Watching the dollar

There are 1,007 replies in this Thread which has previously been viewed 49,581 times. The latest Post () was by UK Man.

    • Official Post

    indeed!


    We ordered a mosquito nets for upstairs (I am very afraid of another zyka-ridden summer), paid a deposit and the rest upon installation. They said they'd come on Thursday, so we exchanged on Thursday morning. Instead, they came on Friday afternoon and I was upset because we 'lost' money by exchanging when they had promised to deliver instead of when they actually did.


    On another account, at the dietetica, we had a shopping galore, and the total was 12 USD!


    Previously, I checked the exchange rate in the morning, only. Now I do it several times a day.

    Quote from Rice

    Not sure I understand, UK Man . ‘Splain, please?

    Neither do I Rice. ^^


    When buying something here I roughly work out what it costs in £'s. It stays more or less the same despite inflation here being rampant. I suppose that's why those who earn in dollars don't have the same worries about inflation others have.

    Solving the inflation problem is the biggest problem they have here.....is it impossible? I'm no expert but it would seem to be without causing even more damage further down the line.

    Quote from UK Man

    Neither do I Rice. ^^


    When buying something here I roughly work out what it costs in £'s. It stays more or less the same despite inflation here being rampant. I suppose that's why those who earn in dollars don't have the same worries about inflation others have.

    Solving the inflation problem is the biggest problem they have here.....is it impossible? I'm no expert but it would seem to be without causing even more damage further down the line.

    That is mostly right, or at least it was until this year. Things are moving so fast that the difference in price re pesos and pounds or dollars has changed. Just take any normal product, like a 2-liter of Coca Cola, which I think I saw in Carrefour this week for 124 pesos. That's barley 50p, which is much cheaper than what that product costs in the UK. Throw in the 50% of the second unit offer this week and you are getting two bottles for less that you would pay for one in other countries. No wonder major brands are jumping ship.


    But then you are correct about the people who earn outside. All I am really worried about is now whether I have to pay what Coca Cola is really worth one day or whether I can keep getting it cheap.

    Quote from Semigoodlooking

    That is mostly right, or at least it was until this year. Things are moving so fast that the difference in price re pesos and pounds or dollars has changed. Just take any normal product, like a 2-liter of Coca Cola, which I think I saw in Carrefour this week for 124 pesos. That's barley 50p, which is much cheaper than what that product costs in the UK. Throw in the 50% of the second unit offer this week and you are getting two bottles for less that you would pay for one in other countries. No wonder major brands are jumping ship.


    But then you are correct about the people who earn outside. All I am really worried about is now whether I have to pay what Coca Cola is really worth one day or whether I can keep getting it cheap.

    Yes there are exceptions to the rule....some can be cheaper, some more expensive. A 4 bar KitKat being one that springs to mind. The normal price here is laughably expensive compared to the UK whereas the discounted 2 for 1 offer price is closer to the price a UK newsagent would sell it for.

    • Official Post
    Quote from UK Man

    It's nothing new though...my packet of fags do cost many times more today in pesos than they did years ago but in £'s they don't really cost that much more.....similar story to beer and I suspect many more poducts.

    The answer? There doesn't seem to be one due the massive reliance this country has on the US$.

    Nothing new UK Man ? Are you serious?

    The peso devalued 11% during the week and is now at historically low levels. This is much more serious than the price of fags or Kit Kats.

    • Official Post

    In an economy where not even top economists can make head to toe of what's happening, each one of us pick their benchmark.

    I like to point at the single factura price to get an idea of how we are doing because it is something I buy regularly and a widespread good. If I were a smoker, I would probably look at cigarette price, too.


    In Italy, everybody looked at the gasoline price, but here it is controlled, so it is not reliable.


    When the numbers fluctuates too much and too quickly, the economy loses its compass and the value of goods is undetermined, which is why wholesalers hold on on their goods: nobody wants to undersell.

    Quote from Semigoodlooking

    I don’t think he is saying a KIt Kat is serious, more that it is a measure to see fluctuating prices. It could be any product.

    Indeed.

    Quote from Splinter

    Nothing new UK Man ? Are you serious?

    The peso devalued 11% during the week and is now at historically low levels. This is much more serious than the price of fags or Kit Kats.

    I am aware of the devaluation...it's happened most weeks for the 13 yeast I've been here. :D


    However if you earn in dollars the price of a KitKat has remained relatively stable.

    • Official Post

    I'm not talking about fluctuating prices, but the serious situation regarding devaluation, hence the title of the thread.

    The peso is in freefall against the dollar and probably every other currency in the world. It's like watching a car crash in slow motion and the knock on effects are already being felt with suppliers not being able to price up work and goods, thus trickling down to many other sectors in general.

    Quote from Splinter

    I'm not talking about fluctuating prices, but the serious situation regarding devaluation, hence the title of the thread.

    The peso is in freefall against the dollar and probably every other currency in the world. It's like watching a car crash in slow motion and the knock on effects are already being felt with suppliers not being able to price up work and goods, thus trickling down to many other sectors in general.

    You sound surprised that this is happening. In Argentina it's par for the course surely?

    • Official Post
    Quote from hairyscotsman

    In simplistic terms can someone explain to me why it happens at such a fast rate?

    The market loses confidence in the economic stability of the country. Foreign investors withdraw from the country. Importers do no want import because they would not be able to sell because their prices are not competitive. Exporters won't export because they would get less USD than before.

    And besides the exchange rate, this government and the past governments from the same political party, heavily taxes both imports and exports, making it even less convenient. This is not done by accident: they believe a closed economy "Argentina first" is the way to relaunch the local industry.

    Quote from hairyscotsman

    And in practical terms what devaluation actually mean to the currency and those that earn in pesos.

    They loses purchase powers, because prices in pesos get inflated to make up for the loss of value of the pesos.

    I.e. if today a good is sold at 100 pesos (or 1 USD with the current exchange rate), and tomorrow the exchange rate is 200, I can't keep selling my good for 100 pesos because I would get half the money. So I increase my good's price to 200.


    The point is that salaries aren't updated that quickly, so if my clients earns 40,000 pesos per month, one day he can buy 4000 units and the next day he can buy online 2000. As a seller, I would be selling far less and earn less to buy new products and pay my employees.

    Quote from hairyscotsman

    In simplistic terms can someone explain to me why it happens at such a fast rate?


    And in practical terms what devaluation actually mean to the currency and those that earn in pesos.

    In simple terms the country's fucked and has been for many years. As the peso is so unstable and more or less a worthless currency transactions of any value are done in US$ which just makes the peso even more worthless.


    There's obviously much more to it than that. Working practices that belong in the 1960's, corruption, high profit margins, etc etc.