Dollar & peso: 2010 forecast

[SaraSara]

From today's La Nacion:.......

"El dólar. Los analistas estiman que, durante este año, el peso se devaluará cerca de un 10% o 12% en relación al dólar. Esta variación está lejos de la suba de precios real que pronostican la mayoría de los analistas para 2010. Y aunque desde varios sectores -el agro o la industria- adviertan sobre atraso cambiario, es justamente el tipo de cambio el último ancla que tiene el Gobierno para frenar la inflación a un año de las elecciones presidenciales. De esta manera, parece difícil pensar una fuerte devaluación que favorezca el valor del dólar. "

Summary: 2010's planned peso devaluation is 10% to 12%, far below the real expected inflation rate. No devaluation is likely before next year's presidential elections.

 

[ctru]

for us who doesnt know anything about economics, what will this mean in real terms. For foreigners coming here, will the exchange rate be more favorable? what will it do to property investments? how will it affect the people of Argentina?

 

[SaraSara]

I don't know too much about economics, but for those earning in dollars it means that this year they will have about 10% less to spend. The dollar will go up 10%, but prices are expected to go up at least 20% - many are predicting 30%.

A real economist would say it means a 10-20% loss in purchasing power.

IMHO, property investments probably won't suffer much: when inflation hits hard people invest in bricks and mortar.

 

[flippinkittin]

I don't know, I would disagree with this article. I know the farmers want the peso to be more like 4.12 to the dollar. Since the farmers are so powerful in this country I would not imagine that they couldn't get what they want. Only time can tell.

 

[SaraSara]

I fervently hope you are right...

 

[sesamosinsal]

Currency is so hard to forecast. I would say it's impossible. Last year they were saying that the peso would be 4:1 by December. Obviously, that never happened. I wouldn't take any forecast (good or bad) to heart.

 

[cabrera]

I fervently hope you are right...

Let the peasants eat cake she hopes

 

[SaraSara]

Let the peasants eat cake she hopes

Sorry to see you seem to have taken offense, although I can't understand why.

The exchange rate means little to those who get paid in pesos. Perhaps your income is in dollars?

(p.s. This being Argentina, "Let the peasants eat factura", she says...)

 

[redrum]

I don't know too much about economics, but for those earning in dollars it means that this year they have about 10% less to spend. The dollar will up 10%, but prices are expected to go up at least 20% - many are predicting 30%.

A real economist would say it means a 10-20% loss in purchasing power.

IMHO, property investments probably won't suffer much: when inflation hits hard people invest in bricks and mortar.

it's also important to buy precious metals such as gold and silver - at least to have a certain percentage as a hedge against inflation.

gold is a safe haven that allows a person to protect their purchasing power. as a currency's value declines do to over printing, gold will strengthen. we're talking long term of course as it's nearly impossible to predict anything short term these days.

 

[A&A]

Have you looked at the Gold chart in the past 10 years? It looks like Aconcagua! Moon shot! I think the opportunity to hedge gold has past. U$S1138 ounce. I would suggest smelting....