38!!

[Onions/Carrots]

Here's the kicker- With a population that has been so entirely conditioned with constant out-of-control spending and deficits, thus its subsequent devaluation of the home currency, any deviation in a deflationary spiral would have very deep and profound implications. The nation, as many other nations the same in this world, is not prepared for a period of falling prices. A complete collapse in real estate and other areas would be a foreign anomaly to the general populace at this point in time and that is most likely why it will come to pass. Can you imagine if the DOP went back to 18 to 1 USD? Many of the so called wealthy in the nation would be decimated as costs of debts on their books soars. The use of debt in DR is pervasive and their are real risks when savings has been thrown out the window with the bath water.

As many are awaiting, myself included, the peso to go to 100 you present a very plausible possibility and highly likely scenario since no one expects it. Economics is as much social as it is mechanical. The fact that we expect the peso to go to 100 may work against us since the expectation will mold the expected event therefore nullifying its future reality.

If most expect it, it may very well never occur. The reason being defined by a Spanish saying, "guerra avisado no mata soldado." If most felt such an occurrence as an absolute reality, positions would be taken that would negate the peso from going to 100. In essence, the opposite may occur because in a panicked frenzy during a crisis event, peso holders may want out at all costs. The central bank would intervene destroying pesos digitally to maintain certain levels.

The peso could very well strengthen in that reckless manner you state going to 20 to 1 and that would definitely bankrupt the nation just as well. The peso has been inflated for over 30 years in order to maintain a semblance of order even if it has been an orderly decline. The devaluation of the peso has covered up the reality of a non-productive economy for 3 decades. It has enabled fiscal mismanagement, economic distortions and an IMF created macro-economic "stability" which isn't true stability at all.

Now, given all of this, the historical track record of the peso has been one of constant devaluation to the point of a peso at 40 equaling 2.5 cents. That's a 98.5% loss of its value versus the dollar. The ZERO point is very near and before the peso hits ZERO, a runaway locomotive effect will take place with the peso moving at wild gyrations. At a nearer ZERO point, the peso could unravel like the Ecuadoran sucre reaching the many thousands to die an ignoble death like the sucre at 25,000 to 1.

 

[AndyGriffith]

As many are awaiting, myself included, the peso to go to 100 you present a very plausible possibility and highly likely scenario since no one expects it. Economics is as much social as it is mechanical. The fact that we expect the peso to go to 100 may work against us since the expectation will mold the expected event therefore nullifying its future reality.

If most expect it, it may very well never occur. The reason being defined by a Spanish saying, "guerra avisado no mata soldado." If most felt such an occurrence as an absolute reality, positions would be taken that would negate the peso from going to 100. In essence, the opposite may occur because in a panicked frenzy during a crisis event, peso holders may want out at all costs. The central bank would intervene destroying pesos digitally to maintain certain levels.

The peso could very well strengthen in that reckless manner you state going to 20 to 1 and that would definitely bankrupt the nation just as well. The peso has been inflated for over 30 years in order to maintain a semblance of order even if it has been an orderly decline. The devaluation of the peso has covered up the reality of a non-productive economy for 3 decades. It has enabled fiscal mismanagement, economic distortions and an IMF created macro-economic "stability" which isn't true stability at all.

Now, given all of this, the historical track record of the peso has been one of constant devaluation to the point of a peso at 40 equaling 2.5 cents. That's a 98.5% loss of its value versus the dollar. The ZERO point is very near and before the peso hits ZERO, a runaway locomotive effect will take place with the peso moving at wild gyrations. At a nearer ZERO point, the peso could unravel like the Ecuadoran sucre reaching the many thousands to die an ignoble death like the sucre at 25,000 to 1.

The one thing that I've learned over the years is: "If it's obvious, then it's obviously wrong."

 

[Criss Colon]

SOMETHING Is"UP"With The PEE!!!SO ???

And I don't mean it's VALUE !!!
It has,"Flatlined" for about 10 days against the US dollar, and the EURO.
"FROZEN"!
I believe that the "Banco Central"(BC) of the DR has done this to support the government/IMF's new tax, electricity,
"EVERYTHING" price increases.
People are afraid,and that should devalue the peso,which in 'Domino fashion,devalues the peso more!
The IMF/Int,Debters,want $$$$$$$$$$$$$ from the DR,not DRpesos.At 50 to one,those dollars cost the DR,25 % more than at 40 to one.Therefore,the "BC" artificially keps the peso at 38-1!

But how long can they "Hold-The-Line"???????????????????

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[windeguy]

A\
But how long can they "Hold-The-Line"??????????????????? QUOTE]

Until the US dollars run out. It is very difficult to overvalue a currency.

 

[PeteyPablo]

Wow, some of you guys make some very good points. A guy can almost learn to Forex trade from these boards!

 

[puryear270]

I have a question and an observation.

Question: I have two accounts at Banco Popular, one in pesos and the other in dollars. I have been depositing checks into the dollar account and withdrawing funds from the peso account, trying to anticipate a devaluation of the peso. Is my dollar account safe?

Observation: El Salvador is a country that switched to the US dollar as its currency, and it was the best thing that ever happened to the country economically. Corruption decreased, infrastructure spending increased, and the inflation rate stabilized. This took place after the United States granted Temporary Protected Status to Salvadorans living in the US (and after the devastating earthquake). With the dollarization, newly legalized Salvadorans in the United States began sending more money home to families and to purchase land and houses in El Salvador. I'm not sure how much of that situation is relevant to the current discussion, but I would love to hear the opinions of those who have a better understanding of macroeconomics.

 

[ExtremeR]

A\
But how long can they "Hold-The-Line"??????????????????? QUOTE]

Until the US dollars run out. It is very difficult to overvalue a currency.

Don't think about it that way, the CB has been undervaluing the currency for so long now that I believe it will be easier for them to control this spiral increase on the exchange due to the oil prices. The CB has more tricks under their belt that they care to admit, so don't be surprised if they come out of this one unscatched.

 

[PICHARDO]

A\
But how long can they "Hold-The-Line"??????????????????? QUOTE]

Until the US dollars run out. It is very difficult to overvalue a currency.

It's impossible for the DR to "overvalue" the peso above anything foreign, period!

Those that believe such stupidity are ignorant to how currencies interact with national economies!

The DR had and still is undervaluing the RD$ peso for a long time!

The hippo administration did so to create a batch of millionaires during their time in office. They first bough all the dollars they could gather for months and once the rate was set, they became super rich in seconds... Without stealing a single penny from the state, but creating a wreckage of the national economy overnight.

For the DR allowing the RD Peso to float freely now, would be like a dagger to the heart of our eocnomy! Think that the real rate is no higher than RD$25 to the USD$! Overnight the DR goods and exports to the largest markets that support our economy would flat line in days...

The IMF wants the DR to exact a slow free float for the DR$ peso, given how they see that the DR is using this to stay in an artificial competitive market, when the reality is that DR biz and industry are far from competitive in their own right.

Think this for one second:
It costs more to produce a can of tomato paste in the DR than it costs one that gets produced in the USA at minimum wage far above the wage of a Dominican worker in the farms, trucks, factory and one more thing: Unlike the can in the DR, the one in the USA pays an extra fee to get shipped to the DR from across the sea! Yet! Still the USA can of tomato paste is far more competitive in price than the one produce in the DR!!!!

That tells you what's the problem with allowing the DR Peso to float freely in the rates...

The DR imports more than it exports, allowing the peso to be worth its true rate would kill more than half of the export values and create a two fold or more in the exports coming in! That's assured!

For Hippo the reverse is truth! His people only think of one thing and that's to become rich the easy way and that's via further devaluing the peso on the dollar, to later after and before their end in office dolarizar the DR economy using the hike as an excuse to cover their tracks.

 

[djuno718]

honestly??

Honestly?? i dont think papa is the answer! if Leo continues his rampage and this whole tax proposal then its here to stay for good! the govt is already trained to run itself on the amount of wages that it has coming in! no way another president is gonna lower what hes brining in or generating now! impossible! theyre gonna keep the dollar low because thats what they want! if they raise the dollar then the denomination of the peso dips even lower thus ppl wont want to spend! and thats what they want! ppl to spend! Sad But True! its amazing how each gallon of gasoline has a rd$76 tax tag on it! each gallon! thats unheard of in any other country! its amazing how a country that produces its own produce (chicken, eggs, fruits, vegetables) Has the price on these items SO HIGH! its incredible!

 

[Celt202]

Maybe Not

Stay put wherever you are now? Its not only the DR, its not only Europe, its not only the USA, its the whole world...except for China maybe...

Ghost towns of China: Satellite images show cities lying completely deserted | Mail Online

tip o' the scally cap to acmike

 

[rubenpriego]

Honestly?? i dont think papa is the answer! if Leo continues his rampage and this whole tax proposal then its here to stay for good! the govt is already trained to run itself on the amount of wages that it has coming in! no way another president is gonna lower what hes brining in or generating now! impossible! theyre gonna keep the dollar low because thats what they want! if they raise the dollar then the denomination of the peso dips even lower thus ppl wont want to spend! and thats what they want! ppl to spend! Sad But True! its amazing how each gallon of gasoline has a rd$76 tax tag on it! each gallon! thats unheard of in any other country! its amazing how a country that produces its own produce (chicken, eggs, fruits, vegetables) Has the price on these items SO HIGH! its incredible!

Yes, anyone can tell why good produced in DR, and being so so so basic, like chicken, eggs, etc, has so ridiculous high prices?????
Do you know that in Spain I can buy EGGS, MEAT, MILK and things like that CHEAPER than in DR????? it is really serious enough for making people taking the streets in DR, even more than that ... I really dont understand this situation ...

 

[Criss Colon]

"PICHARDO" For "President", of the "PLD" of Course!

ONLY a "PRDista" could EVER make a statement like; " The value of the DR peso to US dollar is,"25 to 1"!:laugh:
EXCEPT, someone who thinks that, "PARKING SPACES",at,$100,000 US,is a steal!
"OH!", I guess it IS a "Steal",at least for some!!:laugh:
But,I digress!
The actual exchange rate between the DR peso,and US Dollar is 50 to 1.
"PICHARDO" will agree
, but try to tell you it is at "50 dollars to 1 peso"!!! :laugh::laugh::laugh::laugh:

"LLEGO PaPa" ONLY ABOUT 1MORE YEAR OF THE "PLD".."PARTIDO LOCO DOMINICANO"

I,"GOT NO DOG IN THIS HUNT"!.........I'm a, "REFORMIST"

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[RacerX]

Yes, anyone can tell why good produced in DR, and being so so so basic, like chicken, eggs, etc, has so ridiculous high prices?????
Do you know that in Spain I can buy EGGS, MEAT, MILK and things like that CHEAPER than in DR????? it is really serious enough for making people taking the streets in DR, even more than that ... I really dont understand this situation ...

Nobody takes to the streets. That is too much work.

 

[Onions/Carrots]

I have a question and an observation.

Question: I have two accounts at Banco Popular, one in pesos and the other in dollars. I have been depositing checks into the dollar account and withdrawing funds from the peso account, trying to anticipate a devaluation of the peso. Is my dollar account safe?

Historically, 3rd world Latin American nations like the DR have frozen dollar accounts when these same nations have had banking and general economic crisis. Take Argentina for example. In their latest banking crisis, they froze dollar accounts meaning that you could not take out dollars. They took the dollars to balance the national economy's affairs namely balance of payments. They then converted your dollars in your account to their "new" currency at a rate that obviously benefited them-the government. You lost your dollars and your previous conversion rate. You paid for their wasteful ways.

I'm not telling you to close your DR dollar account but to think your dollars are safe because they are dollars is an error prone mode of thinking. When the DR collapses which I believe will be in tandem with the rest of the world's collapse, they will take your dollars and use them as they see fit. Remember, the dollars are in a DR bank account and are subject to DR banking laws not USA laws.

The following example is not a direct example of what I've written about but generally touches on some of the same principles. Our family has a friend who came to the DR in the early '80's with around 80,000 US dollars. He changed them all to DR pesos which at that time was 1-1 so he got 80,000 DR pesos (DOP).

When the peso hit 20 some 15-20 years later, his 80,000 pesos were worth 4,000 dollars. He lived off the interest not touching the principal for some time. Today, he can't even live off the interest because what does 80,000 pesos mean today in terms of money to live off. Even cheaply in a shack on the mountains of Ocoa, you might last one year. Now, he is broke and back in the US.

Think on that and how the government can take your dollars during a crisis and give back pesos at a rate which will benefit them. If you decide to keep your dollar account be aware of economic events on a daily basis. Even then you'll have to be fast and furious to get your money out. We have a friend in Argentina who believed a crisis was about to erupt in Argentina having lived through one before. Luckily, just a few days before, he closed out his dollar account and took out a massive amount of loans. When the crisis hit, he had is dollars wire transferred to an account in the USA and paid back his loans at a 67% discount.

Observation: El Salvador is a country that switched to the US dollar as its currency, and it was the best thing that ever happened to the country economically. Corruption decreased, infrastructure spending increased, and the inflation rate stabilized. I'm not sure how much of that situation is relevant to the current discussion, but I would love to hear the opinions of those who have a better understanding of macroeconomics.

When a nation dollarizes their currency, they relinquish the right to devalue a currency when they need to do so. For example, if El Salvador in the future needs to lower interest rates via a currency devaluation scheme to spur economic activity yet the USA is in a tightening phase, then El Salvador's economy will contract even further. They have no choice since they dollarized and the dollars belong to the USA not to El Salvador.

It's true that corruption drops greatly because the ability to fool around with the national currency is taken away from you. Fooling around with a national currency via central bank tricks is the most easiest way for governmental officials to get rich quick. You are getting something for nothing. The middle class and the poor are paying for that nothing in the form of a lowered standard of living. Since they don't know macro-economics very well they are easily fooled by politicians and central bank attendants. They can tell them anything and the workers will accept it as fact.

Nobody takes to the streets. That is too much work.

Events have to get worse. When people have nothing to lose, they lose it. In the DR when widespread hunger and starvation hit the streets, you'll see the masses rioting. It's coming to America. It will come to the DR.

 

[AndyGriffith]

Historically, 3rd world Latin American nations like the DR have frozen dollar accounts when these same nations have had banking and general economic crisis. Take Argentina for example. In their latest banking crisis, they froze dollar accounts meaning that you could not take out dollars. They took the dollars to balance the national economy's affairs namely balance of payments. They then converted your dollars in your account to their "new" currency at a rate that obviously benefited them-the government. You lost your dollars and your previous conversion rate. You paid for their wasteful ways.

I'm not telling you to close your DR dollar account but to think your dollars are safe because they are dollars is an error prone mode of thinking. When the DR collapses which I believe will be in tandem with the rest of the world's collapse, they will take your dollars and use them as they see fit. Remember, the dollars are in a DR bank account and are subject to DR banking laws not USA laws.

The following example is not a direct example of what I've written about but generally touches on some of the same principles. Our family has a friend who came to the DR in the early '80's with around 80,000 US dollars. He changed them all to DR pesos which at that time was 1-1 so he got 80,000 DR pesos (DOP).

When the peso hit 20 some 15-20 years later, his 80,000 pesos were worth 4,000 dollars. He lived off the interest not touching the principal for some time. Today, he can't even live off the interest because what does 80,000 pesos mean today in terms of money to live off. Even cheaply in a shack on the mountains of Ocoa, you might last one year. Now, he is broke and back in the US.

Think on that and how the government can take your dollars during a crisis and give back pesos at a rate which will benefit them. If you decide to keep your dollar account be aware of economic events on a daily basis. Even then you'll have to be fast and furious to get your money out. We have a friend in Argentina who believed a crisis was about to erupt in Argentina having lived through one before. Luckily, just a few days before, he closed out his dollar account and took out a massive amount of loans. When the crisis hit, he had is dollars wire transferred to an account in the USA and paid back his loans at a 67% discount.



When a nation dollarizes their currency, they relinquish the right to devalue a currency when they need to do so. For example, if El Salvador in the future needs to lower interest rates via a currency devaluation scheme to spur economic activity yet the USA is in a tightening phase, then El Salvador's economy will contract even further. They have no choice since they dollarized and the dollars belong to the USA not to El Salvador.

It's true that corruption drops greatly because the ability to fool around with the national currency is taken away from you. Fooling around with a national currency via central bank tricks is the most easiest way for governmental officials to get rich quick. You are getting something for nothing. The middle class and the poor are paying for that nothing in the form of a lowered standard of living. Since they don't know macro-economics very well they are easily fooled by politicians and central bank attendants. They can tell them anything and the workers will accept it as fact.



Events have to get worse. When people have nothing to lose, they lose it. In the DR when widespread hunger and starvation hit the streets, you'll see the masses rioting. It's coming to America. It will come to the DR.

Sadly it is coming to the U.S. also, but there is still enough political will there vs. the rest of the world to get a Volcker type in and reconcile a situation gone bad with the current G. William Miller lunatic reincarnation. In terms of China, there won't be any "safety" there either. The DR is a basket case and will remain so as long as the home currency is in existence and used to expand deficits at the great cost of the domestic economy.

 

[puryear270]

Thanks so much for your answers, especially Onions/Carrots. Very informative!!!!!

 

[Criss Colon]

What's The Best Wat to Leave The DR with One Million Dollars??????

Come to the DR with TWO million dollars!
And you will be EXTREMELY luck to have the 1,000,000 !!!

Cris Colon

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[AndyGriffith]

Come to the DR with TWO million dollars!
And you will be EXTREMELY luck to have the 1,000,000 !!!

Cris Colon

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How does a guitar dealer end up with a million dollars? Starts with two million.

 

[Criss Colon]

When A Man With Money,Mets A Man With Experience,..................................

The Man With The Experience,Ends Up With The Money,:classic:
And The Man With The Money,Ends Up With The EXPERIENCE!!! :ermm:

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[greydread]

Stocks fall again; Dow below 12,000 level - Business - Stocks & economy - msnbc.com

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Redirect to cash reserves, anyone?

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