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Living in Patagonia
New member
Username: Soulskier

Post Number: 25
Registered: 9-2008
Posted on Thursday, October 02, 2008 - 8:42 pm:   Edit PostPrint Post

With all this talk about the US dollar tumbling, I noticed the Dollar is actually getting stronger against the Peso. It closed today at 3.14 or 3.15 to 1 dollar, depending on which website you look at.

Any thoughts from the collective on what the exchange rate will do if and when the value of the dollar falls?
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Roberto
Board Administrator
Username: Admin

Post Number: 1767
Registered: 12-2004
Posted on Thursday, October 02, 2008 - 11:35 pm:   Edit PostPrint Post

I am thinking out loud here...

A depreciating dollar should normally lead to currency appreciation in other countries if such countries let this happen and provided they are fiscally sound. Example, the "Real" in Brazil in the last couple of years. An opposite example has been Argentina which prevented appreciation by printing pesos while accumulating reserves (or appreciated the peso through reflation). Having said this, I am thinking that the reasons for strong depreciation of the dollar are what matters to assess how other currencies might behave.

If the dollar collapses or depreciates rapidly, it could mean that capital is flying away (repatriation by foreigners as well as americans moving it abroad) which would indicate there is greater turmoil in the economies around the world. This, in turn, will affect Argentina in getting credit as well as selling its merchandise or in getting the high prices of recent years because of deeper recessions worldwide. Such distress in the local economy will have a direct impact on trade/fiscal deficits/surpluses impacting negatively on the currency. At present, the Central Bank can withstand a run against the peso. But that might change in the future... in which case it will be a game of which one depreciates faster, the dollar or the peso. Have no doubt it is going to be the peso.

Someone tweak my theory, please...

(Message edited by admin on October 02, 2008)
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Arial
Advanced Member
Username: Arial

Post Number: 267
Registered: 10-2006
Posted on Friday, October 03, 2008 - 6:07 am:   Edit PostPrint Post

Comment from me--someone else looking for answers.

I do know that ALL countries are doing the same thing and all currenies are depreciating. It is just a matter of which one falls fastest. At present it appears the U.S. is inflating faster than anyone else and therefore the currency is falling faster (with occasional rallies, nothing rises or falls in a straight line). I spoke with a Swiss investment manager lately who thinks the only "money" to be in is gold, swiss francs and Japanese yen. He is so alarmed that has all his clients completely out of the market and into these things. (I think even investment professionals can be victims of fear.) He was telling me about banks that are going down in Europe that I had not heard about--but I'm sure there is a LOT that I haven't heard!

This probably doesn't help answer your question but I thought you might find it interesting.
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Arial
Advanced Member
Username: Arial

Post Number: 268
Registered: 10-2006
Posted on Friday, October 03, 2008 - 7:10 am:   Edit PostPrint Post

I have discovered Internet radio. I was listening this morning to an amazing broadcast.

But first, when I read Perkins' Confessions of an Economic Hitman, about how he worked first for the government, then for corporations, making up bogus economic studies to entice heads of state of little countries with resources to borrow from the IMF to "improve life for their people" and to make themselves wealthy. In the process (and perhaps the goal) the corporation gains control of the object resource of that country. The money the country borrows goes to the corporation that comes in to do the work so it actually does not go to the country itself, the corporation gains, while the result is to indebt the little country to the International bankers and then to take over parts of their country when they cannot pay the debt.

I understand that they foreclosed on and now own part (or all, not sure) of Brazil's Amazon because Brazil could not pay their debt. Since I can see, logically, how this is in fact happening, I get so alarmed, since I read that book, when I hear these small countries are being offered loans to build dams or infrastructure or whatever.

When I read that book I thought in astonishment, this same thing is being done to the American people. That was long before signs of this crisis began to surface. Well, it is not just the debt, but the entire process to take over the wealth of the people. I have tried to tell people this but most just scoff. That can't happen, this is America. Other countries are corrupt, but not America!

I understand why AptsBA repeats how he told us this and he told us that. When you start to realize, you try to tell people and they act like you're deluded. It happens to me, so I am sure it happens all the time to him. When houses in Ft. Lauderdale were run up to ridiculous prices I tried to tell my brother don't buy into this, it is going to fall. My sweet brother and his sweet wife both treated me with ridicule. That would NEVER happen. EVERYONE wants to live in Florida. I am not exagerating! What planet was I from? It is just going UP UP UP!

There were some complications and he just sold for about half what he still thinks it was worth because he had to to forestall foreclosure. But do they remember that I told them so? Well if they do, they are not going to admit it. I know the temptation to remind them. But so far I haven't.

I honestly think this is why Apts feels the need to keep telling us he told us. I am sure he is met with the same things all the time. If you try to tell them it is not as it seems, you get criticism. If someone tells me something I have not heard, I don't reject it. I go see if it is true. Maybe it is. How do I know unless I investigate? But that apparently is not the way it is most of the time. But anyway . . .

Roberto, perhaps a year or so ago you posted that some Argentines believe this is deliberately orchestrated periodically so that when the crash comes, certain people move in to pick up the bargains. I felt so puzzled when I read that. But on this radio program they specifically used Argentina as an example. Their theory is that the same process is now happening to America. It seems sureal. But I have long said How in the world is it that out of an entire nation, everyone that goes to Washington DC is so STUPID. Even I can see that it is stupid! But maybe it is not stupidity. I now conclude that it is not. Well, with some it is, but not all. But a person needs to accumulate information from different sources before it starts to seem possible.

What a can of worms this is opening. If this is so, my heart hurts for the people being hurt by all this.

When I talked with the investment manager I wrote about above, I said, "Have the U.S. bankers brought this on these other people with this toxic debt they have sold off to everyone?" He was so gracious. He said well, we would have to go back to the Carter administration when the regulations were taken off bankers and they were allowed to do whatever they wanted to do--but bankers in Europe got involved in it too so it is their fault as well." But what I "heard" was that it started with the Carter administration, i.e., it started in the U.S. that everyone has had confidence in. They think we are so successful so obviously we are to be copied. But they don't understand that we achieved all we did under a different philosophy and a different set of rules. We have been taken over and become governed by leaders with a socialist philosophy. Foolish people buy into it because they think they are going to be taken care of, that they will be given something for free. And so they vote for these guys instead of voting with principle saying this guy is proposing a direct violation of the Constitution. It seems to work for along time, but in the evening of the era the chickens will arrive home at the roost! I don't know about you, but I now hear the clucking of chickens!

I don't know if this makes any difference in the discussion. But it is from my heart.
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 26
Registered: 9-2008
Posted on Saturday, October 04, 2008 - 8:40 pm:   Edit PostPrint Post

Wow, you guys are techie. I am more of a concise kind of guy. I think that Argentina will simply switch to a more favorable currency to be compared to, quite possibly with a moments notice. I have seen a couple instances (real estate and leather couch) where the price was in Euros. Vamos a ver!
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 31
Registered: 9-2008
Posted on Tuesday, October 07, 2008 - 10:30 pm:   Edit PostPrint Post

Hey Brittany, that's great news.
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Roberto
Board Administrator
Username: Admin

Post Number: 1775
Registered: 12-2004
Posted on Thursday, October 09, 2008 - 4:46 pm:   Edit PostPrint Post

Brittany, I will be moving your message over to the Plenitas thread in a few... Welcome to the forum!
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Roberto
Board Administrator
Username: Admin

Post Number: 1786
Registered: 12-2004
Posted on Monday, October 13, 2008 - 9:59 am:   Edit PostPrint Post

Morgan Stanley published a new paper today regarding worldwide currencies and the current unwinding of positions that will affect emerging markets currencies. The central idea is that EM currencies will depreciate sharply in the coming months:

We Are in the Second Inning of the EM Currency Sell-off
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Roberto
Board Administrator
Username: Admin

Post Number: 1788
Registered: 12-2004
Posted on Friday, October 17, 2008 - 6:01 pm:   Edit PostPrint Post

News of possible devaluation:

http://www.bloomberg.com/apps/news?pid=20601086&si d=aIl8mn0weC2w&refer=latin_america
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 40
Registered: 9-2008
Posted on Friday, October 17, 2008 - 9:42 pm:   Edit PostPrint Post

Muy interestante, gracias por sharing.

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