Chile Wealth, Inequality, and International rankings

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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Mon Apr 01, 2019 10:25 am

That is like a perfect hypothetical, of all three types of retirement savings, and median income retirement. As the article points out, most people don't have a pension in the U.S. anymore, only a small percent have an IRA, and the medium 401k for people over 65 was only around $58,000 U.S. in total balance.

So, as you add in an aging population, reduce tax revenues, increasing health costs, etc, etc, in 10 years what is the average income in the United States look like?

That is whole lot of people dancing around even the B.S. politically defined poverty line they use in the U.S.

To compare some sort of apples and apples, that even hypothetical number, would be around 20,400,000 (30,000 x 680 pesos) a year.

It does not take much for Chile to catch that.

Many of the other western developed countries are not in much better off economic and demographic shape. Chile might simply need to hold the economic line over the next 10 years, because that line is coming down to Chile's level fast. If it keeps up the rate of gains it has had for the last 20 years, it will easily surpass many "developed" economies on a per person basis in short order.

I seen hedge fund manager Mark Mobius describe the U.K. as behaving like an emerging market the other day, both in political, social, and economic terms.
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Re: Chile Wealth, Inequality, and International rankings

Post by at46 » Mon Apr 01, 2019 12:02 pm

I'm not awfully worried about Chile for about the next 10 years. But within that time there'll be a lot more copper coming to market in other countries. The global copper market may fragment to serve only specific geographical regions built around their own resources/currencies. If Chile is seen as affiliated too strongly with the US, who else is going to buy from it? The US will obviously not be able to process all Chilean copper no matter what.

On the positive side, Chile has become a regional safe haven. The powers that be might wanna look at Switzerland more than Australia for a role model here.

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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Mon Apr 01, 2019 1:19 pm

considering the vast majority of chile's copper goes to china, i doubt that is much of an issue for a while.

my big concern is chile needs fully privatize and sell off codelco. should be done as an IPO, then the government can transition from shareholder to just collecting royalties. this next 5 to 10 uears will be the big chance for chile to out from under that dog while it still has some value.

there are a bunch of goverment companies and assets that the government could dump, that are just dogs. banco estado. the train company. the oil company. etc. none of those should be goverment owned, and almost all of them are under performing vs. similar private sector companies or just outright loosing money due to bad management. dumping those legacy assets would pay off the national debt, and say buy a good free public education system, or something else useful for chile's future; all while still providing tax revenue streems as private companies.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Wed Apr 10, 2019 12:14 pm

so I finaly came across a paper and article with a good set of stats to explain why people have quit leaving Chile.
Emigration tends to peak at a per capita gross domestic product of $8,000 to $10,000. Every world region except sub-Saharan Africa is now at or near that threshold
.

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

https://www.nber.org/papers/w14785

essentialy once a country passes a certain per capita income, people stop emigrating.

but, it would seem there should also be some number in terms of wealth / opertunity at which a country starts attracting immigrant, or immigration starts accelerating.
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Re: Chile Wealth, Inequality, and International rankings

Post by at46 » Wed Apr 10, 2019 12:47 pm

admin wrote:
Wed Apr 10, 2019 12:14 pm
so I finaly came across a paper and article with a good set of stats to explain why people have quit leaving Chile.
Emigration tends to peak at a per capita gross domestic product of $8,000 to $10,000. Every world region except sub-Saharan Africa is now at or near that threshold
.

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

https://www.nber.org/papers/w14785

essentialy once a country passes a certain per capita income, people stop emigrating.

but, it would seem there should also be some number in terms of wealth / opertunity at which a country starts attracting immigrant, or immigration starts accelerating.
Immigration is not only about the money though. In Canada, for example, there's practically no illegal immigration, not because nobody wants to come there but because nobody will hire an immigrant without the social security number. And if they arrest one, they deport them.

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Re: Chile Wealth, Inequality, and International rankings

Post by 41southchile » Wed Apr 10, 2019 2:56 pm

Speaking about money in a round about way, the IPC figures for the first quarter seemed to be a "surprise" for many commentators , I dont know what planet they are living on but I can't understand how they saw it as a suprise. So supposedly annual inflation is back to 2 percent I dont know exactly what they measure, I looked it up once, but whatever it is they may need to adjust their measurements.
I wont say its manipulated but it seems very inaccurate. It shouldn't have been that much of a surprise with a strong economy and tight labour market. Prices have been going up way more than 2 percent on what I buy, that's for sure.
I know its more complex than that but still it seems a bit of a joke when I can list off half a dozen things that have risen by at least 20 percent in the last 12 .months.
Fuel has stayed low but other than that ?.
I hear good maestros and plasterers and trades people now are getting between 800k and 1 million per month in Los Lagos because there are not enough of them.
http://t13.cl/noticia/negocios/df-retor ... e-esperado
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Re: Chile Wealth, Inequality, and International rankings

Post by 41southchile » Fri Apr 12, 2019 8:38 am

Growth projections (for what it's worth, they will probably all change again mid year) still it's a hell of a lot better than 1.7% a couple years ago. Copper price is pretty good at the moment, so I guess that helps. I did read something somewhere thr other day saying that Chile was not keeping up with copper investments according to some analyst and would eventually be dethroned as numero uno producer by the mid 2020s .
https://www.emol.com/noticias/Economia/ ... e-ano.html
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Fri Apr 12, 2019 9:19 am

you know seen that prediction too, but i think it orginated out of bloomberg; and they seem to have some sort of agenda when it comes to reporting things about chile.

yea, chile's ore grade has been in decline for the last decade, but there is also some massive investment projects in various stages of development. a lot of the hold up has been regulatory more than physical lack of ore.

chile is also finaly starting to diversify away from just copper focus in mining, and that takes time.

one complaint i have seen is that the mining exploration rights are indefinite. companies can sit on the rights, and not do anything. they need a use it ir loose it rule so someone else can develope the resources.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Fri Apr 12, 2019 9:29 am

regarding inflation, i seen an interesting report on how inflation in the u.s. has changed in recent decades; but, it gets distorted by the mix that is in the indexes. it probably applies to chile too, but i have not looked.

prices of things like services and localy produced goods have gone up. prices of technology, machines, etc, that are produced internationally has gone down. things that are mass produced, and not local. for instance the price of a refrigerator has gone down. prices of things like insurance, education, rent, etc have gone up. the durable goods prices, and technology have gone down so much that it is masking the real inflation as we have shifted as a society to consuming more services as a percentage of our overall income.

so the inflation you see is not imaginary.

of course in chile we are subject to the exchange rate flux driven by copper prices, and on the other hand the price of oil as an energy importer.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Fri Apr 12, 2019 9:47 am

chile, for better or worse, effectively is a dollarized economy, with the peso perhaps more pegged to the dollar than the chinese RMB.

you can not say walk in to a store and spend dollars (in most places), but the vast majority of the economy is backed by dollars. all those exports and a lot of imports are all priced in dollars.

i had two wires the other day. one came in dollars. one came in euros. dollars were converted to pesos at the bank no problem. the euros took 24 hours, two trips to the bank for signatures, and was finally exchanged from euros to dollars to pesos. Here is the kicker. it was Santander. you would think a European bank could do a euro to peso exchange. not in chile.
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Re: Chile Wealth, Inequality, and International rankings

Post by at46 » Fri Apr 12, 2019 12:21 pm

admin wrote:
Fri Apr 12, 2019 9:47 am

i had two wires the other day. one came in dollars. one came in euros. dollars were converted to pesos at the bank no problem. the euros took 24 hours, two trips to the bank for signatures, and was finally exchanged from euros to dollars to pesos. Here is the kicker. it was Santander. you would think a European bank could do a euro to peso exchange. not in chile.
That must be something specific to Santander, or how the euro swift was wired via a US bank. Because Banco de Chile converts euro swifts wired via Deutsche Bank into pesos directly, no problem.

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Re: Chile Wealth, Inequality, and International rankings

Post by 41southchile » Fri Apr 12, 2019 1:46 pm

admin wrote:
Fri Apr 12, 2019 9:47 am
chile, for better or worse, effectively is a dollarized economy, with the peso perhaps more pegged to the dollar than the chinese RMB.

you can not say walk in to a store and spend dollars (in most places), but the vast majority of the economy is backed by dollars. all those exports and a lot of imports are all priced in dollars.

i had two wires the other day. one came in dollars. one came in euros. dollars were converted to pesos at the bank no problem. the euros took 24 hours, two trips to the bank for signatures, and was finally exchanged from euros to dollars to pesos. Here is the kicker. it was Santander. you would think a European bank could do a euro to peso exchange. not in chile.
Yeah Santander, they sting you to change from euros to dollars, then dollars to pesos, so commissions work out double, I tried to hit them up about that once but for the effort involved and the very rare times I get Euros the effort wasn't worth it.
I can't decide for you. You'll have to make up your own mind.

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