US Economic Analysis - and I am not an Economist nor am I a Banker, nor do I work for the US Fed. But I will add some diatribe/harangue/polemic, to the conversation and people are free to pull it apart, if they wish.
Despite the negativity towards to the US Economy, (particularly buy the Snowflake’s and arguably for an alternative reason) my perception and the reality is that, the US Economy as a whole (at this time), is in a much better state than it was during last year (2016) and immediate years before that, if you take an unbiased look at some of the key indicators. By no means have I looked at all of them (indicators)
Unemployment Rate: Out of the developed countries, the US has currently has one of the lowest unemployment rates, with only Germany at 3.6% and Japan at 2.8% arguably in a better position, according to stats published under “Countryeconomy.com” for the year 2017.
The US is in a much better position that Australia, Canada, New Zealand, significantly better than the Eurozone & Countries such as France, Italy, Spain and the likes and a touch ahead of the UK. Granted this is just one indicator of a Country on the improvement, but if you look back a few years,
2010: US was 9.8%, Germany was 7.5% & UK was 7.9%
2014: US was 6.6%, Germany was 5.1% & UK was 6.8%
2016: US was 4.9%, Germany was 4.4% & UK was 5.1%
No one can deny that a lowering of the unemployment rate reflects a degree of confidence in the state of an economy and arguably an improvement for some who managed to become employed, regardless of what wage they might be paid. Earning an income is better that sucking up welfare.
Interest Rates: To my knowledge the US is one of the few countries that has managed to lift their interest rates from the “Gutter” (Zero or Negative Percent) over the past 12 months. My take on Zero interest rates, is that,
1.The environment for Zero interest rates was created by those who introduced the concept of “quantitative easing”, i.e. printing money to pay or conceal paying debt
2.That ultimately have interest rates stay at Zero, will in the long term impact on economy, because it will stifle growth and investment, since money is cheap and companies will simply defer making decisions and or capital investments.
3.That it will reduce the net worth of your assets (house, pension funds etc.) in the future, as they will simply not grow in overall value (or grow very little), in the absence of inflation and in the absence of your pension funds being able to make reasonable returns of 8% plus per annum. Possibly what you out into your pension funds over the next... years is all that you will get back, which is not good news for those in their 50’s plus.
4. The normal working person, does not benefit a great deal from low interest rates, but others who are very wealthy benefit the most
Either way, I believe that even with my limited knowledge of economics, I am smart enough to know that, you cannot maintain interest rates at Zero % or Negative %, for the longer term and still expect your Economy to grow and your average person to grow his wealth.
The fact that the US has managed to drag its interest rates upwards, (be it ever so slowly) towards a target rate of 2% in 2018 (when other Countries cannot), is a plus for the growth of the US Economy in the longer term, in my view, and should eventually lead to of result in more investment in the US and possibly more demand for the US Dollar and so a more stable US Dollar. Hasn’t happened yet, but at least the US is ahead of the field (other Counties) in this area and positively moving in the right direction.
De-Regulation and withdrawing from Bottomless Pits (organizations): What is taking place in the US with winding back Regulations, together with withdrawing from near useless Organizations around the world, has to be a plus for any Country.
Just ask yourself, honestly, how many Administrative People/Government Bureaucrats literally feed-sponge off all the money that pours into the so called World Agreements or Organizations that run them, not to mention into the United Nations, UNFCCC, Brussels, NATO and the like, who deliver what?? You would also be astounded at how much the US has contributed to these Agreements and Organizations and how little other wealthy Countries have put into the pot.
They, the Organizations are simply breeding grounds for creating jobs and fat paychecks for “has been” Politicians and older Bureaucrats, who when in their previous positions of power /authority in their own Countries, simply helped push through enormous amounts of funding, to those Organizations. OK the deal is, you send me money from your Taxpayer and will promise you a nice cushy job after your retirement in my Organization, with a much better pension at our end.
Just have a close look at the pension fund/payout & perks, that are given to the staff of the United Nations, UNFCCC, Brussels NATO etc. and ask yourself how you could get a piece of the gravy train. Then you may understand why Trump saw no value in contributing to the Paris Accord
The Value of the USD against Others: The US Dollar Index, a measure of its value against a basket of other currencies. With the US Dollar Index (DXY) sitting at 93.93 , yes it has come down from its high in January 2017.
It might surprise some, that in April 2016, the US Dollar Index was also around the 93 – 94 mark. As far back as 2011 the US Dollar Index was at a low of 80.0 and in 2008 as low as 84.0. Somewhere between 97 - 100 is arguably considered to be its worth. Currency exchange rate fluctuations are part of a normal process and tend to be cyclic for a number of reasons and not directly related to the person who sits in the main chair in the White House.
A lower US Dollar Index is good news for the US and should promote opportunities for the Exports and hence US Economy overall (i.e. good news for those in the Workforce).
US Exchange Rate Prognosis for Thai Baht: Back to the point of the Prognosis for exchange rate of the US to the Thai Baht, it doesn’t affect most people and it doesn’t relate to Trump in the White house as some suggest. Movement in exchange rates are driven by the two Countries and their respective circumstances and I seriously doubt that anyone can believe that the USD to Thai Baht Exchange rate will ever return to TB 25.0, of some 20 years ago (1997), before the Asian Crisis.
Over the past 8 years the USD to Thai Baht Exchange Rate was below TB 32.5 to the US nearly 4 ½ of those years (a long stint from April 2010 through April 2015). Then in April 2015 the rate moved up, very suddenly over a relatively short period of time and not because of anything that Obama did or didn’t do. At that time there was no talk of US Tax Cut and not indication of Trump running for President. The Thai Baht simply weakened purely because of the circumstances in Thailand in April 2015 and the uncertainty which followed. Now it has returned to where it was after what can arguably be described as a period of "Stability in the Country (in Thailand)". Some might disagree, but I for one feel Thailand is more stable under the currently Rule, than that under either the Red or Yellow Politicians.
Should Members be concerned that the USD to Thai Baht Exchange Rate will return to TB 25.0, due to Trump being President or the likelihood of the US Tax Cuts happening, - the sensible answer is, NO.
Trump Tax Cuts: Will the Trump Tax Cuts strengthen the US Dollar relative to the Thai Baht: Logic tells you the cuts should have a positive impact over time, on the US Dollar, but it also depends on whether the Financial Markets view the level of US Debt as being sustainable. There are variables/views that can work in parallel or against each other, when it comes to weakening or strengthening a currency in either Country. If however the Financial Markets choose to ignore the issue of level of US Debt and in turn favor or put more emphasis on the impact potential of the Tax Cuts, then you should get more Thai Baht for your US Dollar by the middle of next year. One needs to understand that the Financial Markets (and the Wall Street Economist) don't actually think like us normal people.
Forecast USD to Thai Baht Exchange Rate: Where or what will be the USD to Thai Baht Exchange Rate in June 2018. Very simple, I will update my post on 01 July 2018 [-o<
Merry Christmas “Snow Flakes” [-o<