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For those who are invested: Time to bail on Costa Rica?
https://forum.costaricaticas.com/viewtopic.php?f=1&t=53981		 Page 1 of 1
Author:  Elkarlos [ Sat Nov 12, 2022 12:37 am ]
Post subject:  For those who are invested: Time to bail on Costa Rica?
Possibly, time bail on Ticolandia.
For those of you who know-it-all (I won't mention any names): no need to read any further.
One needs to look no further than the fact that they are trying (albeit late as tico usual)to float $6,000,000,000!!! (they wanted to do $12,000,000,000!!!!) of BS, worthless bonds (I don't know who TF will buy them) to assume more debt on top of already existing MASSIVE debt, because the do not even have the funds to pay December's alguinaldos and January's $1,000,000,000 debt payment ( FYI: yesterday, they borrowed another $750,000,000 for overdue infrastructure repairs) on top of everything else.
Don't want to believe me: do some research.
When the government defaults and imho it is inevitable: foreigners will become prime targets. When people can't feed their k*ds, they will do desperate things.
Having said that: how far is the US behind on this?
Author:  Boynton [ Sat Nov 12, 2022 1:24 am ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
Yep, and they are doing it by buying Eurobonds instead of issuing CR bonds (which nobody would buy). Last year, they changed the CCSS regs to collect retirement contributions from new applicants for pensionados and rentistas (doubling the payments). They are also flirting with Global Income tax.

Although I have residency, I have no assets or bank accounts in CR. All my bills are in my lease, so no CNFL, AyA, or TIGO contracts. I could fit everything important to me in 2 checked bags and my carry on. CR is still a good fit for me, but I could bug out within 24 hours.
Author:  Netgems [ Sat Nov 12, 2022 1:26 am ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
The weird thing is, their currency is punishing the usd and all other currencies that interact with them, Mexico, Colombia, Canada, the Euro, you name it.

Before I retired, I was in finance, and have a little knowledge of how all this works, and at 680 and climbing, it made sense, now it fell to apx 620, even lower and hovering.

I am baffled and so is everyone else I've spoken with. I can't find any explanation all over the internet, they dropped in less than two months apx. 60 bp, costing me a good $300 or so a month and I'm just a middle income monger.

If CR implodes (unlikely, they always find someone to bankroll them, maybe China, they wouldn't mind annoying us in our underbelly and already are cozy here...) there's always Granada, Nicaragua.

A couple friends just moved there, said it costs 1/2 to 2/3rds max what CR costs, girls visit them for $20, all with great attitudes, and they scored a 3/3 with small pool and a/c in bedrooms, ceiling fans in all other rooms, $600 a month nice section of town by restaurants bars and shopping and very clean, very safe, no thugs, and we're from Florida so we don't consider Nicaragua "hot"...it's "warm" to us...

They say old commie Ortega rallies with komrads in the day, and is shaking hands and inviting gringos in with money at night... :mrgreen:
Author:  Boynton [ Sat Nov 12, 2022 1:51 am ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
The gov't used to keep adding colones to the market by issuing CR bonds. Now they are shifting the maturing debt from Colones to Eurobonds which means they are effectively withdrawing colones from the market as the old debt is retired. The exchange rate issue is because the aguinaldo must be paid in colones. Expect the exchange rate to continue its trend until after the first of the year.

They are also scrounging loans from the IMF, IDB, and every other foreign source giving them dollars now in exchange for future taxes and austerity. This has been happening for years and accelerated during the pandemic. Options for future include bailouts, write-downs, debt defaults or fiscal responsibility. Which do you think they will choose.

Cash is king. CR assets will become unsaleable. Rent, don't buy. All of Latin America will be the same or worse.

Tourist Visa for US passport holders are 6 months in Mexico, 3 months in Colombia (180 days a year), Thailand, Cambodia, Vietnam, Philippines are 30 days each (with paid extensions available).

Lastly, China and Russia domination are old news. Watch out for India/Pakistan/Bangladesh more people than China and lots of nukes. Karachi, Mumbai, New Delhi, Dhaka are each larger than New York City.
Author:  Elkarlos [ Sat Nov 12, 2022 10:31 am ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
Yep. The World is changing rapidly.
I'm with ya as I don't see how they are keeping the colon strong. Except, by obviously cooking the books. It should have tanked already.
What entity in it's right mind would continue to loan them more funds as they can't pay existing debt. Hell, they can't even pay the interest.
When Alvarado was head payaso, it seemed every week you would read how the country just borrowed another $500,000,000, $750,000,000... they did spend a little on infrastructure, but there are still 100s of bridges deemed unsafe and the joke that is Rt. 32 (probably the most important hwy. in the country) will probably never be completed. I could go on with other unfinished, wanting-to-begin projects. So, where did the monies go other than to just keep the government afloat?
As for the possibilities you mentioned Boynton, no old debt is being retired. Only new debt being added... I see default as the only outcome/option.
I wonder if the gringos with the McMansions even have a clue.
I too can bug out in a moment's notice.
Glad I got to enjoy Costa Rica in it's prime as it was awesome 'back in the day'.
Author:  Boynton [ Sat Nov 12, 2022 11:55 am ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
Elkarlos wrote:
As for the possibilities you mentioned Boynton, no old debt is being retired. Only new debt being added... I see default as the only outcome/option.
I wonder if the gringos with the McMansions even have a clue.
I too can bug out in a moment's notice.
Glad I got to enjoy Costa Rica in it's prime as it was awesome 'back in the day'.


$1.5 Billion of 6 is to replace debt that will mature in January 2023. Instead of selling CR bonds at a high interest rate, they are selling Eurobonds through international banks such as Duetsche Bank and HSBC at a lower interest rate. (Plus, nobody bought the CR bonds the last time they were offered.)

https://www.crhoy.com/economia/expresid ... necesaria/

So, by issuing Euro denominated debt instead of Colon denominated debt the Central Bank is, in effect, removing the number of colones in the market at the exact time that they will be needed to pay the aguinaldo. This creates a 'short supply' of colones impacting the exchange rate. In December, the workers get the colones, spend like drunken sailors and the colon supply goes back to normal. The exchange rate will gradually revert closer to 700:1.

CR is still awesome. They just opened an Arby's in Curridabat!
Author:  Elkarlos [ Sat Nov 12, 2022 12:14 pm ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
Boynton wrote:
Elkarlos wrote:
As for the possibilities you mentioned Boynton, no old debt is being retired. Only new debt being added... I see default as the only outcome/option.
I wonder if the gringos with the McMansions even have a clue.
I too can bug out in a moment's notice.
Glad I got to enjoy Costa Rica in it's prime as it was awesome 'back in the day'.


$1.5 Billion of 6 is to replace debt that will mature in January 2023. Instead of selling CR bonds at a high interest rate, they are selling Eurobonds through international banks such as Duetsche Bank and HSBC at a lower interest rate. (Plus, nobody bought the CR bonds the last time they were offered.)

https://www.crhoy.com/economia/expresid ... necesaria/

So, by issuing Euro denominated debt instead of Colon denominated debt the Central Bank is, in effect, removing the number of colones in the market at the exact time that they will be needed to pay the aguinaldo. This creates a 'short supply' of colones impacting the exchange rate. In December, the workers get the colones, spend like drunken sailors and the colon supply goes back to normal. The exchange rate will gradually revert closer to 700:1.

CR is still awesome. They just opened an Arby's in Curridabat!


Not sure if you are being sarcastic, or not. I Hope so. But if not, I am glad that you find fat, lazy American fast food and the health issues it brings (obesity, diabetes, heart issues...) as being 'Awesome'. hahahahahaha Not! :?
Author:  Boynton [ Sat Nov 12, 2022 1:24 pm ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
Sarcastic on the Arby's. Speculative on the colones.
Author:  DManWalking [ Sat Nov 12, 2022 6:18 pm ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
60,050 per $100 US today at the Colonial
Author:  Jackal [ Fri Nov 18, 2022 10:54 am ]
Post subject:  Re: For those who are invested: Time to bail on Costa Rica?
Elkarlos wrote:
foreigners will become prime targets.

That sounds about right. They'll be sticking pura vida right up your ass.
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