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| Is this the time to buy colons? https://forum.costaricaticas.com/viewtopic.php?f=1&t=31038 |
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| Author: | Seahawk [ Fri Oct 16, 2009 4:29 pm ] |
| Post subject: | Is this the time to buy colons? |
The colon has dropped from 582 to 573 in a few days. Remember last year when the colon dropped to around 490. I was told at the first part of December that all of the businesses were exchanging their dollars for colons. The reason was to pay their employees their 13 TH month wages. Required by law to pay by colon. Thus dropping the value of the colon. Is there any truth in this and is a good time to buy colons? SEAHAWK |
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| Author: | Bktuna [ Fri Oct 16, 2009 5:20 pm ] |
| Post subject: | |
The only currency you can count on to underperform the dollar is the colon. That drop was the first major drop in History. Then the dollar zoomed back up again. Inflation here is ridiculous. BKTUNA I am never going home |
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| Author: | JazzboCR [ Sat Oct 17, 2009 12:54 am ] |
| Post subject: | |
...And then there's the Canadian dollar, up something like 27% vs. the US dollar in a short period of time...FX arbitrage--it's a wonderful thing...as long as you're on the right side of it. Not a game for amateurs. |
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| Author: | Bilko [ Sat Oct 17, 2009 1:54 pm ] |
| Post subject: | |
I had a conversation with a friend who is definitely not stupid, but he pointed to the exchange rate between the Colon and the US dollar as proof that the dollar was getting stronger. Uh... well... no. It's like we have two people walking backwards. The fact that the dollar person is not walking backwards as fast as the colon person is does not mean the dollar is moving forward. |
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| Author: | JazzboCR [ Thu Oct 22, 2009 3:12 am ] |
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The operative phrase here is "purchasing power parity". The way it was explained was, if you buy a capuchino here for 500 colones (assuming 500:$1) and it costs $1 in the US, then there is parity. There was a subscriber-only article in the WSJ on it but that's the essence. The whole issue is tremendously complex including a lot of social, legal and cultural factors ( How do you value poosey in the US vs. CR when it's illegal one place and not-illegal another?) but the item I mentioned seems to cover most of it. |
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| Author: | Irish Drifter [ Thu Oct 22, 2009 10:43 am ] |
| Post subject: | |
JazzboCR wrote: The operative phrase here is "purchasing power parity". The way it was explained was, if you buy a capuchino here for 500 colones (assuming 500:$1) and it costs $1 in the US, then there is parity.
There is a survey that is published every year that does that using a Mc Donald's big mac as the measuring stick. |
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| Author: | Tague21 [ Thu Oct 22, 2009 10:45 am ] |
| Post subject: | |
Mexican Peso is also down (around 13 pesos per Dollar). I agree, U.S. dollar going down, but at a slower rate than Colones or Pesos. |
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| Author: | Crazyhorse0017 [ Fri Oct 23, 2009 6:20 pm ] |
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USD is about to do a moonshot. The "weakening dollar" is a crowded trade right now. This will occur during the next bout of asset liquidation (stocks, gold, etc). Look back to June 2008 and remember how the "consensus" was that the dollar was doomed....then assets tanked. When dollar denominated assets are sold off, dollars are demanded, therefore the price for them rises. I wouldn't ever hold Colones for an extended period of time...period. They serve one purpose...:) CH |
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| Author: | Del Rey Dave [ Fri Oct 23, 2009 9:27 pm ] |
| Post subject: | |
If anyone is that worried buy a basket of different currencies. Swiss Francs, Euros, British Pounds, ect. But stay away from Latin American currencies aside from maybe the Brazilian Real. |
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| Author: | Crazyhorse0017 [ Fri Oct 23, 2009 10:39 pm ] |
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Dave: I concur..after the dollar runs its "flame out course", actually during the flame out, I think the Real might be a good place to park your paper. CH |
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| Author: | Haywood Jablommi [ Sat Oct 24, 2009 9:25 am ] |
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When I saw the thread title " buying colons" I assumed it was just another anal sex thread. Imagine my disappointment. |
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