[Vnbiz] Vietnam's position on economic issues
Shane Wall
shane.wall at translingualexpress.com
Sun Jun 8 09:52:01 PDT 2008
Anh Craig,
It seems to be a 'taboo' to talk about the "herd mentality" here
nowadays! Rumor, speculation and opportunistic behavior are rampant now.
To say otherwise is to ignore reality.
I joined the throngs. But I sold my 1.9 taels of gold ... and used
the proceeds to help fund some more rice paddy acquisitions and land
improvements for my wife and son's long-term future. Given the most
recent issues about food security and all the macro-measures that
different Governments have taken on the international level, the actual
land was cheaper than it was 6 months ago. And it's good dirt too!!!
Of course I am not complaining about the current situation ... it
suits me perfectly because I am looking at a 10-15 or 20 year
time-frame. All those "short-term" gain chasers are now losing their
shirts ... and helping me pay for my wife and son's future. I like this
"free-market" stuff! :-)
Shane
----------------------------------------------------------------------
Mr. Shane Wall
Managing Director
Trans Lingual Express
188/16 Nguyen Thuong Hien St,
P.1, Q. Go Vap, HCMC,
Vietnam
Mail: shane.wall at translingualexpress.com
Web: www.translingualexpress.com
Ph: +84 (8) 588 1701
Mbl: +84 (090) 9484 753 (English)
Mbl: +84 (090) 7885 375 (Vietnamese)
Craig Stevenson wrote:
> [ Vietnam Business Forum ]
>
>
>
> ------------------------------------------------------------------------
>
> 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
> <mailto: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 <mailto: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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