Chile Wealth, Inequality, and International rankings

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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Wed Jun 05, 2019 6:44 pm

So here is an interesting spin on emerging markets ETF. Investment allocations to countries are based on freedom or openness ranking of countries.

https://www.etf.com/sections/features-a ... nopaging=1

And Chile get's ranked number 4 with about a 14% weighting of stocks in the fund (companies like fallabella and copec are in it). China, get's no position. Tiawan, poland, south korea are at the top.

The fundamental theory makes sense however. Free societies, with open transparent markets, tend to out perform in the long-run over closed, more command economies (wasn't that like the whole point of the cold war?).

Still not seeing it listed anywhere (ticker FRDM), but I like the way they are doing it. I really did not like the mix in EEM. Which is essentially a mostly direct China ETF, or investing in China via proxies in other countries, even though it is suppose to have all the Emerging markets in it.

It is probably what is slowly killing the economy of the United States too. Without even realizing it, the U.S. turned in to a command economy over the last 30-40 years. Sucks to be a frog in that pot of boiling water.
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Re: Chile Wealth, Inequality, and International rankings

Post by at46 » Thu Jun 06, 2019 2:26 pm

admin wrote:
Wed Jun 05, 2019 6:44 pm
So here is an interesting spin on emerging markets ETF. Investment allocations to countries are based on freedom or openness ranking of countries.

https://www.etf.com/sections/features-a ... nopaging=1

And Chile get's ranked number 4 with about a 14% weighting of stocks in the fund (companies like fallabella and copec are in it). China, get's no position. Tiawan, poland, south korea are at the top.

The fundamental theory makes sense however. Free societies, with open transparent markets, tend to out perform in the long-run over closed, more command economies (wasn't that like the whole point of the cold war?).

Still not seeing it listed anywhere (ticker FRDM), but I like the way they are doing it. I really did not like the mix in EEM. Which is essentially a mostly direct China ETF, or investing in China via proxies in other countries, even though it is suppose to have all the Emerging markets in it.

It is probably what is slowly killing the economy of the United States too. Without even realizing it, the U.S. turned in to a command economy over the last 30-40 years. Sucks to be a frog in that pot of boiling water.
If China gets no position, you know where that ranking is coming from and what it's worth. Or Russia - didn't Gazprom just deliver a 50% growth in less than 2 weeks? :) And you're totally right in that the Western economies have become more stifling and over-regulated than the traditional 'command' economies have ever been.

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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Thu Jun 06, 2019 3:37 pm

well I have to say it is flattering to be quoted in an article, even if slightly misunderstood and taken out of context. kind of wish they would have talked to me first, but at least they gave us a plug rather than just plagerizing from our web sites like most the expat authors tend to do:

https://finance.yahoo.com/news/20-count ... 19599.html
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Re: Chile Wealth, Inequality, and International rankings

Post by Space Cat » Thu Jun 13, 2019 11:21 am

According to the Global Peace Index 2019, Chile is still the 27th most peaceful country on this planet (higher than Croatia and Poland) and, of course, #1 in LatAm.

Meanwhile, the United States is #128 — between South Africa and Saudi Arabia.
Only Colombia, Uruguay and Chile improved in South America last year, while the rest of the region deteriorated. Venezuela is now the least peaceful country in South America, and Brazil recorded the fifth largest fall globally, with nine indicators deteriorating and only one improving.

Safety and Security is the chief challenge in the region, which is the only continent free from war – exempting drug wars. The upside for Safety and Security were marked reductions in the homicide rate in Uruguay, Ecuador, Argentina and Guyana. Venezuela and Colombia also recorded reductions, but they are still amongst the ten highest rates in the world.

The incarceration rate rose in nine South American countries, while declining only in Chile. All of South America’s incarceration rates are in the bottom half of the index. And the impact of terrorism escalated in six countries: Colombia, Brazil, Peru, Venezuela, Ecuador and most especially Bolivia.

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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Fri Jun 21, 2019 11:20 am

well here we go. these guys seem to have dome some serious number crunching, that seems a whole lot more relistic than a lot of the studies i have recently.

https://www.df.cl/noticias/mercados/fin ... 00325.html

they are pegging the personal liquid investable dollar amount of chile at around 500 billion, without considering companies controlled by people or real estate holdings (taken together are probably worth far more, and make up the vast majority of chilean wealth).

52.8% have more than 100,000 u.s. liquid investiable assets.

again, no buisness or real estate was included, and I am sure that number is much much higher if those two asset classes were included. in fact, i bet the vast majority of the wealth, among the poorest half of chile, is in those two classes of investment, of small to medium size business and real estate (and not just homes).

i might point out, chileans are not real big in investing the stock market overall. outside of the AFP system, they mostly stick to real estate to park their money long-term.

put that up against all the studies of over half of americans do not have anywhere near as much retirement savings, or can not put together sufficient money for a $400 or $1000 dollar emergency, dont own their own house, etc, etc; and the definition of "development" starts getting turned on it's head.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Fri Jun 21, 2019 11:32 am

this article has more details:
https://www.latercera.com/pulso-trader/ ... 23/707911/

the striking one is that only 6% of the wealth is invested outside the country. i am not sure i buy that number, if you exclude controlled companies. for example, the families that control ripley, fallabela, etc, have hundreds of billions invested outside the country.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Sat Jul 06, 2019 4:00 pm

so, one of the most enduring criticisms about chile's success, that has basically been going on at least since I got here, and probably since electricity was invented, is about how sustainable is copper demand.

well my counter argument to that, having spent most my life living in and traveling developing countries, is much of the world's population still does not have reliable electricity, or any eletricity. never mind things like copper pipes, appliances, et, etc.

a modern developed lifestyle, takes a lot of copper.

well, how much is that?

here is a great article on the growing demand of india, relative to china, at the same GDP (and china is far from done):

http://blog.gorozen.com/blog/copper-mar ... i=70371825

what is striking, when china had about the same GDP as india today, it had installed 45 pounds of copper per person. India has 14 pounds. FYI, china has currently about 175 pounds per person.

so, have a look at the amount of money chile made over say the last 20 years from the copper demand from china.

this is all before diving in to future trends like green energy storage, eletric cars, urban densification, etc, etc needing far more copper than current technology and trends.

I don't think demand for copper is going away anytime soon, and all indications at least the next 4-5 years, will be a deficite of supply. 10 years is a bit far out, but i suspect 10 to 20 years will also see a deficit in copper, and higher copper prices; relative to the current and planned mining projects under development globally.

even if copper goes again to $4 or more per pound, for a sustained period, it takes years to bring new mining capacity online. we could be seeing a $5 plus spikes a pound for years.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Sat Jul 06, 2019 4:08 pm

USG by the way pegs u.s. copper per person at:

The U.S. Geological Survey (USGS) estimates that every American born in 2008 will use 1,309 pounds of copper during their lifetime for necessities, lifestyles and health.

that is a lot of catching-up to do for developing countries.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Sat Jul 06, 2019 4:09 pm

and developed markets, have their own legacy grid issues going on with a new build-out of green economy infrastructure.
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Re: Chile Wealth, Inequality, and International rankings

Post by admin » Tue Jul 16, 2019 2:41 pm

so average incomes in chile for 2019: 882,000 pesos a month, around a 3.03% increase over 2018. not bad considering the nearly none-existant inflation the last year.

https://www.latercera.com/pulso/noticia ... 41775/amp/
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Re: Chile Wealth, Inequality, and International rankings

Post by tiagoabner » Tue Jul 16, 2019 5:24 pm

I wonder if there are median figures as well. Averages usually tend to be pumped by ABC salaries. But 882k is not bad at all.

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Re: Chile Wealth, Inequality, and International rankings

Post by eeuunikkeiexpat » Tue Jul 16, 2019 11:33 pm

I would say this papers over the struggles of the new (past two decades) middle class now competing with Venezuelans and other "skilled (CV impressive)" immigrants with their free Uni degrees and better English abilities.

This just shows the "rich" from the upper middle class onwards are making more while those behind are losing ground just like the rest of the world.

So yeah, tough fuckin shit for those degree-less chilenos who were just beginning to taste professional success now finding declining to near minimum wage salaries.

This will definitely not have political and social impacts, none whatsoever...
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