and political disruptions,'' he said. 
Emergency Meeting 

The Philippines is urging China, Japan, India and other Asian nations to convene an emergency meeting this month or next on the region's food crisis, Agriculture Secretary Arthur Yap said today. International Monetary Fund Managing Director Dominique Strauss-Kahn said April 12 that ``hundreds of thousands'' worldwide may starve as food costs jump. 

Philippine President Gloria Arroyo said on April 1 she may abandon plans to balance the budget. Two days later, Indonesia widened its 2008 deficit target to 2.1 percent of gross domestic product from an earlier 1.7 percent. 

Food accounts for 49 percent of the consumer price index in the Philippines, the world's biggest importer of rice, and 38 percent in Indonesia, according to Mirza Baig, an economist at Deutsche Bank AG in Singapore. In the U.S., it's 14 percent. 

Indonesian inflation surged to an 18-month high of 8.2 percent in March, breaching Bank Indonesia's target of 6.5 percent. It reached a 20-month high of 6.4 percent in the Philippines, above Bangko Sentral ng Pilipinas's 5 percent target. 

Asian central banks may be able to curb inflation by raising interest rates and seeking stronger currencies because of ``robust'' growth, the Washington-based IMF said on April 9. Excluding Japan, Asia will grow 7.5 percent in 2008, compared with 9.1 percent in 2007. 

*Balance of Payments* 

Currencies backed by balance of payments surpluses will keep appreciating even as inflation accelerates, said Sailesh Jha, a senior regional economist at Barclays Capital in Singapore. He recommended buying the Singapore dollar, which climbed 5.7 percent this year to S$1.3593. 

In the Philippines, a widening trade deficit will cause the peso to fall beyond 42 per dollar within a month, said Wee Ming Ting, the head of Asian fixed income in Singapore for Pictet Asset Management, part of the largest privately held bank for the wealthy in Switzerland. The trade deficit was $756 million in January, compared with a surplus a year earlier. 

``We are thinking of shorting the peso,'' said Ting, who helps oversee the equivalent of $136.1 billion. He also trimmed holdings of rupiah debt three weeks ago because of increased government borrowing and rising inflation. 

A slowing global economy may also curb the amount of money sent home by Filipinos working overseas, said Daniel Moreno, one of the investors for Global Evolution, a hedge fund with $400 million in assets based in Kolding, Denmark. 

``We have been reducing over the last three weeks,'' Moreno said. ``Currently we have close to zero. Now that prospects for growth worldwide are falling, it's difficult to anticipate that those flows will increase,'' said Moreno. The peso may fall 3 percent to 43 in six months, he said. 

Thailand not mentioned, but inflation is at least as rampant here as it is regionally. I think that (at long last) the long-anticipated slide of the Baht could be commencing....

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## buad hai

> Thailand not mentioned, but inflation is at least as rampant here as it is regionally. I think that (at long last) the long-anticipated slide of the Baht could be commencing....


It would be nice (for me) if you were right, but I'm curious as to what draws you to that conclusion?

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## bkkandrew

> Originally Posted by bkkandrew
> 
> Thailand not mentioned, but inflation is at least as rampant here as it is regionally. I think that (at long last) the long-anticipated slide of the Baht could be commencing....
> 
> 
> It would be nice (for me) if you were right, but I'm curious as to what draws you to that conclusion?


Er, the article from Bloomberg that I posted...?

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## buad hai

^I see how it applies to countries like the Philippines and Indonesia, which are net importers of food, but I see it being less applicable to a country like Thailand and suspect that's why Thailand wasn't mentioned in the article.

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## bkkandrew

A principle determiner of currency valuation is the domestic rate of inflation. High inflation is essentially a reduction of the value of the currency, ergo a drop in value in comparison to other currencies that have lower domestic inflation. That where I draw inference from in prediction of Baht decline.

As important as the inflationary food price increase (which Thailand is indeed a net exporter of and therefore can gain benefit from in balance of payments terms) is the rise in oil price that feeds throught to increases in petrol, deisel, cooking gas etc. Thailand imports the vast majority of its oil and price increases in this sector offsets the trace balance benefit from food. Another offset is the reduction of export of manufactured goods headed to the recession-bound of the West.

In short, I believe that the next phase of the economic crisis gripping the world will include a currency crisis in SE Asia. Thailand will not lead a collapse, as it did in '97, but will be surely caught up in it.

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## buad hai

Thanks Andrew.

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