When Will The Peso Hit 10?

[Joe]

Look at the chart. It has officially gone parabolic.

Joe, also known as The Guru in the Peso Pits, predicts that the peso will be back below 10 by the end of the week.

This is not a vote of confidence in K, but simply an affirmation of a market overreaction.

 

[shoush]

For some reason I'm feeling the same thing Joe! I think it will go down, but stay level at 9.73 ish

 

[Inferno.]

But, isn´t a low valued peso, even if only by the Blue rate, an incentive for people to spend in Argentina ?

I always try to see the good and the bad. Of course, that's a good thing, people from other countries are coming here and spending buying things. One of the problems is that by exchanging their money into the blue market (and not by using credit/debit cards, banks, oficial exchange houses), the central bank of argentina is not getting those dollars nor they are going into the official market (because that's dirty money, unless you launder it). That's something that hurts the country, but is not something that has a direct impact on the people in the short haul.

The second problem is one of the policies of this model. By not allowing the people to save their money (BCRA/AFIP resolutions to prevent exchange pesos into another currency, or buying gold/silver), they promote spending. That's partially good (and answering your question, it also applies to foreign people using the blue market). The bad thing, and the second problem that I see, is that doing this because of this reason, causes inflation to raise even more and contributes to the depreciation of the national currency.

Buying because you want is one thing. Doing it because you want to get rid of the money is not good, it generates more problems that what it solves. So, in other words, I don't think that this policy can work in the long haul if the currency is being looked at something that will keep depreciating and has less buying power each day. Confidence is not something you can keep by putting laws, resolutions or similar. I believe they should address this with other measures, not hiding it under press releases that no one believes except fanatics.

Joe, also known as The Guru in the Peso Pits, predicts that the peso will be back below 10 by the end of the week.

I think the same, it will probably go down because that's what it always does, but not at the values we saw in the past. I believe this marked a new floor, so I doubt we are going to see again the blue at less than 9. When it reaches 11 in the next few weeks/months, we will not see it again at 10, and so on.

 

[JamJam]

Thats still a big spike.

How do you guys see this playing out?

 

[Rich One]

The blue dollar rate does not respond to classical supply and demand but instead to some external factors that alter the public levels of confidence . Such as Cristinas Twits, new exchange restrictions, Moreno's bullying , etc.

 

[Joe]

Thats still a big spike.

How do you guys see this playing out?

I expect they can keep this game going for years. The dollar restrictions will slowly be increased. The one thing that could cause it to blow up sooner than a year or two is if Europe or China (or US or Japan) implode in the meantime.

Some of the new restrictions I see coming down the pike:

• A law making it illegal to wire money overseas to buy a house (all monies must be in Argentina).
• An eventual crackdown on the cuervas and arbolitos.
• Reduction of the amount of currency you can bring in and take out.
• Requirement that you change all hard currency at immigration or face confiscation at aduana.
• Transfer tax of 70% of the difference between the Official and Blue rate at Xoom and others.

Full disclosure: I'm bucking for a position as a Finance Policy Consultant for Kiciloff.

 

[Hybrid Ambassador]

If a greater portion of world tourists destination ( one billion ) stops in Argentina and spends a tiny portion of its calculated ( one trillion dollars )total spendings, it will help tremendously to the economy recovery of Argentina. Argentina has to concentrate its focus for its foreign currency revenue attainment by luring the elusive tourists to visit Argentina. Mean measures is to be in the books of reform,create a squad of "Tourist Police" to look after the thousand of tourist visiting the prime tourist attraction places of the country. What do you the savvy expat folks living there thinking and giving the opinions of how to attract more foreign tourist with Dollars to spend in Argieland.?

 

[Joe]

If a greater portion of world tourists destination ( one billion ) stops in Argentina and spends a tiny portion of its calculated ( one trillion dollars )total spendings, it will help tremendously to the economy recovery of Argentina. Argentina has to concentrate its focus for its foreign currency revenue attainment by luring the elusive tourists to visit Argentina. Mean measures is to be in the books of reform,create a squad of "Tourist Police" to look after the thousand of tourist visiting the prime tourist attraction places of the country. What do you the savvy expat folks living there thinking and giving the opinions of how to attract more foreign tourist with Dollars to spend in Argieland.?

All the Japanese tourists go to Machu Pichu but nowhere else in LatAm. Your job as Toyota Prius Hybrid Ambassador is to get the Japanese to come to Argentina, as it has not yet received radiation fallout from Fukushima, like Hawaii and the US and Canadian west coast. If you can redirect Japanese tourists from North America to Argentina, Cristina is prepared to make you a Living National Treasure.

 

[Splitty]

If a greater portion of world tourists destination ( one billion ) stops in Argentina and spends a tiny portion of its calculated ( one trillion dollars )total spendings, it will help tremendously to the economy recovery of Argentina. Argentina has to concentrate its focus for its foreign currency revenue attainment by luring the elusive tourists to visit Argentina. Mean measures is to be in the books of reform,create a squad of "Tourist Police" to look after the thousand of tourist visiting the prime tourist attraction places of the country. What do you the savvy expat folks living there thinking and giving the opinions of how to attract more foreign tourist with Dollars to spend in Argieland.?

How about adding flavor and spice to food here. Maybe a change from the 3 food groups: Empanadas, pizza and Pasta

 

[Hybrid Ambassador]

All the Japanese tourists go to Machu Pichu but nowhere else in LatAm. Your job as Toyota Prius Hybrid Ambassador is to get the Japanese to come to Argentina, as it has not yet received radiation fallout from Fukushima, like Hawaii and the US and Canadian west coast. If you can redirect Japanese tourists from North America to Argentina, Cristina is prepared to make you a Living Treasure of Argentina.

Joe-san, now get serious. The Japanese are not the big spenders anymore, the PRC's tourist are the ones.! Look, they bought off all of France's vintage wines. The Chateaus, the vineyards, etc. Plus they are donating to Bs As,the train system to Ms K. So and then and no all J-tourists goes to Machu Pichu, they visit the Patagonia's region and the great falls, both Brazil and Argentina.