What comes next? Chile peso, and economy 2019

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AnciaVagar
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Re: What comes next? Chile peso, and economy 2019

Post by AnciaVagar » Fri May 31, 2019 1:52 am

admin wrote:
Thu May 30, 2019 10:01 pm
they are calling it a black swan as no one has time to react to it:

https://www.zerohedge.com/news/2019-05- ... tion-stops


every currency in latin america will take a wipper tomorrow.
Sky falling? Considering revelations of Pemex's true condition, and thus Mex Gov's true condition, MXN has been over-valued all along.

2.2% ain't much, so stand by for more.

P.S. I wonder why DXY is up.

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Re: What comes next? Chile peso, and economy 2019

Post by admin » Fri May 31, 2019 8:05 am

I din't think black swan is the right term. More like yellow Albatross.

This is a fundemental misscalculation regarding the importance and integration of the mexican economy in to the u.s. economy.

China, although important, mostly produces cheap junk for the u.s., with a few exceptions. The u.s. got along fine without china.

Mexico however would be like putting tarrifs on the entire production of the midwest and south west united states; which are likly to get wacked the most by this. mexico is also a gateway / final value added production to the u.s. for a lot the rest of latin America's goods.

also I would seriously question if this does not inject a massive amount of inflation, especially related to food. You simply can not have the already imploding agro industry pickup the slack for the imports coming out of mexico. 25% increase at the grocery store may be just the start.

Mexico has also been a sort of labor / inflation valve for the u.s. for decades. hot labor market in the u.s., bigger flows of cheap labor, both mexican and other countries to fill the demand. yea, there might be some shor-term wage bumps in the states, but that has its limits in a strong dollar world. who you going to sell to?

at some point, hopefully, the world says, 'enough of this shit, stick your free trade agreements up your ....'.

that is the message he is sending to the world too. you can sign a free trade agreement with the u.s., and they can just opt out of it, in whole or in part, at any time. so why bother?
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41southchile
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Re: What comes next? Chile peso, and economy 2019

Post by 41southchile » Fri May 31, 2019 3:34 pm

admin wrote:
Fri May 31, 2019 8:05 am
I din't think black swan is the right term. More like yellow Albatross.

This is a fundemental misscalculation regarding the importance and integration of the mexican economy in to the u.s. economy.

China, although important, mostly produces cheap junk for the u.s., with a few exceptions. The u.s. got along fine without china.

Mexico however would be like putting tarrifs on the entire production of the midwest and south west united states; which are likly to get wacked the most by this. mexico is also a gateway / final value added production to the u.s. for a lot the rest of latin America's goods.

also I would seriously question if this does not inject a massive amount of inflation, especially related to food. You simply can not have the already imploding agro industry pickup the slack for the imports coming out of mexico. 25% increase at the grocery store may be just the start.

Mexico has also been a sort of labor / inflation valve for the u.s. for decades. hot labor market in the u.s., bigger flows of cheap labor, both mexican and other countries to fill the demand. yea, there might be some shor-term wage bumps in the states, but that has its limits in a strong dollar world. who you going to sell to?

at some point, hopefully, the world says, 'enough of this shit, stick your free trade agreements up your ....'.

that is the message he is sending to the world too. you can sign a free trade agreement with the u.s., and they can just opt out of it, in whole or in part, at any time. so why bother?
I think things are going to get a lot worse before they get better, because of the bafoon in the White House.
You right admin, countries are going to band together without the US, and tell them to take a jump with a free trade agreement. Possibly China (who are starting to actually look rational despite all they have been accused of compared to trump) is going to step in a lot more cementing new relationships and strengthening existing ones.
The US is like a rich successful person who is in self destructive mode (through drugs or alcohol) and is pushing those close to them away and into the arms of others, there is only so much you can be there for someone like that until you say , you know what ? Sort your own shit out we have had enough of you, no matter how succesful and rich you maybe we will find a way.

It's not until they sort their own shit out and hit rock bottom that they have some self reflection that do things start to improve again .

Same with the US of A., Trump could be the thing that needed to happen to send the USA down the tubes so that people realise globalisation and TRADE and specialization has been a good thing and has improved hundreds of millions of peoples living standards over the last few decades .
Probably not though, MAGA what a joke, cant even drown you sorrows in beer or snack foods now without it costing more, thanks to orange face .
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Sat Jun 01, 2019 12:19 pm

Friday trump imposed tarrifs on India and Turkey also:

https://www.bloomberg.com/news/articles ... nd=premium

Trump's tarrifs is like holding a gun to your head, and demanding the otherside surrender. problem is, that only works if the other party gives a dam if you blow your head off, and right now I don't think the world gives a dam if America blows its head off.
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Sat Jun 01, 2019 12:30 pm

well the good news is, Trump's base will take the brunt of this:
https://www.bloomberg.com/news/articles ... nd=premium

https://www.bloomberg.com/news/articles ... nd=premium

and i am sure mexico will focus their counter tarrifs where it will hurt trump the most. they did it a few years back, targeting Republican congressional districts.
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Re: What comes next? Chile peso, and economy 2019

Post by bert.douglas » Sat Jun 01, 2019 5:03 pm

Regarding tariffs -- I lean towards the Austrian school of economics. Free trade is good for everybody involved. Tariffs are bad.

On the other hand, complex interlinked global supply chains are inherently fragile. If every factory depends on numerous parts from other countries, then an interruption of ocean shipping (or global finance) results in a halt of all production. It is not uncommon today for a single factory to supply the entire world demand for certain items.

I think that the US is headed for a serious economic upset, similar to that which was experienced in Russia, with the collapse of the Soviet Union. Russia survived because its supply chains were highly redundant. Each factory was practically self contained, making even its own nuts and bolts.

I think that the US needs more redundancy in its supply chains. If you look closely at what Trump is doing, it seems to be designed specifically to disrupt global supply chains. The effect will be to create redundancy. Redundancy is good.

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Re: What comes next? Chile peso, and economy 2019

Post by admin » Sat Jun 01, 2019 8:09 pm

I seen a stat this moring in an article somewhere, that in spite of Trump's bullshit claims and a handful of companies making promises to do so, not one factory has been moved back to the united states since Trump took office.

Well, i always kind of thought that in the long-run these global supply chain disruption would be good for chile. If the u.s., china, mexico, etc all need their own factories to produce the same products, that is twice the raw resources in terms of copper, lithium, etc. horribly inefficient from a cost perspective.

Will also be interesting to see what those tarrifs do for chilean agro industry.
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Mon Jun 03, 2019 3:49 pm

Well, would not want the Australians thinking Trump did not love them. White house is talking about imposing tariffs on Australian aluminium imports, and possibly other things:

https://www.theguardian.com/business/20 ... -aluminium
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Mon Jun 03, 2019 11:38 pm

and seems mexico is now hinting at targeted tarrifs in retaliation.

https://www.npr.org/2019/06/03/72940283 ... er-tariffs

Tarrifs for trumpets!!!!

:lol: :lol: :lol:
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Re: What comes next? Chile peso, and economy 2019

Post by 41southchile » Tue Jun 04, 2019 9:12 am

After growth forecasts have already been trimmed this year, Piñera is still clinging to the 3 to 3.5 percent growth figures for 2019 . First quarter was 1.6 , by August we should have an idea how it may go, but Im guessing it will be difficult to even get to those numbers this year and anything over 2.5 % will be a win.
https://www.emol.com/noticias/Economia/ ... ilena.html
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Re: What comes next? Chile peso, and economy 2019

Post by admin » Tue Jun 04, 2019 1:03 pm

he might still get there.

The winter typically always has been lower economic activity overall in Chile, with last year being sort of an exception due to the pent-up demand created by bachelet / change of administration.

3% to 4%, tends to be a nice sustainable growth rate. After about 4%, or below 3%, things seem to start breaking in most economies. It works for a while, but sooner or later problems start popping up (inflation, labour issues, interest rates, wild exchange rate swings). Essentially it causes distortions that are hard to undue without wild swings one way or the other.
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Re: What comes next? Chile peso, and economy 2019

Post by 41southchile » Tue Jun 04, 2019 1:11 pm

admin wrote:
Tue Jun 04, 2019 1:03 pm
he might still get there.

The winter typically always has been lower economic activity overall in Chile, with last year being sort of an exception due to the pent-up demand created by bachelet / change of administration.

3% to 4%, tends to be a nice sustainable growth rate. After about 4%, or below 3%, things seem to start breaking in most economies. It works for a while, but sooner or later problems start popping up (inflation, labour issues, interest rates, wild exchange rate swings). Essentially it causes distortions that are hard to undue without wild swings one way or the other.
I'm rooting for him, but the math on the numbers are looking harder as time goes by. If it was only 1.6 in Q1 and April is looking like it was slow, winter is slow, that makes for a huge amount to catch up in Spring and something will need to change drastically to give a figure of over 4 percent growth figure in the final quarter, which doesn't look too likely .
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