What do you think the US to Euro exchange rate will be in 18 months

[Hauldren Collider]

yes, they have dogs that detect dollar in the fronteer
People want to take out dollars and put them in Uruguay which is something like the Switzerland of south america.
In the neighbour countries they accept pesos with a 30% devaluation

That's incredibly ridiculous.

[Dinner]

I hate to say it but Argentina really does need deregulation. Ditch the minimum wage so more people get hired, deregulate just about everything (other than banks) so industry has a reason to relocate there, lower spending and taxes so a real recovery can occur, and consider a Chile style pension system where workers are forced to contribute to long term savings. Yes, this will make things worse in the short run but it will attract investment capital, give people with money a reason to bring it into Argentina, and actually get employment growth going again.

Lastly, fire the ***** in charge and make damn sure the government stops trying to steal foreign owned assets (like the Spanish oil company's investment). That kind of bullshit destroys economies because no one will investment if the government just steals their earnings after they invest. They need a good strong dose of the rule of law in Argentina. While they're at it, copy South Korea and sign free trade agreements with everyone you can just so prices come down and businesses are more competitive. Don't worry about local manufacture because that will pop up when and where there is an opportunity and right now they need to lower costs and become competitive.

If the government has absolutely any ability to borrow it should be put into infrastructure to get people working again and to increase the ease of which goods and people move about the country. Roads, rails, canals, ports. Deregulation should take care of their electricity shortages in time provided they truly take the hard medicine.

[C0ckney]

I just don't think that Spain has been extraordinarily profligate recently -- no more profligate than the US, for instance. The story line doesn't fit with regard to Spain or Ireland. It does fit with Greece, Italy, and Portugal.

It's not my opinion that Spain has done things correctly, of course. Just that normal ways of doing business that could serve Spain well in this situation don't exist. Compare to the support that the BoE and the Fed provided. Unavailable to Spain.

all the countries in trouble have their own crisis, with its own causes. i wouldn't put them into two groups.

the ecb has already intervened with enormous sums to aid spanish and other european banks (more than 1 trillions euros and counting) and this has clearly not resolved the problems in the european banking system. for them to do the same for countries directly would be massive politically and legally (it would be contrary to the treaties). i don't see how it could be done.

There are more solutions than you list.

there really aren't IMHO, in terms of workable solutions to keep the euro in its current form, with its current members. there are many variations on a theme and different names being bandied about but they all come down to those two things. i don't think either will happen, because of political difficulties. so there will be no solution and things will continue on their current downward path.

i think that greece will leave, or be forced out, within the next few months. a lot depends on the elections in june. after that, things will get very interesting.

[C0ckney]

just to be clear, i think the only realistic solution is for the euro to either be abandoned altogether or relaunched with a much smaller group of countries.

all this talk about a two tier euro or some such is nonsense. the problems in the euro stem from the fact that the various european economies are too different to each other to work as a single currency zone. any plan which does not address this problem will solve nothing.

[Dinner]

i think that greece will leave, or be forced out, within the next few months. a lot depends on the elections in june. after that, things will get very interesting.

Greece will never leave. They'll be forced out kicking and screaming because they're too third world and incompetent to do what in necessary to stay. So long Greece because the door will be hitting them on the ass shortly.

[Dinner]

That's incredibly ridiculous.

It makes sense in the short term as it helps to prevent capital flight. Of course, the long term solution is to give investors a reason to invest so that capital stops leaving the country and starts coming in. That would mean the worthless ***** in charge would have to stop trying to steal other people's money (see Ripsol) and it would mean difficult financial solutions if it was implemented but it is the best long term solution. Once people see profitable reasons to bring money in they will stop trying to get money out.

[C0ckney]

Greece will never leave. They'll be forced out kicking and screaming because they're too third world and incompetent to do what in necessary to stay. So long Greece because the door will be hitting them on the ass shortly.

the plan that greece was told to follow in the 'rescues' could never have worked. however the effects of the greeks attempting to follow those plans have been an economic depression and a furious electorate.

if syriza win the election (about 50/50) and manage to form a government (difficult to see how), they will repudiate the 'bailouts' and this will mean leaving the euro and defaulting on their debts. if new democracy win (about 50/50) and manage to form a government (difficult to see how, but not impossible), we will continue with this farce for a while longer.

i hope that syriza win. not only because it will mean an end to the farcical 'rescues', but because they might actually be able to slaughter some of the sacred cows in greek politics (i.e. tax the church, slash military spending).

[Dinner]

http://economywatch.msnbc.msn.com/_n...ing-short?lite

Spain is saying they're almost cut off from credit markets due to sky high interest rates.

[DanS]

all the countries in trouble have their own crisis, with its own causes. i wouldn't put them into two groups.

Why not? You're handwaving here.

the ecb has already intervened with enormous sums to aid spanish and other european banks (more than 1 trillions euros and counting)

During the 2008 crisis, the Fed provided $13 trillion in liquidity to the financial system. Much of that was directly to European banks. It's time for Germany, et al. to get serious and stop passing the buck.

[C0ckney]

Why not? You're handwaving here.

During the 2008 crisis, the Fed provided $13 trillion in liquidity to the financial system. Much of that was directly to European banks. It's time for Germany, et al. to get serious and stop passing the buck.

handwaving?

i wouldn't put them into two groups because each country has its own crisis. they need to be analysed individually. the bigger problem is that as well as the problems in each country, there is a europe wide banking crisis in the background.

the one trillion in fact only relates to the two LTROs and a few other related items (i checked the figures, as they seemed on the low side). the ecb has provided a huge amount of, short term, liquidity and undertaken many other measures to help the banks. in fact i would argue that the country 'bailouts' are in reality, banking bailouts. however all these measures have not worked. i don't think more of the same, only bigger, is the answer.

[C0ckney]

i have a problem with the two groups thing as well, the 'good' countries, who didn't spend too much, and the 'bad' countries who overspent, not only because it's wrong, but because it reduces the whole thing to some kind of morality tale.

[Dinner]

They need to do something besides just bailing out the banks to get the economy growing again. A new rash of infrastructure projects would be nice but there is no way the southern European countries could afford that (and unlike the US, Japan, the UK, or Germany they can't just borrow more; to compare foreigners are begging the US to borrow more because it's seen as safe) so they're pretty much stuck with trying to do things like lowering the minimum wage, making it easier to hire by reducing regulations, and trying to allow things like mines or logging which previously had been blocked by NIMBYs. At least those things would create jobs, make current businesses more profitable (though tax cuts are out due to the fact they'd make the deficits worse), and maybe increasing export earnings and employment by green lighting natural resources projects.

[The Mad Monk]

x-puppy'd

Like "The Ant and the Grasshopper"?

[C0ckney]

very much so.

[gribbler]

Except in this case both the ant and the grasshopper are going to freeze to death.

[DaShi]

And many other bugs, if this keeps up.

[C0ckney]

spanish ministers have denied that spain is going to seek a bailout, so expect it to happen soon, possibly this weekend.

the leader of angela merkel's party has publicly said that spain should come under the 'bailout umbrella'. what a tempting offer, why not and join ireland, greece and your neighbour portugal, you can see how well the 'rescues' are working out for them!

[The Mad Monk]

Returning to Argentina for a bit...

yes, they have dogs that detect dollar in the fronteer
Attachment 172077
Attachment 172078

People want to take out dollars and put them in Uruguay which is something like the Switzerland of south america.
In the neighbour countries they accept pesos with a 30% devaluation

Argentina loses a third of its dollar deposits

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Fri Jun 8, 2012 4:46pm EDT

* Argentines reacting to foreign exchange restrictions

* About $100 mln in dollars withdrawn every day

* Rush toward greenback started in November

By Jorge Otaola

BUENOS AIRES, June 8 (Reuters) - Argentine banks have seen a third of their U.S. dollar deposits withdrawn since November as savers chase greenbacks in response to stiffening foreign exchange restrictions, local banking sources said on Friday.

Depositors withdrew a total of about $100 million per day over the last month in a safe-haven bid fueled by uncertainty over policies that might be adopted as pressure grows to keep U.S. currency in the country.

The chase for dollars is motivated by fear that the government may further toughen its clamp down on access to the U.S. currency as high inflation and lack of faith in government policy erode the local peso.

"Deposits keep going down," said one foreign exchange broker who asked not to be named. "There is a disparity among banks, but in total it's about $80 million to $120 million per day."

U.S. dollar deposits of Argentine banks fell 11.2 percent in the preceding three weeks to $11.5 billion, according to central bank data released on Friday. The run on the greenback has waxed and waned since November, after President Cristina Fernandez won a second term on promises of deepening the state's role in the economy.

From May 11 until Friday, data compiled by Reuters from private banks showed $1.9 billion in U.S. currency had been withdrawn, or about 15 percent of all greenbacks deposited in the country.

Feisty populist leader Fernandez was re-elected in October vowing to "deepen the model" of the interventionist policies associated with her predecessor, Nestor Kirchner, who is also her late husband.

Since then she has limited imports, imposed capital controls and seized a majority stake in top energy company YPF.

A spokesman for the central bank said on Friday that the rate of dollar withdrawal from Argentina's financial system shows signs of slowing.

"We have seen a tendency toward fewer withdrawals, to about $90 million (per day) over the last week from $120 million the week before," the spokesman said a day after the bank lifted daily reserve requirements on dollar deposits to help banks respond to steady drum beat of withdrawals.


DITCHING HER DOLLARS

The near-impossibility of buying dollars at the official rate is driving some savers and investors to pay a hefty premium in the black market.

Many are taking what dollars they can get their hands on and stashing them under the mattress or in safety deposit boxes, fearing moves by the government to forcibly "de-dollarize" the economy. Officials have strongly denied any such plan.

The president's battle to slow capital flight and fatten the central bank reserves needed to pay the public debt has prompted even tighter controls in recent weeks, making it almost impossible to buy dollars at the official rate. The effects have been felt throughout the South American country's economy.

For example. Argentines, who normally pay for new homes with stacks of dollar bills, have been struggling to get their hands on U.S. currency since Fernandez started imposing stringent controls on dollar buying late last year. [ ID :nL1E8H6EZ8]

She wants Argentines to end their love affair with the greenback and start saving in pesos despite inflation clocked by private economists at about 25 percent per year.

Fernandez set an example on Wednesday by vowing to swap her only dollar-denominated savings account for a fixed-term deposit in pesos.

But savers in crisis-prone Argentina are notoriously jittery. Memories of tight limits on bank withdrawals and a sharp currency devaluation remain fresh a decade after the country's massive sovereign debt default.

"There is a lot of fear, considering everything that has happened before," another foreign exchange broker said. "Confronted by risk, whatever kind of doubt, depositors pull their dollars out of the bank and wait to see what happens. (Writing by Hugh Bronstein; Editing by Leslie Adler)

http://www.reuters.com/article/2012/...8H8EJA20120608

...the dogs aren't working.

[N35t0r]

Even taking your dollars out of the bank and sitting on them is worth more than saving in pesos, and leaving them in the bank risks them being forcibly swapped to pesos (something the government swears it won't do, but there's a precedent).

[Dinner]

Rumor has it today is the big day where Spain gets its bailout.

[Zoetstofzoetje]

a small one, perhaps, and the beginning of the beginning of the end.

[DanS]

Good job on the rescue. Germany finally got a little creative.

[Kuciwalker]

They don't need to get creative. They just need to tell the ECB print some more ****ing euros and make up for criminally undershooting their inflation target.

[gribbler]

At this point is that really enough for Spain to get out its mess? A little more inflation?

[Jon Miller]

The question is if the markets decide that this means that the rest of europe will back up Spain.

JM

[Kuciwalker]

At this point is that really enough for Spain to get out its mess? A little more inflation?

A little more inflation and a lot more NGDP. And sure, the Eurozone will still have problems, but they'll be more manageable.

[Zoetstofzoetje]

you know what the problem is with Spain?

every time there's an issue, a cause is clearly identified. the politicians / the government / the province / the mayor / the corporations / the banks / the neighbour. but the cause is never 'me', so someone else always has to do the changing.

welcome back, peseta.

[C0ckney]

Good job on the rescue. Germany finally got a little creative.

it's certainly 'creative' to promise funds from one 'rescue' vehicle which doesn't exist yet (ESM) and funds from another to which spain is supposed to contribute 13% of the money (EFSF).

the plan will add 100billion euros to spain's debt on the back of a rapidly shrinking economy. it will not solve the problems in the spanish banking sector and spain will still be left in a currency which does not suit its needs. it's the same plan which has failed in greece and is about to fail in portugal and ireland. this time it will be different i'm sure...

[DanS]

the plan will add 100billion euros to spain's debt on the back of a rapidly shrinking economy.

Unavoidable. Besides, no serious investor omitted it from the Spanish gov't's balance sheet anyway. Rather, now the Spaniards know where they're going to get the money to plug the leak. Last week, they didn't.

Spain should now be able to weather this, given sufficient austerity and structural reform.

[C0ckney]

of course it was avoidable. they could have nationalised the banks, defaulted and left the euro. instead they've chosen the long and painful road to nowhere already taken by greece, ireland and portugal.

Spain should now be able to weather this, given sufficient austerity and structural reform.

why do you think this? i see no evidence that would support this view.