Chile Forum

So I'll take it nobody knows whether Chile's banks have depositor insurance?

Check here:

http://www.sbif.cl

CLP-637.50....USD has now broken above the critical 82-09 level on DX....EUR in meltdown...1.33....MXN...lost 40% value in 3 days....Gold down 9%...Silver down 20%....

The Chinese and other U.S. debt and dollah holders will be paid!...

MikieO wrote:So I'll take it nobody knows whether Chile's banks have depositor insurance?

108 UF per RUT according to my bank executive. At todays UF that is about 2.3 million pesos. At todays dollar that is about $3,500 at last weeks dollar about $4,000.

Got to correct that about the insurance on accounts at Chilean banks.

Checking accounts, savings accounts, valle vista are 100% covered with no limit by the Chilean government (well until they go broke anyway).

Certificates of Deposits have a 90% insurance, up to 108 UF.

The law:

Garantía Estatal y Preferencias para los Depósitos y Captaciones


Las normas de la Ley General de Bancos (artículo 65, 123 inciso quinto, 132 y artículos 144 al 153) aseguran a los depósitos en moneda nacional o extranjera de un banco o sociedad financiera, los siguientes pagos:

PRIMERO:

En el 100% de su monto:
1) Los depósitos en cuenta corriente
2) Los depósitos en cuentas de ahorro a la vista
3) Los demás depósitos a la vista
4) Los depósitos en cuentas de ahorro a plazo con giro incondicional.


SEGUNDO:

En un 90% de su monto total, con tope máximo a pagar de 108 UF., en todo el sistema financiero por cada año calendario, los depósitos a plazo que cumplen con los siguientes requisitos:

1) Que el titular sea persona natural
2) Que se trate de depósitos a plazo mediante documentos nominativos o a la orden incluso con libretas de ahorro a plazo con giro diferidos.
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As for the discussion of a possible real estate collapse, if it happens in Chile at all it will be related to the commercial foreign ventures in the Central Region. Good old land prices have been fairly flat over the last year, with I would say a slight increase in price in some areas.

Hell, down where Vicky is a volcano exploded and we are still getting inquiries about land from foreigners that do not seem to really care now that they can get more pesos. The Chilean market is still mostly internally driven, and Chileans still have credit and money to buy. There is plenty of land around. With the exception of Santiago developments, there is not sufficient foreign money floating around that it will make a big difference if it leaves in terms of real estate prices.

1 USD = 636.500 CLP

Please forgive my ignorance, but what is the difference between the peso and UF?

On the bank run issue, I just read an article the other day (can not find it now) that talked about the new digital bank runs and how they are not like the runs we think of in the great depression. Most of the banks that have had bank runs so far have had like 90% of the money removed by the internet, not people standing in line. So, essentially a bank executive can go give a press conference that everything is fine with their bank, and by the time the press conference ends the bank can be insolvent. No lines, just rumors are sufficient to get people to point, click, and collapse a bank that is even just moderately strapped for cash.

Thanks for clarifying, it seemed a bit low. Now I don't have to put my extra savings underneath my mattress. We were talking about CDs when I brought up the subject... Mi espanol ya no es perfecto.

Also FYI, CDs are giving approximately 8% annualized return. Sounds great until you factor in the likely 10 - 11% annualized inflation this year.

I Royal, true, but it still beats what US banks are giving, insured to 100k by the govt.
I'm about to move some money around to take advantage of the lower CLP.
I would prefer to wait on buying anything else until we see how things pan out (as in will home prices tank?) and was looking at getting some shelter from inflation
in a CD while I wait, but if I'm only covered to 108 UF I'm better off in checking. Mainly, I don't want to shift a load of $ to Chile only to lose out as Citibank/Edwards go under.

The Economist magazine says that inflation rates in "industrial" economies are around 4%, while inflation rates in "emerging" economies are about 8%. so this means that it's better to keep the bulk of our holdings in USD, right? but the exchange rate is very favorable now between the USD and the CLP....and becoming more favorable day by day.....this suggests that it's a good time to convert dollars to pesos.....which contradicts what the inflation rates suggest. am i getting this right? any ideas for a good plan over the next 6 months? cash out an annuity and move funds from CDs to cash when the CDs mature....then convert to pesos while the exchange rate is still favorable?

btw....i am another one of those who has been very conscientious about NOT living in debt and conserving ALL resources, while teaching in the inner city and NOT profiting off of the greed of others. i accept no responsibility whatsoever for the bad lending or the bad borrowing or the bad "debt products". the ignorance here is as stunning as the consumerism is. i'm happy to leave this rotting society and start over......82 more days....

Adding the icon was fun

cashpoor wrote:Please forgive my ignorance, but what is the difference between the peso and UF?

I don't believe anyone answered your question - in a nutshell a UF (Unidad Formeto) is a number on a table that represents a relative value in pesos, so if I buy a house for 100UF, but inflation wacks the peso, it holds the same relative value over time - the number increases (or could decrease) based on the published UF tables. UTM's are larger amounts, and the peso is all over the table w/ ups and downs. The US will need a UF soon as inflation gets out of hand.

Here's a link:
Unidad de Fomento - Wikipedia, the free encyclopediaThe Unidad de Fomento (UF) is a Unit of account that is used in Chile. The exchange rate between the UF and the Chilean peso is constantly adjusted to ...
en.wikipedia.org/wiki/Unidad_de_Fomento

So anyone for a bank holiday? Futures #s are down, gold is off ... Corrective rally before another wave?

Articles I found interesting:

Wednesday, October 8. 2008
Posted by Karl Denninger at 03:38

Time Is Up Congress - And America
http://market-ticker.denninger.net/arch ... erica.html

I know RGEMonitor has been posted before but can't recall if yesterday's article made it:

The world is at severe risk of a global systemic financial meltdown and a severe global depression
Nouriel Roubini | Oct 9, 2008
http://www.rgemonitor.com/roubini-monit ... depression

eeuunikkeiexpat wrote:30 Day T-Bills are hitting bottom because in a financial system meltdown, they would be the last cash holding instrument to fail.

As US debt went above $10trn at the end of September (and some forum members, I believe, made a small contribution to this event ), and the national debt clock in Times Square, New York, has run out of numbers (the dollar sign has been turned into a '1'), why not post an idiot's guide to the safety of 'safe havens' on this board?

What would be the first Treasury instrument to fail and why?

In case any of the Treasuries fails, what happens to the secondary market in US Treasuries?

Is that correct, that the shorter the term, the safer the Treasury instrument, and why?

Does that mean, that even a newly issued 4-week T-Bill would be safer than, say, a 26-week T-Bill issued 22 weeks ago (i.e. that also matures in 4 weeks), and why?

The die has been cast, might be too late to do anything to save one's stash and even if not, it may all be futile if all paper burns.

All we can do now is wait while the minions of the Masters of the Universe maybe call for a worldwide bank holiday and hopefully present a workable new Bretton Woods type system (granted, for their benefit not ours) instead of ineffective posturing and stop-gap measures that fail after two days.

Cash in hand for the short term - try for low denominations and coins for everyday consumable transactions.

USA T-Bills - two options, a Treasury Direct Account or a MMF that invests solely in short term T-Bills and NO OTHER AGENCY OR COMMERCIAL PAPER. Problem with Treasury Direct and MMF, you still need a bank account to ultimately covert to physical cash so if the banks are SOL, well ... so one may just have to rely on a FDIC insured bank account (though the FDIC is broke) for your liquid cash. Banks, two views; use the Weiss ratings and similar to find "safer" than other banks to put your cash into or put it into what is considered too big to be allowed to fail banks.

Gold - to preserve value through the crisis till stability returns.

If all paper burns, Mad Max Road Warrior time in the States and hard times though probably survivable in Chile.

i am pessimistic, but i am not THAT pessimistic. while it's true that human avarice has put us all into this stew (whether we participated or not we have to deal with the reality at hand), it is also true that human practicality will emerge in various forms to get us off the burner. i hope.

it seems clear that the world will evolve into something new and different. there are major adjustments to the structures of power taking place as we speak....the fault lines have ruptured and the earth is still shaking....lots of BIG changes coming....not only a new US president and a new cabinet, but also economic relationship around the world, the structure of the global banking system, the way the american population spends/saves money. this is a good time to be on the sidelines, poised with resources, observing, studying the situation as it evolves and taking advantage (in a good way, of course) of opportunities when they arise. investment in essential commodities like food and energy make a lot of sense right now, both for personal security and also for long term profits/savings.