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Ouch - US dollar under 40 baht


OCgringo

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Hard to say exactly what might happen among the world markets and currencies (other than an obvious shakeup) should the US dollar drop another 30, 40 or more percent. And as someone mentioned - this is a very real possibility. With the picture you paint it would seem to me gold might be the best thing to have should things get really bad - that and a 357 magnum?

 

Also, I?m not sure the events that followed recessions, depressions, currency devaluations and the fall of world powers in the past are necessarily good predictors of what might happen in the future. It?s a new world and anything is possible.

 

ST

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"Nevrous_Dog" asked about the price of gold.

 

Here is one source for predictions - complete with technical analysis and charts:

 

http://www.clivemaund.com/article.php?art_id=68

 

That site will be especially interesting to followers of this thread because the analyst also tries to predict the direction of the US dollar. Of course, there are many others who attempt such predictions.

 

For the price of gold today, here is a useful site which shows the price of a baht (weight) of baht gold (fineness), expressed in baht (Thai currency). In other words, a baht of baht in baht. Note: the price on this web site is not exactly the price you'll find in the shop windows, but within 100 baht or so.

 

http://gold.yabz.com/

 

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I have thought of gold, of course, but there are problems with it. First, it the price has already been pushed up to a fairly high level. Then there is the problam that central banks hoard it and national governments sometimes confiscate it. Some people think the quantitiy of gold in the world is much higher than the official tallies. Then there is the problem of how to buy it which falls out into the actual metal or some kind of derivative, like gold bank certificates or exchange-traded funds. Derivatives are convenient, but lack the assurance of metal. Among the metal alternatives bullion coins seem the most convenient, but the spreads are much higher than for other securities. I found only one dealer who posts prices to buy, which for a Krugerrand was recently USD 428 while the same site would sell for USD 464.

 

Silver and platinum are interesting, but since both are industrial as well as precious metals their values are subject to changes in manufacturing processes. The phasing out of silver-based photography will eliminate a market segment that now accounts for 30% of demand. I am reading up on platinum now.

 

In the long run precious metals don't perform very well, but at times of crisis they may. As the dollar decline continues metals may be a good neutral currency.

 

Khun Pad Thai

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  • 2 weeks later...

I'm planning a move to Thailand or somewhere in Asia next year, and my money will come to me in US dollars. I suppose I could tolerate a drop in the value of the dollar so that it's 25 baht to one dollar, but I'd rather not see it go any lower than that. Does anyone think that's possible?

 

Rex

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I'll go ahead and complete the purchase of the furniture that I put a deposit on in Chiang Mai last January. Hopefully, the increase in the dollar will offset the higher fuel prices. Thanks for your help, OC.

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Some economists (eg. Stephen Roach of Morgan Stanley) and currency traders (eg. Bridgewater Associates, managing USD 70 billion) think the US dollar will lose an additional 30%. That seems plausible to me. The US twin deficits are still growing alarmingly.. Presumably, the loss of value in the dollar won't stop until the trade deficit is substantially corrected.

 

Like you, I am thinking of moving to Thailand, but not for a few years and am trying to think of a way to protect value. Not an easy task. The Thai Baht might go up in value when China permits the yuan to float. Also, the Thai economy is going pretty well at the moment. You might think of moving some of your USD into Baht. Japanese yen and Korean won may also be good bets. I have also thought of gold and silver, but how would you transport those across borders?

 

Khun Pad Thai

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