Holy shizznit...dollar droping like a rock

[MrMike]

Yeah I will be surprised if there are any significant lowering of prices happenning.

Everybody loves an excuse to raise prices, but pretty much ignores any reason to lower them. Plus, most businesses do their accounting in pesos, and so stock that they bought at a higher rate will be expensive until they are sold out - and with the prices as high as they are it could take a long time.

 

[mk-ultra]

well i guess the key is stability. a few years ago when the peso was around 16:1 - 18:1, it didn't fluctuate much outside that spectrum and things were stable. but when it began to drop, it dropped drastically and really hurt the dominicans, while helping the foreigners. i would hear nothing but economic horror stories from my dominican family and friends all over the country. many looking for a way out of there.

as some have mentioned, it'll take time for prices to drop and i assume it'll be the duty of the government to regulate prices. if they can keep the peso stable again, then balance should inevitably follow. the good thing is atleast things are moving in the opposite direction. for a while there we feared another argentina. i spend dollars when i go there, so a stronger dollar is in my personal best interest, but my individual interests mean nothing compared to the whole. i don't mind losing personally, as long as the country does well.

peace

 

[DogsRule]

I agree with you

again, i'm no econimist and infact this is a foreign subject for me, but i know as the peso was getting weaker and made it to around 50:1, the prices went up and the wages remained the same, which put a real hurting on the average dominican earning pesos. was good for the foreigners and tourists with their dollars, but bad for the dominicans. so it seems to me as the peso gets stronger again, prices will eventually go down somewhat and dominicans will be better off.

i know many on this board are foreigners, which is why they prefer hippo and a weaker peso. but isn't that a bit selfish? capitalistic to say the least? not thinking of the greater good for the dominican people? i mean after all, it is the dominican republic, not the american republic.

peace

As I read this board it seems that our view is the minority view, but I agree 100% with what you are saying here.

 

[ecarignan]

I'm no expert but is the CDN dollars loosing at the same rate as USD against the pesos? It would be interesting to see if Euros and CDN $ is devaluating against the peso at the same rate or is this just related to USD? What's the current going rate for CDN:RD.

As some of you might know, the USD is devaluating against the CDN dollars also. I'm arriving this weekend and wonder to bring USD or CDN.

Thanks,
ecarignan

 

[AnnaC]

Good question. Can someone find out what the CND is getting? Right now it's at an 11 year high against the US dollar and I'm trying to decide whether to buy US or not.

Hang on I knew Trina had asked the other day and I found it. As of Sept 29th posted by Dodger

Currently the rate is 27.15 pesos to the $Canadian

If it's like this not worth changing to US

Thanks

 

[Jerry K]

Canadian $

This mornings quote is 22.5 to 1 Ca
The peso is gaining on both the US and Canadian $
Looks like the almighty peso is the coin of the realm now.

 

[mharshman]

peso peso

again, i'm no econimist and infact this is a foreign subject for me, but i know as the peso was getting weaker and made it to around 50:1, the prices went up and the wages remained the same, which put a real hurting on the average dominican earning pesos. was good for the foreigners and tourists with their dollars, but bad for the dominicans. so it seems to me as the peso gets stronger again, prices will eventually go down somewhat and dominicans will be better off.

i know many on this board are foreigners, which is why they prefer hippo and a weaker peso. but isn't that a bit selfish? capitalistic to say the least? not thinking of the greater good for the dominican people? i mean after all, it is the dominican republic, not the american republic.

peace

However,
Now, foreigners like me, are not buying,and eventually people will not have work because of no business. It is now cheaper to buy products in the US and send Business Mail.
The prices for local products are now the same as imported. Check meat at Supermacado National.
All work suspended in La Casa.
So if you think that this is good for the Domincan people who just lost their jobs because business is down 40% and there is no money to pay wages you must be very rich.

 

[mharshman]

Bull

again, i'm no econimist and infact this is a foreign subject for me, but i know as the peso was getting weaker and made it to around 50:1, the prices went up and the wages remained the same, which put a real hurting on the average dominican earning pesos. was good for the foreigners and tourists with their dollars, but bad for the dominicans. so it seems to me as the peso gets stronger again, prices will eventually go down somewhat and dominicans will be better off.

i know many on this board are foreigners, which is why they prefer hippo and a weaker peso. but isn't that a bit selfish? capitalistic to say the least? not thinking of the greater good for the dominican people? i mean after all, it is the dominican republic, not the american republic.

peace

You have to be kidding.
Supermercado National empty and laying off people as of yesterday.
Shipping what I need Business Mail
Local goods same price as imported goods.
Not having any work done on my house.
Plumbers Electiricians etc. out of work.
You have to be kidding fella,or ignorant.

 

[Riu]

my 50 cents

I believe that the DR economy is really bad, but not as bad as many perceive. If you read the news, over the past month the foreign private sector has already begun with investment plans in the DR, the political climate is more stable as opposed to HIPPO, let's face it the guy was an ignorant jackass. Perception is the trick here, granted the economy is bad, but as in any economy what people perceive may overshoot reality. The plans and actions by the new administration are causing the dollar price to slide that is not to say that that is the actual price at which the dollar will stay and stabilize. The previous dollar spike (50:1) was caused more by political conditions that led to economic shutdown than by actual economics alone. When leaders are not chosen well the outcome is devastation at all levels of the economic spectrum. HIPPO was irresponsible and what the Dominican population is dealing with right now is the aftermath of his administration behavior. In short I see the peso stabilize around 25-30.

 

[suarezn]

You have to be kidding.
Supermercado National empty and laying off people as of yesterday.
Shipping what I need Business Mail
Local goods same price as imported goods.
Not having any work done on my house.
Plumbers Electiricians etc. out of work.
You have to be kidding fella,or ignorant.

Agree with you bro...I was just about to begin a large addition to my house in The DR. This would provide a few jobs to people who need it. As of now I'm putting it off until we have an idea where things ill finally stabilize. I had already put it off when the dollar was going up like crazy, since I didn't know how high the prices would go.

Leonel...remember that without stability the country cannot move forward!

 

[NALs]

Yes, in theory...the issue is that once prices go up they don't come down as they should. So now everyone suffers, even those people whose main income are remittances from relatives abroad, who were doing good before.

Like I said before, where is Hippo when you need him?

The reason why prices have had a tendency to not come down as they should, is because in the past, whenever the dollar fell, it usually went back up again by the time business men were going to believe that it had stabillize it self. So, they don't lower the prices.

If the Dollar keeps falling and stabilizes in the 20s or maybe even the teens, and it stays those ranges for a while, watch prices fall as investors and business owners begin to believe that the peso will be down for longer period of time. No body wants to lose money, so they hold on to high prices as a precaution in case the dollar jumps up again. I believe the dollar will continue to fall and the stabilize in the low to mid 20s or maybe even lower. Once it reaches that area, prices will begin to tumble as people and business owners put more belief in the exchange rate.

 

[NALs]

ps. I never met a third world government that didn't help the rich and screw the poor

What government in the world helps the poor and screws the rich?

 

[NALs]

It would be good if it was permanent, for Dominicans earning pesos, especially those who need to buy dollars.

As this board is comprised of mostly foreigners, for whom this is not good, we are all complaining.

Also, prices are not reflecting the value increase. Add to this the fact that many foreign businessmen, like myself, are considering other countries like Costa Rica to conduct our business as a result of the devaluation of the dollar. My company pays Dominicans 12 times the minimum wage, as do most of the other companies in my business. Less high paying jobs in the country, less foreigners vacationing here, foreigners here spending less, etc. can not possibly be a good thing for this country.

That's the problem with a country that depends on others countries industries rather than our own.

That is why I'm against free trade and more for protectionism. That way, Dominican industries would flourish and we become less dependent on foreigners for our own survival!

 

[NALs]

This transition to The "New Fernandez Economy" occured way too fast.
Unless you had the heads up call to get out of dollars you got burnt.
I guess the RDBBC made a killing on this..........no surprise.

I hate to say it, but I told you and everybody else this was going to happen.

The funny thing is that I said that back in DECEMBER - all under the basis of whether Leonel won the elections. He won, so my predictions are becoming a reality!

If people put more attention to what I say, they would be making fabulous money if they are smart enough to figure it out!

Oh well...

 

[NALs]

If it does not then you can only assume that the wealthy are determined to keep prices high in order to make more money. They can make all kinds of excuses...gasoline is high, hurricanes, bought product when dollar was more expensive, new itbis...
QUOTE]

Believe it or not, people make more money here when prices fall than when they increase, except in the markets geared towards foreigners who can pay the exorbitant prices.

Most capitalist are waiting to see if this is temporary or permanent for the remainder of the year or Leonel's term. If it proves to be permanent, watch the prices fall.

 

[NALs]

However,
Now, foreigners like me, are not buying,and eventually people will not have work because of no business. It is now cheaper to buy products in the US and send Business Mail.
The prices for local products are now the same as imported. Check meat at Supermacado National.
All work suspended in La Casa.
So if you think that this is good for the Domincan people who just lost their jobs because business is down 40% and there is no money to pay wages you must be very rich.

This is just a short transitional effect. Things will have change significantly for the better by the time January rolls in, maybe even sooner.

 

[TiberiusMineola]

Process?? Volatility!!

This is an interesting thread. I have 2 broad questions:
a. The exchange rate seems to be set 5 or 6 days per week, usually. What person, probably a group, actually sets the exchange rate? It trickles down to us, the retail level w/i a few hours. Exchange houses learn the current rate via the telephone. Who makes the decisions that the peso will trade @ 25 - 35 - 45 today? I'm referring to trading vis-a-vis the US $. I don't think that the Central Bank or the government is involved? Directly, indirectly? If foreigners don't like the [descending] rate they are free to hold on to their [our] US $ for X days or Y weeks. This can be anticipated; a financial law of gravity. Does anyone know the names of the Dominicans actually making these daily decisions? Who? Trnasparent? How does the process work in practice?
b. Volatility: I think that everyone who has lived here for a few years expects the value of the Peso to move up or down 2 - 4 - 6 - 8% per month. Mostly down in the recent past. But, 20 - 30% in a week? In 4 business days. [ie 35 +- to 28 +-]. That's a decline of 20% in 4 business days. There appear to be no financial emergencies nor approaching Dominican miracles on the near or far horizons. Affter ranging from 35 to 40 for 3 - 4 monhts, why 20% in 1 week. Market forces? Manipulation? "Insider trading"? Do I see Kenneth Lay or Martha Stewart lurking in Santiago? Where is Allan Greenspan when Dominicans need him?
Thank you.​

 

[nickkieswetter]

Oh, yeah, like this is just great!

I hear a few people sitting on this forum stating that Peso appreciation is good for the economy? Good for the Dominican People? And good for foreign investment?

Jesus, how wrong can you guys be?

Ok, so I want to build a 50 million dollar hotel complex somewhere on the north coast, I am sure you appreciate that this is not something that you wake up one morning and go and do, it takes some time and planning, so twelve months ago I send some guys over who start putting things together, find some land,research and account costs for local building products, workforce, taxes, supervisory expenses. Then I send a team to calculate how much capital I need to employ for the first 12 months of running (salaries, consumables etc) then I go to my investors and give them a DOLLAR amount that we are going to need for the project (less returns from recievables, which would be in dollars in any case)

Now I come to start my project 1st October 2004 and What The Hell I am 80% over budget before I can even start!!!!! OK so no hotel, no US dollars into local economy and NO EMPLOYMENT!!!! Lets go build someplace else!!

So thats good news is it guys?? I dont think so! Of all the places on earth for expats to live and work or invest why would anyone choose here in the DR?? Let me tell you because its CHEAP, take that factor away and all that foreign money is just going to go someplace else!

Ok, so theres my rant, but Iseriously believe that a bad situation has just become worse. Also why did no-one here tell me this was going to happen **** I could have made an easy 200K just converting to pesos at 50, not to mention the interest benefits in the mean time! (thinking particularly about those guys who seem a little quiet now but used to put nice example of how 60% interest actualy gave a negative return in the face of curreny devaluation & that guy who said it was going up again and if we didnt believe him to bet against him!! well I sure as hell wish I had and I bet he does too!)

Nick

 

[jerryme]

I did bet against him at 52:1. Thanks to whoever is responsible for doubling my money.

 

[Argo]

Knowing what the exchange rate is going to do would be like knowing what the next card out of a blackjack shoe is going to be, instant success!!


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