[Vnbiz] Vietnam's position on economic issues

Sun Jun 8 09:05:15 PDT 2008

Not Friday, Saturday, whoops, and I have dollars...not had

On Sun, Jun 8, 2008 at 11:04 AM, Craig Stevenson <cstevenson2000 at gmail.com>
wrote:

> Very openly, on Thursday they offered between 18,000 and 18,500, even at
> those rates, buying Gold just seemed terribly expensive.  On Friday,
> 16,200.  We all know that the Mafia, government officials, and powerful
> people can do pretty much what they want everywhere around the world, and,
> of course, Vietnam is no exception, but for common folk, such as me, the
> rate was 16,200 at Gold shops and they were out of dollars, and I had
> dollars, but I was trying to buy a necklace and at those prices, the price
> was just too much.
>
> A tael = 37.5 grams
> An ounce on the gold market worldwide = 31.1 grams (normal ounce 28.4
> grams)
>
> Nearing 19,000,000 a tael, and we have a significant, 10% or more, rate
> above, already exorbitant, worldwide gold prices, too rich for my blood, at
> least my taste.
>
> I figure I'll wait it out.  As everyone else should.   Hopefully, short
> term excess leads to better choices among the people (ie less Chinese
> imports) and no borrowing for speculation (either Real Estate or Stock
> Market) and better allocation of capital (for what purpose would oil
> companies and banks run resorts and high-rise developments, and how could
> they compete with world-class hoteliers and property managers, they can't,
> why bother, but to solidify the wealth, power, and position of select
> groupings of elites.  Hopefully the economy gets better at allocating
> capital and becomes less dependent upon feeding a consumptive frenzy among
> some groups of people.  It amazes me that the guys and girls who serve me
> Pho have nicer cell-phones than I do, how could that be, it is a dangerous
> push toward consumption, and an emphasis of image before substance, sorry,
> but it is a precious waste of resources.
>
> Craig
>
> On Sun, Jun 8, 2008 at 9:12 AM, Tran Dinh Hoanh <tdhoanh at gmail.com> wrote:
>
>> [ Vietnam Business Forum ]
>>
>>
>> Dear Craig & CACC,
>>
>> I am glad you say "it seems," Craig.  Of course, everything must "seem" to
>> look official.  I imagine you will never see a sign with the free market
>> rate anywhere in Vietnam (except probably in some small ares of the
>> country where no one knows who the SBV is and no one cares about what the
>> SBV says).  All the signs at all the exchange places have the official rate
>> (That is how the rate is OFFICIAL!).
>>
>> (The daily rate shown on VNExpress is always the official rate,  which of
>> course gives me very little news value. The only way I know the free market
>> rate is that once in awhile, VNExpress has an article on the exchange rate.
>> Other than that,  most of the time, I am blinded on this matter).
>>
>> If you want to sell your USD at the gold shop at the offical rate, the
>> shop is happy.  Buying at the official rate is a diffdrent thing though.
>> Chances are the answer is "Sorry, we're out of USD already.  Want some gold
>> instead, sir?"
>>
>> When government really enforces the official rates, only regulars in the
>> "market network" are able to do business with each other at the free market
>> rate.  If at the gold shop, then it is in the back of the shop, not the
>> front. However, where government may harass, most of the free market
>> exchanges are not at the shops, but at more private locations.
>>
>> As a matter of terminilogy, there is a recent noticebale change.  Since
>> the beginning  of time, it has always been "black market rate" (gia cho
>> den).  But very recently, probably within several weeks or several months,
>> the new term pops up on the media--"gia tu do" (free price) or "gia do la
>> tren thi truong tu do" (the USD price on the free market).  This could be a
>> subtle sign of a very significant change in policy.  Probably the "black
>> market" was slowly allowed to become (legally tolerated) free market.
>>
>> I think the SBV now is trying to reverse its own (quiet) policy, which, I
>> repeat, is not very wise move.  I think the SBV shoul just let the market
>> work and utilize the exchange rate to push export.  If it wants it can use
>> the offical rate to help import and to withdraw some VND circulation to
>> reduce inflation pressure, until it runs out of USD to do that, then it can
>> simply let the market take over.  Holding the VND too high against the USD
>> not only distorts the economy so much (which makes more difficult the
>> planning for all other things like export, import, price controls, inflation
>> control, etc.) but also greatly increases the chance for speculative
>> currency attacks from international players.  Don't give them the reason to
>> form a wolf pack.
>>
>> Have a great day!
>>
>> Hoanh
>>
>> On Sun, Jun 8, 2008 at 2:52 AM, Craig Stevenson <cstevenson2000 at gmail.com>
>> wrote:
>>
>>> [ Vietnam Business Forum ]
>>>
>>>
>>> FYI, at least yesterday, it seems that the Gold Shops, at least in Hanoi,
>>> were trading at official SBV rate, VND to USD.
>>>
>>> And Gold is way to high....
>>>
>>> Craig
>>>
>>> --
>>> Tran Dinh Hoanh, Esq., LLB, JD
>>> Washington DC
>>>
>>
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>
>
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