[QUOTE=Combo;1912835]This analysis assumes everything consumed in Colombia comes from the US, which is obviously not the case. If everything she buys is from the US (and thus priced in dollars), yes, things should go up virtually in sync with the Peso going down. However, if she consumes things with only Colombian inputs or things from countries whose currencies haven't appreciated versus the Peso, the exchange rate with the US dollar means nothing.
While Colombia does trade with the US, it's not a significant portion of their economy. Inflation has peaked in the last year (around 7% I believe). But in general, consumer products haven't gone up nearly as much as the depreciation vs the US Dollar.
Your last point is very valid, at least for venues where the customer is mostly Gringos. If and when the Peso strengthens to where it was, prices won't come back down to make up for it. However, if it's a venue with mostly Colombia clientele, they never would have increased significantly anyway.
IMO, what we should be thinking of is (roughly) what the locals pay. Of course most of us can afford to pay several times that, but the consequences of doing so aren't good.[/QUOTE]If I recall correctly, the Colombian Peso is directly tied to the US dollar. If grocery prices, rent prices, utility prices haven't come up in the last 2 years they soon will. Just a quick check and it looks like the Colombian CPI has been rising steadily the past 2 years, up about 15% and still rising. It's not instantaneous, but the prices will always follow the exchange rate, except the price for pussy never comes back down.
