Chile Peso 2016, starts at 717

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seawolf180
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Re: Chile Peso 2016, starts at 717

Postby seawolf180 » Sat Mar 12, 2016 12:35 pm

The Federal debt is cheaper for the government with a weaker currency, lower rate, and inflation.
This is a sellout to the tune of 20 Trillion dollars. To finance a progressive ponzi scheme of epic proportions.
Federal Scum Bags.
Considering copper, economics, etc locally, the dollar should be going ballistic.
We are all financing Obama's pathetic legacy of waste, and future statism.
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Re: Chile Peso 2016, starts at 717

Postby admin » Tue Mar 15, 2016 6:41 pm

hey, time to play 'bet the fed' one more time.

683 as I post this to the dollar. Copper and commodities in general have been picking up a little bit. Everyone has sort of taken ignore China stance, for now. Brazil and a few of the other local basket cases have stabilized to improved. Latin america, a little bit, is cool again for international investors. Euro is getting QE for it's QE.

Speaking of local basket cases, here is an interesting article on a study comparing the economies of Chile and Argentina in forbes:
http://www.forbes.com/sites/hbsworkingk ... f7b8813378

Pretty much nothing any of us that have been to both did not figure out in the first 10 mins on the ground in both Chile and Argentina, but interesting historical comparison none the less.

My bet is the Fed chickens out for at least one more meeting, at least. Which means weaker dollar, increase commodity prices. All good for Chile. The markets are far too spooked to handle a rate hike, and even the fed can not handle Donald trump in the white house. Which don't forget, with such low interest rates, not raising rates is the same as a mega QE by historical standards.

Chile from my own limited ground view, seems to be chugging along. No real economic 'woooooooo' going on, either good or bad; and, I guess that is all good given the global mess. There is some growth. Unemployment is fairly steady. Inflation is mas o menos. Considering half the world has too much inflation right now, and the other half has too little, I guess Chile is in a Goldilocks zone of inflation. 3-4% or so. IPSA Stock market is starting to show some signs of life. Not sure I would call it a bottom, but whatever.
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Re: Chile Peso 2016, starts at 717

Postby admin » Wed Mar 16, 2016 9:09 pm

well, that was a none-event. 686. really don't understand what is moving the peso any more. got nothing.

copper moved up, perhaps, had something to do with it. not sure.

well, no rate rise for a while, and fed says fewer rate rises when it does happen. QE is back!!!! again, like a B movie series, they just can not kill because there are still sufficient suckers willing to pay good money to go see it.

Fine with me. lit a fire under my energy stocks. Who cares how much oil the Iranians are pumping, when the dollars are free to buy it, or more exactly the credit is cheap to drill it.

The oil markets are all about credit right now. It is a big game of chicken to see who can borrow the most while getting the closest to bankruptcy without actually going bankrupt. Perhaps a more fitting description is it is a big game of Russian Roulette.

So, the story goes there is suppose to be 1-2 million barrels of excess production a day on the market, plus reserves that have built up. Let's see what is in the revolver chamber, and who is going to catch the bullet next.

Venzuela has already blown it's brains out. someone get the mop. Whatever numbers they are reporting is pure socialist propaganda bullshit. They can not even get the dilutants to move the oil they have, let alone keep drilling to hold production. I would not be surprised to wake up to a report they are really producing less than a million barrels a day.

The other smaller south american producers, collectively, I guesstimate are giving up somewhere between 300,000 and 500,000 barrels a day less.

Brazil, has got to be at least another 300,000 barrels a day down, due to petrobras and economic issues.

Mexico just privatized their industry, sold the rights, and no one showed up for the auction but small producers. No one is drilling that any time soon.

Nigera has a pipeline issue taking 300,000 barrels a day off the market.

Iraq has a pipeline issue taking 300,000 barrels a day off the market.

Iran is suppose to drop 3-4 million barrels a day on the market, but 500,000 for the moment. So far, they have sent one extra oil tanker to Europe since sanctions were lifted. that is under 2 million barrels, in two months, not per day.

Russia is chugging along, but I don't buy their numbers either with the economy in a tail spin, winter coming to an end soon, they will give up the ghost. we will find out they are really not pushing 10 million a day. Perhaps more like 8.

Saudia aribia is full of shit, they are not pumping 10 million + a day. Not for very long anyway. They can keep up appearances, because they opened a massive oil hedge at prices well above $80, and have been hedging all the way down. Just before they started this glut, they hired a pile of the best oil traders in the world and created a dedicted company to do just hedge oil. No one is really talking about it, but they are fine for money. They don't need to pump more oil, they can just pretend to pump that much, while making good money for a long time to come.

The IEA says that the pipeline problems have cut like 700,000 barrels a day. Bullshit. They got called out recently for their 700,000 missing barrels of oil in public and had to cover their statistical rear.

Canada, they are shutting down everything they can, while they can. some of the oil sands are paying to give away their oil. negative prices. good luck with that.

frackers in the U.S., have seriously dialed back. Still, there are drills running, wells unfinished, and plenty of companies that are so far underwater they can not afford to stop drilling even at a loss. That said, the boom in output and drilling in November and December was obvious because if you know oil is going to under $30, better to get as much out of the ground as you can at $40 dollars. Those fast fracks will be dropping in production in the next few months, and we will see oil production in the states tank. Still, many of the rest will be able to hang in there at $35+. In other words, all the saudis managed to do is trim the fat off the u.s. drillers, weed out the weaklings, and provide super deals for those that were not leveraged up.

Say you have an oil company, that has 10 billiion in assets (wells, drills, and whatever). It leveraged up 10 to 1 to build those assets, it goes bankrupt, and the next guy picks them up for 5 cents on the dollar in bankrupts. The cost basis for developing those assets for the next fraker just got way cheaper. What use to cost $60 a barrel to produce, now costs some lucky company $20 a barrel to produce. The survivors can now take the Pepsi challenge with the Saudis and iranians for costs per barrel in the cheapest oil in the World.

My guesstimate, at this point, we are easy 2 million barrels a day short of demand. Perhaps even a lot more. We are going to wake up one day with all kinds of fake shock about how there is a sudden oil shortage. As someone recently described it, the oil rally will "rip your face off".

That however, might also rip the face off the global economy. Nothing has such a hard historical link to recessions, as sudden oil shocks.

The good news, this will likely be the last great gasp for oil. This will be the last great oil rally. Possibly north of $100+ U.S. a barrel, and then a combination of renewables, electric cars, and return of the frakers and other marginal players will put oil on the same trajectory as coal. Natural gas might hang in there a while, but oil will start falling out of fashion. There will not be any peak oil. just a slow drip, drip into obscurity, perhaps used in very specific things like plastics and so on, but no more 100 million barrels a day demand. all going the way of the dinosaur (wait they are the dinosaurs). Perhaps it might take another 50 years, but it will happen.
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Re: Chile Peso 2016, starts at 717

Postby admin » Sun Mar 20, 2016 1:50 pm

hey, we hit $671,97 this week. Grandma (the fed) shot the dollar in the foot, and gave a shot in the arm to slumping commodities prices.

I seen a report on TVN that Chileans are rushing to buy dollars as it get's cheaper. Not sure a 25 peso slide makes that worth it, especially if it keeps on sliding, but they feel all warm and fuzzy sticking those dollars under the mattress.

A couple of weeks ago some executive at a bank in Chile made a comment to us about how Chileans get investing in currencies ass backwards. When the peso is 700+ to the dollar, people are rushing to buy dollars when it moves down just a few pesos. When it was under 500 to the dollar, no one is interested in buying dollars.

I grabbed all the pesos I could well above the 700 line, just in case, in spite of my own suspicion there is still a good chance of a run towards 800 in the cards sometime in 2016. Kind of like finding money, literally. I live in a peso economy, and have very limited use for dollars unless I am going on vacation or something.

Current short-term thoughts now is we might see a run below 650.
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Re: Chile Peso 2016, starts at 717

Postby bazzasoft » Mon Apr 18, 2016 10:16 am

On your site you very helpfully give exchange rates for all manner of currencies but not the British Pound !! :( Why ? Baz

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Re: Chile Peso 2016, starts at 717

Postby admin » Mon Apr 18, 2016 11:46 am

no reason. just use of real estate for the most used currency. Those are just quick reference rate.
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Re: Chile Peso 2016, starts at 717

Postby admin » Sun May 22, 2016 10:48 pm

sorry, guys been a while. Been very busy with various day to day life things recently.

so, here we are again. flirting with 700 again, after our run down to the 650ish range.

I am attributing almost all of this to the the expectations of the Fed, killing commodity price, even if they don't raise rates in June. We might blame a bit of this on oil, as Chile imports most of it's oil, and oil has more than doubled in price in recent months ($26 to $48 as of this post).

Chile's economy I would not describe as particularly robust, but not doing too bad either. Definitely not Venezuela. Acutely, kind of looking around the neighborhood, not producing oil seems like a good thing. All the oil producing countries in South America have really gotten beat hard this year, even if it is not all directly related to oil (being a politician is always harder when the country is broke).

I am still convinced, and holding a lot of dry powder, the international markets are way, way overdue for a big crash in either 2016 or early 2017. this bull market is bullshit. I am with the guys calling for a 1500-1600 on the S&P 500 sooner rather than later.

I screwed up my Gold (miners not rocks) bet last year. I bought in too early, got bored when nothing really happened, sold, and then watched the mining stocks take off. I still think my basic thesis was right, just got the timing wrong. Sufficiently so that I am back in Gold miners, and if you have been following along, know I am not a fan of Gold as an investment medium.

The one thing, that I heard in an interview recently, that made the most sense of all the b.s. floating around: the U.S. federal reserve is dammed if they do, and dammed if they don't.

We seen this during the last little rate hike experiment, when the fed tested the waters. They raised, and the stock market crashed. They don't raise, and they are creating an even bigger bubble (how much bigger is really baffling, but bigger), and the stock market will crash.

This is not going to end well. The kick the can down the road policy, is running out of road. When it happens, emerging markets are going to get clobbered. Not sure how. Perhaps China's domestic debt goes off the charts. Perhaps Venzuela bites the bullet. Europe. Whatever. Something will not go well. I think ultimately the emerging markets will save the World, but they will still get a bad beating before everyone figures out the developed markets are dead.
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Re: Chile Peso 2016, starts at 717

Postby admin » Sun May 22, 2016 11:10 pm

So, the other bit of train of thought I have been meaning to share for a few weeks now is my thoughts on the U.S. I just got back a few weeks ago from a trip to Florida with the family. My first trip back in over 8 years.

I read the other day one of the most terrifying things I think I have ever heard a serious stock broker say, in a serious stock trading article. He said that his rich clients, in upstate New York, were regularly calling him to withdraw $50,000 to invest. Not in real estate. Not in some other broker. Not in some private company. They needed the money to build fences around their houses.

I agree. As we drove all over Southern Florida, Key west to about Orlando and back several times, I kept asking myself 'where are the trucks'? Where is the economic activity?

Every time I ventured in to a conversation with an American, in all kinds of different situations, it did not take long for them to bring the conversation around to how poor they were, or how the rich were getting richer, or some variation on that theme. It was really depressing.

I lost count of how many shopping malls I passed that were abandoned. Like malls that were easily more than 10-20 million dollars or more to build, perhaps 50 million, that were new, and simply never occupied. Many did not even have real estate signs on them. No one was even trying to move them. How many apartment building complexes I went by that had foreclosure signs still on them. Hell, if I had any faith what so ever left in the United States, I would have been all over them for investment. I have no faith left, and this recent trip just confirmed it.

Even more, everything was just worn out, tattered, and generally in disrepair. I have been living in developing countries for 25+ years now, and kind of expect some parts to be better than others; but, not like I recall the U.S. ever being. Just outright, passed it's expiration date.

It was an economic waist-land.

Any time you seen any sort of real economic activity, it was somehow tourism related or foreign money. There was nothing really going on domestically.

That economy is not recovering. I have seen economic recoveries in the United States. That is not what they look like. Especially 8 years after the fact.
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Re: Chile Peso 2016, starts at 717

Postby admin » Tue Jun 14, 2016 1:39 pm

o.k. the pesos has been rather dull recently.

This however may cheer (or freak out) those that wonder if we are at the bottom of a commodity super-cycle, and if interest rates can go any lower.

Lowest interest rates in 5,000 years, lowest commodity returns in 80 years.
http://www.marketwatch.com/story/charti ... 2016-06-14
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Re: Chile Peso 2016, starts at 717

Postby Dosedmonkey » Tue Jun 14, 2016 6:38 pm

In refernce to your empty malls. I was always astonished by howmany malls usa and chile has. The uk doesnt really do malls to the same extent. A small one sometimes, but not many big ones. And well since online shopping rocketed off over the last 15 years high street shops have just got less and less and many gone bankrupt purely because people are shopping online.

I have fond memories of visitng Florida 16 years ago, also drove from key west up to orlando, start finish in miami. I guess they will always have the tourisn there.

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Re: Chile Peso 2016, starts at 717

Postby john » Tue Jun 14, 2016 6:57 pm

One must care about a world one will not see.
--- Bertrand Russell

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Re: Chile Peso 2016, starts at 717

Postby seawolf180 » Sat Jul 02, 2016 3:28 pm

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