Dollar Domination! USD Surpasses 4000 Colombian Pesos

433POSTS

3 years ago

@cccmedia So I should continue transferring money to my Bancolombia account from the USA, yeah? Maybe one transfer every week that the exchange rate is more favorable?

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#42

Great question, Chine.

However, I don't agree with

that strategy.

The best use of money in the Dollar

Supremacy era may be as a consumer,

especially for those living in Colombia.

Simply put, you get more now for

your Dollars (and $$ converted

to Pesos) .. than you did

last year.

Given the inherent uncertainty

of exchange rates and the fact that a

new and controversial leader is taking

office next month, I'd say that

consistently moving money into

a Colombia bank account is

a dubious strategy.

Especially questionable is the purchase

of homes and real property in Colombia,

which may be a tempting proposition

for Dollarized Expats.

I do not recommend property purchase

in La República .. other than

for two types of investors...

1. Seasoned Colombia investors who

have repeatedly been successful in the

property markets here.

2. Less savvy investor/gamblers

who have money to burn!

cccmedia in Medellín

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Laker4115 Serial expat

217POSTS

3 years ago

#43

The dollar is still in the early stages of skyrocketing in value compared to the Colombian Peso. Best strategy is to keep your money in dollars as long as possible before making the conversion to Pesos. Colombia now is like Venezuela in 1998 just before Chavez took power, "he that does not learn from history is destined to repeat it".

ChineduOpara Serial expat

433POSTS

3 years ago

#44

@cccmedia Well your first paragraph is exactly what I meant... Transfer some U$D to my Bancolombia account (pesos) approximately every 1-2 weeks, only when there is a substantial uptick in the exchange rate.

Because I am only in the dUSA for a few months, before heading back to Colombia to continue being a consumer.

Sounds about right? Or did I misunderstand your comment.

ChineduOpara Serial expat

433POSTS

3 years ago

#45

@Laker4115 Problem is, we cannot time the market. No the stock market, not the ForEx market. Absent any attempts at government/forced/artificial "price pegging" (which would backfire anyway), the U$D-COPeso exchange rate will ebb and flow based on global events and other factors. In other words... there's no guarantee that the exchange rate will be any higher in October when I go back, than right now 🤷🏾‍♂️

...but I hope it is!

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cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#46

Neither Laker nor I see an advantage to

transferring funds from USA banks

to Colombia at this time .. unless it's

to purchase 'mercancías'.

cccmedia

Laker4115 Serial expat

217POSTS

3 years ago

#47

@ChineduOpara The ebb and flow of the dollar peso exchange rate is over. The communists are now in charge and the dollar compared to the peso is only going to in one direction up up and away.

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#48

Are you a Colombian millionaire?

With the exchange rate above 4200 Pesos

to the Dollar, $250 US is worth over a

million pesos.

So any Expat in Colombia with

local currency worth $250 or more

may consider him/herself a

Colombia millionaire.

cccmedia in Medellín

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cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#49

Although Sr. Petro's election seems to

be affecting the exchange rate,

the "Communists" are not officially

"in charge" at this time.

Petro will not be seated as presidente

for another month.

He is not a self-declared Communist,

although it is indisputable that he was a

guerrilla operative decades ago.

cccmedia in Medellín

1 member reacted to this post

Laker4115 Serial expat

217POSTS

3 years ago

#50

@cccmedia True the communists are not officially in-charge but the flight of Colombian capital and assets out of the country is well underway as people now know for sure that communists will be running things the next four years and perhaps forever. Right now that is great for gringos living in Colombia and earning dollars, it is also great for the Miami real estate market.

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#51

Left-wingers or "communists" running Colombia

"forever," you say?

That is impossible to predict.

The departing presidente, Sr. Duque, was term-limited

(four years max) and so will be Sr. Petro.

Could another left-winger be elected in four years? Naturally,

that could happen .. but probably only in the case where 'la gente'

approves of the job the Petro administration does.

cccmedia in Medellín

Laker4115 Serial expat

217POSTS

3 years ago

#52

@cccmedia Have you ever seen a communist government give up its power, Castro, Chavez, Mao-Tse-Tung, Stalin, etc. etc. The Supreme Court is already in their hands and they will probably implement a new Constitution so Petro can stay in for the rest of his life or have a puppet President like Putin has. The four year problem is easily overcome by them.

ChineduOpara Serial expat

433POSTS

3 years ago

#53

@Laker4115 That's a whole lot of speculation, buddy. Majority of political experts (of which I am definitely not) predict that - aside from some little tweaks here and there, and the ForEx rate swinging higher a little (4,300) - things in Colombia will stay more or less the same under Petro. Let's not throw around words like "Communists" absent definite evidence. Colombia isn't China... Now THAT is a bona-fide Communist state, and they are proud of it!

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cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#54

USD versus Colombian peso:

Dollar Goes to the Moon!

The U.S. Dollar is shooting skyward.

For the week ended today, July 8, 2022,

the Dollar closed at 4421 Pesos,

shattering previous records.

The U.S. currency was pegged at

below 3800 Pesos in May .. then

began its extraordinary run-up

versus the Peso just after the election

of Gustavo Petro. He will assume the

presidency in early August.

Source... xe.com USD-COP charting

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#55

Dollar versus Euros.

The strong Dollar has almost reached the value

of the Euro. One Euro now equals $1.02 US. The

last time the Euro was worth less than

one Dollar was 20 years ago.

The Dollar's value has been boosted by Fed

rate increases .. while European countries find

their economies decimated by the

Russia-Ukraine conflict and its effects.

The Doillar's strength also is a boon to other

countries that use U.S. currency as their

own currency. These countries include

Panama and Ecuador.

Source... Fortune

mtbe Contributor

195POSTS

3 years ago

#56

July 8 closed at 4420

Colombia's lost with Petro's win....

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cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#57

Dollar so strong that Petro is tweeting about it.

The momentum of the U.S. Dollar versus the Colombian Peso picked up on Monday (July 11, 2022).

With the Peso losing another 3.7 percent in value versus U.S. currency on Monday, the Dollar closed at a record 4561 Pesos.

Presidente-elect Gustavo Petro tweeted that Colombians should not bet against their own currency through a strategy of buying Dollars. "To those who are buying Dollars in Colombia," Petro said, "I have to announce that when you come to sell them again, they'll be worth less than they are now...

"Watch out! Don't lose your money," he cautioned.

Since Petro won the election on June 19, the Peso has lost 16 percent of its value versus the Dollar. In Monday's trading, the Peso lost more value versus the Dollar than any of the other 138 world currencies tracked by Bloomberg.

Many Colombian and foreign investors are concerned about Petro's proposals that would phase out oil and coal, which account for about half of Colombia's exports.

Source: Bloomberg

Laker4115 Serial expat

217POSTS

3 years ago

#58

My crystal ball from ten days ago is looking pretty accurate.

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#59

Crystal ball still correct.

The U.S. Dollar continued to defy gravity .. and,

in line with Laker's crystal ball predictions,

moved up again on Tuesday (July 12)

to a new record high.

The Dollar closed at 4622 Pesos .. as

Gustavo Petro's tweet cautioning Colombians

not to buy Dollars failed to

suppress Dollar dominance. The Dollar's

strength is approaching one thousand Pesos

above its levels from early last month.

Source... xe.com USD-COP charting

Laker4115 Serial expat

217POSTS

3 years ago

#60

This is actually not good news. You might feel happy as a dollar earner that things are getting cheaper for you but what is really happening is that a country we all love is becoming more unstable and may actually end up becoming a hell hole like Argentina, Venezuela, Cuba, Nicaragua etc. etc. Colombia has dealt its cards in this situation and one can only pray that common sense may prevail.

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futuroexpat Contributor

120POSTS

3 years ago

#61

@Laker4115 ... My understanding is that Petro is a capitalist and believes in democracy, which means he is not a communist. I listened to his acceptance speech where he described his capitalism project for Colombia.

Petro believes in listening to opposition voices, not silencing them, which is why he invited Uribe to dialog with him. He was, long, long, ago a member of M-19, which was a group founded on democratic principles, as opposed to ELN and FARC which were based on communist principles.

Petro renounced violence and decided to work inside the system. He negotiated turning in arms, surrendered, paid a prison sentence, and then dedicated himself to use ballots, not bullets. He became mayor of Bogotá. He became a senator. He has worked inside the system for 32 years in a peaceful way. He received a majority of votes from Colombian voters to become president. None of that seems to justify calling him a communist.

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ChineduOpara Serial expat

433POSTS

3 years ago

#62

@futuroexpat Well, just understand this: For some people, throwing around words like "Communist" is just code for "I'm angry or fearful about some vague stuff, and I don't know how to seek help, properly express, or humbly say "I don't know, please educate me"... so I'mma just throw around vaguely-intellectual words (that I don't fully understand) at random targets and see what sticks. And if it creates an argument, even better, I can let off steam in the most negative and bad-karma-spreading way possible".

See also, "Marxist", "Globalist", and "Liberal".

I've seen people literally string together a bunch of these words together, trying to insult someone else. Then when asked to define just ONE of those words, they disappeared, then came back with personal insults 😂

Anyway... thanks for the summary about Petro. I knew some of these things but your comment was much more concise than many other websites/bios I've read about him. Gracias.

1 member reacted to this post

Laker4115 Serial expat

217POSTS

3 years ago

#63

@futuroexpat I hope you are right that Petro is not a communist as that would be good for Colombia. However I happen to be old enough to remember in 1960 Fidel Castro swearing to the New York Times that he was not a communist. Same thing in 1998 Chavez swore he was not a communist and you can see the results.

So again I hope you are right as I would love to see Colombia remain the same as it has been for the last fifty years. The rapidly declining value of the peso tells me that I am right and people are voting with their feet and investments that Petro is a communist or socialist as you prefer and the future for Colombia is not so bright.

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futuroexpat Contributor

120POSTS

3 years ago

#64

@Laker4115 ... Fortunately, Colombia is not Cuba or Venezuela, and Petro is not Castro or Chavez.

I am old enough to have lived in Colombia the election year four popular presidential candidates were assassinated before the election took place. This year Petro and Francia were able to run, not be assassinated, and win the election. So, things change. Colombia now is not even the Colombia of back then when four presidential candidates were killed.

I am overjoyed that Petro and Francia won the election. It bodes well for the majority of the population, the majority that capitalism largely forgot as the wealth gap, the disparity between rich and poor, became larger and larger, in the last fifty years. With Petro and Francia there is hope of raising many out of absolute poverty, increasing the size of the middle class, and expanding opportunities for all.

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Laker4115 Serial expat

217POSTS

3 years ago

#65

@futuroexpat Talk about wealth gap, go visit your friends in Cuba, Nicaragua, and Venezuela and you will see how well the poor are doing and a real wealth gap between the poor and the rich. Now you have two million poor Venezuelans living in Colombia, where are they going to go now that the communists have taken over? Enjoy your socialist paradise.

mtbe Contributor

195POSTS

3 years ago

#66

@Laker4115 ... Fortunately, Colombia is not Cuba or Venezuela, and Petro is not Castro or Chavez.

I am old enough to have lived in Colombia the election year four popular presidential candidates were assassinated before the election took place. This year Petro and Francia were able to run, not be assassinated, and win the election. So, things change. Colombia now is not even the Colombia of back then when four presidential candidates were killed.

I am overjoyed that Petro and Francia won the election. It bodes well for the majority of the population, the majority that capitalism largely forgot as the wealth gap, the disparity between rich and poor, became larger and larger, in the last fifty years. With Petro and Francia there is hope of raising many out of absolute poverty, increasing the size of the middle class, and expanding opportunities for all.
- @futuroexpat

This is the new invention: Wealth gap. The rich are getting richer....so are the poor. If I have $1MM to invest and gain 10%, and someone with $10k invests and gains 10%...the divide is bigger, but both are better off. No one wants to wait and earn anymore. They want things given to them. I guess as the middle class has grown the last 40 years, and their children are given things (like phones, netflix, nice clothes, good education, etc...), the children grow accustom to having everything provided for them, not realizing how hard their parents had it. Now, they want the government to provide for them. They call it free.

So much has been spent on the 'war on poverty', to no affect. Taxing the middle class and the wealthy won't fix it. Only creating jobs...not government jobs (that's a vicious cycle)...will help. Get the government out of the way and let companies create.

Hope doesn't provide anything but empty promises.

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#67

"You might wonder why the Dollar is so strong

even though inflation is high and a possible

recession looms," writes columnist Peter Coy,

in his column today in the New York Times.

Coy notes that consumer prices rose 9.1 percent

in the first half of 2022, the highest rise in

a 12-month period since 1981.

High inflation, the column points out, tends

to erode the value of a currency.

"The explanation?" he continues. "It's all relative.

The United States has inflation, but so does Europe.

The difference is that the U.S. has higher

interest rates, and the expectation is that they will

go higher still in the coming months.

"International investors are willing to pay more

for Dollars to earn the higher returns on offer

in the U.S. money market," writes Coy.

Source... New York Times op-eds

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futuroexpat Contributor

120POSTS

3 years ago

#68

@mtbe ... "Taxing the middle class and the wealthy won't fix it."

I don't know if you were around in the USA in the 1950s under Eisenhower, but taxing the middle class and wealthy seemed to work to get America on its feet after the war. For tax years 1944 through 1951, the highest marginal tax rate for individuals was 91%, increasing to 92% for 1952 and 1953, and reverting to 91% 1954 through 1963. Most agree those Eisenhower years of high taxation were years characterized by peace and prosperity.

Since it worked in the USA, I hope taxation of the wealthy is increased in Colombia.

futuroexpat Contributor

120POSTS

3 years ago

#69

Dollar at COP 4,490.00 today, July 14.

I thought the conservative critique was that the Feds "endless printing of fiat money" would weaken the dollar and lead to collapse. Instead the dollar seems to be getting stronger.

Printing fiat currencies is also supposed to result in "hyperinflation" and that has not happened either. Inflation in Colombia (June 2022) is 9.67%. That is down from the 28% inflation in Colombia when I lived in Medellín in 1988.

By the way Colombia and USA have about the same inflation rates for June 2022: 9.67% in Colombia and 9.1% in USA. Neither qualifies as hyperinflation. Doesn't even come close to the annual inflation high of 28% I experienced while living in Colombia in the 1980s (under a president who was a capitalist!)

Laker4115 Serial expat

217POSTS

3 years ago

#70

The U.S. could put up with high taxes in the fifties because it was repaying war debts essentially back to itself and its citizens from whom it had borrowed to begin with and because the rest of the world was flat on its back (Europe and Japan) and the U.S. was the only producer of industrial goods like cars at the time.

HIgh taxes and eliminating oil, gas, and coal revenue in Colombia will lead to hyperinflation and the collapse of the economy like Venezuela. The fools running the government in Washington also have an inflation problem from living off the credit card but are being saved by Latin America and other places where the rich are buying our dollars because the U.S. is considered a safe haven. So the wealthy will flee to dollars and Miami while the Socialists/Communists put the Colombia into real poverty.

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mtbe Contributor

195POSTS

3 years ago

#71

@mtbe ... "Taxing the middle class and the wealthy won't fix it."

I don't know if you were around in the USA in the 1950s under Eisenhower, but taxing the middle class and wealthy seemed to work to get America on its feet after the war. For tax years 1944 through 1951, the highest marginal tax rate for individuals was 91%, increasing to 92% for 1952 and 1953, and reverting to 91% 1954 through 1963. Most agree those Eisenhower years of high taxation were years characterized by peace and prosperity.

Since it worked in the USA, I hope taxation of the wealthy is increased in Colombia.
- @futuroexpat

Very few paid 90% in tax in the USA. Yes, the rate was that high...but very few paid that. The effective tax rate was in the low 40s. People and companies deducted everything they could or hide it anyway they could. There were also several 'mini' recessions in the 50s nobody talks about as part of those high rates. The main reason the USA did so well is the baby boom....it raised the number of consumers. And all of those war manufacturers (who weren't still producing for the cold war) could now produce consumer goods.

Tax revenue greatly increased only when tax rates decreased and people/companies didn't feel the need to hide it.

There isn't enough individual wealth in Colombia to be taxed. Miami realtors are making bank with all the wealthy Colombians moving there. Taxes on businesses just get passed down to the consumers. It's the poor that get hurt in the end.

mtbe Contributor

195POSTS

3 years ago

#72

...

And now, there are talks about Petro getting rid of the Peso and moving to the dollar. This would be a good thing for the country, and a smart move. El Salvador, Panama and Ecuador did it a while ago. I think Belize is tied 2:1 to the dollar. Argentina was tied directly with the dollar 20 years ago but gave up on it. They'd be in much better condition if they stuck with it.

Laker4115 Serial expat

217POSTS

3 years ago

#73

Petro is learning from his friends in Venezuela. The marxists in Venezuela tried to save the Bolivar for years until people started using it as wallpaper and toilet paper. They finally woke up and began using the dollar for their economy, that has helped a bit as so many Venezuelans earning money in other countries send dollars back to their relatives. Colombia has had a strong currency compared to other Latin countries, so the question is why destroy it and jump to the dollar if you don't have to. The people who will really be hurt are the very poor who have no access to foreign dollars, Petro's voters.

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ChineduOpara Serial expat

433POSTS

3 years ago

#74

@mtbe If Colombia moves to the Dollar, that'll spell the end for tourism. The country will take a massive hit, economically. For example, Costa Rica and Panama are way overpriced, Americanized, and gentrified... both in commerce AND attitudes of the locals. That's not good for the locals, and not good for budget-conscious tourists and expats.

I pray that Petro doesn't do this.

mtbe Contributor

195POSTS

3 years ago

#75

Costa Rica, Panama and Ecuador, all on the dollar, are huge draws for tourism. But you are right, if it brings more Expats, that drives up the costs for everything else...especially happened in Panama...and the locals are hating it. It's even happening in Portugal, where US Expats are heading recently, driving up the costs for everything, and they aren't on the dollar.

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Laker4115 Serial expat

217POSTS

3 years ago

#76

Venezuela has moved to the dollar although they don't really want to promote it, it is breathing oxygen into their economy, however tourism in Venezuela is totally dead, just look at the latest pictures from Isla Margarita which used to have tremendous tourism before the communists took over. So if Petro implements his socialist paradise plan and eventually moves to the dollar the gringos in Colombia will disappear as will the tourists. Havana used to be Las Vegas before Las Vegas existed, there are not many tourists there now.

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#77

According to a variety of Internet websites,

the official currency of Venezuela is

the bolívar or bolívar soberano

(sovereign bolívar).

However, Venezuela's currency has been

so devalued in recent years that some

actors/vendors/tiendas may not accept

bolívars in all circumstances .. and may

pursue payment or transfers in dollars.

The old bolívar was pegged to U.S. Dollars

years ago for a while.

Bolívar is probably the most

mispronounced word or name in

South America, odd since its the

name of the Great Liberator of the

19th century. It's usually

mispronounced BOH-lee-vahr.

It's more correctly pronounced

boh-LEE-bahr.

cccmedia

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#78

Confused yet?

Adding to the confusion is the fact that

the currency exchange website xe.com

has two listings for Ven's bolívars.

One shows the currency at about

5 to each U.S. Dollar. The site shows

the other currency-listing at over

half a million bolívars to the Dollar.

cccmedia Ecuador/Colombia Expert

10285POSTS

3 years ago

#79

An opinion about Colombia.

IMO, life in Colombia is too good for

any possibility that a potential switch

to U.S. Dollars would chase

the Gringos away.

Just follow these few rules...

1. Stay in the cities. It's generally

and relatively safe here.

2. Stay off the intercity roads at night,

except in the Coffee Zone or if you know

your area so well you can predict

safe passage. (The latter strategy

is not for novatos.)

3. Do not display papaya.

4. Don't do stupid stuff like

confronting a macho .. or

walking on deserted streets

late at night .. or accepting

beverages from strangers.

Yes, some consider a Gringo

rude if he/she turns down

a shot of aguardiente.

Just tell them your doctor

doesn't allow you to

'beber alcohol'.

cccmedia in Medellín

MotitaSr New member

5POSTS

3 years ago

#80

I was reading an article not too long ago that said many Venezuelans have reverted to using gold. Just straight up gold. They said people are so used to it now that many are able to give a pretty accurate weight estimate just by looking at a piece.

While I hope it doesn't happen, I don't think that moving to the dollar would spell disaster for Colombia. It works just fine in several other countries and some American tourists get so discombobulated trying to convert that they prefer countries that use the dollar.

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