Whats up with the baht?

[Guest]

Then explain why all the "experts" can't agree on the economy

McBif is right. There is more agreement on economic principles and the economy by economists than most people think.

 

In addition, economic is not really about predicting what the stock market will do next week. In many ways, it is more a method of analyzing the world in terms of incentives.

 

Part of the problem is that journalists, who don't undestand economics, often write on the subject, and often get it wrong. The Financial Times, Wall Street Journal and The Economist all do an excellent job, but the popular press says some absurd things sometimes. Finally, much of the "economic" commentary you will read - outside of the papers I mentioned (and the Wall Street Journal's editorial page) - is based on politics. Economics shapes policy, and therefore is subject to distortion by groups with agendas that are not supported by economic analysis, particularly since a large segment of population is economically illiterate (Thailand is actually worse than the US).

[chuck6660]

elef,

 

"The Thai ecomomy is in better shape than the US economy"...How so?

[elef]

It's too complicated to describe all factors that I base thet conclusion on but you can start with the trade balances of the 2 countries, investments and so on - a weak thai government is also a plus for the thai economy. Or even better go to Lam Chabang and see what's happening there - I started to invest in land and buildings in that area 6 years ago! ::

[Coss]

Any one want to make a guess on why the baht is so strong when they're going to disestablish 5 political parties soon?

 

Cheers

 

Coss

[rookie]

Economics was not one of my favorite college classes and regardless I'm also now kinda concerned about the Baht.

 

Last Oct or Nov I sent in $US to my Thai bank and obtained 41:1.

So, a few months ago when the Baht dropped to 37.5 I had the bank exchange most of my Baht back into $US...I made about 9% on the deal and have been sitting on a bunch of $US ever since.

I ...was..waiting for the Baht to again rise to at least 39:1, when I'd again convert my $US back into Baht, and make another few percent on the exchange. Well, it got as high as 38.5, then the recent collapse.

I think I'd best convert the $US back to Baht now and at least be able to keep the 9% I made earlier, lest I lose even that profit! Sigh...

[ThaiHome]

junglesoup said:

Thailand has a trade surplus, the US a trade deficit. Massive global trade imbalances. The weakening of the US dollar is a longterm process.

 

Actually, I believe that Thailand is running a deficit these days due to the high price of oil imports. Hence the emphasis to use natural gas, which Thailand does not have to import (at least not now).

TH

[FAT_AUSSIE]

Perhaps look in your own backyard instead of looking to the Thai economy for an answer to your FX question...

 

cross examin the USD with one or more other currencies- JPY, CHF, AUD, EUR, GBP, etc- nothing exotic. That will give you a better picture of who up and who's down....

 

Fatty.

[Old Hippie]

Isn't the USD at lows against all of them? or so it seems...

[Guest]

Tis not just a numbers game! have the prices in Thailands "punters industry" stayed stable over some time. Fairly so in my experience. Sure the USD is down but sans the price increases it does off set the lowerd currency exchange. I would love to see the dollar go back to 41 but I expect there would be a bit of a nic in punter prices to correspond with that increase. Am I wrong, but aren't prices just about the same?

[junglesoup]

The geometrically weighted dollar index has been in a decline for 4 or 5 years. The dollar index is a gauge of the strength of the dollar against a basket of 6 other currencies.

 

Forget about trying to predict currency movements. Alan Greenspan said forecasting currency movements has about the same success rate as predicting the outcome of a coin toss.

 

George Soros and Warren Buffet both said that if they tried to predict market direction they would be broke by now.

 

I have a currency trading account with CMSfx,a New York based company. You can trade about 20 currency crosses with them,on their state of the art trading platform. The secret to successful currency trading is to follow what the market is actually doing and not what you think. Dont try to 2nd guess the market.

 

I dont care if the dollar is going up or down because I know I' m positioned to take advantage of either direction. You need to have a fairly good knowledge of markets and how they operate before trying to try any currency speculating.

 

It takes at least 2 years of intensive study before you can even think about making consistent profits trading them. Two years is the bare minimum. Anyone can make a few exchanges and make some money, but thats down to luck, and eventually you will get burned.

 

If you are worried about the dollar value then hedging with some sort of derivative instrument would be a better idea, although still risky. For example gold has been in the past negatively correlated with the dollar. If you had spreadbet for gold to go up, then if the dollar falls at least the value of your spreadbet would cancel it out. However I dont know how strong this relationship with gold and $ still is. THis was just an example.