Inflation, the bane of our existence

[Dolores]

bar chart with red up arrow and dollar coin, vector icon

Inflation has hit the Dominican economy quite hard, although the Abinader administration keeps trying to play it down and is attempting to stem the markets’ volatility.

However, the gradual removal of government subsidies from fuels and electricity distributors, along with price increases attributed to the crisis in the global supply chain is, are hurting most consumers. Prices for some fuels are now getting close to RD$300 per gallon when 19 months ago they were under RD$200. The electricity bills have increased across the board, with January’s bill showing a marked increase over December. This is due in part because of the gradual removal of the government subsidies to the EDEs, the power distributors, plus the fact that any electricity consumed in December, but which was reflected on January’s bill, was charged at the...

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[chico bill]

Welcome to the club of excess government spending making money less valuable.
Governments around the world (Especially Europe and the US) borrow and deficit spend and must lower the value of currency to pay off their borrowing
It is not that the goods are more valuable, it is that the currency is worth less.
Moving off the precious metal link to currency has forever set off a cyclone of inflation

All we can afford soon is Chinese junk

 

[DR fan1990]

Buy silver and gold as a hedge against inflation (and to preserve your weath if any).

You can also buy land and or real estate.

Invest in stocks from promising companies.

Buy Bitcoin.

Basically buy any assets that will accrue VALUE over time unlike shitty fiat money.

And diversify your portfolio, i.e. don't put all your eggs in one basket.

 

[chico bill]

The US published today that inflation is at 7.5% on a yearly basis.
Does anyone believe that is all it is ? Hell no.
Seems to me that if you factor in gasoline and food here in the DR plus the increase in other hard goods it seems to me like the last year has been closer to 15-20%, or higher.
I have not done as scientific study of course, but based on what I pay for gasoline, chicken, hamburger meat, dog food, 5 gallon water bottles, OJ, bagels and vegetables, cookies, spaghetti sauce, paper towels, etc it is certainly way above 7.5%.

My credit card used to be around $1,400/mo and I use it for purchases at the supermarket and for gasoline.
It is now over $1,800 a month and I buy and have the same (or much less) driving habits.
$300/$1500 = 20%.

I pay cash pesos for meals out and drinks at bars - and we all know how much beer has gone up
What are other who live in DR experiencing as their best guess of percentage ?

 

[windeguy]

Buy silver and gold as a hedge against inflation (and to preserve your weath if any).

You can also buy land and or real estate.

Invest in stocks from promising companies.

Buy Bitcoin.

Basically buy any assets that will accrue VALUE over time unlike shitty fiat money.

And diversify your portfolio, i.e. don't put all your eggs in one basket.

I'm not confident in the Bitcoin or other Crypto pyramid things. but I will continue to be invested broadly in companies that the big boys invest in.
Not a big fan of putting much into gold/silver either, but to each his own as ways to keep up with inflation.

It might still work for me.

 

[chico bill]

I'm not confident in the Bitcoin or other Crypto pyramid things. but I will continue to be invested broadly in companies that the big boys invest in.
Not a big fan of putting much into gold/silver either, but to each his own as ways to keep up with inflation.

It might still work for me.

If you want to buy silver by the silver ETF "SLV". I made $24K on it in a few weeks back in 2011 when it went over $43 - but it has not gone anywhere significant since although if you bought mid 2020 around $15 you would be up 40%

 

[playacaribe2]

Since this story was posted, in fact the same day it was posted, the Banco Central raised the monetary policy rate to 5%.

Lots of inflationary effects globally.................Covid/supply chain issues/monetary policy that has stayed to loose too long/oil prices/food prices, etc.

The party is coming to an end in the DR and elsewhere and the fiddler needs to be paid.

I was amazed at the DR borrowings since Abinader took office to fund deficits, subsidies etc., and now that no longer can be done. But the damage of cheap money has been done. Interest rates need to continue to rise. Costs to pay for those deficits and borrowings will also increase the need for hard currency. Expect more inflationary price pressures in the DR for 2022 and the inevitable weakening of the peso.


Respectfully,
Playacaribe2

 

[CristoRey]

Buy silver and gold as a hedge against inflation (and to preserve your weath if any).

You can also buy land and or real estate.

Invest in stocks from promising companies.

Buy Bitcoin.

Basically buy any assets that will accrue VALUE over time unlike shitty fiat money.

And diversify your portfolio, i.e. don't put all your eggs in one basket.

You may want to add GBP Sterling to this list.
The currency has been around a very long time and the governing bank
of london rules with an iron fist.

 

[wuarhat]

Buy silver and gold as a hedge against inflation (and to preserve your weath if any).

You can also buy land and or real estate.

Invest in stocks from promising companies.

Buy Bitcoin.

Basically buy any assets that will accrue VALUE over time unlike shitty fiat money.

And diversify your portfolio, i.e. don't put all your eggs in one basket.

Gold is up 1/3 of a percent since a year ago. I probably wouldn't lose more than a couple hundred bucks on a $20 Saint Gaudens I bought ten years ago. Bitcoin is down 11%. Neither has paid a dime in dividends. They are pure speculation, take them off the list. Unless you know what you're doing with stocks, unlike most of us, stick to Dividend Champion stocks with a nice thirty year total return chart, preferably bought after a good dip in stock price. Reinvest the dividends in the stock. Unless you are actually living in it or getting rent that pays more than the maintenance costs, real estate can be tricky also. Don't use anything you'll need for day to day living expenses for any of these ventures.

 

[Kricke87]

The US published today that inflation is at 7.5% on a yearly basis.
Does anyone believe that is all it is ? Hell no.
Seems to me that if you factor in gasoline and food here in the DR plus the increase in other hard goods it seems to me like the last year has been closer to 15-20%, or higher.
I have not done as scientific study of course, but based on what I pay for gasoline, chicken, hamburger meat, dog food, 5 gallon water bottles, OJ, bagels and vegetables, cookies, spaghetti sauce, paper towels, etc it is certainly way above 7.5%.

My credit card used to be around $1,400/mo and I use it for purchases at the supermarket and for gasoline.
It is now over $1,800 a month and I buy and have the same (or much less) driving habits.
$300/$1500 = 20%.

I pay cash pesos for meals out and drinks at bars - and we all know how much beer has gone up
What are other who live in DR experiencing as their best guess of percentage ?

I would totally agree.
I mean in the article they even include an example. Gasoline for soon 300 pesos/gallon, when just a year ago it was less than 200, that's 50% increase. And just as another example, 1 lb ground beef (80/20) in like Nov/Dec 2020 it was around 90/92 pesos, now it's 154-160, that's more or less 65% increase.
So a 7.5% increase, is just pure BS, it must be more like 20%

 

[chico bill]

I would totally agree.
I mean in the article they even include an example. Gasoline for soon 300 pesos/gallon, when just a year ago it was less than 200, that's 50% increase. And just as another example, 1 lb ground beef (80/20) in like Nov/Dec 2020 it was around 90/92 pesos, now it's 154-160, that's more or less 65% increase.
So a 7.5% increase, is just pure BS, it must be more like 20%

And at 20% and climbing how long will the population stand for it?
That Canada freedom convoy may be about more than just masks.
It may be about world wide rejection of woke leadership ignoring the working class.

 

[playacaribe2]

Gold is up 1/3 of a percent since a year ago. I probably wouldn't lose more than a couple hundred bucks on a $20 Saint Gaudens I bought ten years ago. Bitcoin is down 11%. Neither has paid a dime in dividends. They are pure speculation, take them off the list. Unless you know what you're doing with stocks, unlike most of us, stick to Dividend Champion stocks with a nice thirty year total return chart, preferably bought after a good dip in stock price. Reinvest the dividends in the stock. Unless you are actually living in it or getting rent that pays more than the maintenance costs, real estate can be tricky also. Don't use anything you'll need for day to day living expenses for any of these ventures.

Except for generational spikes, gold is not a very good investment......and should not be viewed that way.

It is however and has been, an insurance policy of sorts preserving purchasing power and deserves a place (10 %) in a well balanced investment portfolio.

Gold exports from the DR have helped maintain its hard currency reserves along with remittances from abroad, This has buttressed the peso, cushioning the blow from a steep tourist decline (which would have brought much needed hard currency into the country). That diversification has helped the country immeasurably during the pandemic..............their insurance policy if you will.

And asset diversification is a key to financial well being for both individuals and countries alike.

There is an investment for every season, but not a season for all investments.


Respectfully,
Playacaribe2

 

[wuarhat]

Except for generational spikes, gold is not a very good investment......and should not be viewed that way.

It is however and has been, an insurance policy of sorts preserving purchasing power and deserves a place (10 %) in a well balanced investment portfolio.

Gold exports from the DR have helped maintain its hard currency reserves along with remittances from abroad, This has buttressed the peso, cushioning the blow from a steep tourist decline (which would have brought much needed hard currency into the country). That diversification has helped the country immeasurably during the pandemic..............their insurance policy if you will.

And asset diversification is a key to financial well being for both individuals and countries alike.

There is an investment for every season, but not a season for all investments.


Respectfully,
Playacaribe2

As I mentioned, I keep a little of it around (<<10%). If for no other reason than that it is pretty, and I like to take it out and look at it every now and then. My point was that its market value (except in the '70s) hasn't seemed to have any correlation with inflation. While everything else has been doubling and redoubling for the last four decades, gold has been bouncing around between $1000 / oz. and $2000 / oz. I think the correlation in '70s was because the inflation just happened to coincide with gold finding its actual market value after decades of not being available on the market.

 

[reilleyp]

Went to Santo Domingo last week looking for furniture. Almacenes Unido’s wanted 255,000 for one sofa. No other pieces included. This is not a high end boutique furniture store. Prices are out of control.

 

[Ecoman1949]

Good time to sell house/property in Canada and move full time to a warmer less restrictive climate

When I first started spending my winters in the DR sixteen years ago, it was a relatively inexpensive place to live. My Canadian dollar had a lot of bang for the buck. Unfortunately that’s not the case anymore. I lived in an AI resort for $1200 a month and rented cars for $600 a month. Gas was cheap. Ran around all week on $20 gas in a subcompact. Those days are long gone. The Brits and Europeans still do well because of the value of their currency.

 

[It wasn't me]

When I first started spending my winters in the DR sixteen years ago, it was a relatively inexpensive place to live. My Canadian dollar had a lot of bang for the buck. Unfortunately that’s not the case anymore. I lived in an AI resort for $1200 a month and rented cars for $600 a month. Gas was cheap. Ran around all week on $20 gas in a subcompact. Those days are long gone. The Brits and Europeans still do well because of the value of their currency.

With average selling prices in the many hundreds of thousands of $$$ and if you were born in '49 you'd never run out of money but, do you.

I know someone in an average market in Canada whose basic 3br bungalow is currently valued at just over 1 cool Million CAD. No garage, no pool and relatively small lot. Average for their neighborhood. They'd love to sell and move up to larger even but unless one goes East and in a small town with no amenities, no Doctor, etc...you are just trading houses and value. They're not interested in leaving the country ot moving East so they're stuck. Stuck in a decent place but still stuck and they feel it.

Me...long gone and content

 

[Ecoman1949]

With average selling prices in the many hundreds of thousands of $$$ and if you were born in '49 you'd never run out of money but, do you.

I know someone in an average market in Canada whose basic 3br bungalow is currently valued at just over 1 cool Million CAD. No garage, no pool and relatively small lot. Average for their neighborhood. They'd love to sell and move up to larger even but unless one goes East and in a small town with no amenities, no Doctor, etc...you are just trading houses and value. They're not interested in leaving the country ot moving East so they're stuck. Stuck in a decent place but still stuck and they feel it.

Me...long gone and content

Money is not an issue for me. I can live very comfortably in the DR even with the price increases. I have the best of both worlds. Summers in Canada and winters in the DR. I’m still very active. Kayaking, mountain biking, hiking and motorcycling during the summer in Canada. No way would I have a motorcycle in the DR. DR winters are more laid back. Explore remote areas, beaches, sail with friends, jam with musician friends. Spend time with friends in the campo. I’ve travelled a large part of the world but at this stage of my life I prefer limiting my travelling between Canada and the DR. It’s a wise person who knows their limitations.

 

[wuarhat]

You should go out there with the same tone tell them truckers how you feel.

Until June of 2020 I was a commercial trucker. I never had any problem telling any of the fellow road warriors how I felt. Those guys are not representative of the profession. I suspect there are a thousand times more truckers pissed off at them for fucking up their businesses over such a petty issue.

 

[Ecoman1949]

Until June of 2020 I was a commercial trucker. I never had any problem telling any of the fellow road warriors how I felt. Those guys are not representative of the profession. I suspect there are a thousand times more truckers pissed off at them for fucking up their businesses over such a petty issue.

Not just 90% of non protesting truckers pissed off but laid off auto manufacture workers, auto parts suppliers on both sides of the border, and Canadian and US business people on the border that rely on tourism and shoppers. The bridge has been cleared and about to be reopened.

All of this at a time when inflation is paralyzingly consumers on both sides of the border. Between the pandemic and inflation, thousands of businesses in the US and Canada have closed their doors never to reopen. Houses and life savings lost and many facing a bleaker financial future because of inflation.

The Bank of Canada plans to raise interest rate in four steps this year. Thousands of home owners are a 1% interest hike away from losing their homes.

 

[AlterEgo]

Back to DR inflation please