There is a whole series of "M" somethings, M0, M1, M2, M3, M4 and so on, each successive layer includes all the things contained in the previous layer, plus new things, for example"

MO is the total amount of paper money and coins in circulation, plus the current amount of central bank reserves.

M1 is the most frequently reported headline number. It is MO plus money held in regular savings accounts and in travelers' checks.

M2 is all of M1 plus money invested in short-term assets that mature in less than a year, like some certificates of deposit.

By the time you get up to M4 there are items included in there that are illiquid and don't mature until 5 years hence.

The levels in each of the M's fluctuates according to what's happening in the economy, importantly, value moves from one level to another rather than going away entirely (usually).

Because interest rates have been high and are forecast to decrease soon, money has moved out of cash and into longer term investments, so as to lock in the higher rates of return. Instead of being happy with 1% on his instant access account, John has now moved all his excess cash from his instant access account, into a 3 year fixed deposit at 5%. That resulted in an equivalent amount, moving from M0 to M4. The problem is that M0 is what banks use to lend to customers when they want to borrow, so if M0 (or increasingly, M1 and M2 also), start to shrink, the ability of banks to lend becomes constrained and lending is how banks make their money. That is a liquidity crisis.

One solution is for the Central Bank to lend money to the banks, in the form of credit, using the long dated instruments as collateral, this means Johns 3 three year Fixed Deposit is now being used to guarantee the banks loan from the Central Bank which in turn means the banks can lend once again. But what if the bank is unable to extend that credit? Well, the government would have to turn to the IMF for a bail out. But since Thailand has over USD 210 bill in Foreign Currency Reserves, this aspect is moot. 

Of course, there also was a last year's low.

Octobers low of 37.23 was when the USD DI was at 106.65 on 8 October.

Today we're at 36.69 and the USD DI is at 104.38.

That tells me that most of the weakness results from an overly strong USD which is in line with other EM currencies.

This is a similar issue, many if not all countries are actively adding to their gold reserves, not just China, even EM's are doing so. Dollar confidence and US debt are the core issues.

US CPI report is due, strong odds are that inflation remains high. If it is, rate cuts look further out, which means USD remains strong.

THB as above, a good chance of weakening.

Somebody mentioned central banks buying gold. I've decided everyone thinks we're going to war, that's why they're buying.

About this, ferkin loonies!

time.com/6333748/thailand-digital-wallet-cash-handout/