Chile Forum

Our original thread had carried on for so long, and wondered all over the place, I thought it might be time to start a separate thread to cover 2008.

The original Chile peso exchange rate and Global economic outlook is here:
/viewtopic.php?t=1037&highlight=2008

THE POLL IS NOW FOR THE REST OF THE YEAR. You can change your vote until then if you would like, in hopes of better reflecting peoples expectations of what is going to happen. Each user now gets 3 votes to select, given there 3 top choices for most likely movement in the exchange rate. It essentially allows us to collectively weight dynamically weight the poll in terms of confidence of direction for all members. DON'T FORGET TO COME BACK AND UPDATE IT.

I think people holding Euros living in Italy, Portugal, Greece, Spain, and France have a once-in-a-generation (if not lifetime) opportunity to realize wealth thanks to their Deutsch Mark-like strong currency. It is not going to last forever and the naked emperor that is the current Euro will be shown to have no cloth by early next decade when civil servants retire in droves with their big pensions. This is a much longer horizon than the daily vagaries of FX markets though, but we plan to sell our Euro assets this year and convert a good portion of them to a mix of USD and CLP (as it looks we're going to like it here for a while).

That said, copper had a nice recovery so far this year from a couple months ago. As long as its high price is sustained, I don't see the peso going down too much. There's enough inflationary pressure in Chile that the central bank can't lower interest rates much. This creates a carry trade opportunity from USD into CLP, given the plunging "helicopter Bernanke" rates in the US. Even if the Chilean central bank buys as much US treasuries/bonds as they can, I don't know that they can do much if there's going to be a lasting 2%+ rate spread between the two countries, given Chile is rated as a rather stable country.

http://www.topforexnews.com/2008/01/18/ ... eculation/

It begs the question for us earning in dollars and spending in pesos: what is the right timing to convert USD into CLP? I may want to have more money sitting in a bank here rather than in the US. I'll spend locally eventually. Need to look into opening a savings account...

otravers wrote:... Need to look into opening a savings account...

Speaking of which, has anyone else down the (only RUT needed) BCI account? Details like the ease of accepting incoming international wires, debit card for local and maybe international use, fee schedule??

I'm taking a lot my dollars out the states this week just to better balance the books. Living in a peso economy, I believe I would rather get caught with pesos in the short term.

I think we are going see some swings however after we get an idea about the democratic nomination today. Super Tuesday in the States today. I am betting that markets will take any sort of certainty as a good sign (no matter how small), over the last 8 years of total uncertainty.

I'll also stress again, all fiat currencies will eventually go down together in a devaluation race to the bottom unless a group of countries wise up and directly back their currencies with commodities and gold and silver.

I've shown the charts in the previous thread and nothing has come close to preserving your purchasing power in the USD/CLP game over the past six years than oil, silver and gold.

eeuunikkeiexpat wrote:I'll also stress again, all fiat currencies will eventually go down together in a devaluation race to the bottom unless a group of countries wise up and directly back their currencies with commodities and gold and silver. . . .

Though I agree from an economic standpoint, I wonder whether (short of virtually worldwide collapse) we shall see such a change in our lifetimes. Bimetallism is impracticable, of course, as is a true silver standard. Europe really abandoned the gold standard for all practical purposes by the end of 1915, and the United States in 1933. Political cynicism combines with "consumerism" to make a return to any solid currency very, very unlikely in any present-day democratic state, I think.

I am on the land standard. There are alternatives to oil and other commodities, but you can not eat most of them. Land with an increased population growth in the World will always have some value. At the least, I can kick back and enjoy the view. Looking at bricks of gold just does not does not hold the same fascination for me as a mountain view.

funny that you are talking about this. check this out:

Antal Fekete wrote:In my last article I suggested that the superpowers China, Russia, and the United States may be, without they knowing it, racing towards reopening their Mints to the monetary metals.

hey, dig the verb "racing". could it be? ya pays ya money and ya takes ya chances.
here is the link(?) to the real thing: news.goldseekdotcom/GoldSeek/1202220328.php
jon

admin wrote:Our original thread had carried on for so long, and wondered all over the place, I thought it might be time to start a separate thread to cover 2008.

The original is here:
http://www.allchile.net/chileforum//vie ... light=2008

Peso today looks like it is going to be 473 against the dollar, as the Euro has been bit by some bad economic news. We might see a recovery.

It's been said "there are no athiests in fox holes" and lately I find myself on bended knee praying this dollar will recover.

admin wrote:I am on the land standard.

I was . However in the States it is very expensive to hold land.
Taxes, insurance Tickets (for weeds, fencing/garbage) etc. add up fast.

admin wrote:I am on the land standard. There are alternatives to oil and other commodities, but you can not eat most of them. Land with an increased population growth in the World will always have some value. At the least, I can kick back and enjoy the view. Looking at bricks of gold just does not does not hold the same fascination for me as a mountain view.

But that gold can be exchanged for land or other things after its value goes up and it needs to be unloaded to rebalance your portfolio. I'm looking to buy some Chile RE if a medium term spike happens in POG and POS. Its about preservation of purchasing power not an end in itself.

Yeah I've come to realize that personal wealth is not just about value creation but also storage and preservation. That's a lot of work even after you've created the value and made it liquid!

yea, I was referring to land in Chile. That fools gold up north will have to come down a bit in price some more; although I have half considered going bottom feeding at some of those busted mortgage auctions. Perhaps later this year.

The Dow dropped 370 points today. According to CNBC, Wall Street wants another interest rate cut before the next scheduled FOMC meeting, which is March 18. If Helicopter Ben drops another round of cotton candy on Wall Street, look for the dollar to take another dive. Looks like the prediction of a 450 peso to the dollar exchange rate will come true.

briloop,

That will be the true test of Chile's democratic government and the supposed independence of the Chilean Central Bank.

Will they cave into direct intervention demands by exporters? Will they then find themselves proceeding towards the path leading to the Argentina disease?

Stay tuned folks ...