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  1. #1
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    Post Consequences of currency manipulation

    Today I suspended my project that would have placed an additional 80-150 jobs in the RD (paying 15,000 to 35,000 pesos a month).

    I simply do not have the tolerance for government and elite sector interference in my business models.

    I have always believed that everything could be done better or cheaper outside the RD and that any business venture in this country was more based other factors (family in my case).

    Today I decided these factors were outweighed by business acumen.

  2. #2
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    Default Be patient for a while

    Quote Originally Posted by Lurch
    Today I suspended my project that would have placed an additional 80-150 jobs in the RD (paying 15,000 to 35,000 pesos a month).

    I simply do not have the tolerance for government and elite sector interference in my business models.

    I have always believed that everything could be done better or cheaper outside the RD and that any business venture in this country was more based other factors (family in my case).

    Today I decided these factors were outweighed by business acumen.
    I belive the dollar will appreciate by the beginning of next year, this country will be dying if the dollars dropped to 1:25 or 1:20, most of the exporting business will be gone, then how this country can earn US dollars? by borrowing? by remittance? NO, never enough.

    Let's see. Be patient a while. take care.

  3. #3
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    Default being patient

    Jamie: it's hard to be patient when what he said breaks down to an estimated payroll cost of $80,000 to $150,000 per month. Not counting his basic start up costs,etc.
    Better he should be intelligent,no?

  4. #4
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    Nobody Is Manipulating The Exchange Rate Guys

    The Lack Of Confidence Of The Hippo Administration Cause All This Caos.

    Things Will Get Better

  5. #5
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    Unhappy Currency Manipulation! Obvious!!

    I disagree strongly that there is no currency manipulation going on the DR.
    25 - 30% increase in the value of the Peso in 3, 4 weeks?? Why??
    What group of human beings, all DRs, is making these decisions? Part of gorernment? Pricate sector?
    What economic factors are these decisions based on?? Goldman Sachs opines that the peso will trade @ 35 in 2005, probably an average price for the calander year.; then 45 iin 2006 & 2005. Assuming that G S is reasonably [not 100$] accurate, what economic factors will have the peso deprecate by 30% in the next 7 months?? [13nov04 @ 27 - to 1jul05 @ 35, rounded off]
    After appreciating by 30% in the past month?? Incredible! Unreal! Corrupt!!! Manipulation! So obvious. So painful. Yet, who are the culprits? Nobody asks; nobody answers!! Where are Dan Rather & the New York Times when we need them?? Socially unjust! Foreigners suffer, some but not terribly. The inreasing ranks of the poor have descended below the poverty line. Who is profiting?? Food for thought.

  6. #6
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    Wednesday, November 13, 2002
    1 US Dollar = 19.22700 Dominican R. Peso

    Tuesday, May 13, 2003
    1 US Dollar = 25.72100 Dominican R. Peso

    Thursday, November 13, 2003
    1 US Dollar = 37.20700 Dominican R. Peso

    Thursday, May 13, 2004
    1 US Dollar = 48.19500 Dominican R. Peso

    Where was the manipulation?

    Barnabé

  7. #7
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    Let me ask you a question. It went from about 54 to 26 when the government didn't supply electric, didn't pay their bills, didn't pay their interest and you don't think this is manipulation?

    Guess I see it differently.

    But... where else in the world can a car I paid 10k for over a year ago be now worth about 30k according to my insurance company. Maybe all of this makes some sense in a nonsensical way.

    Scott

  8. #8
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    Quote Originally Posted by gringosabroso
    Goldman Sachs opines that the peso will trade @ 35 in 2005, probably an average price for the calander year.; then 45 iin 2006 & 2005. Assuming that G S is reasonably [not 100$] accurate,
    I keep seeing references to Goldman Sachs or Merril Lynch et al. These brokers are in the business of making money for their clients. Their clients make money if the DR pays back all those high interest loans. These loans are payable in US$. Their idea of a good DR economy is not your idea of a good DR economy.

    These are the same brokers that told you to buy Juniper Networks at US$200/share. They don't give a crap about the average Dominican Resident. They have been and continue to be thieves....just like Mejia.

    Here is a stock picking tip: when all brokers have a stock at "SELL", that is the time to buy.

    Stop listening to these guys, for heaven's sake.

  9. #9
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    Default Currency manipulation.

    There is of course currency manipulation in the DR. While it may be romantic to fantasize about well functioning free markets in the DR, there is no comparison to the first world.

    When you can tell me that the rule of law is fairly and evenly adjudicated....then that is a start.

    As an example, ostensibly in an attempt to keep the exchange houses/banks from hoarding US$, the DR governement decreed that all unsold US$ had to be forked over to the Central Bank at a predetermined rate. At the same time, the amount of US$ that could be bought at any one time was limited. This means that at the end of each day, the Central Bank was sure to sweep quite a bit of US$, just like a bunch of gangsters coming for their take at the end of the day.

  10. #10
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    Default

    Quote Originally Posted by mondongo

    As an example, ostensibly in an attempt to keep the exchange houses/banks from hoarding US$, the DR governement decreed that all unsold US$ had to be forked over to the Central Bank at a predetermined rate. At the same time, the amount of US$ that could be bought at any one time was limited. This means that at the end of each day, the Central Bank was sure to sweep quite a bit of US$, just like a bunch of gangsters coming for their take at the end of the day.
    This has been a legal obligation for years, if you followed the rules provided by the Superintendencia de Bancos, well before Hippo came onto power, not to mention Leonel. 24 hours to sell the foreign currencies, and a DAILY report of the operations to the CB.

    The problem is the price level, not the exchange rate. In the sectors with oligopolistic control, the adjustment is likely to be very slow.. In others it's already under way.

    Also not all the businesses are short sighted. Look at the cement bag: the few companies could have agreed to keep it at a higher price for a while.

    Barnabé

    PS I agree 100% that comparing DR with the US or Western Europe doesn't make much sense.
    Last edited by Barnabe; 11-13-2004 at 12:45 PM. Reason: PS

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