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Thread: Black Monday

  1. #4501
    always learning ... BlackPeter's Avatar
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    One picture says more than 1000 words:

    Attachment 9887

    60% might not be enough to pay for the annual devaluation ...
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  2. #4502
    percy
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    Quote Originally Posted by iceman View Post
    Don't be tempted. I've just been to a bank over here (Argentina)and they've all run out of USD. They were advertising 1 months fixed deposit with 35% interest pa. Supermarkets closing down for a few days as they don' t know what to sell their goods for in order to have enough cash to restock at unknown prices. Many over here have mortgages in USD or tied to USD and inflation. One of my colleagues just told me his mortgage has gone up 25% in the last 2 days. Terrible situation and people are in great panic.
    In the 1970s I owned toy shops.Inflation was running at approx 20%.After working extremely long hours,at the end of the financial year my profit did not cover the cost to restock.Yet I was paying tax on a supposed profit.
    I can feel for the Argentines who face a lot harder challenges than I did.

  3. #4503
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    Does this make Argentina a roaring success. At these rates of inflation most debt should be cleared or be very manageable within a few years although interest payments might get a bit onerous. Other world central banks will be jealous as they are trying to ramp up inflation to no avail.

    I saw a 60% return on something over in Argentina in the paper didn't go past the headline though. Maybe after they float the peso I should be working out how to invest as yields around here are a bit lower.

  4. #4504
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Aaron View Post
    Does this make Argentina a roaring success. At these rates of inflation most debt should be cleared or be very manageable within a few years although interest payments might get a bit onerous. Other world central banks will be jealous as they are trying to ramp up inflation to no avail.

    I saw a 60% return on something over in Argentina in the paper didn't go past the headline though. Maybe after they float the peso I should be working out how to invest as yields around here are a bit lower.
    Living through a hyperinflation is no fun for the people who experience it - and given that most creditors are not stupid either you can safely assume that most loans in Argentina are these days issued in foreign currency (like USD). Just imagine you have to pay a credit back where the principle (in your local currency) doubles (or worse) every year ...

    However - for the people tempted by 60% interest rates ... Just take a step back and calculate how much money in NZD or USD) you are losing if the peso only loses 50% of its value over the same time ... you would need to get at least 100% interest rate to just keep your principle.

    BTW - Peso lost over the last year 53% of its value against the USD, but I am - as always - an optimist :
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  5. #4505
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    To put it into perspective, when I started operating in Argentina 11 years ago, 1 USD bought me 2.9 pesos. Today it buys me 33 pesos. A taxi from airport into the city cost 85 pesos back then, now 1,000. No hyper inflation is no good for anyone that has to live through it.

  6. #4506
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    Quote Originally Posted by BlackPeter View Post
    Living through a hyperinflation is no fun for the people who experience it - and given that most creditors are not stupid either you can safely assume that most loans in Argentina are these days issued in foreign currency (like USD). Just imagine you have to pay a credit back where the principle (in your local currency) doubles (or worse) every year ...

    However - for the people tempted by 60% interest rates ... Just take a step back and calculate how much money in NZD or USD) you are losing if the peso only loses 50% of its value over the same time ... you would need to get at least 100% interest rate to just keep your principle.

    BTW - Peso lost over the last year 53% of its value against the USD, but I am - as always - an optimist :

    I can’t remember the exact details but theres some inflation exchange parity theory that says the exchange rate between two countries should change by the inflation differential between the two (holding all else constant).

    so you should be no better off dealing in Pesos and in fact should be much worse off with the increased costs and instability hyigh inflation causes.

    argentina and venezuela the nightmare of every reserve banker

  7. #4507
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    Quote Originally Posted by bull.... View Post
    1 trillion in buy backs , earnings up 20% , pe ratio falling all the time , trade deals happening .... still the most hated bull market in history

    althought i see the 500 is at the top of the channel again, see what happens
    fell back into the channel over the week from overbrought levels , looks healthy too me.
    ASX having its normal sept weakness.
    NZX sold off from overbrought levels.



    biggest news off the night was musk smoking pot and drinking whiskey during a interview , hahhaa funniest thing ive seen a CEO so relaxed and chilling.... cool

    https://www.cnbc.com/2018/09/07/tesl...-cao-exit.html
    one step ahead of the herd

  8. #4508
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    Came across this

    David Rosenberg (@EconguyRosie)
    8/09/18, 6:29 AM
    Signs of an unhealthy market: FAANGM stocks up 30% YTD, the S&P 494 up 3%. Over half the 2018 gains came from six stocks. Historians know what that means.


    To me more of a reflection of how the world works these days.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #4509
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    Trump is talking about targetting Japan for "serious talks" next. Is he going to go through each asian country and demolish trade? The US is something like 40-50% of world trade. Will he be the cause of the next recession or depression? Will he be reigned in or maybe he can't do enough damage fast enough? Maybe it'll all just be fine? I'd love to hear what people think.

    Personally, i think we'll be fine for a while, but i have concerns for the coming years. All a bit random, really.

  10. #4510
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by Lewylewylewy View Post
    Trump is talking about targetting Japan for "serious talks" next. Is he going to go through each asian country and demolish trade? The US is something like 40-50% of world trade. Will he be the cause of the next recession or depression? Will he be reigned in or maybe he can't do enough damage fast enough? Maybe it'll all just be fine? I'd love to hear what people think.

    Personally, i think we'll be fine for a while, but i have concerns for the coming years. All a bit random, really.
    The US still have the biggest GDP in the world (from memory roughly 25% of world GDP if measured in US dollars) - but I don't think they are contributing 40 to 50% to the world trade - no matter how you are measuring that.

    Both China as well as the EU have a similar sized GDP than the US, and both China as well as Europe are trading much more internationally than the US (where international trade is only something like 10% of the total inland GPD).

    However that might be - the US are a very important trade partner and I have no doubt that some of Trump's actions will be the cause for the next economical crisis. I guess he is just like a child playing with matches around an open petrol tank ... hard to say how many matches the child needs to bring the fuel tank to explosion - but the bang will be substantial.

    The biggest risk factor I see is him driving the US into the worst debt crisis ever. The public debt clock is now at 21.5 trillion USD - that's nearly USD 71k for each head in the US. On the other hand - the gross annual per capita income in the US is only USD 15.5k. this means every US citizen would need to work 4 and a half years without eating, drinking or spending any money to just repay their public debt.

    The US will never be able to repay the debt accumulated under Trump - and guess what will happen when people realize?

    Trumps trade wars are obviously bad for the US as well as for the rest of the world. While each one alone is probably not a spark big enough to cause the explosion ... the fireworks he is generating well might.

    So yes, we better prepare for interesting times ... but hard to say whether the big bang will be in a month, a year or in a couple of years. Don't think it will take much longer.

    Take care out there ... and enjoy the fireworks
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

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