Peso up to 4.13 - Collapse Finally Here?

[gouchobob]

The Aussie dollar is coming off an all time high and is still, even after last week's losses, much higher than it ever was in the entire history of Australia... Currencies fluctuate wildly in the short term and weekly movements are not of great concern.

In any case, the chart of US dollar to Argentine peso is completely different than the chart of US dollar to Australian dollar (when taken over the last year or years).

All bubbles burst when the underlining asset is at or near its all-time high. Time will tell who is right but should look at where commodity demand in the recent past has come from(i.e. China) and what's happening there now and whats likely in the future. That's why I say its the area of the world that will determine what prices are in the coming months. Right now there is considerable concern about viability of continuing demand from China and other locales. These are the concerns that drove the crash last week.

 

[igor]

All bubbles burst when the underlining asset is at or near its all-time high.

I think this observation alone deserves a Nobel Prize in Economics.

 

[gouchobob]

I think this observation alone deserves a Nobel Prize in Economics.

Thanks but I don't deserve the prize. I am only commenting on an earlier post that basically stated I was wrong because the Australian dollar is or near its all-time high. All I meant to say is that all-time highs frequently result in serious corrections or represent something that is seriously overvalued.

 

[tanvimil]

I think this observation alone deserves a Nobel Prize in Economics.

Snap. If there was a top 10 for best retorts on baexpats. That one would be a great candidate.

 

[John.St]

Looking at a one year chart of the Arg Peso against the dollar today's move is unprecedented.

Not really, the same happened in

2008.09 2.98
2008.10 3.15 +5.7%
2008.11 3.34 +6.0% +12% in two months

and again

2008.12 3.06
2009.01 3.49 +14%

View U$S/AR$ 2008-2011 JAN here: http://baexpats.org/expat-life/15559-inflations-factor.html#post113609

 

[ptolemy]

A somewhat old link but a plausible forecast: http://www.bloomberg.com/news/2011-...ollar-for-first-time-since-1992-creation.html

 

[gouchobob]

An interesting article on worries from Canada on weakening demand from China for commodities. If demand does drop significantly then its probable that commodity prices could fall dramatically. If this happens most commodity countries including Argentina will feel the impact along with a drop in their currencies versus the U.S. dollar. My opinion is that we could see the peso drop in value significantly over the next few month. Those with dollars may find they go further in the near future.

http://www.ctv.ca/generic/generated/static/business/article2017135.html