Ouch - US dollar under 40 baht

[Guest]

In fact, I think there is a good chance to see a long-term decline of the standard of living in the developed countries. Some of the economists whom I read, (e.g. Steve Roach of Morgan Stanley) are looking for the dollar to fall 30% or 40% more. China and India are having a deflationary effect on the US economy. The current recovery is not only jobless, but wageless as well since there is no real growth in wages unlike previous recoveries. When the liquidity fueling the current property bubble dries up and the values drop, there may well be a recession. None of this is good. When China revalues the yuan, the baht will go up also. How inviting would Thaliand be at 25 baht to the dollar?

 

Khun Pad Thai

[keekwai]

>>>>Fact is, the trade deficit is at an all time high and in 2004 increased to $666 billion or 25.5% from the previous year.

 

Not siding with Bush's economic policy but wouldn't the deficit have been even higher if not for the weaker dollar?

[short-time]

I think we share a similar mindset, I hate to be a ?gloom and doom? predictor but I agree with what you say. There is not much good news ahead for the US economy or the greenback. If the dollar drops by 30 or 40 percent from what it is now, this would probably result in the bottom falling out of the US economy and an economic upheaval with no recovery in sight that might make the great depression look like a picnic.

 

I see the Euro replacing the US dollar as the world?s benchmark currency in the not too distant future and China eventually becoming the worlds new superpower. At some point China will have to un-peg the yuan from the dollar or their money will become as worthless as ours. Also, I keep hearing about this recovery you mention, but I don?t see any evidence of a one.

 

In the last few months I?ve been diversifying my investments into International markets and currencies and am continuing to do this.

 

BTW, for you Aussies out there: what might some of you banker or stock broker types consider good and relatively safe investments in your markets for the future? I see very strong growth potential for Australia in the next five years or so (also Asia in general) and would like to cash in on it should I be right.

 

ST

[Nervous_Dog]

Well you've missed a lot of it, in the last 2 years Aussie dollar gone from .52US up to .80US to the dollar, housing market falling, decift booming.

 

One thing i'd like to point out, I work in telco/technology industry, where a lot of it is now manufactured in China. Howwever everything is priced in US$.

 

WIth the fall of US dollar tw things will happen.

 

Electronics and high tech stuff will get cheaper for the rest of the world, creating a bit of a boom (I already see this in orders) however, when the manufacturer and the designing company (Often say a UK Design, China manufaturer) convert this back into local currrency, their proifts may fall. So they may put UP he prices.

 

DOG

 

DOG

[OCgringo]

stuff from China, Taiwan and India is usually priced in US$

 

which makes them even cheaper now in Eurolands !

 

Hard to compete against low labor costs and the currancy that is undervalued

[OCgringo]

the US$ has been inching up against the baht , its about 38.5 now

 

luckly I paid my big bill at 41.2

[Nervous_Dog]

OGringo, yep - cheao labour, and priced in USA$.

 

Cpompany I work with is UK Based, but manufacture in China, and all prices in USA$

 

Their prices are falling rapidly, a competitive and emerging market, however they are also feeling the US UK pound squeeze!

 

DOG

[Guest]

Short-time,

 

The trouble with diversifying out of the US stock market into foreign stock markets is that the correlation between them has always been high and has increased in recent years. This is not unexpected in view of the fact that since 1995 more than 95% of the growth has come from the US. If the dollar drops and/or the US has a recession, China and India will suffer because they export goods (China) and services (India) to the US market. In the past commodities have been on a different cycle from the US stock market, but if a US recession were to depress China's sales, their appetite for commodities would presumably decline also. Basically, the worldwide credit bubble has inflated everything and it seems as though there is no place to hide. This is the reason that Warren Buffett's Berkshire Hathaway is sitting on USD 41 billion in cash with no place to put it.

 

Khun Pad Thai

[chelseafan]

The other side of the coin is that I buy goods direct from the states, at nearly $2 to £1, I can sell out cheaper by passing the savings onto my customers. So its good for the US export market.

 

I appreciate if you are American and planning that trip to LOS, maybe not so good.

[OCgringo]

I buy cheaper and pass the extra profit on to ME !

 

You have to keep a base market price of what your product will sell for ,

 

Its easy to lower prices but people really bitch when you raise them !

Pocket the extra few pence , because it will one day it will turn around and when you raise the prices, even just back to where they were you will be looked at as gouging...

 

OC