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As the title of this video suggests, we are discussing a weak Baht and the question posed is "Is a weak Baht a cure for a weak Baht?" What does that mean? It sounds pretty redundant. Well long story short, I thought of that when I was listening to somebody who was talking about oil prices, specifically globally and specifically in the United States, that oil prices are going up rather dramatically. Someone pointed out something that apparently is almost kind of a cliché if you will in the oil business and that cliché is "the cure for high oil prices, is high oil prices". Apparently the reasoning behind that cliché is as oil prices go up, people want to produce more oil to make more money off of that. Exploration goes up, refining goes up, like they increase their capacity, they start essentially selling more oil which then as the supply goes up it brings the price down. Now I know that is very simplistic; there's a lot going on, there's OPEC, there are all sorts of factors to consider; supply chain constraints that get into the mix; it's not just a pure sort of arbitrage kind of look at oil. I am no expert in oil by any stretch but there is some grain of truth in it insofar as, as the price goes up, it incentivizes people to produce more oil and therefore that may have sort of a deflationary effect on the price.

The reason I got to thinking of this, I was reading a recent article from the Thai Examiner, that's thaiexaminer.com, the article is titled: Fears for the Baht as it hits a 15-year low and Thai economic performance in a medium term with chronic ills. Quoting directly: "The Thai Baht this week, reached a 15-year low against the US dollar with local analysts predicting it will reach the Baht 36 barrier against the US currency."  So that is 36 Baht to the Dollar. "They project, at the same time, that it will rebound later this year with rising foreign tourist numbers." I will get to that in a minute. "However, there are growing concerns that a widening divergence between US interest rates points may be the real cause of June's 4% drop in the Baht and a projected even further widening of the rate difference could see the Thai currency falling even further. It comes in a week when Fitch Ratings, the American credit rating agency, rated the Kingdom's borrowing at BBB+ and gave the country's economy a stable outlook due to its robust external financial position." Yeah, just on a side note from me. Thailand has gone out of its way since the turn of the millennium to maintain a really sound financial footing. I think a lot of that comes from the experience they had in 1997. Quoting further: "However, it warned that Thailand faces significant problems in the medium term with an aging population, a record level of household debt, ongoing political instability." Household Debt? I mean compared to who? If we are comparing it the West, I would say Thailand has probably not got that bad a household debt, especially in the United States. Ongoing political instability? Well it looks to me like political instability, that's kind of got that baked into the cake pretty much anywhere so relative to other countries, I don't think Thailand is all that bad off. Quite frankly, yeah, there is some tension in the air, I don't want to get too deep into this, but yeah there is always going to be disagreement politically out there. I frankly, when I look around in Thailand I feel that it is far more stable than other places here in the region and back in the West too for that matter. Quoting further: "These issues are believed to be the underlying reason for the Kingdom’s lackluster economic performance since 2018 which because of the pandemic crisis, has seen the country's growth stalled since then as its peers in Asia and Southeast Asia move forward." Well I don't know. No, the pandemic crisis or more importantly the Governments' response globally to the pandemic, not just locally, I am not going to blame only the Thai Government, frankly I think the Thai Government took a much more prudent approach in the beginning and really didn't fully lock down and just do this until they realized "Wow, basically the rest of the world is doing this, we're going to do this." So, the big issue was the shutdown and this other thing is “as its peers in Asia and Southeast Asia move forward”, they are not moving forward that much more quickly, okay? Yeah, I will say going back a month, other countries, Cambodia most notably were sort of reopening more quickly than Thailand, getting some of the restrictions, some of the requirements to get into the country off, but people seem to forget Thailand was basically the only place open for like a year out here. I was here, I remember that the Philippines closed, Vietnam was closed; Vietnam was sending people out whereas Thailand brought in the amnesty and then continued it along with the Emergency Decree. Vietnam was kicking people out of the country. Okay, Cambodia reopened fairly early but they were really locked down for a period of time when Thailand was allowing people in. Now people had to go through a bunch of different checks and a bunch of different requirements to get in but they could come in. Thailand was far more open for far longer than a lot of other places. Long story short of all of this was, and we have done going back into January we had the numbers on this, Thailand's Tourism Industry was decimated, literally decimated. It went from like 18% of GDP down to like 1.8% of overall GDP. I mean that is just shocking and to me the excerpt in here that most sums this up and kind of the reason for the video, quote: "They project at the same time it will rebound later this year with rising foreign tourist numbers." Yeah, if you have a sector of your GDP that makes up 18% of your GDP and it gets decimated over the course of 2 years and now you are reopening and that sector of GDP is going to come back, yeah I would imagine it's going to have a substantial impact in a positive direction for your currency. 

Now the reason for the video, look when the Thai Baht gets weak especially around 36, I remember being here at 38, 36 going back 15 years ago, it attracted a lot of foreign tourists. So this is why I sort of ask the question: "Is a weak Baht, possibly the cure for a weak Baht?" because as we see it go to 36 in coming months, our prospective tourists and they should frankly, and even prospective retirees ought to really take a long close look at Thailand because I think especially for retirees in the longer term, I think Thailand is going to be very good especially for American retirees because I think Thailand, America is pretty high up there in terms of FDI and also America is one of Thailand's biggest export partners. Thailand exports a lot to the United States and for that reason, I think Thailand's going to have a pretty good currency relationship between the Dollar and the Baht especially for people who are looking to come over here possibly on fixed incomes and retire. When you get above 36 to 1 to the Dollar, let me tell you, things seem pretty darned cheap here in Thailand when comparing them to the United States. So again I don't know how this is all going to play out, this is kind of an exercise in speculation. Long story short is I do think that a weak Baht at least in the near term, may be beneficial especially to reviving the Tourism Sector here in the Kingdom of Thailand.