Hypothetical situation regarding dollar vs peso

[criswkh]

I agree with Pericles about Brazilian Real, gold, and companies that produce natural resources and of course as my 81 Nana says, guns and food

 

[bigbadwolf]

Regarding Chinese swapping dollars for real assets this is already happening big time in Argentina and some very important land acquisitions are on the cards now.

My question is: What do people do with the hot-potato dollars they are receiving for the sale of their assets? If, say, China paid me $50m for the sale of some land, I would want to rid myself of the dollars as fast as possible.

 

[elhombresinnombre]

This might be of interest:
http://www.telegraph.co.uk/finance/economics/5586543/Is-this-the-death-of-the-dollar.html

 

[Recoleta Carolina]

I just made the point there is no inflation now, that's correct.

There is no need to be concerned about inflation now

WOW! You think that there is no inflation now? Maybe the issue of inflation has to do with what one is willing to pay for or what one has to pay for.

If you are paying for health insurance your premiums are going up enormously each year. Anyone with health issues knows that there is serious inflation. If you have kids in private school or college you know that there is serious inflation. The cost of groceries is not what it used to be. The cost of gasoline is way up there again in the States. People are being careful of how often they drive again. When I first came to Buenos Aires the taxi meter started at around $1.20. It now begins at $3.80. That is inflation to me. A very fine dinner 5 years ago cost about 30% of what it would today in Buenos Aires. The cost of airline tickets has gone sky high in those same years.

I would be curious as to what exactly you think constitutes inflation?

 

[RichG]

This all sounds very technical. Putting it into simple terms is it likely that the price of beer and empanadas will go up?

I'm not taking a chance, I'm off to stock up.

 

[mini]

WOW! You think that there is no inflation now? Maybe the issue of inflation has to do with what one is willing to pay for or what one has to pay for.

If you are paying for health insurance your premiums are going up enormously each year. Anyone with health issues knows that there is serious inflation. If you have kids in private school or college you know that there is serious inflation. The cost of groceries is not what it used to be. The cost of gasoline is way up there again in the States. People are being careful of how often they drive again. When I first came to Buenos Aires the taxi meter started at around $1.20. It now begins at $3.80. That is inflation to me. A very fine dinner 5 years ago cost about 30% of what it would today in Buenos Aires. The cost of airline tickets has gone sky high in those same years.

I would be curious as to what exactly you think constitutes inflation?

I think BlahBlah was talking about inflation in the US & not in Argentina.

 

[Recoleta Carolina]

I think BlahBlah was talking about inflation in the US & not in Argentina.

Inflation is very high in the States. All forms of insurance, treatment for anything health related, gasoline, food, education, etc. Why do you think that so many Americans are living paycheck to paycheck?

 

[mini]

Inflation is very high in the States. All forms of insurance, treatment for anything health related, gasoline, food, education, etc. Why do you think that so many Americans are living paycheck to paycheck?

I have no idea.

Do you know what the inflation rate is in the US? Do you think that the official rate is not the real rate, like what happens here in Argentina?

 

[soulskier]

Inflation is very high in the States. All forms of insurance, treatment for anything health related, gasoline, food, education, etc. Why do you think that so many Americans are living paycheck to paycheck?

Americans are living paycheck to paycheck because they lived outside their means and their credit and/or jobs have dried up. Es decir, many Americans are paying the piper at the moment.

 

[bigbadwolf]

Do you know what the inflation rate is in the US? Do you think that the official rate is not the real rate, like what happens here in Argentina?

Inflation has been underreported for decades in the USA but the "devil lies in the detail" with regard to the technical changes that have been made in the methodology of calculating it. Thus, using official rates of inflation, Americans should be better off than ever, and with a higher standard of living and yet, as Recoleta Carolina points out, are increasingly living paycheck to paycheck (or not even managing this and hence either sinking deeper into debt or having to pare back on already compromised lifestyles). You can get a better idea by looking at the graph at this site: www.shadowstats.com. Thus, when the official rate was abot 4% three years ago, the true rate was around 11.4%. The reasons for these shenanigans can also be read at the same site, here. I can't resist quoting a snippet:

The Boskin/Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that.

The article does go on to explain that while this system of variable-goods was not used, it was mimicked by giving lower weightings to good rapidly rising in price. Cumulatively, annual inflation is underreported by about 7%. Thus if 2% is the official rate, a more accurate estimate would be 9%. So if an American received a pay rise of 3% (in the good days, not today) and the official rate was 2%, then by golly, he should be more prosperous than ever. And yet his or her budget was more strained than ever. And then rent-a-pundits would appear on television decrying the McMansions and SUVs, blaming the culture of consumption rather than the true culprit: higher cost of living.