Devaluation rumours have not come to fruition

[perry]

For the last year we have heard from many members here that the argentinian peso will be up to 6 pesos per dollar by the end of the year . This has not come to fruition and now the unofficial rate is 4.53 and coming down .

Any devaluation of the peso since 2007 has not benefited one person here as inflation in dollar terms has been higher.
This trend is continuing and in 2012 Argentina will become one of the worlds most expensive countries again.

 

[Spfly731]

I tend to agree with Perry.

 

[French jurist]

Indeed, but anyway even the ones predicting some sudden & strong devaluations (often in Capital letters btw) never wanted to bet on it. I hope some forum members did not lose money buying dollars at 5:1.

USD should end 2012 around 4.90/5.30 in my view (maybe rather 5.30 than 4.90).

One event could trigger a quick raise of the USD (anyway the BCRA will be able to limit the effect) --> That's because of the second wave of the crisis initiated in 2008. In fact, the coming week may bring its share of surprises on the Eurozone front.
Now it's no more a possibility, it's there for good and the effects are going to be devastating (much more than in 2008) on both sides of the Atlantic.
USD should keep gaining quickly in value because of the deleveraging effect.

After that (for 2012), many things might/will happen:
Many other bankruptcies, the currency war increasing (anyone noticed the yields on the Italian + Spanish obligations have gone down with no plausible reasons...?! Euro zone has a few surprises in its bag).
Also the geopolitical situation should get quite wild (how soon before two small Iranian speedboats supposedely attack an US destroyer?! etc...). Anyway, it's not sure the US could attack Iran (would need the green light of China and/or Russia) but still, some bad things could happen.

I'm in my early 40s and I'd bet that 2012 will produce the worst crisis I ever saw until now in my life.

Life in Argentina is going to sound really sweet...

 

[nikad]

I believe there was no abrupt devaluation due to the restrictions the government implemented though. And now look at this ( be careful if you plan to leave the country with a few hundred dollars! ) http://www.infobae.com/notas/622647...evitar-la-salida-de-dolares-durante-el-verano

 

[jb5]

It's very hard to see how they can not devalue the peso with Brazil pushing the real down. The trade situation is going to get bad fast, it already has in auto manufacturing here.

For many, many reasons it makes the best sense for Argentina economically to devalue the peso considerably, but the issue is that CFK has an uncanny ability to ignore what's
economically best for the country. Argentina is an economic island. There's a very good reason those who have money got it out of the country in the last couple of years.

Increasingly, Companies are not investing in anything brick and mortar. CFK is waging a battle over wages with the unions because she can't afford anymore 25% wage hikes. Commodity prices look to be getting weaker. LAM has gotten too expensive for foreign companies to continue spurring their growth. It's going to be a bumpy ride.

 

[scarface]

For the last year we have heard from many members here that the argentinian peso will be up to 6 pesos per dollar by the end of the year .

I have heard from many that Elvis Presley is still alive. Does the fact that some believe this make it credible?

This has not come to fruition and now the unofficial rate is 4.53 and coming down .
Any devaluation of the peso since 2007 has not benefited one person here as inflation in dollar terms has been higher.

Unless, of course, you believe INDEC stats in which case the dollar has just about kept pace with inflation. Makes one wonder whether the AR governement is not manipulating the dollar/peso ratio. What do you think?

This trend is continuing and in 2012 Argentina will become one of the worlds most expensive countries again.

If you back out housing, BA (not AR) is now one of the most expensive cities in the world. This is especially true if one takes into account the comparatively low BA wage and salary structure. The problem with this trend continuing, however, is that it depends upon the AR govt having access to a sufficient supply of dollars to keep manipulating the price of the peso. Soon the govt will run out dollars (in large part because it is a pariah in the international borrowing world). Then the peso will devaluate to the point that the black market rate will be such that BA will be cheap for those with dollars. How cheap depends on the world markest for commodities like soy and internal governance (tax collection efficiencies).

 

[notebook.fix]

The momentum for a devaluation is certainly there..now they have dollar sniffing dogs waiting for you on the way out. If that's not a sign of desperation by this Gov, what is?
http://www.lanacion.com.ar/1433730-...lares-para-luchar-contra-la-salida-de-divisas

 

[Napoleon]

I believe there was no abrupt devaluation due to the restrictions the government implemented though. And now look at this ( be careful if you plan to leave the country with a few hundred dollars! ) http://www.infobae.com/notas/622647...evitar-la-salida-de-dolares-durante-el-verano

That is AWESOME!! I love it.

 

[dennisr]

No devalution at a cost of 12% of their reserves propping up the peso this year. About five billion US dollars of some poor soul's pension fund.

 

[scarface]

No devalution at a cost of 12% of their reserves propping up the peso this year. About five billion US dollars of some poor soul's pension fund.

I've come to believe that the Fed gov took over control of the Anses pension fund so it could pay current operating expenses (including the purchase of pesos) by borrowing from it at artificial low Indec based rates. Repayments will not be sufficient to keep pensions anywhere close to the real cost of minimal living. Pensioners will have a tough time of it and it won't be that far into the future this becomes apparent.