MercoPress. South Atlantic News Agency
Uruguay investing hundreds of millions to support the US dollar and exports edge
Uruguay’ financial and political stability is backfiring as the Central bank is forced to buy a massive inflow of foreign capital which in turn creates an abundance of Pesos that need to be absorbed to control inflation and support the competitive edge of the country’s exports. Read full article
Comments
Disclaimer & comment rulesPoor little Uruguay. It is suffering. It is suffering from its old, frightened, senile, ass-licking “president”, from being next door to argieland and from having its economy entwined with that of argieland. Just look at it. Uruguay suffered for years because it couldn't follow its own interests and build pulp mills. Because of the lies from argieland. The lies about pollution. The pollution that was being created by argieland. Then there are the channels in the Rio de la Plata. The northern channels where argieland is supposed to enable dredging for proper access to Uruguayan ports. Except that it doesn't. Because that would create competition for the argie ports of Buenos Aires and Rosario. Of course it's a treaty matter and so all is explained. When did argieland ever comply with treaties? Then there was the instance of argieland refusing to buy back its own currency from Uruguay. Currency that Uruguay had acquired by exchanging worthless argie pesos for Uruguayan pesos so that argie crooks could buy goods in Uruguay. Goods that were, effectively, stolen. Solutions for Uruguay? Get rid of the belly-crawling wimp. Get a man. If you want to do something in your own interest, do it. Ignore the whingers across the river. Dredge your own channels. If necessary, accompany the dredgers with warships. Trust us on this. If you fire at an argie warship and so much as chip a little paint, it and the rest will run. Remember that you helped Britain achieve the destruction of the Graf Spee. Argieland has nothing comparable to the Graf Spee. And the money? That's easy. When someone wants to buy, require production of a passport. For argies, require payment in US dollars. Under NO circumstances, accept or exchange argie pesos. Unless you have an overwhelming need for overpriced toilet paper!
Apr 20th, 2013 - 03:32 pm - Link - Report abuse 0Ignoring 'Comical Alli' above, this item seems to ignore one thing.
Apr 20th, 2013 - 04:49 pm - Link - Report abuse 0667 M USD is only 0.75% more than the previous years total of 665! And this when inflation was (pick a figure) between 8% and 12%
Are we not seeing the wood for the trees here, or are we so utterly confused we don't know what we are doing?
If you keep sending different signals to the market (raising base rate to 9.25% to “combat” inflation) then something is seriously remiss when the Central bank president Bergara panics at the obvious result of offering investors MORE money and is surprised when they take it!
I am one of the investors and so far it has worked out well.
Mujica losing control of the cabinet such that there are TWO financial bodies operating to control the government money market is ludicrous in the extreme but he seems unabled to understand the conflict OR, more seriously, is unable to deal with it.
Poor Uruguay is going the way of Cyprus remember Cyprus 8 times more deposit than the GDP Russian money.
Apr 21st, 2013 - 01:02 am - Link - Report abuse 0Uruguay has Argentinean money and the economy cannot absorb of course I wonder how many times over of Uruguay’s GDP Is there in Dollars from Argentineans I bet 5 billion along from Cristina the thief.
This is a copy of the Cyprus situation.
3 cornelius
Apr 21st, 2013 - 03:44 pm - Link - Report abuse 0I have no idea why you have said that it is the same problem as Cyprus.
I just cannot see any correlation: Uruguay is paying its way Cypress was broke and took EU loans with no intention or ability to repay them. The banks were overextended on LOANS, not flushed with investors cash.
I will like to know how much of the GDP to deposits are in Uruguay in the us in a n economy of 16 trillion dollar the bank’s deposits that are about 1:1 if there is an unbalance that is a problem unless Uruguay send that Cash somewhere for the Argentineans.
Apr 21st, 2013 - 05:13 pm - Link - Report abuse 0Cash for a bank as I understand is liability unless they are not paying them interest like the Swiss did some time ago.
5 cornelius
Apr 21st, 2013 - 06:16 pm - Link - Report abuse 0I think you may have misunderstood what banks do.
Cash on deposit is used to provide the money for loans to people WHO CAN PAY THEM BACK. That lets out the argies.
The interest that the borrowers pay, less the banks fees, is paid to the savers. It may become a problem if the number of times that the SAME equity is loaned is not managed properly by the bank monitoring the payback 'efficiency' to ensure that there is ALWAYS enough money to pay back savers who want to withdraw their money.
The answer of course is to encourage savers to leave their money in the account for a number of years. This is done by offering higher interest rates and making the term irrevocable except for certain reasons such as the death of the saver.
Obviously the borrowers have to pay more interest but it may be the only way they can finance a long-term project.
Cash on hand is NOT a liability in real terms just a missed opportunity to increase bank profits.
Chris I understand what you saying and I agree but there is only so much credit that the Uruguayans market can afford or any market of that size before it becomes inflationary easy credit is created by too much liquidity and not enough return for the bank to pay the savers which is what you stated. In this case I believe cash becomes a liability. I do not know enough about the health of Uruguayan Banks and their return or how open their books are.
Apr 21st, 2013 - 08:24 pm - Link - Report abuse 07 cornelius
Apr 21st, 2013 - 09:49 pm - Link - Report abuse 0Well, please take this constructively: I hope you are wrong!
The reason why I hope you are wrong is very simple, one of my biggest investments is in a government bond which pays substantially above anything else available in Uruguay and I would hate for it to fail!
You could say I have put my money where my mouth is.
I also Have a found in Latin America bonds in my retirement account trough my company with JP Morgan so I hope I'm wrong.
Apr 22nd, 2013 - 12:17 am - Link - Report abuse 0Sounds like you guys are betting on SA :)
Apr 22nd, 2013 - 12:28 am - Link - Report abuse 0We are too, but without the gambling
;)
Most of the ETF's are in Brazil, Chile and Colombia
Apr 22nd, 2013 - 01:06 am - Link - Report abuse 010 Stevie
Apr 22nd, 2013 - 12:32 pm - Link - Report abuse 0And how much money have you got invested in YOUR country, whichever that is?
It is investors such as I and other expats who are helping finance Uruguay. Yes, it is a good return, but I didn't HAVE to do it as I could easily invested off-shore.
I did it to show faith in my lovely adopted country. The only betting I would do on S.A. is that the lefties / commies and the fascists (of AR) are sooner or later going to get their arses kicked.
When Paraguay shows what a self-made millionaire can do for the people who want to work and not live on handouts, other countries (except the idle bastards in AR) will wake up and see what they are missing.
I think Brasil needs to keep a close eye on this man - they could certainly use him as the Chief Financial Officer of the State.
12
Apr 22nd, 2013 - 05:06 pm - Link - Report abuse 0To show your faith in your adopted country you plan how to make a profit out of your love. In the end, remove more capital than you invest. Natural.
I hope the bonds fall. I hope the devaluation hits every country like a plague. Currency wars is what is needed. I hope the people storms the banks in order to withdraw every last penny. I hope they keep that money under the matress in order to stagnate growth.
In order to start all over again.
Kinda like argentina.....except it will not happen.......lol
Apr 22nd, 2013 - 06:10 pm - Link - Report abuse 013 Stevie
Apr 22nd, 2013 - 06:31 pm - Link - Report abuse 0You still don't get it do you?
I COULD have invested elsewhere and not have to pay the tax, which goes to the government. Whichever way you look at it, it's a win for Uruguay.
I thought you lived in Uruguay? If so why do you want to destroy the money base? Wouldn't your family be left destitute as well as me? Or don't you GAF?
What is it with you stymied commies? If you can't have your way everybody has to suffer, is that it?
Just fucking grow up will you? You have been sucking the tit of others work while you pontificate about ideals such as a UNITED SOUTH AMERICA: HA,HA,HA,HA!
IT WILL NEVER HAPPEN.
15
Apr 22nd, 2013 - 07:47 pm - Link - Report abuse 0Oh yes it will.
And growth will stop too.
You better start investing in life...
;)
16 Stevie
Apr 22nd, 2013 - 09:05 pm - Link - Report abuse 0“You better start investing in life...”
Yet another glib comment when you have no real answer.
Chris
Apr 23rd, 2013 - 10:34 am - Link - Report abuse 0You are a well educated man, you could do wonders in Uruguay.
If you only knew how much your profession is needed in this little nation.
If you, someday, would use your knowledge to the benefit of the people around you, instead to benefit your pockets, you would be amazed at the love you would recieve.
You wouldn't have to go around being upset all the time (yes, calling a dead man names is a sign of being upset)
You would smile again, and feel what life is really all about.
District heating, flue gas treatment, eolic power, biofuel, solar power...
The possibilities are enormous and the need even greater.
Chris that is the communist calling on you.
Apr 23rd, 2013 - 12:52 pm - Link - Report abuse 019 Captain Poppy
Apr 23rd, 2013 - 06:31 pm - Link - Report abuse 0Yes, it is laughable isn't it?
Plus he does not know what I do to help undergraduates who wish to get a better result in their chosen profession and all free of charge.
Mind you I love talking with young people who have brains in their heads unlike the argies.
@18 Stevie
Calling Chavez Dead Man Walking now Dead and Rotting is both perfectly true and quite funny to see the reactions from lefties like you. I am an acerbic wind-up agent!
Believe me, the ONLY things that upset me are the stupid bastards goading the Falklands and the lefties like you who won't be happy until all the politicians have robbed the electorate and given a minor share as handouts to the illiterate and unemployable people THEY failed in the first place.
That's the trouble with you dyed in the wool commies, you continually get everything backwards. Sustainable wealth for a reasonable government that spends it on education and real job creation (not sweeping the streets) COMES FIRST.
Just going straight over your head though isn’t it?
20
Apr 23rd, 2013 - 08:46 pm - Link - Report abuse 0You weren't in Uruguay prior to 2002, were you?
You just arrived, didn't you?
How can you say “lefties like you who won't be happy until all the politicians have robbed the electorate and given a minor share as handouts to the illiterate and unemployable people THEY failed in the first place”
Exchange “lefties” for “Rosaditos” and you have a perfect descriptionn of what the Rosaditos have been doing for 180 years. Since the creation of this nation.
Study SA history, Chris, people will think you're a nutter, and we both know that is not true.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!