Chart, foreign currency reserves and US Treasuries : “Gimme more”

Britney Spears ? Nope. The Bank Of Thailand.

Time passes and the BOT pursues with a striking constance -like all the other asian central banks- their suicidal mission : buying US Dollars, mountains of it, and worse  US Treasuries, AKA US debts in US Dollars, in order to save their pathetic exports figures by keeping a weak exchange rate for their currency: it’s the Beggar thy neighbour policy.

US debt in US dollars ? Talk about a double whammy.

And meanwhile… the smart guys (asian too) are buying gold.

Talk about major schizophrenia.

Let’s update our charts.

BOTTREASURIES1

“Gimme more of less”. What to say else ? More USD and more US Treasuries (US debts).

BOTTREASURIES2

Yes, the proper word is : “correlation”. This chart is screaming… The Great Correlation.

BOTTREASURIES3

The key word is : “stability” (apparent, virtual). That’s the fantasy of the thai central bank… But it doesn’t work this way. Because if indeed it’s possible to fool all the people all the time, at one point you face laws of physics

We can see a lot of efforts (buying a lot of USD) in order to keep the exchange rate USD-THB stable.

We are deep inside the Rabbit’s Hole, Wonderland. It’s the lala economy.

Sustainable ? We will see.

(Source Bank Of Thailand, and US Treasury).

PS : Sorry to repeat myself, over and over… But if you’re looking for some light inside the tunnel… Point your browser to Mish Blog and Calculated Risk Blog. Those people have understood it all… since at least 3 years… Yes, the “crisis”, the “recession”, the “depression” whatever you wish to call it is nothing but new… It was documented, predicted, announced, analysed, dissected… But of course, you didn’t get the chance to read it on Bloomberg or the Wall Street Journal.

Don’t be a clown.

Break your chains.

14 Responses to “Chart, foreign currency reserves and US Treasuries : “Gimme more””


  1. 2 Insanity 14 November 2009 at 11:34 am

    If you are considering buying physical gold BE CAREFUL:

    Gld ETF Warning, Tungsten Filled Fake Gold Bars
    http://www.marketoracle.co.uk/Article14996.html

  2. 3 fall 14 November 2009 at 1:54 pm

    What I dont get is, are Thai product so uncompetitive that they NEED an indirect export “subsidy”(currency interference)?
    Is such “subsidy” a necessary and wise choice?

  3. 4 Pricilla 14 November 2009 at 6:24 pm

    Thanks for those blogs, some more reading.

    Buying US Treasuries does seem courageous, but as to dollars lets wait and see. Some people I read are saying that the dollar despite the doom and gloom will bottom soon and take off again. If so Thailand may accidentally do well. Likewise predicting gold will peak and correct down again. If so that is when I will buy in. A friend who does trade successfully in Australia has been buying up lots of US dollars on the same assumption.

    Know there are many views out there, will be an interesting ride, still think another crash is coming.

  4. 5 antipadshist 14 November 2009 at 10:19 pm

    today I went to “Set in the City” expo at Siam Paragon, 5th floor.
    (tomorrow Sun Nov 15th is the last day)

    tell you folks – SO MANY people there, apparently looking for … INVESTMENTS ! wuahahahahaha …. blind faith into “green shoots” is so addictive ! 😀

  5. 6 mostromarino 14 November 2009 at 11:56 pm

    sorry

    but i cannot understand this:

    http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=94&language=ENG

    http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

    the total of reserves
    how much is ???

    n. 13 Total 4,523,178.12

    or n. 6 Total 135,257.10

    thank you

  6. 7 ThaiCrisis 15 November 2009 at 12:07 am

    It’s “I Want To Believe“, the X Files Movies. 😉

  7. 8 ThaiCrisis 15 November 2009 at 12:09 am

    … It’s the same, AKA the total reserves ! The first amount in USD… and the second in THB…

    My chart stops in august (latest data for US Treasuries)… but you can see that the trend, since then, continues with a vengeance !

    The Bank Of Thailand continues to buy US Dollars (foreign currency reserves = 130 billons USD in october, against 127,3 billions in august).

    I follow the foreign currency reserves of the BOT in another chart :
    https://thaicrisis.wordpress.com/2009/10/07/chart-foreign-reserves-and-exchange-rate/

    And what I wrote at the end remains valid : “Those trees won’t be able to grow to the sky…”

    It’s a fallacy to believe that asian central banks will be able to continue to buy USD, month after month, year after year, in order to keep “exchange rate stability” … ! There is no stability…. The system is nothing but a massive imbalance.

    There is a wall in front of us… And our velocity -relative to the wall- is… increasing. 😉

  8. 9 mostromarino 15 November 2009 at 3:52 am

    thanks

    today i am more stupid than usual….

    always nice and interesting in reading

    you

  9. 10 antipadshist 15 November 2009 at 4:10 pm

    to my big surprise, today on Nation channel TV there was one guy (wearing spectacles) was talking about economy and he said that SET is …. going down. he warned everybody to be very careful in investing on it or to continue trading on it.

  10. 11 ThaiCrisis 15 November 2009 at 4:35 pm

    You’re sure he wasn’t a foreigner ?
    😉
    I mean : an alien ? An extraterrestrial life form ?

  11. 12 Lord HaHa 15 November 2009 at 6:37 pm

    @antipadshit/TC

    I can see the story now:

    ALIEN CHARGED WITH LEISE MAJESTE

  12. 13 antipadshist 17 November 2009 at 10:27 pm

    here is an interesting piece about dollar and Asian currencies, particularly about the stupidest idea of “devaluing into prosperity” :


    Obama Gets an Earful About America’s Super-Easy Money

    At a conference in Singapore, Hong Kong chief executive Donald Tsang—a former finance minister—said Friday he’s “scared” about loose U.S. monetary policy.Where is the money going—it’s where the problem’s going to be: Asia,Mr. Tsang said. “You can see asset prices going up, not only in Korea, in Taiwan, in Singapore, and in Hong Kong, going up to levels that are incompatible or inconsistent with the economic fundamentals.”

    On Saturday, China’s top banking regulator, Liu Mingkang, chimed in that the Fed’s binge is the main cause of “massive speculation.” The risk is more asset bubbles and misallocation of global capital.

    In response, the Obama Administration seems to be trotting out an updated if more subtle version of Nixon-era Treasury Secretary John Connally’s famous quip that the dollar may be “our currency,” but it’s “your problem”

    There is also the risk of a political backlash if countries conclude that the U.S. is trying to devalue for the sake of increasing its exports — in effect, attempting to steal demand from the rest of the world. The last thing the world needs is beggar-thy-neighbor competitive devaluations, just as the global economy is getting back on its feet.

    That’s the message President Obama will hear in China this week… Asset bubbles that build and burst in Asia will eventually cause trouble here, much as they did in the Asian monetary crisis of 1997. And if Chinese leaders conclude the U.S. is deliberately squeezing their currency as a way to devalue away America’s rising debt burden, they will find ways to return the offense — perhaps on Iran, or North Korea.

    The larger mistake is to believe that any nation can devalue its way to prosperity.

  13. 14 Insanity 17 November 2009 at 11:04 pm

    China’s Phony GDP Growth Data, Evidence Ordos the Empty City

    Just a fascinating 5 minutes video showing how China is achieving these “consistent” GDP growth numbers.

    Obviously on a relative basis the country is doing far better than many in the world but trying to figure out what is actually happening inside is guesswork.


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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