- Thread starter NYC_Girl
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Banco Central Certificates - 50%
If inflation here is over 100% inless than one year,
What good are certificates that pay at 50 %? You do the math!Would you loan money to a "Evil Knievel" at 100% just before he jumped (Or attempted to jump) the Snake River Canyon in a rocket propelled motor cycle???CC
What good are certificates that pay at 50 %? You do the math!Would you loan money to a "Evil Knievel" at 100% just before he jumped (Or attempted to jump) the Snake River Canyon in a rocket propelled motor cycle???CC
A simple way to read this new offering is that the bank knows the peso will devalue by more than the interest rate paid over the term of the certificate.
In otherwords, If the term is three months, expect the peso to devalue by at least one quarter of 50% or 12%. That means 54 to 1 by end of May.
In otherwords, If the term is three months, expect the peso to devalue by at least one quarter of 50% or 12%. That means 54 to 1 by end of May.
NYC_Girl said:
I know some idiot who bought them and feels very happy about it and keeps telling everybody.
Of course, so far he only gave his money to the Central Bank. We'll see if he's still as excited when the day to cash interest comes. Or even when he asks his deposit back
Asked and Answered
There you go. You answered it already, they of course must be.
They'd be called "dumb-asses" proven by depositing anything of substance in pesos. A sock full of US$ is a better bet, as long as you can afford a sock.
NYC_Girl said:
There you go. You answered it already, they of course must be.
They'd be called "dumb-asses" proven by depositing anything of substance in pesos. A sock full of US$ is a better bet, as long as you can afford a sock.
NYC_Girl said:
a) I don't like my money (RD $, ? Sreling OR US $) in any bank here, it could well go missing - swallowed up by a new Central Bank ruling!!
b) I wouldn't trust CB any more than I could throw them - They change the rules to meet THEIR needs, not MINE!!
c) I wouldn't invest in RD $'s until any Goevernment in power PROVED to me that the RD pesos would remain strong for a 6 month period (HELL, they can't manage six HOURS at the moment!!).
d) 10 or 12% return from outside institutions (they have been mentioned many times before on this board - look up Finance Houses or yell me for explanations) on US $, Euros or ? Sterling is a FAR safer risk, will give you a POSITIVE return rather than negative one.
Do a search on "Investments", "Investing", "Finance Houses" to see what information you can gleen & IF such a risk is relevent & acceptable to you. Saving in RD PESOS is NOT a good idea - change them for International type currency (US $ is best due to the reliance here on US $'s!!) & then invest if you can afford it!! - Grahame.
It'll Be Tough
Since they are peso certificates I can't figure out how you will buy them without, well, pesos.
You don't get 50% interest per year on US$ (you get 5 or 6% and still ahve the same risk of getting the principal back) that's the reason these useless certificates are 50% per annum.
So if you are blessed, in a year you can redeem them for less cash equivalent in US$, than you paid for them , and IF you can get the money back at maturity. Woo-hoo! Sign me up!
I will offer 100% per annum on US$ if I don't necessarily have to give the money back. As an alternative I will sell a good sock, your choice of colours for US$100 and with every deposit you get a toaster.
NYC_Girl said:
Since they are peso certificates I can't figure out how you will buy them without, well, pesos.
You don't get 50% interest per year on US$ (you get 5 or 6% and still ahve the same risk of getting the principal back) that's the reason these useless certificates are 50% per annum.
So if you are blessed, in a year you can redeem them for less cash equivalent in US$, than you paid for them , and IF you can get the money back at maturity. Woo-hoo! Sign me up!
I will offer 100% per annum on US$ if I don't necessarily have to give the money back. As an alternative I will sell a good sock, your choice of colours for US$100 and with every deposit you get a toaster.
They Shouldn't Invest Either
You have enough RD$ to put into the certificates I'd say turn it into US$ and hang on to it.
gerd said:
You have enough RD$ to put into the certificates I'd say turn it into US$ and hang on to it.
And you can make toast as well
With the toaster you can at least eat , with a mitt full of pesos eventually, maybe not.
Formosano2000 said:
With the toaster you can at least eat , with a mitt full of pesos eventually, maybe not.
You never know
Says who ? When cooking gas becomes critically short (as has happened ), those pesos will come handy as emergency "combustible". Just make sure you have those old-fashioned open-air clay ovens
ricktoronto said:
Says who ? When cooking gas becomes critically short (as has happened ), those pesos will come handy as emergency "combustible". Just make sure you have those old-fashioned open-air clay ovens
If you already have pesos, a CB certificate is a GOOD investment.
There are a lot of nasayers out there but the reality is that the DR has been down this road before - fuel shortages, high inflation, bank failures, government corruption, etc. During these periods (the last one was 1991) CB rates of interest rose dramatically (up to almost 40%). Eventually, inflation came down, banks became stronger, corruption lessened and the economy stabilized.
There's a lot of panic out there. Reading some of the post you'd think that the country was going to fall off into the ocean. The DR, like every place else, has a cyclical economy. The only difference here is that the peaks are a little higher and valleys are little deeper. :smoke:
There are a lot of nasayers out there but the reality is that the DR has been down this road before - fuel shortages, high inflation, bank failures, government corruption, etc. During these periods (the last one was 1991) CB rates of interest rose dramatically (up to almost 40%). Eventually, inflation came down, banks became stronger, corruption lessened and the economy stabilized.
There's a lot of panic out there. Reading some of the post you'd think that the country was going to fall off into the ocean. The DR, like every place else, has a cyclical economy. The only difference here is that the peaks are a little higher and valleys are little deeper. :smoke:
People ought to read history threads
How many times have we gone over this? Only about two weeks ago I posted a thread about my experience with Banco Central in the open forum. I had one of those 180 day certificates with 36% interest. When I opened the certificate I took a considerable risk, equivalent to buying international stocks in Wall Street.
Upon maturity, Banco Central people told me they could offer me up to 54% interest if I renewed. I refused, took my money and bought myself an apartment, where great deals are found with cash in hand. The day I cashed the check at BC the stack of $1000 and $2000 pesos bills they paid me with were still hot from the press. Many even stuck together due to the static. Banco Central prints money as they pay these certificates with "inorganic" money, the same kind Germany used to print after WWI when they could not pay the war reparation debts ordered by the Treaty of Versailles.
This new scheme by Banco Central and supported by Hipolito Mejia is nothing more than a pyramid scheme. Those who got in at the beginning will get and many, like me got their money with big gains. Those who get in now are taking an incredible risk, because it is hard to find out at what stage the Banco Central pyramid has risen before its critical mass reaches its own Chandrasekhar Limit(the scientific formula whereas the mass of a star has increased beyond a limit that forces it to collapse within itself and becomes a black hole).
I believe that just like an overblown white dwarf star, Banco Central certificates are close to the default limit and those who get in now are risking at least having their capital payments deferred for 10 years upon maturity of the certificates. There are many economists pushing for this, among them Eduardo Tejera. Once these economic gurus start making suggestions like this, they soon become reality. Economists are used by government as devil's advocates to throw trial balloons. Regardless, Banco Central has no reserves in gold or dollars to back up over $100,000,000,000 in debt.
While I was in it my monthly payments were religiously made thru electronic transfers to my bank account. Several times payments arrived earlier than the due date. Banco Central had no trouble either coming up with my capital at the time of maturity. But that was then. What will it be in 90 days after the elections with a bankrupt government and a bald head maniac at the helm?
TW
How many times have we gone over this? Only about two weeks ago I posted a thread about my experience with Banco Central in the open forum. I had one of those 180 day certificates with 36% interest. When I opened the certificate I took a considerable risk, equivalent to buying international stocks in Wall Street.
Upon maturity, Banco Central people told me they could offer me up to 54% interest if I renewed. I refused, took my money and bought myself an apartment, where great deals are found with cash in hand. The day I cashed the check at BC the stack of $1000 and $2000 pesos bills they paid me with were still hot from the press. Many even stuck together due to the static. Banco Central prints money as they pay these certificates with "inorganic" money, the same kind Germany used to print after WWI when they could not pay the war reparation debts ordered by the Treaty of Versailles.
This new scheme by Banco Central and supported by Hipolito Mejia is nothing more than a pyramid scheme. Those who got in at the beginning will get and many, like me got their money with big gains. Those who get in now are taking an incredible risk, because it is hard to find out at what stage the Banco Central pyramid has risen before its critical mass reaches its own Chandrasekhar Limit(the scientific formula whereas the mass of a star has increased beyond a limit that forces it to collapse within itself and becomes a black hole).
I believe that just like an overblown white dwarf star, Banco Central certificates are close to the default limit and those who get in now are risking at least having their capital payments deferred for 10 years upon maturity of the certificates. There are many economists pushing for this, among them Eduardo Tejera. Once these economic gurus start making suggestions like this, they soon become reality. Economists are used by government as devil's advocates to throw trial balloons. Regardless, Banco Central has no reserves in gold or dollars to back up over $100,000,000,000 in debt.
While I was in it my monthly payments were religiously made thru electronic transfers to my bank account. Several times payments arrived earlier than the due date. Banco Central had no trouble either coming up with my capital at the time of maturity. But that was then. What will it be in 90 days after the elections with a bankrupt government and a bald head maniac at the helm?
TW
Thanks Golo for your reply. I was looking for responses from people that actually have the experience in this subject.
It will be interesting to see what happens in May. We took our money out last year but my sister-iin-law kept the certificates they were offering last year. They mature at the end of May. I'll keep posting what happens when she goes to cash in her certificates.
Thanks,
Lucy
It will be interesting to see what happens in May. We took our money out last year but my sister-iin-law kept the certificates they were offering last year. They mature at the end of May. I'll keep posting what happens when she goes to cash in her certificates.
Thanks,
Lucy