The Chile Economy, Social Crisis and Virus Impact

National Crisis, Emergencies, and Natural Disasters in Chile; including the experiences of Chile Forum Members have shared in current and in past crisis, as they have assisted each other and Chile. Things will always go wrong. It is how you deal with it that counts, and that starts with information. When things go wrong, this is the place to come to exchange information about what is going on in Chile.
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tiagoabner
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by tiagoabner » Thu Jun 03, 2021 9:01 pm

My understanding is that AFP investiments can only be done within a certain group of financial instruments, due to the way the system was set up by financially conservative bureaucrats without enough knowledge about mutual funds and diversification.

Their fees are bloated because they can be bloated. Simple as that. It would most likely be possible to provide a similar service charging half as much as the cheapest AFP, but they have no financial incentive to do so.
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for31
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by for31 » Sat Jun 05, 2021 12:12 pm

Yeah, economic crisis my .. :lol: Car sales are soaring all over the country. Dealerships are running out of stock. Sometimes I think there is an alternative reality in this country (especially when your watch the news on how "bad" the things are over here) :D

https://www.emol.com/noticias/Economia/ ... viles.html

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hlf2888
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by hlf2888 » Sat Jun 05, 2021 12:17 pm

for31 wrote:
Sat Jun 05, 2021 12:12 pm
Yeah, economic crisis my .. :lol: Car sales are soaring all over the country. Dealerships are running out of stock. Sometimes I think there is an alternative reality in this country (especially when your watch the news on how "bad" the things are over here) :D

https://www.emol.com/noticias/Economia/ ... viles.html
Very interesting. Are these more "magical" numbers? Are people using their pension windfalls to buy new vehicles? What is the cultural mindset behind this phenomena? I am 70 and have never bought a new car. They lose 10%+ of their value when you drive them off the lot.

for31
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by for31 » Sat Jun 05, 2021 12:48 pm

hlf2888 wrote:
Sat Jun 05, 2021 12:17 pm
Very interesting. Are these more "magical" numbers? Are people using their pension windfalls to buy new vehicles? What is the cultural mindset behind this phenomena? I am 70 and have never bought a new car. They lose 10%+ of their value when you drive them off the lot.
Not sure about the numbers in absolute terms, but they are not far from the reality. I've been talking to few friends of mine who are buying cars these days and all of them are telling the same story - some car models are totally booked out, zero stock, waiting lists. The demand is huge especially given some prices have actually also gone up !

I don't know whether pension windfalls is the major reason (I doub it). However it does seem an average chilean household income is much much higher than it's officially reported. I am not an economist though. Just personal observations :D

Donnybrook2
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by Donnybrook2 » Sat Jun 05, 2021 1:06 pm

for31 wrote:
Sat Jun 05, 2021 12:48 pm
hlf2888 wrote:
Sat Jun 05, 2021 12:17 pm
Very interesting. Are these more "magical" numbers? Are people using their pension windfalls to buy new vehicles? What is the cultural mindset behind this phenomena? I am 70 and have never bought a new car. They lose 10%+ of their value when you drive them off the lot.
Not sure about the numbers in absolute terms, but they are not far from the reality. I've been talking to few friends of mine who are buying cars these days and all of them are telling the same story - some car models are totally booked out, zero stock, waiting lists. The demand is huge especially given some prices have actually also gone up !

I don't know whether pension windfalls is the major reason (I doub it). However it does seem an average chilean household income is much much higher than it's officially reported. I am not an economist though. Just personal observations :D
Part will be using the AFP windfall. Television sales jumped after the first 10%. But I think you are confusing buying something with being able to afford it. People go into a lot of debt here through bank loans, informal loans, pay in quota plans with the seller. The only debt we ever had was the mortgage. There is also a cultural slant to what people are willing to pay big money for. When we arrived in Chile our first car was a Lada station wagon. We lived in the country and it was a good workhorse. You could fill the back with firewood and not worry about it. But my husband was told by colleagues that it was not a car befitting the level of his job.

for31
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by for31 » Sat Jun 05, 2021 1:27 pm

Donnybrook2 wrote:
Sat Jun 05, 2021 1:06 pm
But I think you are confusing buying something with being able to afford it. People go into a lot of debt here through bank loans, informal loans, pay in quota plans with the seller. The only debt we ever had was the mortgage. There is also a cultural slant to what people are willing to pay big money for.
I would partially agree. However, there is a catch. Generally such spending (mortgage, new cars, etc..) cannot last forever. It's simply not sustainable if your believe the official numbers of the total household income of majority of chilean families. From where the liquidity is coming from ? How a defined middle class family (with an average income 2..3 mil pesos) can afford cars for 20 mil or apartments exceeding 200 mil ? Besides, prices on many items (from house appliances to electronics, etc..) here are totally inflated (in comparison with the US or Europe). Nevertheless, people buy this stuff all the time and retail is doing pretty well.

I've been asking myself the same question many times. Admin pointed out that here in Chile there is a huge amount of hidden wealth (like property, land, etc..) However, I still struggle to understand from where the liquidity is coming from ? Sure, someone could have a piece of land which worth millions. But the land goes nowhere, it is where it is. Where people are getting money to finance their current lifestyles ?

I am definitely economically naive and I hope someone could explain in simple terms how this country works :D

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41southchile
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by 41southchile » Sat Jun 05, 2021 2:58 pm

for31 wrote:
Sat Jun 05, 2021 12:12 pm
Yeah, economic crisis my .. :lol: Car sales are soaring all over the country. Dealerships are running out of stock. Sometimes I think there is an alternative reality in this country (especially when your watch the news on how "bad" the things are over here) :D

https://www.emol.com/noticias/Economia/ ... viles.html
I Don’t watch the Chilean tv news, Haven’t done for quite a while, sometimes I listen on radio if things come on in the car, but even then.
My consumption of Chilean news has greatly reduced in recent years. I follow people on LinkedIn to keep up with what’s happening, yeah some of that is manufactured, but not as much as the idiot box .
“Facts do not cease to exist because they are ignored.”

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admin
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Sat Jun 05, 2021 8:25 pm

well they approved a "universal income" that is not so universal, and last until august, cut in half in september.

waiting for the small print. so far they have been shoveling a lot of crap head lines out of congress, but actually not delivering much else.
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Sat Jun 05, 2021 8:33 pm

for31 wrote:
Sat Jun 05, 2021 12:12 pm
Yeah, economic crisis my .. :lol: Car sales are soaring all over the country. Dealerships are running out of stock. Sometimes I think there is an alternative reality in this country (especially when your watch the news on how "bad" the things are over here) :D

https://www.emol.com/noticias/Economia/ ... viles.html
That is why I say, stand at a major intersection, and give an eyeball estimate of the value of the cars going by. no matter how rich you are, you can only drive one car at a time.

now, tell me chileans are poor. 😆
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fraggle092
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by fraggle092 » Mon Jun 07, 2021 1:54 am

for31 wrote:
Sat Jun 05, 2021 1:27 pm
I am definitely economically naive and I hope someone could explain in simple terms how this country works :D
After all my time here, it's a mystery to me as well.

The root of the money tree is mainly the Mining Industry, that's eventually where the Dollars come from to pay for all that imported stuff. (Except for this recent boom which was triggered by the AFP funds sell-offs.)

The trickle-down beneficiaries are the "aspirational", and well-paid, white-collar classes, namely:

The vast shoals of Bureaucrats.
Public and private medical service personnel.
Private utilities and services employees, Engineers and Lawyers.
Banking/financial services employees, battening off the Chilean thirst for Credit at any cost.
Not forgetting the sizeable "Cash Only" black economy.

How this class of well-paid Chileans can reconcile their demands for more "equality" with rampant consumerism and tax aversion beats me.

Can anyone else do better than this?
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by admin » Mon Jun 07, 2021 11:47 am

Well, the government muppets are on TV with lavin the mayor of los condes, telling everyone that has not registered before for the "social registry" to register to receive the new "universal income".

Supposedly, anyone that earns less than 800,000 pesos a month, per person, in the household is suppose to qualify (e.g. family x 4, 3,200,000 a month).

Still waiting for more small print.
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hlf2888
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Re: The Chile Economy, Social Crisis and Virus Impact

Post by hlf2888 » Mon Jun 07, 2021 12:14 pm

800,000 per month. that is 1350 CAD. Here in Canada the basic pension is 1000 CAD. Seniors have to survive on that. The Chilean government is being super generous.

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