Medellin Chit Chat Thread

[JjBee62]

Dude. No. There are not discounts on foreign currencies. You're not going to buy a dollar for 94 cents ever, either.

Dude. No. Is there something in viagra that causes people to forget basic math? The numbers are right there in my post for the hypothetical situation I offered and they clearly indicate that a discount was not being discussed.

When you exchange currency, either by withdrawal from an ATM in another country, or using a currency exchange office, you pay a fee (although at times the fee is zero or even negative, I'll explain). That fee takes many forms. Some banks charge for a foreign currency conversion, some charge for using a foreign ATM. Exchange offices give a rate which is less than the current rate. Even with no fees, there is usually a difference between the rate you receive and what the actual market rate is at the time of the transaction (which is how it's possible to get a negative fee, or get the money at a discount). All of this has been explained completely by both Villainy and FunLvr.

I don't know all of the various rates which you can buy pesos in the US. I know that at one time Bank of America customers could get pesos for a very good rate. If I remember correctly 1.5%. I also know that one of my banks, when I asked about it offered a terrible rate, worse than bad airport exchange rates.

[Elvis 2008]

This actually might be the right time to be bringing money into the Country at such a good exchange rate, to buy an investment property..

Land is about all I would look at. That traditionally has been much harder to seize. I put $1500 in a stock fund in Bolivia, and Morales drove that to zero. I would be really careful about bank accounts, stocks, bonds, or anything else that can be easily seized with this guy Gustavo. Maybe he is not Chavez or Morales but you never know.

[Huacho]

Other way around. What he said was you are getting charged a 6% commission when you look at his example. Which is often the case.

Right, so it's not a fucking discount; it's a premium or a haircut or a cost or a negative or whatever you want to call it. I get his math. My point is the futility of overcoming such charges when it's all a crapshoot. A lot of people think they can predict the direction of forex, interest rates and so forth. But, I actually can predict exactly what foreign exchange rates are going to do!.

They are going to fluctuate. Forex rates will always depend on relative real interest rates, the balance of trade, and the perceived ability of the country to control and tax its citizens. But, all three of those components are continually fluctuating. Keep your wealth in a stable currency and go with the flow on exchange rates. If you live in Colombia, you're going to have to put up with it because you can't control it. If you are portable, you can live where your native currency is strong. But, that could change. Now, if you are based in a country with a strong currency and just travel periodically, then you can definitely benefit by traveling where the exchange rate tells you to.

[Villainy]

For those of you who care. The Visa Exchange Rate, which is what you will get at the ATMs, tomorrow will be 4,513.

For those you who don't care. I return you to your regular schedule programming.

[Oterri]

Can we keep this forum for mongering purpose? This morning there's a full page of review about exchange rate, why are you guys are so concern about that, to save 2-3 buck?

This page should be for Trip reports not discussions.

[Knowledge]

I am very clear about the general risk profile. The recent peso slide is a pointed reminder. I'm not very clear about the benefit potential. Is there really enough profit potential to justify the risk of devaluation and loss of liquidity? It seems to me there are many other investment opportunities around the world. If nothing else, the pace of construction here limits the potential property value appreciation.

I don't necessarily disagree (double negative for effect). We might be seeing a temporary peak in the dollar and a return to sub 4000 soon onces the reaction recedes. And I don't necessarily think he's going to do anything crazy, I just think the possibility exists now and is beyond my personal risk threshold at the moment.

I'm certainly glad I didn't buy the property I was looking at in early June as I'd be down 20% right away due to the devaluation, so to this point waiting has served me well.

My thinking on waiting is simply I want to have a better understanding of whether he has authoritarian leanings or not. If not, and the peso stabilizes I'll feel much more comfortable at that point. We all have our risk thresholds and while that might mean a missed opportunity, I'm willing to accept that. I also believe that this thinking is what's driving people to sell off on the peso, it's just a level of uncertainty that didn't exist before.

[Carter80]

This actually might be the right time to be bringing money into the Country at such a good exchange rate, to buy an investment property.

And if your a "small potato" investor, and not living in the Country more than six months a year and not considered a full time tax resident, you would only be subject to income taxes on your investment property. And if you have good Colombian accountant, those taxes can be mitigated.

Petro will most probably instigate the wealth tax again which expired a few years ago, along with going after owners of very large properties to tax them as well.

However in your case, as a "small potato", I don't think whatever he does will have much impact on you, in the short term, yet I get your concerns.

As far as waiting to see what happens after he is in power, well it might be at least a few years before there is anything significant taking place, except taxation I believe.

I don't necessarily disagree (double negative for effect). We might be seeing a temporary peak in the dollar and a return to sub 4000 soon onces the reaction recedes. And I don't necessarily think he's going to do anything crazy, I just think the possibility exists now and is beyond my personal risk threshold at the moment.

I'm certainly glad I didn't buy the property I was looking at in early June as I'd be down 20% right away due to the devaluation, so to this point waiting has served me well.

My thinking on waiting is simply I want to have a better understanding of whether he has authoritarian leanings or not. If not, and the peso stabilizes I'll feel much more comfortable at that point. We all have our risk thresholds and while that might mean a missed opportunity, I'm willing to accept that. I also believe that this thinking is what's driving people to sell off on the peso, it's just a level of uncertainty that didn't exist before.

[Knowledge]

El Colombiano is splashing the 4600+ and rising level of the US dollar today. Alongside the primary article is an editorial feature with the headline "is it possible to dollarize the Colombian economy?

It's an interesting proposal with historical precedent in Ecuador. As all of us know here, prices quoted in dollars tend to be higher than when they are quoted in a local currency. Let's hope the idea doesn't go farther.

This actually might be the right time to be bringing money into the Country at such a good exchange rate, to buy an investment property.

And if your a "small potato" investor, and not living in the Country more than six months a year and not considered a full time tax resident, you would only be subject to income taxes on your investment property. And if you have good Colombian accountant, those taxes can be mitigated.

Petro will most probably instigate the wealth tax again which expired a few years ago, along with going after owners of very large properties to tax them as well.

However in your case, as a "small potato", I don't think whatever he does will have much impact on you, in the short term, yet I get your concerns.

As far as waiting to see what happens after he is in power, well it might be at least a few years before there is anything significant taking place, except taxation I believe.

[Surfer500]

While markets are hard to understand, the impact of the election seems pretty clear to me. I'm an example of it, I was planning on buying an investment property in Medellin this year and have decided to wait for a while to see what he's like in power. I'm a small potato, but hard to believe I'm the only person who's decided not to move my money into pesos since Petro was elected.

This actually might be the right time to be bringing money into the Country at such a good exchange rate, to buy an investment property.

And if your a "small potato" investor, and not living in the Country more than six months a year and not considered a full time tax resident, you would only be subject to income taxes on your investment property. And if you have good Colombian accountant, those taxes can be mitigated.

Petro will most probably instigate the wealth tax again which expired a few years ago, along with going after owners of very large properties to tax them as well.

However in your case, as a "small potato", I don't think whatever he does will have much impact on you, in the short term, yet I get your concerns.

As far as waiting to see what happens after he is in power, well it might be at least a few years before there is anything significant taking place, except taxation I believe.

[Knowledge]

You are right. There is no need to track the exchange rate if you use the currency for weeks at a time. Some of us use pesos full time. That is why the exchange rate is more interesting to us. When I vacation outside of Colombia I don't pay attention to the exchange rate for the reason you stated.

Based on the frequency I need to go the ATM, I get a dollar cost average exchange rate that is insignificantly different than if I tried to time my withdrawals.

[Elvis 2008]

Good points, I might just hold out on taking any money from ATM until COP stabilizes or until I literally run out of COP. I got another month here, so before leaving I'll see if I should stock up or it might even hit 5,000 by end of the year, who the hell knows right.

Yeah, there are two things that have surprised me, the panic selling continues. If you look at the currencies, the COP is down way more in the few days than other currencies. This is not interest rates ETC. It is panic selling.

But at some point, you would think the Colombian central bank would step in and stop this. You never see the Peruvian sol makes moves like this because the Peru puts a tight grip on its currency.

With the COP this weak, inflation in Colombia is going to be out of control. If I were Colombian, I would be screaming for Colombian authorities to stop this fall. It makes you wonder what is going on and why they are not. Are they trying to show up Gustavo? Are they the ones selling the Colombian assets? You would think at some point soon there would have to be an intervention.

[Villainy]

It's a really disgusting rate of commission if you pause to think for a moment about what work they are actually doing. It's another form of financial robbery.

Oh dear God! Are you saying that Banks take advantage of their customers? I never thought I would say this. But I agree you JustTK. Just don't let it go to your head.

[Carter80]

To put this all into perspective, please consider this question. What does Gustavo Petro or anything else in Colombia have to do with the US dollar being at its highest rate against the euro in more than 20 years? You and I are saying basically the same thing.

There's a lot of movement to usd, but the euro decline appears largely related to the dependency on Russian exports in a time of war.

Further perspective, the euro is down 15 percent in the last year, and 4% since Jun 19, the peso as of this am is down over 18% since June 19 alome. The peso is clearly getting hit much harder. Further perspective, as a Canadian I need to follow the exchange rate with USD for various reasons and our dollar remains stable in the last month.

While markets are hard to understand, the impact of the election seems pretty clear to me. I'm an example of it, I was planning on buying an investment property in Medellin this year and have decided to wait for a while to see what he's like in power. I'm a small potato, but hard to believe I'm the only person who's decided not to move my money into pesos since Petro was elected.

[Zeos1]

It's a really disgusting rate of commission if you pause to think for a moment about what work they are actually doing. It's another form of financial robbery.

I think that was just a hypothetical, but yes, agree with you 100%. And in reality in the country I am in I cannot get an overall cost for currency exchange less than around 3-4%. It is robbery in my opinion.

[JustTK]

Other way around. What he said was you are getting charged a 6% commission when you look at his example. Which is often the case.

It's a really disgusting rate of commission if you pause to think for a moment about what work they are actually doing. It's another form of financial robbery.