Peso Becoming Top Carry-Trade Currency as Exports Soar: Argentina Credit

[steveinbsas]

This is encouraging, yet the article even predicts a more favorable exchange rate for those with dollars to spend in the next year (in spite of QE2?).

http://www.bloomberg.com/news/2010-...urrency-as-exports-soar-argentina-credit.html

 

[Rad]

If the Peso really was the top carry-trade currency, it's value against the dollar would go up, not down. In a carry trade, you have to borrow dollars and use them to buy peso denominated paper, which in turn would push the value of peso higher. So if ARS goes down against USD, it will be *despite* the carry trade, not because of it.
The other possibility is that peso is not really as popular as the title of the article suggests.

 

[ghost]

Sorry Steve that article is totally bi-polar.
"Investing in the peso-denominated money-market instruments delivered a total return of 3.7 percent this year, trailing the 15.1 percent gain in the South African rand and 14.4 percent advance in the Colombian peso, according to data compiled by Bloomberg."
WTF?

 

[Bajo_cero2]

Well, if the dollar stays in 4 pesos but prices rise, then the peso is getting stronger in a non nominative way. And if they keep printing dollars, the peso is going to rise more. However this is not good in long terms, this is exactly what created 2001 crisis.

The disadvantage of the peso is that after last crisis, there are many mechanism to avoid vultures investors, so once you bring money it is difficult the take it away.

Regards

 

[darmanad]

Don't forget to factor in the unreliability of the AR govt. Any calculations incorporating govt figures are unreliable. Moreover, if the peso has maintained strength based upon market forces that are themselves affected by the govt's phony stats, that barometer is also suspect.

 

[Bajo_cero2]

Don't forget to factor in the unreliability of the AR govt. Any calculations incorporating govt figures are unreliable. Moreover, if the peso has maintained strength based upon market forces that are themselves affected by the govt's phony stats, that barometer is also suspect.

Well, rule number one during crisis, there is nothing reliable, so it is all about who is less unreliable. So, big deal.

 

[redrum]

well....i think a good general rule of thumb is not to be overly leveraged in any fiat currency or basket of currencies in this race to the bottom.

gold and silver still have a loooooooong way to go in this commodities bull market so keep stacking those coins. silver is actually a great buy right now at "only" $28/oz. it's projected to hit between $100-150 over the next 3 to 5 years.

 

[perry]

The main reason for the very high inflation in Argentina right now is the weakness of the US dollar and for this reason in Pesos the prices are skyrocketing. In Brazil inflation is much less but their currency the Real has been allowed to float and has more than doubled in value in three years .

To many people are fooled by fiat currencies where their history has always been very short . Redrum is right when he says buy silver as it is a great investment.

 

[Bajo_cero2]

I agree. Money is paper, gold is gold, silver is silver always.

 

[azerty]

Gold is more and more paper as well (ETF).