Sit Tight...Your Dollar is About To Go ALOT Further!

[BAFinance]

Everything seeming a little pricey?

Don't stress too much! For those of you who have/earning in U$D....the rate is likely to change significantly in the next few months.

The Arg Gov has been buying pesos out of the exchange market with dollars to keep the dollar vs pesos exchange rate artificially low (election time).

Well......the dollar reserves are running low and unfortunately Cristina is getting re-elected.....But....the Gov can no longer afford to keep bailing out the peso.

Shortly...the dollar will buy more pesos...how many more? Who knows! Only the free market will tell.

Laugh all the way to the bank

 

[chris]

This will fuel inflation, right?

 

[dr__dawggy]

Everything seeming a little pricey?

Don't stress too much! For those of you who have/earning in U$D....the rate is likely to change significantly in the next few months.

The Arg Gov has been buying pesos out of the exchange market with dollars to keep the dollar vs pesos exchange rate artificially low (election time).

Well......the dollar reserves are running low and unfortunately Cristina is getting re-elected.....But....the Gov can no longer afford to keep bailing out the peso.

Shortly...the dollar will buy more pesos...how many more? Who knows! Only the free market will tell.

Laugh all the way to the bank

Hasn't the Arg government been doing this since, oh, about 2002?

 

[Lucas]

Everything seeming a little pricey?

Don't stress too much! For those of you who have/earning in U$D....the rate is likely to change significantly in the next few months.

The Arg Gov has been buying pesos out of the exchange market with dollars to keep the dollar vs pesos exchange rate artificially low (election time).

Well......the dollar reserves are running low and unfortunately Cristina is getting re-elected.....But....the Gov can no longer afford to keep bailing out the peso.

Shortly...the dollar will buy more pesos...how many more? Who knows! Only the free market will tell.

Laugh all the way to the bank

They wish...

As Duhalde had said before, 'People who had deposited in dollars would receive dollars'.....If Ignorance is bliss then you'd better get stupid quick!

People who think the dollar will come back from a diagnosed terminal death just are kidding themselves.

People who think, if not the dollar then what else?....be tuned and you will be surprised in a big way.

People who are wishing and prognosticating that this country will get again bankrupt also are fouling themselves as they have been doing and predicting this for the last 8 years.

People who are beating against the peso and investing in dollars as they have been fed with misinformation and with scaring doom and gloom tactics also will get their fingers burned as they did when in a stampede run to get into the Bernie Malouf's greedy Ponzi scheme.

People who are thinking that this country, because they just wish and hope that this suddenly be happening because of the elections and by a result it become again a 'el cheapo' paradise, will be better if they get a comfortable chair, hammock or whatever they have at hand, a cozy pillow and their loved teddy bear and lots of patience in the years to come.

 

[mendozanow]

I don't think it is wise to buy dollars with oyur pesos if you earn pesos here (like me) because everything is too uncertain, but there is a very good opportunity that dollars will increase in relative value after the election, so I am holding on tot he dollars I have here and elsewhere..

 

[AlfajorEfi]

Good news for me, but saw it in Clarin 2 weeks ago..

 

[Johnny]

I've been in Buenos Aires for nearly six years and throughout those six years multitudes of expats have been predicting an exchange rate of 5:1, 6:1, 7:1, you name it. This has been going on a long time. Despite those predictions the peso has been gradually weakening with government intervention. I wouldn't be so quick to predict a steep devaluation after the election. The government has called for an exchange rate of $4.40:1 by the end of 2012 and I am sure they will work towards that end. A lot of what is happening at this moment with the increased government intervention in the market is due to speculation. The speculation in the market feeds on itself (like short selling) and will likely taper off after the election, rather than the opposite. So, don't get too giddy. In addition, if the peso does devalue rapidly, the inflation rate will be trotting right along with it.

There is no free lunch.

 

[perry]

If people believe that the dollar is a safe investment they are misguided . Since 2002 the USA has lost 70 % of its purchasing power in Argentina and over 30% in the USA . This is due to inflation and especially food inflation in dollar terms has been brutal the last years world wide.
Dollar inflation is now 20% annually in Argentina and the current rate of devaluation for the peso is 8% in 2011 meaning that a weaker peso has not helped at all . What happened in 2001 is very likely to happen in Europe and the USA soon meaning that all bank accounts and fiat currencies are at risk.

Gold and silver are safer investments . Throughout human history physical gold has been the currency of choice and when human society is in decline fiat currencies all collapse . There are many examples of this in the last 100 years .

The USA is printing trillions of dollars and this will cause hyperinflation destroying your purchasing power . No fiat currency is safe from this.

 

[jb5]

I don't think what BAfinance is talking about is whether the dollar is a safe investment. The issue is whether the peso will continue to lose value against the dollar.

I believe it will for several reasons. One of the biggest reasons in the planned devaluation of the Real. Given the trade relationship between AR and Brazil, this will put tremendous pressure on the peso.

Next is capital flight. We can all take our best guess on what the dollar will do, but the fact is wealthy Argentines have been betting on the dollar and money is leaving Argentina at an amazingly fast pace. The US has pending legislation that will allow foreigners with a half million dollars invested in US real estate to become permanent residents. This will speed it up further. The wealthy fueling the economy will be fueling the economies of Miami and NYC.

Then there's the fact that the central bank recently had to turn to the futures market to keep the peso stable before the election. That can't be sustained.

And then there's the bottom line--given the rate of inflation, the peso is simply overvalued.

There are many, many more reasons. We're living in a country with out of control spending and many unsustainable policies that is driving interest in foreign investment away. Our stronger neighbors are experiencing severe slow downs.

The only reason the peso has remained at this level is the increasingly desperate intervention of CFK. It cant go on much longer.

 

[PhilipDT]

I don't think what BAfinance is talking about is whether the dollar is a safe investment. The issue is whether the peso will continue to lose value against the dollar.

I believe it will for several reasons. One of the biggest reasons in the planned devaluation of the Real. Given the trade relationship between AR and Brazil, this will put tremendous pressure on the peso.

Next is capital flight. We can all take our best guess on what the dollar will do, but the fact is wealthy Argentines have been betting on the dollar and money is leaving Argentina at an amazingly fast pace.

Then there's the fact that the central bank recently had to turn to the futures market to keep the peso stable before the election. That can't be sustained.

And then there's the bottom line--given the rate of inflation, the peso is simply overvalued.

There are many, many more reasons. We're living in a country with out of control spending and many unsustainable policies that is driving interest in foreign investment away. Our stronger neighbors are experiencing severe slow downs.

The only reason the peso has remained at this level is the increasingly desperate intervention of CFK. It cant go on much longer.

Thats it in a nut shell, I think both johnny and jb5 (and bafinance) are right (Lucas as usual has no idea what he's talking about.)

The government's currency manipulations are unsustainable and eventually the market will correct itself, this seems pretty obvious. But it's probably not going to happen overnight on monday.