www.CostaRicaTicas.com

Where are all the experts on the colone? Almost Dec and still not 600.
CR totally controls the exchange rate.

In December, there is a bigger demand for colones, as the car marchamos, year end payroll for the extra month aguinaldo, christmas gifts, preparing for January's school expenses, etc.. It makes sense that the exchange rate would change, as there is less demand for dollars. We will see, but I expect the rate will go above 600 starting in January

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Having too much fun. 8)

It’s true that CR controls the exchange rate. They do that by using foreign currency reserves to buy Colones.

They burned through $1.6 billion in the last eight months buying colones protecting the exchange rate. They are now under $7 billion in reserves. They also have massive government debt that must be paid in dollars using this reserve.

It can’t go on forever. As more traders see the reserves dwindle along with the ability to protect the rate traders will sell more colones. As more traders sell colones this puts more pressure on the rate, increasing the monthly cost to protect the rate, accelerating the burn of reserves. Classic case of a negative feedback loop that can end in free fall.

It has been well above 600 several times this month-- as much as 617! Just yesterday it started out at 600, then during the day it dropped to 597. It was above 600 for several days last week and the week before, then the National bank dumped several million dollars into the system and it dropped back down to around 600. They had said they could not afford to keep pumping dollars into the system but when it got close to 620 they suddenly found a few million . Your last statement is almost correct. By law the National bank is suppose to control any rapid rises by releasing their reserve dollars into the system. They have now been doing this for several years with only a slow but fairly steady increase. They are now out of dollars (they said but then apparently found more). With the country now being unable to pay its debts and their credit rating dropped lower, it is very unlikely the National bank will be able to continue injecting dollars into the system. Rising prices and high interest rates are really beginning to hit everyone hard!!

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Old and retired but still bang, and bang, and bang!!!

Not us gringos living here and collecting our loot in USA dollars as long as we don't have mortgages or other expensive CR loans.

People keep yammering that it'll be a wash for us because of "inflation" and that is nonsense.

Of course we all will experience increases in inflation, but the upward trajectory and rapid rise to once again start in January of the dollar value to the lowly overborrowed and grossly mismanaged colones has already been quite incredible in the last 9 or 10 months.

During that time period inflation has not rapidly expanded over what it already is, and that is high here anyway, regardless of the colones position.

I'm personally up the equivalent of a couple hunnert per month already since January on my modest retirement payout.

So the effects of inflation on expats will exist, but it will be small in comparison to the benefit we will receive as our dollars value continue to rapidly increase.

That is, unless the corrupt government officials here have mismanaged the colones even more astoundingly than we and all economic prognosticators had envisioned.

If it really takes off, there will be turmoil here, and Bang Bang, I'm told we both have rooms waiting for us in Medellin, and the reports I'm getting are that the girls are nicer, cheaper, not that many con artist sharks, and overall cost of living is already about 2/3 of CR.

So Bang Bang, just let me know when you're ready, I'll help you sell your Bonsai trees outside HDR alongside the fake Rolex and fake Cuban cigar purveyors and after that, I'll help you pack and away we go on the next misadventure...

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Don't try to understand 'em, just rope 'em down and brand 'em...

It's definitely cheaper in Colombia, as far as living in the city goes (San Jose vs. Cartagena). At least it is for me, living in SJ for a few years vs living in Cartagena now. Girls, cons, etc. is pretty much YMMV. Colombia has a lot of similarities to CR, and some differences. My take is that if you're happy in one, you'll probably be happy in the other. Girls are plentiful here -- probably more so in Medellin, but I'm a beach boy.

It's definitely cheaper in Colombia, as far as living in the city goes (San Jose vs. Cartagena). At least it is for me, living in SJ for a few years vs living in Cartagena now. Girls, cons, etc. is pretty much YMMV. Colombia has a lot of similarities to CR, and some differences. My take is that if you're happy in one, you'll probably be happy in the other. Girls are plentiful here -- probably more so in Medellin, but I'm a beach boy.

The biggest -- and only significant -- difference that I've noticed in lifestyle is that you need good knowledge of Spanish in Colombia... no squeaking by with just English.

That's what my friends in Medellin tell me, but with the cost difference being already strong, you can afford to go to a Spanish language school or hire an interpreter...

By the way, how are the beaches there? As a lifetime resident of South Florida, I love the warm, low wave height, rare undertows and no crocodiles Atlantic Ocean and have no love for the West side of Costa Rica and the Pacific. I'm guessing it's similar to Florida.

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Don't try to understand 'em, just rope 'em down and brand 'em...

My first trip to Costa Rica; Labor day weekend 2001 35,000 colones for $100 US

The USD/CRC pair rallied up to its 624 peak going into the November 7th & 8th US Fed meeting where they were expected to raise interest rates. The Fed held rates steady but remained hawkish signaling they would raise rates one more time this year and at least four more times next year. Costa Rica countered the currency move by raising their interest rates in lieu of buying USD reserves.

https://www.exchangerates.org.uk/USD-CR ... story.html

I expected the USD/CRC pair to rally into the next Fed meeting December 17th & 18th; however, today the Fed Chairman Powell reversed his hawkish bias stating that interest rates are now just below neutral to alleviate inflation (probably thanks to Cramer and Trump's bashing comments). The DOW popped 600+ points on the news.

I would expect the USD/CRC pair to break support at the 600 handle tomorrow and maintain just below in the recent traditional range 580-592 until the Fed begins another tightening cycle. I think the CR bank has done a good job of “fixing” their currency in relation to the USD but the long term outlook is grim based on Costa Rica's deteriorating finances. In the mean time, I will do my part helping the single moms of this great nation and vacation paradise.

-LG


Sent from my BLN-L24 using Tapatalk

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It's a jungle out there. A pusseycat like you will get eaten alive!!!

[quote="LocoGringo"]T

"I would expect the USD/CRC pair to break support at the 600 handle tomorrow and maintain just below in the recent traditional range 580-592 until the Fed begins another tightening cycle. I think the CR bank has done a good job of “fixing” their currency in relation to the USD"



Good research and analysis, but I'm disagreeing with you on this one, I'm anticipating 600-610 for December, I revised my previous "irrational exuberance" thoughts of 650 by December, but I see no colones strength to drop under 590, certainly not 580!!!

I'll bet you a SL fish sandwich and beer that won't happen.

Bond traders are on to these clown's Ponzi scheme...

Hey "Bond Trader" poster, where are you? Chime in!!!!

"CR Bank "good job"????

if you consider riding a unicycle and juggling turned on chain saws a good job...They're still borrowing and spending the last sliver of their reserves loot, mostly the scam they have been perpetrating for a loooong time and it's quickly coming to an end, the pollos are coming home to roost, the punches are going to fly come January, mid January if not sooner.

You heard it here first, I prefer the baked potato over the fries when you place my order, thank you....

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Don't try to understand 'em, just rope 'em down and brand 'em...

There's a pretty nice selection of beaches, both Caribbean and Pacific side. It all depends on your personal taste, of course, but based on your love of the Florida beaches and the very slim pickings that CR has on the Caribbean side, I'd say you're much more likely to enjoy the beaches in Colombia than those of CR. Plus, Colombia actually has a couple of decently sized cities right on the coast -- precisely why I chose Cartagena.

Plenty of Caribbean-style beaches in my area. You'll hear the names Bocagrande and Tierra Bomba tossed around a lot. Those are both general areas, with several nice beaches each. Just find the one you like -- quiet, crowded, isolated, in the center, or whatever. Just north of the airport (which is also right on the beach) are the beaches where most of the Colombians hang out.

There are some nice beaches on the Pacific side, too, but it's kind of reversed from Costa Rica. The Caribbean side is where all the action is here (as far as beaches go).

Thanks, I looked up pictures of that city and beaches, look like my home town of Ft. Lauderdale, somewhat, huge, modern city! I still love Costa Rica but San Jose is a giant slum, lol.

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Don't try to understand 'em, just rope 'em down and brand 'em...

Cartagena has made some decent strides, with a lot of modern construction going up near the beaches and in the major tourist areas like Bocagrande. The walled city (old Cartagena) is cool and old architecture, but seems like more of a tourist trap every time I go there. More tourist money pours directly into the city than it does into San Jose. I guess it's just that Cartagena is a tourist city, but San Jose is definitely not. Cartagena is a pretty decent place for an expat, as there's a nice mix of expats and locals, and both foreign and domestic tourists. Whatever kind of beach, bar, hotel, club, or whatever you like, you'll generally find it somewhere in Cartagena, but it will take some legwork and trial-and-error.

Elektra is pretty much Cartagena's equivalent to the Hotel Del Rey, although it's not the same experience. That's right on the edge of the walled city. Others swear by Mr. Babilla, which is more out-of-the-way. I'm not the world's best mongering tour guide, though. I tend to just bar-hop randomly. You always run into something fun here. The girls are everywhere, and a lot of them are just Colombianas on a short beach vacation looking to party.

Just a note... I keep in touch with a couple of guys in Medellin. They tell me that Medellin is generally cheaper but not extraordinarily so. Girls in Medellin are more readily available -- more working girls actually hanging out in bars and the public -- but the actual quantity/ratio of available girls is about the same.

I do hope you are saying that as a joke!! In either one of those two cities just my house here would cost me more per month than my entire SS check! Here I have no real problem paying my rent, buying food, and paying for my 3 hobbies!! I pay $100 a month for no deductible, no co-pay insurance. And with all that I save about $200 most months!!

Yes, there is inflation here which none of us like, Yes, the colon is going down in value. No, it is not like it use to be. BUT: My SS check and everyone else's is in dollars so, as stated, the colon going down just means we get more colones for our dollars which so far as stated by Netgem, more than offsets the inflation. The colon going down is (right now) to our favor!! I learned a long time ago to avoid Auto Mercado for food. I buy most of my food in the Markets where most Ticos buy theirs. Most of the time less than half the Auto Mercado price and fresher!! In fact, I normally only spend about $200 a month on food. My insurance would cost 10 times more anywhere in the States, if I could even get insurance that paid 100%--couldn't, and for sure not at 76 years of age!! I have more cloths than any 2 people really need so I spend very, very little on cloths. My 3 hobbies- chicas, art (painting), and bonsai combined are my biggest expense every month! I have a lot of long time regulars so about the most I ever spend on a chica is less than $50. art supplies get expensive at time and right now I am spending a lot on plants for bonsai- my first 10 years here I did not have time for bonsai (too many chicas ) So since starting back doing bonsai 3 years ago, I am buying a lot of plants! And, at 76 the buses are free for me! Can go anywhere in the country for almost nothing!! When I do have to use a taxi, I use UBER!!

The people who are being hurt by the falling colon are the Ticos, especially those who have home loans, car loans, and/or personal loans that are in dollars. And most of the home and car loans here are in dollars.

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Old and retired but still bang, and bang, and bang!!!