Baht What up with Dat?????

[bumper]

Well now that I thorugh being angry. I had a great discussion with Jimbo this weekend. Very sharp man. No guarentees on the baht or dollar. But I think the Baht has started it way down at least four months ago. It will continue. I anticiapte it being a faster before the end of the year. Thats my wild guess.

[bumper]

In the normal world this would weaken the dollar and add strenght to the baht but this is not the normal world, so who knows. Basically they are robbing Peter to pay Paul.

Have fun guys I'm off on a two week vacation to spend some Baht and help the Thai economy

Recession’s Grip Forces U.S. to Flood World With More Dollars

By Rich Miller

Nov. 24 (Bloomberg) -- The world needs more dollars. The United States is preparing to provide them.

In an all-out assault on capitalism’s worst crisis since the Great Depression, the U.S. is taking on the role of both lender and borrower of last resort for the global economy.

The Federal Reserve, which has already pumped out hundreds of billions of dollars, might formally adopt a policy of flooding the world financial system with even more money. The Treasury, on course to borrow some $1.5 trillion this fiscal year, may tap global capital markets for even more to finance a fiscal stimulus package of as much as $700 billion and provide additional bailout money for banks.

“You want to do everything you can when you’re facing the threat of a deflationary breakdown of the economy,” says Michael Feroli, a former Fed official who is now an economist at JPMorgan Chase & Co. in New York. He sees the central bank cutting the overnight lending rate to zero in January and holding it there throughout the year.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson are being forced to pull out the stops because the extraordinary actions they’ve taken so far have failed to gain much traction. Credit markets are collapsing, stock prices are plunging and the world economy is sinking into a recession.

As the economy deteriorates, deflation -- a sustained decline in wages and prices -- is emerging as a new threat. U.S. government figures last week showed that consumer prices excluding food and fuel costs fell in October for the first time since 1982.

Shell-Shocked

Investors, shell-shocked by the turmoil, are piling into super-safe Treasury securities, even as the U.S. government ships more supply out the door. Three-month bill rates dropped last week to 0.01 percent, the lowest since at least January 1940, and yields on Treasuries maturing in two through 30 years all fell to the least since the government began regular sales of the securities.

And the dollar has risen as loss-ridden banks worldwide husband their resources, even after receiving generous dollops of liquidity from the Fed. The U.S. currency has surged about 17 percent against the euro -- signaling demand for still more dollars -- in the two months since the crisis deepened after the failure of Lehman Brothers Holdings Inc. Meanwhile, gold is down almost 25 percent from its peak in March.

Swap Lines

To help fight the worldwide dollar squeeze, the Fed has set up currency swap lines with more than a dozen other central banks. Some arrangements, including those with Europe, Britain and Japan, are open-ended, allowing the Fed’s counterparts to draw as many dollars as they need. The U.S. has also established individual $30 billion swap lines with Brazil, Mexico, South Korea and Singapore.

In a speech to a banking conference on Nov. 14, Bernanke characterized these efforts as an “internationally coordinated approach” among central banks to fulfill their function as lenders of last resort.

As the Fed has stepped up its efforts to combat the credit crisis, its balance sheet has mushroomed. Assets rose to $2.2 trillion on Nov. 19 from $924 billion on Sept. 10, just before the bankruptcy of Lehman Brothers shook the global financial system.

The central bank’s holdings are likely to increase further. “I would not be surprised to see them aggregate to $3 trillion -- roughly 20 percent of GDP -- by the time we ring in the new year,” Dallas Fed President Richard Fisher told the Texas Cattle Feeders Association on Nov. 4.

Only the Start

That may be only the start if the Fed cuts its benchmark rate, now at 1 percent, to zero and adopts what economists call a policy of “quantitative easing.” Under such a strategy, it would concentrate on expanding the amount of reserves in the banking system because it could no longer reduce the cost of that money.

The Bank of Japan followed this policy in the early part of the decade as it struggled to rescue the world’s second-largest economy from the grip of deflation. Its balance sheet eventually rose to the equivalent of about 30 percent of gross domestic product, says Tom Gallagher, head of policy research for International Strategy and Investment Group in Washington.

“The Fed could blow through the BOJ’s ceiling,” he adds - - ballooning the central bank’s holdings to more than $4 trillion.

The Treasury is also heading into uncharted territory as it taps capital markets for cash to help finance its bailout fund for the banking system and plug holes in the federal budget caused by the weak economy.

Money From Abroad

Much of that money will come from abroad. “Foreigners don’t seem to be interested in any kind of risky U.S. asset,” says Brad Setser, a former Treasury official now at the Council on Foreign Relations in New York. So, “instead, they are buying Treasuries.” That includes China, which recently passed Japan as the biggest holder of Treasuries.

On Nov. 3, the department tripled its estimate of planned debt sales in the final three months of the year to a record $550 billion. Paulson told a conference in Washington Nov. 17 that the U.S. will issue some $1.5 trillion worth of Treasury securities in the fiscal year that began Oct. 1.

That number, too, could grow. Lawrence Summers, Treasury secretary under President Bill Clinton and an adviser to President-elect Barack Obama, told the same conference that the U.S. needs a “speedy, substantial and sustained” stimulus package to aid the economy.

More Government Spending

“Government may have to spend $600 billion to $700 billion next year to reverse the downward cycle,” Robert Reich, another Obama adviser and a professor at the University of California at Berkeley, wrote in his personal blog Nov. 9.

Kenneth Rogoff, a professor at Harvard University in Cambridge, Massachusetts, and former chief economist at the International Monetary Fund, says the new administration will also have to ask Congress for more money to repair the financial system, over and above the $700 billion already authorized for Paulson’s Troubled Asset Relief Program.

“By the time all this ends, the TARP is going to be closer to $2 trillion than $1 trillion,” ISI’s Gallagher says.

Paulson has already committed $290 billion from the program to buy preferred shares in banks and troubled insurer American International Group Inc.

There’s always a danger the Fed and Treasury may go too far, setting the stage for a big rise in inflation or another asset bubble down the road as the economy revs up and investors get back their nerve. That’s what happened in the early part of the decade as ultra-easy Fed policy and Treasury tax cuts helped fuel a credit boom since gone bust.

Bernanke and Paulson might welcome a bit of that exuberance right now -- even at the risk of higher inflation later -- as they try to prevent the biggest credit catastrophe in decades from sending the economy into a deflationary nosedive.

“It’s true that, over the long run, too much money creates inflation,” says Lyle Gramley, a former Fed governor now at the Stanford Group Co. in Washington. “But they’re trying to keep the economy from going over the precipice and into the abyss.”

To contact the reporter on this story: Rich Miller in Washington rmiller28@bloomberg.net

Last Updated: November 23, 2008 19:01 EST

[laphanphon]

is this just a typo, or does someones calculator not work, or simply revised, since from same person. 1 % or 12 %, sadly, 12 % seems more realistic, OUCH.

Figures from the National Statistical Office showed that there were 0.43 million unemployed persons at the end of September, or 1.1% of those in working age. The northeastern region had the highest rate of unemployment, at 1.3%, while the central region had the lowest percentage of 0.9%.

http://www.bangkokpost.com/breaking_new ... ?id=132265

The Federation of Thai Industries (FTI) expects 1.1 million employees, or 12.4% of the workforce in the industrial sector, will lose their jobs by the second quarter of next year, according to Sommart Khunset, an FTI deputy secretary-general.

http://www.bangkokpost.com/251108_Busin ... _biz25.php

[bumper]

You know that is interesting they are figuring two million jobs in the states. So percentage wise the estimate for Thailand in fact is much higher.

[BKKSTAN]

I noticed the baht was up to 35.28- 1USD this morning,so I assume that the political turmoil is effecting it some!

[aznyron]

Stan is that what the banks are giving or was posted in BKK post ?

[BKKSTAN]

Yahoo currency!

[aznyron]

Stan that is off shore rate which is not given at the banks here a web site which you can use when going to get your money exchanged http://www.bangkokbank.com/Bangkok+Bank ... efault.htm

[TJ]

This is a good thread to review what happens when government-mandated financial systems fail and the State is reduced to printing money without restraint. This is certainly happening at present world-wide

The classic book, Fiat Money Inflation in France, written by a college history professor, can be read in one sitting. Easy to read, holds your attention throughout. Reveals effects of inflation. Even though it is a tale of history 200 years ago, as it goes along, the parallels with present day inflation in the United States are striking. It describes how individuals in the various professions fare under runaway inflation and it reveals which profession fared best.

http://www.gutenberg.org/dirs/etext04/fiatm10.txt

[laphanphon]

off and on shore rates aren't that different anymore, not like past.

[aznyron]

it a joke it was 34.93 now it down to 34.82 it seems the demonstrators & bomb throwers made the bot stronger on a point of interest I don't see bkk exchange rate posted it has not been updated in several days. back on topic LA when you go to the bank and exchange USD you get now 34.80 as to off shore rate is 35.26 true not much of a difference but it sure makes you feel a little bit better thinking the bot is heading a favorable direction for you

[aznyron]

good morning well the the pound has moved up good for those from the UK today the USD is 35.07
good news and the markets are closed in the USA until Monday let us all pray that the baht falls apart and we get back what we lost in a B/S inflated baht GBP=53.31

[WBU ALUM]

Be careful for that which you wish.

Rather than hoping for a collapsing baht, I hope for a stronger dollar.

[BKKSTAN]

It is hard to have faith in a stronger dollar with the bailout and printing of new money!

[WBU ALUM]

It is hard to have faith in a stronger dollar with the bailout and printing of new money!

Yes, but the negatives far outweigh the positives in hoping for a collapsing baht. There will be other things collapsing besides the value of the money.

[aznyron]

WBU if the baht was not being prop up and inflated with smoke & mirrors then I would not want any thing to happen but that the problem it is being prop up with lies etc and it been going on for over two years
and I for one am tired of being rob every time I exchange my USD to thai baht and I am not alone
all of Asia is in the toilet except for good old thailand with airports shut down bombs being throw at unarmed citizens tourism is down by over 50% exports are down I bet over 50% with the exchange rate
causing factories to shut there doors unstable government a coup over throwing a elected PM and how much more is going on we don't know about and yet the FM is playing her games for fear of losing face
but the country can go in the toilet first

[WBU ALUM]

WBU if the baht was not being prop up and inflated with smoke & mirrors then I would not want any thing to happen but that the problem it is being prop up with lies etc and it been going on for over two years
and I for one am tired of being rob every time I exchange my USD to thai baht and I am not alone
all of Asia is in the toilet except for good old thailand with airports shut down bombs being throw at unarmed citizens tourism is down by over 50% exports are down I bet over 50% with the exchange rate
causing factories to shut there doors unstable government a coup over throwing a elected PM and how much more is going on we don't know about and yet the FM is playing her games for fear of losing face
but the country can go in the toilet first

All of what you say is true, Ron; but I don't wish ill on any market or currency, and I don't consider it being "robbed" when I exchange currency unless the currency exchange is ripping me off. All governments do things to prop up their economic systems.

There are usually far-reaching and unexpected effects when a currency collapses.

[aznyron]

well the other day it was 35.43 now it 35.03 there must be a big demand for the thai baht expecting it to crash & burn other wise you tell me how it got stronger with all the B/S going on in thailand

[banpaeng]

Did you ever think maybe the dollar went down as it has. Maybe that is why the baht got stronger!

[aznyron]

ban sorry i doubt that since the country is in turmoil at the moment but I could be wrong but I do smell a rat