No, this ain't another Nok / Ton / Lek tale and if that's what you're after you may find many related postings on this site. However, if your pocket has begun hurtin' lately in the Land Of Smiles, this may just be what the doctor has
The recent rise of the baht has interested many and surely caused some concern to others, mainly to us – poor American farangs. This story is my encounter with the recent exchange developments and I wish to share it with Stickman readers.
First, some disclosure: in addition to my professional career I spent three decades in dealing with currencies and can even humbly state that I've not done that badly either. Still, if I may add a note of caution to any aspiring guys / lads now reading
this across the globe: the foreign exchange markets (which roll no less that 1.5 trillion dollars daily) are as risky and merciless as you can possibly envision and unless you posses iron nerves it really isn't your cup of tea.
So, back to our LOS angle.
I first visited the Kingdom in 2001 (only days after 911) and noted instantly how cheap the joint is. Getting 42 baht for my dollar was incredibly sweet and when I figured that my taxi ride from the airport cost no more that $6 (250 baht) I was really surprised. The professional term PPP (purchasing-power parity) came immediately to mind. The PPP theory states that, in the long run, identical products and services in different countries should cost the same in different countries – based on the belief that exchange rates will adjust to eliminate the arbitrage opportunity of buying a product or service in one country and selling it in another.
As I spent more time in Thailand this distortion became clearly evident. I couldn't help but attempt to establish a proper exchange rate in my mind. Indeed, following six more trips to LOS (every year since 2001) I concluded that the US dollar should
fetch no more than 30 baht.
Two years ago I decided to make a buck from this conclusion by simply buying baht back home. I contacted several banks and discovered (to my dismay) that (just like China's yuan) this currency can be bought strictly in Thailand.
Now, had the LOS been an "ordinary" country like, say, Switzerland, I would not have hesitated but we all know too well that it ain't. Several stories that I heard from the Nana gang (to those unfamiliar with this piece of history please
let me clarify: should you ever book into the Nana Hotel you will soon discover a bunch of farangs sitting in the lobby and exchanging "war stories") brought me a shiver and certainly held me back from any Thai endeavors. Here is one
which I heard in the context of this posting:
A British lad married to a Thai lady soon after his retirement and settlement in LOS (Land of Scams). He transferred his entire capital to a Bangkok bank and used his ATM card extensively thus eliminating the need for frequent visits to his branch. Still, one day he had some free time on his hand as his wife had just left for a vacation up north ("to see Mama & Papa") and decided to exchange a few investment ideas with his bank manager. So, the lad goes to the branch and is met by a stunned manager: "So sorry, Sir, but your widow was here yesterday and emptied your account".
If you liked this war story I have another one for you (copyright reserved to the Nana gang): A guy returns from the US with his fresh wife after having presented his new bride to his family. The wedding had already taken place in Thailand several months
earlier following which he had opened a joint bank account and bought a house (which, as veteran Stickman readers know, must be registered in the name of a Thai citizen, i.e. the lady). So, the plane lands in BKK and the couple goes through passport
control. Before exiting the airport building the lady needs to go to an important place. Well, if you got to go, you got to go. "I'll be right back, honey". Informed sources tell me that this poor guy is still waiting (this took
place a year ago but she might have looked him up in the new airport).
Joking aside, folks, I believe that my point is well made.
You may well appreciate my concern then. At that point I decided to approach an authority – Stickman no less. I wrote him an email, expressing my concern and asking for advice. His email took exactly one day to arrive: "I'd rather keep
my money in New Zealand". So, I reflected, if a guy like Stickman who has lived in Thailand for over eight years and married a Thai lady is apprehensive about keeping his money there then I should just forget it.
Indeed, I did.
I enjoyed a casual conversation with a Brit, a retired dentist. I soon learned that the guy was well off and then decided to ask him that same question: "Would you keep your money in a Thai bank?" His reply should teach all you shy guys that
being close to people may truly be harmful (to your pocket, at least): when he moved to Thailand a short while ago he received a phone call from a friend who had heard of the dentist's intention to place a large sum of money in Bangkok. The
caller was an owner of a small bank in Jersey, an island next to Britain. "Don't you dare doing it" came the warning "there are many scams in Thailand".
At that point my mind was already made up but, just the same, it was reassuring to receive such confirmation.
The months have gone by slowly and the US dollar has begun a sharp decline against almost all currencies. The Australian dollar rose from US$0.50 back in 2001 to $0.8850 today while the New Zealand dollar rose from US$0.40 back in 2001 to US$0.81 today.
Can you imagine? The Thai baht has made its own show, rising from 42 back in 2001 to the current 30 (yes, I know that you've just received 33 for your dollar but this is the Thai government's artificial rate which is higher by 10% from
the foreign exchange markets).
You have to realize that even the Nana gang as well as that British banker are unaware of the entire spectrum of scams taking place in the kingdom. Sure, we all know of customers who woke up one morning to a zero bank balance (after certain bank clerks
had cloned their ATM card) but the level of local "sophistication" surely contains more colors than Rembrandt's paintings.
Thailand is indeed a wonderful country and you are bound to find there many nice people (as so well demonstrated during the Tsunami disaster in Phuket). The letters LOS should in many instances mean just that – Land of Smiles – but, unfortunately,
we must be fully aware that this amazing and enchanting destination also has another meaning to these three letters: Land of Scams.
Just be careful and you can't miss.
I personally see little reason to keep money in Thailand. As you have alluded to, there are all sorts of dangers and if your bank balance happens to just fall to zero for some crazy reason, don't expect the bank manager to give you a deep wai and reinstate the previous balance. Oh no, it will be up to you to try and convince them to do that and that will be very, very hard. Also, there is almost zero return for foreigners leaving money in Thai bank accounts. Frankly, I can think of few good reasons for one not to keep their money in their home country.