www.CostaRicaTicas.com

I have no interest in reading the article. My post was based on my general knowledge about economics and my specific knowledge about the colon exchange rate. For years, it has not been allowed to fluctuate freely based on the market forces. You just can't keep doing this.

CR is experiencing DEFLATION along with the US right now ...

You cannot use foreign-based cusine as a measure of currency 'worth'. I can still get rice and beans cheaper in CR than I can on the streets of Fort Lauderdale.

Seriously, the prices of commodities in the street is not directly related to the value of the currency. Signs of inflation, yes. Tariffs, yes. Price controls, yes. But the exchange value to the dollar, not really.

I can understand, based upon what has been posted recently, a devaluation of the colón, but I am still amiss regarding the statements of 'propping up' the currency, and artificially controlling it for the benefit of the ruling class. Unless 'pegging' is what we are talking about here, I just don't get it.

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bypassin' kinky, and usin' the whole chicken!!!

FACT NOT HYSTERICAL FICTION
Current inflation "Annual inflation measured from October 2014 to September 2015 was -0.86%" crhoy.com/inflacion-interanual-lleva-3-meses-con-signo-negativo/
The crime rate has nothing to do with social unrest. It is all about distribution of drugs and their gangs.

That's what is says on paper. Ask the locals if they feel that there is deflation.


I guess you weren't a econ major.

http://www.economist.com/content/big-mac-index

The Costa Rica politicians, like those anywhere, have a very convenient way of measuring inflation. They create what is determined to be a basic basket of goods or "canasta basica", as it is known in Costa Rica. Then they determine inflation as the price change of the average cost of this basket. Well that is not real life!

Like I mentioned before, gasoline is a component of this basket (along with rice, cooking oil, etc.) and its temporary decrease in price has dragged down the cost of the canasta basica significantly this past year...thus your number above.

However, and most importantly, look at the REAL cost of life in CR the last year, the cost of living of a regular Tico family, and you will see a very different inflation picture! This picture is real life. Costs going up, salaries stagnant. And yes, this does lead to populist instigated social unrest and an increase in crime.

CR needs to allow its currency to reach a natural balance and create more opportunities by accurately reflecting the cost of doing business and investing in the country, to both domestic and foreign investors. This will benefit all in the long term.

+1

Minimum wages go up twice a year, by law.
It's not that I don't believe you, but point me to real evidence, not an opinion, so that I can be better informed. Thanks

Does this also mean the minimum wage goes up twice a year?

Yes, it's the minimum wages.

Oh stop. Have you ever actually looked at that thing? If it were realistic, then every currency in the world is undervalued. That would make this thread a non-issue as well.

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bypassin' kinky, and usin' the whole chicken!!!

Or the populace has no more room for more debt or extra purchasing power. Then if a recession hits and unemployment ticks up or in CR's case expats and tourists start to go to other locals the shit hit's the fan. I still can't understand how food can be so expensive in a country that is more or less one big farm.

This is the real question. But remember that we only see the restaurant side. What does the actual food costs look like to the locals (who don't necessarily eat out every night like Americans do)?

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bypassin' kinky, and usin' the whole chicken!!!

No we don't. I actually go into stores all over the place. I like deli's for grabbing food so I check out stores of all sizes. It just isn't restaurant food. At least compared to here in the states.

Take a bus trip to Panama next time you are in country. David is good enough. Do Panamanians make more than Costa Ricans? Hell even the cows are fatter in Panama!