Thread: Thai currency continues upward trend

Originally Posted by Thormaturge

The truth is that the US is overpaid. In order to compete with the world US workers need to become more competitive, and the quick way to do that is to devalue the Dollar.

Is the Obama administration trying to put an end to Globalization, and pricing out the world to make America more competitive ? it does sound like a conspiracy theory, and even though it might happen, not sure if it was intentional

the wild "Global Capitalism" since the early 90s might be coming to an end, I think Bush 2 contributed more to its end than Obama

China would be the first victim eventually,

Originally Posted by Butterfly

Originally Posted by socal

Nothing goes up in a strait line.

no, but they can go in trends for long periods which is about the same as a straight line until it breaks and follows another trend

a bit like Gold

or bonds.(that back the fiat dollar)

Originally Posted by Butterfly

China would be the first victim eventually,

I think the US Administration has given up waiting for the Chinese to act and has decided to devalue the Dollar rather than wait for the Chinese to revalue.

Originally Posted by socal

If it wasn't bad enough for the unemployed Americans, now the devalued dollar is going to push the price of gas and food up for them.(inflation) The price of wheat is already up something like 60% in the last 3 months price in dollars.

Yes the US needs to reduce imports.

Originally Posted by Thormaturge

Originally Posted by socal

If it wasn't bad enough for the unemployed Americans, now the devalued dollar is going to push the price of gas and food up for them.(inflation) The price of wheat is already up something like 60% in the last 3 months price in dollars.

Yes the US needs to reduce imports.

They will when they cant afford imports.

When the dollar falls, the standard of living in the US falls with it.

Originally Posted by socal

Originally Posted by Thormaturge

Originally Posted by socal

If it wasn't bad enough for the unemployed Americans, now the devalued dollar is going to push the price of gas and food up for them.(inflation) The price of wheat is already up something like 60% in the last 3 months price in dollars.

Yes the US needs to reduce imports.

They will when they cant afford imports.

When the dollar falls, the standard of living in the US falls with it.

Exactly.

The question is not whether the Dollar is heading for ThB 25, but when.

Originally Posted by Thormaturge

Yes the US needs to reduce imports.

if they do, USD will go up again, and world commerce will collapse, with Asia on the front line

remember the 2008 crisis that happened to be American made ? how did that do for the rest of the world ?

it just followed the fall

To think that a strong USD and stopping US imports will do wonders for world economic activity is beyond naive. Keep also in mind of the J-curve effect and what it means if it happens to the US

^
There are huge new consumer markets evolving. The Chinese themselves are becoming greater consumers (remember Henry Ford's concept of creating a market amongst your own employees). Then there is India.

Maybe the world won't need to sell so much to America in future. The Dollar can collapse and stay there so far as the rest of the world is concerned, after all China's got all the money now anyway..

Originally Posted by Thormaturge

There are huge new consumer markets evolving. The Chinese themselves are becoming greater consumers (remember Henry Ford's concept of creating a market amongst your own employees). Then there is India.

only because this is being fueled by the US and western countries, when that stops, it will fall apart

Demand needs a "money" flow, when that flows stops, demand collapse

The US and Europe is the sugar daddy of all those little third world countries, that's the problem, they can't survive on their own

it's really no different than a twisted economic colonialism,

Originally Posted by Butterfly

Demand needs a "money" flow, when that flows stops, demand collapse

The US and Europe is the sugar daddy of all those little third world countries, that's the problem, they can't survive on their own

If you hadn't noticed, China has the money now. I wouldn't call either China or India "little" and both countries have growing demand, not only for consumer goods but also for the American companies that are currently going cheap. I think they will let you keep Chrysler and GM though.

I't been a gigantic three card trick and the USA is left without its shirt and China has all the money.

Originally Posted by Thormaturge

If you hadn't noticed, China has the money now.

do they ? all their money is parked in US treasury, what does it mean if US treasury does collapse ? no money. So at the end their wealth is bound with American wealth. Again see what happened in 2008 when things got wrong. I am sure a lot of the bad things that happened there weren't even reported. China is nothing more than a big factory.

Originally Posted by Thormaturge

I wouldn't call either China or India "little" and both

they are big in population, but small in population wealth. Concentration of wealth in those countries are absolutely obscene.

Originally Posted by Thormaturge

countries have growing demand, not only for consumer goods

growing demand because of growing money supply from USD. When that stops, it all goes, it's the money supply multiplier effect.

[quote=Butterfly;1589424]

Originally Posted by Thormaturge

Yes the US needs to reduce imports.

if they do, USD will go up again, and world commerce will collapse, with Asia on the front line

Just like everyone thought that house prices would keep going up, everyone now thinks the dollar will go up again. That is what bubbles are made of.

remember the 2008 crisis that happened to be American made ? how did that do for the rest of the world ?

The run to the dollar in 2008 was obviously a head-fake. It had no long term momentum. It set no new long term trends. If you held onto all of your Asian stock positions through 08, you lost nothing.

To think that a strong USD and stopping US imports will do wonders for world economic activity is beyond naive. Keep also in mind of the J-curve effect and what it means if it happens to the US

As the US dollar falls, other currencies rise. As an Asian currency rises, an asian person now has more discretionary income to spend because he is paying less for commodities. The Americans loss was the Asians gain. Now the Asian can go buy an iphone and and SUV rather then the American.

Nobody is going to stop the US from importing. Their imports will slow down as their ability to pay for them slows down.

Originally Posted by Thormaturge

I't been a gigantic three card trick and the USA is left without its shirt and China has all the money.

but you are missing the point, globalization has "correlated" everything and everyone. The Chinese are fucked as much as the American.

There is also a good reason for them to keep US treasury. They can't find a better deal internally. They can't develop their infra or "improve" their population lifestyle because the money will not be used efficiently. It would create more disruption and inflation than there is already, so US treasury is the perfect "savings" account, even it pays negative interest rates, it's better than losing 20% of your real GDP to inflation.

the more likely inflation you have, the better you have to keep your "savings" in a currency that is not exposed as much to inflation (USD).

[quote=Butterfly;1589482]

Originally Posted by Thormaturge

If you hadn't noticed, China has the money now.

do they ? all their money is parked in US treasury, what does it mean if US treasury does collapse ? no money. So at the end their wealth is bound with American wealth. Again see what happened in 2008 when things got wrong. I am sure a lot of the bad things that happened there weren't even reported. China is nothing more than a big factory.

If US treasuries collapse, that would be hyperinflation for the US. That is what hyperinflation is. Also, the US was one big factory after WW2, that is how the US got so rich. China destroyed the US industrial and manufacturing industry without dropping one bomb.

Originally Posted by socal

that would be hyperinflation for the US. That is what hyperinflation is

you need to look up that definition again and see how hyperinflation comes to be

Macro Econ 101

.....a currency that is not exposed as much to inflation (USD) (GBP) (EUR) (CHF) or even gold

yes, Gold is a natural hedge against inflation

however when it becomes inflated as it is these days, it loses that inflation hedge and becomes a speculative instrument, creating greater risk rather hedging against it

when you are in risk management, no doubt China is knee deep in that, you focus on assets that provide the best risk/reward ratio

"Thormaturge;1589129]I've just realised that we all have got this terribly wrong.

The Dollar is backed up by something far more powerful than gold."

You are correct.

Military Power - Not Gold or the USD or the Renminbi - is the Real Coin of the Global Realm - Attila the Wimp -- Seeking Alpha

Originally Posted by Thormaturge

Originally Posted by socal

If it wasn't bad enough for the unemployed Americans, now the devalued dollar is going to push the price of gas and food up for them.(inflation) The price of wheat is already up something like 60% in the last 3 months price in dollars.

Yes the US needs to reduce imports.

Huh! Good luck with that suggestion. As the bloody American economy and their illusional existence is purely on mindless consumption, the consciousness of living beyond ones means, and credit. Who might be producing all the goodies that Yanks yearn for....?? Themselves? I think not. The U.S. long put themselves into the corner that there is no way out.

^
When the cost of a lump of rubber immitation dog excrement costs a month's salary the party may well come to an end.

Originally Posted by Butterfly

Originally Posted by socal

that would be hyperinflation for the US. That is what hyperinflation is

you need to look up that definition again and see how hyperinflation comes to be

Macro Econ 101

I cant believe you have the gall to still try and "smart ass" me on this topic. Let me explain to you how hyperinflation could come about in the US....

To use their own words,the dollar is backed by the full faith and CREDIT of the US government. Treasuries are US debt, treasuires back the dollar. If treasuries collapse, there is no CREDIT left in the US dollar. The dollar would go back to its intrinsic value, which is zero.

Hyperinflation is more understandable if you think of it as hyper-devaluation. The devaluation comes first. Prices nominally go up but that is only a reflection of the currency going down.

Originally Posted by Butterfly

yes, Gold is a natural hedge against inflation

however when it becomes inflated as it is these days, it loses that inflation hedge and becomes a speculative instrument, creating greater risk rather hedging against it

when you are in risk management, no doubt China is knee deep in that, you focus on assets that provide the best risk/reward ratio

haha,

Golds $800 high in 1981, adjusted for inflation is $2200.

And the only reason gold fell from that point in the 80s was because interest rates where jacked up to 20%. So with gold prices half of what they where in the 80s and interest rates at 0%, we can conclude that the big rise in gold is in front of us, not behind us.

Originally Posted by Zampan0

"Thormaturge;1589129]I've just realised that we all have got this terribly wrong.

The Dollar is backed up by something far more powerful than gold."

You are correct.

Military Power - Not Gold or the USD or the Renminbi - is the Real Coin of the Global Realm - Attila the Wimp -- Seeking Alpha

Thats what everyone thought about the Soviet Union too, also Britain in its heyday. Britain even lost reserve currency status.

Originally Posted by socal

To use their own words,the dollar is backed by the full faith and CREDIT of the US government. Treasuries are US debt, treasuires back the dollar. If treasuries collapse, there is no CREDIT left in the US dollar. The dollar would go back to its intrinsic value, which is zero.

Hyperinflation is more understandable if you think of it as hyper-devaluation. The devaluation comes first. Prices nominally go up but that is only a reflection of the currency going down.

like I said, you need to study Macro Econ 101 about what drives hyper-inflation