Chile Forum

OK I'm buzzed but I just can't help commenting on the analysis that WE ARE ALL responsible for what happened.

Yeah me, who never bought the consumer, keep up with the Jones'es, look good, smell good, live in debt like there's no tomorrow lifestyle but instead saved money, payed taxes, never accumulated major debt, lived extremely frugally for all the years of my adult life, never helping myself to the federal trough, with years of Libertarian voting and participation before leaving the States am partly to blame for this shit?

What would you have me do instead? Blow up a federal building? Assassinate government officials? Send home brew anthrax to the bank? Go on a shooting rampage at the mall?

You will hear more analysis of this type as this crisis deepens to assuage the guilt of the folks who had no clue and actually benefitted from my responsible lifestyle and tax dollar paying behalf.

Now we all suffer for the excesses of the masses and the stupidity OR intentional planning by the TPTB.

Screw you all who use that argument.

As a self employed, (also buzzed) business owner, I take that to heart.. . I've remodeled the houses of people who shouldn't have access to that kind of cash for years! Mortgage brokers who've had me out on their yachts, invited to secret parties at waterfront homes and are now abandoning said homes to the bank!
I guess one could say I benefited from their greed in a secondary way... but if I didn't do the work, someone else sure would have! Does this make me like a Nuremberg defendant? "I only obeyed orders"....... In any event, I have saved some small amount of these ill gotten gains and I'm wondering if the Chile real estate crash I'm hoping for is around the corner, the block or the moon?

I can relate, I worked on computers in well-to-do appearing people's homes from mansions in NoVA to the Watergate apartment complex in DC to luxury custom built homes in Maryland. So maybe I also indirectly benefitted somewhat from the craziness.

Salud <hic>

Not buzzed but making beer in Southern Chile is sounding better by the minute.

Ditto on the sweeping generalization - "we're all responsible." Perhaps from the system, but in terms of personal choice squeezing each peso until it screams like a good Scot, no way.

The fraudulent credit bubble is bursting. "Global crisis requires global solutions" seems to be a standard headline - TPTB must be quite satisfied. Bloomberg.com has a great summary of the news, but I'm curious what insights everyone can offer to expect, or at least anticipate.

Your letter of credit link article brings up a valid point - while the MSM pays attention to numbers and headlines, agricultural production may be a significant short term issue. I wonder if we will see shortages from shipping issues, slowing production, and see fear perpetuated from perceived or real scarcity. "A can of beans? $3 please if you can find it "Need a bandaid anyone? We haven't had a box of those since ..." It's not a stretch to guess scarcity may be a real issue and toilet paper jokes will get serious. Scarcity + inflation may contribute to more hoarding than we've already seen stateside - 2 bag limits on bulk rice, etc.

Stateside it's following a normal pattern of MSM - it's 24/7 coverage. People are talking about how much to pull out of the banks - the slow run is picking up momentum. The average individual getting out $1K isnt' an issue, but my perception is no longer localized - now systemic. That wave + failure to pay on debt other than mortgages may have a compound effect.

I've been asked a couple times recently about whether it would be wise to pull out large amounts - where to keep it? *Not my question* It's not the answer that concerns me but the question, and the across-the-board high level of concern.

Finally, 31 states are indicating serious deficits, and at least here but no doubt across the US and the city/county/state coordinated contingency plans have been discussed. It only makes sense, but again ...

So given where it's at, and appears to be headed, what issues can we reasonably anticipate? What will it look like in one year?

Petunio said, "It's not a stretch to guess scarcity may be a real issue and toilet paper jokes will get serious..." I guess I'll save these old telephone books. Seriously, I also wonder what everyone thinks things might look like in one year, or two or three.

My 3rd-grade opinion on real estate here in southern Chile is that unless energy or food prices become outrageous, real estate here will not be dramatically affected. I say this because it seems that most people here don't "need" to sell property. Unless someone is elderly and there is no one left to work and enjoy the land, or there is no great urgency for funds for some medical need, or child's overseas education, property just isn't going to be sold at a firesale price. I'm thinking that in general, things won't change much here in Region X. Can't speak for other Regions, and possibly I'm off the mark, or doing some wishful thinking here, but with plentiful water, a plentiful (if not terribly diverse) food supply, and an infrastructure that can adapt, this area seems poised to weather the storm. That's not why we chose here...it was fools luck (if I'm right). Credit here is more to the tune of my Grandfather's day...credit meaning you pay when you got it, for things you NEED, not want. The only thing that might change real estate here would be panic. If people panic, then there might be a fair drop in prices...I just don't see that happening as things here are pretty much unchanged since Futa was founded 79 years ago. Which reminds me, I should be building a chicken coop and buying some hens.

I still don't get the left is right, right is left thing here in Chile. If someone could explain.

I've got a question ... as the USD continues to shoot up in Chile over 600, will the prices of items change?

For example, an apartment I'm looking at to rent for 200,000 /m, is that going to be more expensive b/c of the dollar? Or a used car? Will it cost more pesos? Computers?

These are items that here in UY are always bought and sold in USD but in Chile it looks like they are all in pesos. I'm wondering if a really strong dollar is as strong as it seems, or if peso prices rise to kill some of that advantage?

Vicki and Greg Lansen wrote:...I still don't get the left is right, right is left thing here in Chile. If someone could explain.

Outside the USA, "Neoliberal" refers to classical economic liberalism exemplified by the Chicago School, Milton Friedman, etc.

A disputed Wikipedia article on"Neoliberal":
http://en.wikipedia.org/wiki/Neoliberal

More on the Chicago School:
http://en.wikipedia.org/wiki/Neoliberal#Chicago_School

In regards to Chile:
http://en.wikipedia.org/wiki/Neoliberal#Chile

Yes almost everything is in pesos and we all pay the same peso price of goods and services wether our income is in pesos, UF adjusted pesos or dollars.

So for now, USD holders are in the drivers seat as this kind of makes up for 30% plus (my guesstimate) general peso inflation in goods and services during the five year CLP/USD fall from 750 to 450ish back to 600+.

The heart of the matter in "bank runs" in my mind is whether/not one's funds will go down with the bank in the event of a collapse.
In the US, FDIC insures depositors to 100k, So my question is: Do Chilean banks have an equivalent backstop? Limits per bank?

To add to MikieO's post, we need some Chilenos to fill us in on recent history in Chile.

What was the national banking situation like in the turbulent 70s through the early 80s?

How did (1) the rich (2) the middle class preserve purchasing power and what was the preferred vehicle used as a store of value? I find it interesting that individuals in Chile unlike other parts of Ibero-America do not seem to have the tradition of hoarding USD currency as a hedge against their home currency.

eeuunikkeiexpat wrote:OK I'm buzzed but I just can't help commenting on the analysis that WE ARE ALL responsible for what happened.

Yeah me, who never bought the consumer, keep up with the Jones'es, look good, smell good, live in debt like there's no tomorrow lifestyle but instead saved money, payed taxes, never accumulated major debt, lived extremely frugally for all the years of my adult life, never helping myself to the federal trough, with years of Libertarian voting and participation before leaving the States am partly to blame for this shit?

What would you have me do instead? Blow up a federal building? Assassinate government officials? Send home brew anthrax to the bank? Go on a shooting rampage at the mall?

You will hear more analysis of this type as this crisis deepens to assuage the guilt of the folks who had no clue and actually benefitted from my responsible lifestyle and tax dollar paying behalf.

Now we all suffer for the excesses of the masses and the stupidity OR intentional planning by the TPTB.

Screw you all who use that argument.

I'd change the language but (save that I'm still in the States) otherwise agree with EE.UU. down the line. I am outraged that I now must pay, through inflation and taxation, for the greed of others. We're [b]not[/i] all to blame. And "homeowners"'s putting the blame on the lenders whom those borrowers sought out and with whom they then were complicit in deception for selfish gain is just as wrong.

MikieO wrote:As a self employed, (also buzzed) business owner, I take that to heart.. . . I guess one could say I benefited from their greed in a secondary way... .

I, too, am self-employed, as a lawyer. Half my practice is in international and estate-planning work for the rich, some of whom may have benefitted from this fraud, but most of whom are (I think) careful and reasonably honest; the other half of my practice is pro bono, helping the poor with everything from criminal trials to eviction proceedings.

I don't think that I've benefitted from others' greed in this situation. I know that I lost at least two clients when I refused to go along in their eager rush to obtain mortgages on properties by lying to the lenders. If I had been a fellow cheat and liar, perhaps I'd already have enough money to be Chile -- but I'd hope that Chile wouldn't want such a person as I'd then be.

This is sort of a time of opportunity isn't it?

With all the stocks going down so drastically -- if you picked ones that the most likely to be back to normal or better in 10+ years, you could clear a hefty profit, right? For example, I'm 24, if I invested just a modest $5k in a few wise places, 10-20 years from now those $5k in stocks should be worth a lot more, right?

I've been thinking of doing something like this. Am i an idiot? I don't know anything about trading so I'm not sure I should even if it IS a good idea, though

Actually Greg you are quite correct, this is a very good opportunity to acquire good stocks at a bargain price, the real trick is to minimize your exposure by doing some "dollar cost average" and by buying the stocks joining a company DRIP rather that on the open market.

Most large companies GE, Marriott, Coke etc have a program that allows the public to purchase their shares by sending them a set amount of money every month, the rules for this transaction are normally located on their respective websites under the tab "investor services", the dollar cost average concept comes into play when you send the money every month, sometimes you will buy higher and sometimes lower.

For further information look at those terms on the net.

Happy investing

Hugh

gregf wrote:This is sort of a time of opportunity isn't it?

With all the stocks going down so drastically -- if you picked ones that the most likely to be back to normal or better in 10+ years, you could clear a hefty profit, right? For example, I'm 24, if I invested just a modest $5k in a few wise places, 10-20 years from now those $5k in stocks should be worth a lot more, right?

I do see this as a great opportunity for some types of investing, however, if you where to expect say a 30% return over the next ten years, then you should really be concerned about inflation. Inflation comes when consumer confidence drops, unemployment rises, and the government goes on a wild spending spree to police the world and have simultaneous costly wars. Like now. So, if our dollar losses value Zimbabwe style, your $5k would be worth a soda, and any gains say even 50% could effectively upgrade your combo size at Burger King.

Warren Buffet is buying into Goldman Sachs, and the defense part of GE (whom is spinning off almost everything that isn't defense related), that should tell you where we are going. One of my investing mentors told me that energy is the only investment. No matter what we always need more, and there is always less and less.

I would consider putting your money into energy sustainability for where you live. If you could buy a couple of wind generators, and maybe even a solar panel, you would save that $5k over ten years in energy costs, and still be saving once you got your money (investment) back. Plus you would be helping the planet. Investing should always be a win win!

You are certainly right about every catastrophy is a investment opportunity.