New Debate:Dollar Power VS Peso Power

[aristoba]

$US should be your choice.

there is no free lunch in the financial markets.
you are being paid the higher interest rate for the higher risk.
just think why dominican banks need to pay 6 plus percent
when US banks or Eurobanks need to pay a half of one percent on CD's. THat premium is there for a reason. Because it is not safe.I dont have numbers but just driving through Santiago
will show you the risk So many bankrupt and closed banks.
assuming a 17 peso exchange rate at the start
after 1 year the breakeven exchange rate is 18.6
after 2 years 20.0 after 5 years 26.27
With hipolito steering the ship i find those rates way to close.
just think about the interest payments which have to be paid on those huge foreign loans all in US$
all those dollars need to be bought on the free market.
as well the bill for energie.
with the present administration you just cant bet on the peso.
And since you cant bet on the peso there is also no argument
to keep your money here ..
you should bring in only what you need for the short term.

 

[Pib]

I missed the news: what "bankrupt & closed banks"? *DC*

 

[Marc]

Re: Note of interest on Peso exchange

The huge payments that the government is making to the power companies right now, are being made in pesos. Much of this is then converted to USD.

Would this not have an offsetting, if not greater opposite effect on the exchange rate than what you just described (with the tourists bringing in US dollars).

genuinely curious.
marc

 

[Marc]

See you in 6 months

Although I hope that the DR does in fact continue to grow. Gross mismanagement of the sort I am seeing with this government can only result in total collapse...

We'll have to do a checkup in 6 months time.

marc

 

[aristoba]

Re: I missed the news: what "bankrupt & closed ban

nothing new PIb this is just old news..
i just used this to illustrate risk

 

[DOMINICAN PAPI]

DO YOU WANT WAR JULIA?

Julia: that is not the answer i expected. my question was meant to gather factual information about the military structure and the threat of Haiti to my country, but YOU had to nose in with your derrogatory and unwelcomed comments. as a typical Dominican man, i love females, so i would hate to disrespect or offend you, but i have noticed from the posts that you write, that there's an issue of lack of sympathy from your part to the DR, the people that live there, and the ones that post in this board. your messages are about hostility and negativism. always trying to put our country and its people down. i wanna know what your problem is, and if there's anything that can be done so you would feel better among us. if there is, i would do my part to accomodate you so you'd feel better, but if there's no way, then you could just go to another board (or another country) where you can feel better. but it is better to communicate before jumping to conclusions, so get it out of your chest. what are you so mad about? why? where?.....speak up, this is a democracy.

 

[mondongo]

How many foreign central banks hold peso reserves?

Points to address:

1) NEVER put any significant amount of money you derive living income from in commercial paper. It does not get any riskier than that; especially in the DR, where adjudication is an art not a science. The chances are very high that that money will expire before you do. It doesnt matter whether its US$ or RD$.

2) The peso is the ONLY legal currency in the DR, so obvioulsy its used more than the US$.

3) The peso is definitely NOT a world currency. That is totally ridiculous. Is there an efficient market for forex transactions? NO. The total amount is DR$ is a drop in the bucket compared to major currencies.

Bottom line: should you hold peso or dollar?
Do Americans walk around with Lira or Bhat or Pounds? Of course not. They use US$. Do they worry about exhange rates? Of course not, since most of their goods are priced in US$. Exhange rates affect many aspects of the economy, especially inflation.

For those living in the DR, ask yourself these questions:
1) Am I staying here for the rest of my life?
2) can I find stable and reputable institutions that pay high yeild on the peso? (like treasuries in the US)
3) can I live with the interest paid on short term investments (to minimize the effects of inflation)?
4) are the prices of the items that I buy pegged to the peso (not the US$)?

If yes on all 4 then you should definitely put your money in pesos.

 

[Tony C.]

the US would side with Haiti

If for some reason the DR and Haiti would get themselves into an armed conflict rest assured the US would side with Haiti. The Haitian Lobby is getting powerful(They learned from the Cubans in Miami), They are recieving support from Jesse Jackson, Al Sharpton and many US congressmen from the Black Caucus.

The Dominican Lobby is practically non-existent. Most suceesful Dominicans in the US distance themselves from the DR so there is no support.

 

[criss colon]

Re: the US would side with Haiti

Not a chance Tony!There will be no war between DR& Haiti! Haitians may have a "civil" war where they all kill each other!The US ties are "tight" with the DR!Americans for the most part see Haiti as a "third World African Country",located in the Carribean! Americans don,t know that Haiti& DR.are on the same island!Latin culture is "on fire" now in the US,not Haitian culture! Criss

 

[Stephen Hadley]

Well said!!! *DC*

 

[criss colon]

Re: See you in 6 months

Maaarc,100% correct once again!!! Criss

 

["The Tourist Watcher"]

Re:What Banks closed? Kidding me?

No banks have closed in the Dominican Republic since I have been here(Since 1993). There were a few financial failures in the late eighties, mostly financial agencies called "Financieras". These were unregulated financial and investment groups that would pay incredible interest rates(As much as 40% a year) and many fools went for it and paid the price.

A bank called Banco Metropolitano also failed at that time and there was another that I forgot. However these banks were doing the same thing these financieras were doing, basicly junk-bonding money. It should have been an alert to all the investors that when you see Dominican Yorks, politicians, banca owners and strange people doing money business, you stay away from it.

There are more bank failures in the United States, Britain and Germany than Dominican Republic, even size considered. In fact, Dominican banks are merging and becoming more powerful and solid. The Dominican banking system has made leaps and bounds in organization and fidelity. The Dominican government does not have the FDIC type insurance, but the Banking Regulation Department has backed the investors who lost money in those "financieras" and is paying them from the sale of assets, in spite of the fact there is no bank insurance on deposits.

When you look at the Board of Directors of a bank in DR, you can tell about the strenght of the bank. In fact banks in DR share some of the same names and the top financiers, industrialists and business people in DR are shareholders in these banks. If you see a bank or financial institution with names you don't recognize, stay away from it. Never do business with foreigners or Dominican Yorks involved in the financial field. Stay with the old established bankers and financiers. We all know who they are and they are well connected.

The Bolsa De Valores, although not regulated is a safe bet. Besides you only deal with short term investments here.

You have to be an idiot to screw up on 30 to 90 day certificates. If you screw up, you deserved your fate.

TW

 

["The Tourist Watcher"]

Re: ARI back up your claims on bad banks

Ari: When making an illustration on these things you got to have the facts and how they affected the situation. Your illustration is not valid nowadays, specially knowing the circumstances they occurred and the period of time. I am glad you retracted, but it was not a good example.

TW

 

["The Tourist Watcher"]

Re: Read "El Ocaso de La Nacion Dominicana"

Those who wish to keep up with the history of Haitian-Dominican relations, causes and effects and the possible conclusions in the on going settlement of Haitians in DR should read a book by Manuel Nu?ez called "El Ocaso de La Nacion Dominicana"

This book is causing a lot of controversy and is the talk of the town, because it is the best book ever written on the issue and the most intriguing. It is 350 pages of dynamite that has unmasked the cowardly conspiracy by world powers, the Jesuit community, international NGOs, the Haitian government and the Dominican establishment to destroy the Dominican nation.

This book reveals how Haiti's population both in Haiti and the growing minority in DR will be a major holocaust for DR; how the health problems in Haiti will turn epidemics into daily occurrences.

TW

 

[Joachim]

Re: Read "El Ocaso de La Nacion Dominicana"

How this author claim that the Dominican establishment are trying to destroy the Dominican nation? Is it not in their best interests to keep the Dominican nation together, they are already enriching themselves to the fullest extent.

Someone once said: "History are lieds agreeded upon"

 

["The Tourist Watcher"]

Re: WAR WITH HAITI

The Dominican Armed Forces should go into Haiti and take over 20 miles of Haitian territory across and from our border to use it as a buffer zone to stop the Haitian migration. Since that whole area is almost treeless, we should defoliate the rest and create a clear area of vision and set up a huge barbwire fence at the border. Set up an airfield in the buffer zone with helipcopter and road patrols all day and establish a corridor for legal travellers, who would commute back and forth with special permits. We should also declare the buffer zone a war zone. Shoot on sight violators.

Haitians should only be allowed to fly into DR with visas in their passports and the border should be closed to all but very restricted traffic.

If we don't do this, we will have the next Kosovo in 40 years.
TW

 

["The Tourist Watcher"]

Re: Dominican establishment and Haiti

The business community has selfishly created the conditions for the Haitian exodus by eliminating the Dominican workforce and replacing it with Haitian labor. Almost 40% of the labor in the construction and farm industry is Haitian. Dominican employers prefer slave labor to Dominican employees who know their rights. Haitians will work for hours for a loaf of bread and a dirt floor to sleep in.

Haitians can survive in conditions that only desert cretures can survive. Most Haitians practice Geofagia(They eat soil)And is not only children but adults who eat dirt when they go hungry and need food. Since soil contains parasites from the larvae, almost the entire population of Haiti suffers from parasites.

So Dominican engineers and landowners use Haitian labor, because they don't even have to feed them. They can eat with their animals.

TW

 

[Tony C.]

Re: the US would side with Haiti

Hate to burst your bubble Criss but most Americans view Dominicans as either Baseball players or small-time coke dealers from NY.

Politically the DR has no pull whatsoever. If there was a war(Highly unlikely) The networks would be influenced by a well organized Haitian pr campaign. And they in turn would influence the American public.

 

[El Jefecito]

Re: the US would side with Haiti

this subject will go on forever, in real life not the board. I can't remember a time when there weren't problems between the two countries. Seems to me I remember a skirmish back in the 60's where Haiti acted up a little and sent up ther aircraft for attack. The dominican Vampire jets knocked down all seven or so WWII Haitian planes within an hour or two. Haiti will self destruct if they keep on the path they are going.

tony, I disagree with you. Most Americans are now fed up with Haiti and its problems. True, in Florida where the majority of Haitian refugees have done well they are well thought of, but in the rest of the country they (the ones still in Haiti)are seen as a burden on the US and not much more than bush folks. This is not a true representation as we know there are some Haitians that do not fit the "bush" decription but they are very rarely talked about in the US. My own personal opinion is that the best thing to come out of Hait is Barbancourt Four Star.

 

[Tgf]

Re: Read "El Ocaso de La Nacion Dominicana"

TW, "El ocaso de la naci?n dominicana" was the talk of the town 11 years ago. It was printed in 1990. That was when it was "big." It received the same praise by some, and condemnation by others, as the 1983 book "La isla al rev?s" by Balaguer. In fact, many claim that Manuel Nu?ez was just kissing up to Balaguer by writing his book. No matter, but it is old news. The talk of the town? Is this by people who read one book per decade?

On another note, Haiti couldn't invade its own Isla de Tortuga, let alone the D.R. If fighting broke out, the OAS and the U.S. would have a military "peace keeping" force along the border within days. The military point is moot. The encroachment of Haitian people into the Dominican Republic is partially the fault of the poverty of Haiti and its poor government, partially the fault of the international community because it hasn't done enough to bring about real change in the government of Haiti, and partially the fault of those Dominicans who encourage the use of Haitian laborers to keep production costs down. It is a multifaceted problem with no easy solutions in sight. I don't think it is a world conspiracy to convert the D.R. into a Haitian cultural block. I do see it as a natural event similar to the United States and Mexico. As long as you have supply and demand, a porous border, and one nation much poorer than the other, the needy and/or the opportunity seekers will go seeking their fortune rather than starve. When they arrive in the new country they seek out others like them to facilitate living and to replicate a bit of home culture in the new land. I think we can point out numerous neighborhoods in the U.S. where Dominicans, Mexicans, Haitians, etc., have carved out their little niche of home. I guess the same pattern is occurring in Santo Domingo and elsewhere. Aside from rounding up all the illegal aliens (Haitians), building a fence and guarding it 24 hours a day along the border, what is the D.R. going to do?