Chile Peso 2016, starts at 717

Chile Investment, how to invest in Chile, what to watch out for when investing, economic issues, currency exchange in Chile, and more.
john
Rank: Chile Forum Citizen
Posts: 6162
Joined: Sun Oct 19, 2008 1:11 am
Location: Viña del Mar, Chile

Re: Chile Peso 2016, starts at 717

Postby john » Thu Dec 15, 2016 3:46 pm

admin wrote:
That whole Fitch negative outlook was based on half-ass management of the bachelet administration of the economy. None of it had anything to do with anything external, perhaps beyond the price of copper. It was all self-inflicted policy moves by bachelet's clown car economics team.


That's not how I read Fitch's outlook...it appears to be structural in nature, as the following excerpt from that outlook indicates.

Fitch Affirms Chile at 'A+' ; Revises Outlook to Negative
http://www.reuters.com/article/idUSFit983477

As Chile's slowdown has appeared increasingly to be structural in nature, potential growth estimates have been cut (e.g. to 3% in 2016 from 4.8% in 2013 by the independent budget committee) and prospects for per-capita income convergence with the 'A' median have dimmed. The reform agenda aims to address bottlenecks in human capital and social equity, but businesses have reacted negatively as the near-term implications for profitability (due to higher taxes and new labor laws) have overshadowed the potential long-term benefits.
One must care about a world one will not see.
--- Bertrand Russell

frozen-north
Rank: Chile Forum Citizen
Posts: 1411
Joined: Wed Jul 18, 2012 1:28 am

Re: Chile Peso 2016, starts at 717

Postby frozen-north » Thu Dec 15, 2016 5:33 pm

admin wrote:
Chile needs to sell codelco. It sucked up 4 billion this year in capital from the country to stay afloat. Either the state becomes a passive investor or they sell it. Probably better if they just tax the output, and let it sink or swim as a public company on its own.

The communist and left however don't want to sell the sacred cow, and they seem like they can not agree on modifying the military fund. The left will lean towards not funding the military at all, if given a chance to mess with it. They have been doing everything they can to try and claw back mining rights from any company they can find an excuse.



The 'sacred cow' was created by the right-wing military government, and I doubt that any changes to Codelco could be made before the derogation of the 'Ley Reservada del Cobre' (https://es.wikipedia.org/wiki/Ley_Reservada_del_Cobre).

It seems that both Piñera and Bachelet presented projects to derogate this secret law, but neither was successful. It seems that Piñera's did not go past the Cámara de Diputados, and it could have been for the reasons here: http://www.elmostrador.cl/noticias/opin ... del-cobre/

Bachelet's project seems to have been blocked by the senate.


Exclusivo: esta es la secreta “Ley Reservada del Cobre”
http://www.elmostrador.cl/noticias/pais ... del-cobre/

La principal diferencia entre las ideas de Bachelet y Piñera para derogar Ley Reservada del Cobre

En 2009 la actual Mandataria presentó su iniciativa al Congreso Nacional, mientras que en 2012 el ex Presidente Sebastián Piñera también hizo su propuesta. Ambas duermen en el Parlamento.

http://www.emol.com/noticias/Nacional/2 ... Cobre.html


User avatar
fraggle092
Rank: Chile Forum Citizen
Posts: 1055
Joined: Fri Mar 28, 2008 6:35 pm
Location: In Chile

Re: Chile Peso 2016, starts at 717

Postby fraggle092 » Thu Dec 15, 2016 5:36 pm

Here is the opinion of a local economist, Alejandro Alarcón from El Mercurio on why the economy is doing badly:
".... intuyo por evidencia separable que la mayor proporción es responsabilidad de la gestión de gobierno. Perú está creciendo cerca del 5% y también ha sido impactado por la caída del precio del cobre. Nosotros este año creceremos cerca del 1,5%".

Its possible to assert that Venezuela's problems are also "structural" in nature.
Après moi, le déluge

User avatar
admin
Site Admin
Posts: 14460
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Chile Peso 2016, starts at 717

Postby admin » Thu Dec 15, 2016 6:38 pm

(due to higher taxes and new labor laws)


That is not structural, that is policy, that is political agenda.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

john
Rank: Chile Forum Citizen
Posts: 6162
Joined: Sun Oct 19, 2008 1:11 am
Location: Viña del Mar, Chile

Re: Chile Peso 2016, starts at 717

Postby john » Thu Dec 15, 2016 7:40 pm

admin wrote:
(due to higher taxes and new labor laws)


That is not structural, that is policy, that is policy, that is political agenda.


Policy that is designed to address structural problems. The following IMF report highlights Chile's structural issues (ref. D. Structural Reform Agenda):

Chile: Staff Concluding Statement of the 2016 Article IV Mission
https://www.imf.org/en/News/Articles/20 ... IV-Mission
One must care about a world one will not see.
--- Bertrand Russell

User avatar
admin
Site Admin
Posts: 14460
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Chile Peso 2016, starts at 717

Postby admin » Thu Dec 15, 2016 7:41 pm

Neither her tax increase nor her labor law, did anything but shoot the economy in the foot. The education reform is dead in the water. The tax she claimed she was bringing in to the government, was in fact lost somewhere else when she killed the economy. The labor law looks like they poison pilled it from the start with crap she knew would not pass through the courts. At least that dog got a bit of lobotomy before it was set loose on the economy, but now no one is sure exactly how to apply it.

So, the country finds itself with a half-ass union law that neither helps workers, nor helps employers. That was likely one of the greatest missed opportunities to fix and modernize the labor laws in decades, both for workers and companies. instead they tried to pass some attempt at some Marxist inspired crap law that was designed to destroy and punish not just companies, but entire industries. It was not designed to get workers better wages and pay, but put companies out of business permanently. The workers can wave their signs all they want, in front of a company that is not coming back.

It is not an accident that the biggest fastest growing companies in Chile, are guess what? The ones leaving the country. They are expanding in to other countries. They are doing most of their long-term investment in other countries. The Chilean companies that did not see the writing on the wall, that stuck to the domestic market, are mostly just limping along. The ones that are growing are buying up companies and expanding in to other countries. Latam merger, everyone knows about. BCI just bought a bank in the United States. Copec just bought a chain of gas stations in the U.S. Fallebella is opening Sodimac in Mexico, while the unions in Chile have shut down sodimac stores in the south for over a month. Everyone is investing in Peru, Colombia, Mexico, and so on.

hell, we might even give Bachelet a bit of credit for encouraging the biggest expansion of foreign investment by Chilean companies in history, in to other countries.

Now she wants to go screw around with the AFP? What they are proposing with the AFP is nothing less than tax increase for companies, and very little in the way of fixing the problem. Let's give more money to the morons that can not beat a monkey with a dart board with their investment picks. Seriously. I think I have made more money this year than all the AFPs (all three risk profiles) just on a crappy bank CD. The chilean stock market is at a three year high. Just an index fund of the IPSA has returned 15%+ this year. The better companies are up 40-60% this year. What the hell are those people investing in that they can not turn more than 2 or 3% a year, with one of the better performing stock markets in the World in 2016?

That is the problem with all of it. What they are proposing is not going to make poor people richer. It will definitely make their buddies richer. It will make the poor people more dependent on them. There is not one thing they have done that is not geared towards locking in a future voting block of poor.

But, now is really the time to watch. As the election approaches, 2017 will be the year that bachelet's clown car starts stuffing the silverware in their pockets on the way out the door. They have already started with the mayor's offices. The PDI just raided the Puerto Varas mayor's office, because 500 million pesos in money, office equipment, and so on was stolen as the mayor left town. Our socialist mayor that got the boot in our local town in the last election, signed a pile of contracts on behalf of the city on the last day, then resigned before his term was up to try and run for congress. The new mayor has requested investigation, and is spending his first months in office trying to cancel a bunch of shady contracts.

2017 is going to be a lot more of the same, as no one is in charge of the government right now. It is the total Lord of the Flies, lame duck administration.

I am all for socialism in theory. Chile is a developing country. Public and private money needs to be spent on developing it. I am however not for corruption pretending to be socialism.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

gjz333
Rank: Chile Forum Citizen
Posts: 150
Joined: Wed Sep 28, 2011 4:05 pm
Location: Concepción

Re: Chile Peso 2016, starts at 717

Postby gjz333 » Sun Jan 08, 2017 3:38 pm

Is there going to be a new peso thread for 2017? I've been gone for a few years but might meet up with a friend there next December/January and was wondering if it might be a good idea to buy pesos now because the exchange rate is better now than it ever was the couple years while I was there even though it was much better a year ago than now. Any opinions on what it will be a year from now or with the elections is it just a complete gamble?
If the good lord had intended us to walk he wouldn't have invented roller skates.

User avatar
admin
Site Admin
Posts: 14460
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Chile Peso 2016, starts at 717

Postby admin » Mon Jan 09, 2017 8:55 am

yea, probably time to retire this one.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
admin
Site Admin
Posts: 14460
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Chile Peso 2016, starts at 717

Postby admin » Mon Jan 09, 2017 8:57 am

Here you go, 2017 thread
viewtopic.php?f=23&t=14304
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.


Return to “Chile Investment, business, and Money Issues”

Who is online

Users browsing this forum: No registered users and 2 guests