Firefighters struggle as country’s economy booms

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Firefighters struggle as country’s economy booms

Postby Kelly » Tue Nov 29, 2011 4:20 pm

Peru’s shoddily equipped firefighters struggle as country’s economy booms

Peru’s underequipped first responders are unable to answer 40,000 emergency calls a year, or nearly a third of the annual pleas for help, because they are short of equipment, pumps and ambulances, said the national fire chief, Antonio Zavala.


I can certainly vouch for that. The one time we tried to call for emergency services, we couldn't ever get anyone to answer the phone.


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Re: Firefighters struggle as country’s economy booms

Postby rama0929 » Tue Nov 29, 2011 5:51 pm

:shock:

Actually, I shouldn't be... I suspect fire protection is like insurance; no one will take it seriously until an orphanage burns down or something.
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Re: Firefighters struggle as country’s economy booms

Postby asgoodasitgets » Tue Nov 29, 2011 9:16 pm

Yeah that's the one thing that is good about rich western nations - emergency services ARE fast.

One thing anyway....
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Re: Firefighters struggle as country’s economy booms

Postby rama0929 » Wed Nov 30, 2011 7:27 am

asgoodasitgets wrote:Yeah that's the one thing that is good about rich western nations - emergency services ARE fast.

One thing anyway....


Except in Peru... As the article states
In neighboring Chile, Colombia and Argentina, firefighters generally enjoy the status of being professional and well-equipped forces. Even Ecuador, which more closely shares Peru’s economic profile, has made serious investments in fire protection.
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Re: Firefighters struggle as country’s economy booms

Postby americorps » Wed Nov 30, 2011 9:27 am

I am wondering if everyone realized that the entire country of Peru has an all volunteer fire department. I remember hearing that from a firefighter when I first moved here and it shocked the H E double hocky sticks out of me.
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Re: Firefighters struggle as country’s economy booms

Postby Kelly » Wed Nov 30, 2011 11:55 am

It surprised me too when I first heard that - it's unbelievable for a city this size.
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Re: Firefighters struggle as country’s economy booms

Postby chi chi » Sun Jan 01, 2012 7:01 pm

I drove past the fire station in Tarapoto this week and their fleet of vehicles looks like they come straight from a museum.

It's not only the fire brigade that's poorly equipped.

Ambulances and police cars are often wrecks as well. And many of them drive at nights with lights broken.
And most of the police their motorbikes have 125cc engines. So, impossible to follow someone that has a bike with a bigger engine.
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Re: Firefighters struggle as country’s economy booms

Postby mtwilson » Thu Apr 05, 2012 4:57 am

I actually first came to Peru in 2005 as the head of a delegation of fire fighters from the states who were donating fire trucks, ambulances and the first portable defibrillators in the country. We were inspired to start this project when a fire in Lime killed 300 people in a mixed residential/manufacturing area in a poor part of Lima (don't recall where now, I knew nothing of Peru and didn't speak Spanish at the time).

Anyway, we shipped down several trucks and ambulances and a host of air-packs, protective clothing and the like and when we got here to attend the donation ceremony we found that instead of sending the equipment we donated to the areas that really needed it, some corrupt leadership was using it to curry favors in affluent areas of Lima. Long story short, we nearly caused an international incident when we demanded that the equipment be sent to the stations we knew needed it most.

During my first trip here I was taken on a tour of the Lima fire houses and I was appalled. I remember talking with senior volunteer officers about how their greatest accomplishments on any fire was figuring out how to bring in water tenders sufficient enough to fight a significant fire because the city's hydrant system is either non-existant or insufficient.

Another fun fact is that the dispatch center for the entire country is located in Lima. So when I was in Trujillo and they had an emergency, they were getting information from the (volunteer) dispatch center in Lima. You can only imagine what that means.

It is truly scary how poorly served a city the size of Lima is. There are practically no public funds directed to fire prevention or suppression there. The volunteers are really fantastic people though and they really want to make improvements, but the upper members of the departments and the politicians have little interest.

I spent 30 years in the fire service in the US and I never saw anything like this. There was one good thing that came from that first trip though. I fell in love with Peru and her people, especially the woman I married!

Once I am in Peru full time I plan to try and work on this issue. I'll be in Tarapoto, so we'll see what we can do about those old trucks up there ;) But people who live in Lima should realize that it is a ticking fire-bomb everywhere there. I routinely make sure I am close to exits and have a plan should a fire break out when I'm visiting, especially in hotels and clubs. Crazy dangerous!
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Re: Firefighters struggle as country’s economy booms

Postby chi chi » Sat Apr 07, 2012 9:16 pm

americorps wrote:I am wondering if everyone realized that the entire country of Peru has an all volunteer fire department. I remember hearing that from a firefighter when I first moved here and it shocked the H E double hocky sticks out of me.


Not only in Peru.
Most fire fighters in Belgium are volunteers too. I did it myself for some time too.
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Sun Apr 08, 2012 3:48 pm

How often do you see fires in Peru. Rarely. The buildings dont burn. They are made of masonary and concrete. Thats the way it is where I live too. Most people build out of non combustible materials because we dont have a professional fire department either. They do it for themselves. Others dont tell them to do it because we dont have a building code either. If you build a crappy house and it burns down, then too bad for you. We do have a volunteer fire department and they have some nice equipment that we have bought for them. But we dont allow them to apply for federal or state grants either. The government shouldnt be taking money from one group to give to another. Peru is doing it the right way. The local people pay for and get what they want.
If Peru went the way of the states they would soon find themselves broke. Just like the states and pretty much every other country that follows the tax and spend plan.
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Re: Firefighters struggle as country’s economy booms

Postby Kelly » Sun Apr 08, 2012 3:53 pm

The government shouldnt be taking money from one group to give to another. Peru is doing it the right way. The local people pay for and get what they want.


Two differences of opinion here -

1 - the government would be taking from everyone to give service to everyone.
2 - The local people pay but aren't getting the service they want. I've never heard anyone who needed emergency service here that was pleased with what they got. Most people have no clue how desperately ill equipped the emergency services are until they need them and there is no response.
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Sun Apr 08, 2012 5:10 pm

No. They are taking from a few people and giving it to another few people. And a large share of that money never gets to the intended source. It goes to another few people. Anytime you tax someone you lose conrol over those funds. The people who receive them spend them however they wish. It never starts that way but it always ends that way.
When I was a kid there were no paramedics. If your relitive got sick or fell down or whatever, you threw them in the car and took them to the hospital. Worked great. These days people just watch the person die... They have been trained to do that. Not react spontainously and do the right thing but wait for someone else to show up. Not good. But that is what every government program does. It makes you dependant on the system instead of responcible for your own actions and life.
Take a look at the places where you pay the highest taxes. You get drowned in new propaganda every election for a new tax or bond or whatever to pay for the hoplessly overburdened emergency services programs of that city. Yet the budget for those programs exceeds Peru's total GNP. There is never enough money for government run programs of any type.

By the way. Peru does not have a booming economy. They have a booming debt. Where do you think the money for this housing came from. The government borrowed it. Then the banks borrowed it from the government. Then the people borrowed it from the banks. Housing is a byproduct of economic growth. Not a producer of economic growth. Where is the growth? Mining hasent grown. Forest products have grown slightly. Manufacturing has gone into the toilet since the free trade agreement with china. So where is the money comming from to fuel this so called growth?
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Re: Firefighters struggle as country’s economy booms

Postby alan » Sun Apr 08, 2012 5:22 pm

[quote="Jimmy111"

By the way. Peru does not have a booming economy. They have a booming debt. Where do you think the money for this housing came from. The government borrowed it. Then the banks borrowed it from the government. Then the people borrowed it from the banks. Housing is a byproduct of economic growth. Not a producer of economic growth. Where is the growth? Mining hasent grown. Forest products have grown slightly. Manufacturing has gone into the toilet since the free trade agreement with china. So where is the money comming from to fuel this so called growth?[/quote]


Peru´s debt to GDP ratio is around 25%, at least a quarter of what it is in most developed countries. Mining exports are way up, agro exports are way up, and even manufacturing exports are way up, too. A lot of manufacturing sectors have suffered, sure, but the competitive ones.. like clothing manufacture, is booming.
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Re: Firefighters struggle as country’s economy booms

Postby falconagain » Sun Apr 08, 2012 6:51 pm

If the economy is booming then I wonder what kind of Peruvians can afford
the apartments and houses that start at $100,000 or more, so far I have seen
no bulk of salaries that justify the sale of so many properties at that price.
I have noticed that credit is provided to everybody but that they do not earn
anything close to even payoff whatever debt they accumulate. Still booming
might be economically or it might a city boom like the one of Alan Garcia
in 1987 where he made everybody equally poor nationwide when he stopped
paying the national debt.
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Sun Apr 08, 2012 6:55 pm

Alan wrote:[quote="Jimmy111"

By the way. Peru does not have a booming economy. They have a booming debt. Where do you think the money for this housing came from. The government borrowed it. Then the banks borrowed it from the government. Then the people borrowed it from the banks. Housing is a byproduct of economic growth. Not a producer of economic growth. Where is the growth? Mining hasent grown. Forest products have grown slightly. Manufacturing has gone into the toilet since the free trade agreement with china. So where is the money comming from to fuel this so called growth?



Peru´s debt to GDP ratio is around 25%, at least a quarter of what it is in most developed countries. Mining exports are way up, agro exports are way up, and even manufacturing exports are way up, too. A lot of manufacturing sectors have suffered, sure, but the competitive ones.. like clothing manufacture, is booming.[/quote]


That is because they count housing as GDP.
Only 1/4 of Peru's GDP is from sources that create wealth. For it to really count it had to be from sources that create something. Farming, Mining and Manufacturing. These things create wealth from nothing. However service sector sources only transfer it from one hand to another. Yet service is counted as production. But it isnt...It didnt add anything to the economy. And if the source of materials and parts for that service job come from outside of the country than it is a negative to the economic growth.
Most of the financial transactions in Peru are housing related. They say that a house sold for $50,000. This is the entry into the GDP. $50,000 in sales. But what really happened? The government borrowed the money for the house from the IMF and loaned it in turn to the banks who loaned it to the person who bought the house. But the bank only gets $150 per month...... Not the $50,000. And by the time that loan has been paid for in full, more than the original amount of the loan has been paid out to others outside of the country. Where is the growth. There isnt any. Then again. A lot of the GDP in peru is from Government spending in the first place which is paid fopr by loans and taxes.

I dont know if you have realized but SUNAT has become more and more agressive at collecting taxes. Even going after the informal business as much as practical. There is new tax after new tax after new tax coming down the pipeline. When they raised the IGV to 19% if gave them cash in the bank for a while but they have spent it all now and are going back into the red.
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Re: Firefighters struggle as country’s economy booms

Postby falconagain » Sun Apr 08, 2012 8:48 pm

Jimmy111 wrote:
Alan wrote:[quote="Jimmy111"

By the way. Peru does not have a booming economy. They have a booming debt. Where do you think the money for this housing came from. The government borrowed it. Then the banks borrowed it from the government. Then the people borrowed it from the banks. Housing is a byproduct of economic growth. Not a producer of economic growth. Where is the growth? Mining hasent grown. Forest products have grown slightly. Manufacturing has gone into the toilet since the free trade agreement with china. So where is the money comming from to fuel this so called growth?



Peru´s debt to GDP ratio is around 25%, at least a quarter of what it is in most developed countries. Mining exports are way up, agro exports are way up, and even manufacturing exports are way up, too. A lot of manufacturing sectors have suffered, sure, but the competitive ones.. like clothing manufacture, is booming.



That is because they count housing as GDP.
Only 1/4 of Peru's GDP is from sources that create wealth. For it to really count it had to be from sources that create something. Farming, Mining and Manufacturing. These things create wealth from nothing. However service sector sources only transfer it from one hand to another. Yet service is counted as production. But it isnt...It didnt add anything to the economy. And if the source of materials and parts for that service job come from outside of the country than it is a negative to the economic growth.
Most of the financial transactions in Peru are housing related. They say that a house sold for $50,000. This is the entry into the GDP. $50,000 in sales. But what really happened? The government borrowed the money for the house from the IMF and loaned it in turn to the banks who loaned it to the person who bought the house. But the bank only gets $150 per month...... Not the $50,000. And by the time that loan has been paid for in full, more than the original amount of the loan has been paid out to others outside of the country. Where is the growth. There isnt any. Then again. A lot of the GDP in peru is from Government spending in the first place which is paid fopr by loans and taxes.

I dont know if you have realized but SUNAT has become more and more agressive at collecting taxes. Even going after the informal business as much as practical. There is new tax after new tax after new tax coming down the pipeline. When they raised the IGV to 19% if gave them cash in the bank for a while but they have spent it all now and are going back into the red.[/quote]

Of course, there is nothing original in here, everything is badly copied from the USA, movies, economic
policies, etc.
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Re: Firefighters struggle as country’s economy booms

Postby chi chi » Sun Apr 08, 2012 9:08 pm

falconagain wrote:If the economy is booming then I wonder what kind of Peruvians can afford
the apartments and houses that start at $100,000 or more, so far I have seen
no bulk of salaries that justify the sale of so many properties at that price.
I have noticed that credit is provided to everybody but that they do not earn
anything close to even payoff whatever debt they accumulate.


I think most Peruvians who can afford those expensive homes are Peruvians that worked abroad for some time.

My gf her sister recently bought a flat for $60000 in Lince. She and her husband worked in Europe for 5 years, saved money and bought a flat and started up a small business.

The home next to my home is owned by a Peruvian who lives in the US but his brother lives in it.

My other neighbor makes 650 soles a month, has 3 children, his wife doesn't work, he pays 450 soles a month rent and bought recently a Honda Tornado for 14500 soles. Last christmas he bought a new laptop for each of his children...but every 1st day of the month we see him standing in line at the Western Union office.

Last weekend, we were in Plaza San Miguel. It was really busy. We saw mostly young people (many teenagers) full of shopping bags walking out of those nice shops and filling up shopping carts at Tottus and paying 100's of soles. I was thinking where do those people get that money from?

But a few minutes later, we walked passed the Western Union office and the people where waiting in line for hours.

Also don't forget, there are also a lot of people who make money with narcotrafico. Not all the people that have money of course.
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Sun Apr 08, 2012 9:21 pm

GDP was proposed by a russian economist. I forgot his name but his theory of GDP was accepted by the US congress in the 1930's during the great depression as a means of classifying personal pay as income (profit) instead of as compensation so they could tax it. Prior to that personal pay was not concidered taxable in many cases because it was not profit. The governments liked the Idea and the bankers liked the Idea because it made it look like there was much more money floating around then there really was. And bankers like governments make their money off of transactions. Not profits. Now the government could print more money because the economy suposably grew and the bankers could loan more money because there was more money to lent. Profits all around. Except for us.
But for the last 70 years they have been printing money for wealth that didnt really exist. It was imaginary. So they had to impose this plan on other countries. Get them involved so more money would flow and more taxes could be collected. The endgame in this is that a cow can still be bought with a oz of gold even after 2000 years but an oz of gold costs you many more hours of work than it did 2000 years ago. Its not that gold costs more, it is because the value of the money has fallen so much because it really is worthless.
That is why a apartment costs $100,000 in Lima and no one can afford one.
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Re: Firefighters struggle as country’s economy booms

Postby chi chi » Mon Apr 09, 2012 1:13 am

Jimmy111 wrote:How often do you see fires in Peru. Rarely. The buildings dont burn. They are made of masonary and concrete.


You've probably never been the cities. Most houses in the provinces are made of bamboo, wood, triplay, plastic and have a roof of palmleaves.

And even in the cities there are a lot of houses that have an extra floor made of drywall. And often when you walk in the cities, you see long walls with a door. Walk through this door and you will find 'accomodations' (it's hard to call them houses) made of wood, plastic, cardboard and other flammable materials. And very unprofessional and in dangerous situatin electricity lines.

http://www.9reyes.net/noticias/3011798- ... soles.html
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Re: Firefighters struggle as country’s economy booms

Postby JoshuS » Mon Apr 09, 2012 6:23 pm

falconagain wrote:
Jimmy111 wrote:
Alan wrote:
Jimmy111 wrote:
By the way. Peru does not have a booming economy. They have a booming debt. Where do you think the money for this housing came from. The government borrowed it. Then the banks borrowed it from the government. Then the people borrowed it from the banks. Housing is a byproduct of economic growth. Not a producer of economic growth. Where is the growth? Mining hasent grown. Forest products have grown slightly. Manufacturing has gone into the toilet since the free trade agreement with china. So where is the money comming from to fuel this so called growth?
Peru´s debt to GDP ratio is around 25%, at least a quarter of what it is in most developed countries. Mining exports are way up, agro exports are way up, and even manufacturing exports are way up, too. A lot of manufacturing sectors have suffered, sure, but the competitive ones.. like clothing manufacture, is booming.


Jimmy111 wrote:That is because they count housing as GDP.
Only 1/4 of Peru's GDP is from sources that create wealth. For it to really count it had to be from sources that create something. Farming, Mining and Manufacturing. These things create wealth from nothing. However service sector sources only transfer it from one hand to another. Yet service is counted as production. But it isnt...It didnt add anything to the economy. And if the source of materials and parts for that service job come from outside of the country than it is a negative to the economic growth.
Most of the financial transactions in Peru are housing related. They say that a house sold for $50,000. This is the entry into the GDP. $50,000 in sales. But what really happened? The government borrowed the money for the house from the IMF and loaned it in turn to the banks who loaned it to the person who bought the house. But the bank only gets $150 per month...... Not the $50,000. And by the time that loan has been paid for in full, more than the original amount of the loan has been paid out to others outside of the country. Where is the growth. There isnt any. Then again. A lot of the GDP in peru is from Government spending in the first place which is paid fopr by loans and taxes.

I dont know if you have realized but SUNAT has become more and more agressive at collecting taxes. Even going after the informal business as much as practical. There is new tax after new tax after new tax coming down the pipeline. When they raised the IGV to 19% if gave them cash in the bank for a while but they have spent it all now and are going back into the red.


falconagain wrote:Of course, there is nothing original in here, everything is badly copied from the USA, movies, economic
policies, etc.


They're even replicating the housing and credit bubble, of course in a much smaller scale and without the derivatives. Here's another proof of how a financial bubble is being exacerbated by EZ credit, through "hot money" pumped through the BCR by Wall Street speculators et al. To think Peru is "progressing" is delusional

http://youtu.be/qVrL9VOyuV8
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Mon Apr 09, 2012 9:00 pm

chi chi wrote:
Jimmy111 wrote:How often do you see fires in Peru. Rarely. The buildings dont burn. They are made of masonary and concrete.


You've probably never been the cities. Most houses in the provinces are made of bamboo, wood, triplay, plastic and have a roof of palmleaves.

And even in the cities there are a lot of houses that have an extra floor made of drywall. And often when you walk in the cities, you see long walls with a door. Walk through this door and you will find 'accomodations' (it's hard to call them houses) made of wood, plastic, cardboard and other flammable materials. And very unprofessional and in dangerous situatin electricity lines.

http://www.9reyes.net/noticias/3011798- ... soles.html


Ive been everywhere except the amazon.
Drywall dosent burn. For the most part steel studs are used for the structure unlike ther states. Not much to burn there. Pretty safe.
The plywood dosent burn well either. It can scorch or smolder but it wont burn without a lot of heat. The Phenolic resins that are used to glue it together are not fireproof but do a lot to preventing off gassing .

Yes in the mountains they have housed built of natural materials. But most of the ones I have seen are adobe with metal roofs. . Again fireproof.


Im not against fire departments or rescue units. Just against the government being involved.
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Re: Firefighters struggle as country’s economy booms

Postby rama0929 » Wed Apr 11, 2012 12:59 pm

Jimmy111 wrote: I dont know if you have realized but SUNAT has become more and more agressive at collecting taxes. Even going after the informal business as much as practical. There is new tax after new tax after new tax coming down the pipeline. When they raised the IGV to 19% if gave them cash in the bank for a while but they have spent it all now and are going back into the red.


Of course they have. People have been dancing and not paying the piper. All those obras you see, someone's gotta pay for them, their maintenance and upkeep.
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Re: Firefighters struggle as country’s economy booms

Postby alan » Wed Apr 11, 2012 10:02 pm

Jimmy111 wrote:That is because they count housing as GDP.
Only 1/4 of Peru's GDP is from sources that create wealth. For it to really count it had to be from sources that create something. Farming, Mining and Manufacturing. These things create wealth from nothing. However service sector sources only transfer it from one hand to another. Yet service is counted as production. But it isnt...It didnt add anything to the economy. And if the source of materials and parts for that service job come from outside of the country than it is a negative to the economic growth.
Most of the financial transactions in Peru are housing related. They say that a house sold for $50,000. This is the entry into the GDP. $50,000 in sales. But what really happened? The government borrowed the money for the house from the IMF and loaned it in turn to the banks who loaned it to the person who bought the house. But the bank only gets $150 per month...... Not the $50,000. And by the time that loan has been paid for in full, more than the original amount of the loan has been paid out to others outside of the country. Where is the growth. There isnt any. Then again. A lot of the GDP in peru is from Government spending in the first place which is paid fopr by loans and taxes.

I dont know if you have realized but SUNAT has become more and more agressive at collecting taxes. Even going after the informal business as much as practical. There is new tax after new tax after new tax coming down the pipeline. When they raised the IGV to 19% if gave them cash in the bank for a while but they have spent it all now and are going back into the red.



I don´t agree with a lot of what you are saying. GDP figures are basically the same composition across different countries, particularly with respect to housing, so the relative comparison I made to support the relatively low debt ratio in Peru is valid. Not sure where you get the idea that the money for the mortgages comes from the IMF. Are you referring to the Mi Viviendo loans? In my own case, my mortgage came from a private bank, and you better believe they are making more than $150 dollars off of my back.

And of course the SUNAT is being more aggressive. Not sure where you get the idea that the Peruvian goverment is in the red though. I thought they had been running a surplus.

Peru has led growth in the region for the last decade, has ample savings, a steadily improving state, and about 50 billion dollars in investment lining up to march into the country. Poverty is dropping; productivity is increasing... in fact, in almost any standard you choose to look at, Peru is moving forward and outstripping its neighbors. The economy is becoming more diversified daily; Peru is exporting more types of products (traditional and non-traditional) to an increasing large number of client countries. Things are not nearly as bad as some here would like to make it.
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Re: Firefighters struggle as country’s economy booms

Postby alan » Wed Apr 11, 2012 10:09 pm

JoshuS wrote:
They're even replicating the housing and credit bubble, of course in a much smaller scale and without the derivatives. Here's another proof of how a financial bubble is being exacerbated by EZ credit, through "hot money" pumped through the BCR by Wall Street speculators et al. To think Peru is "progressing" is delusional

http://youtu.be/qVrL9VOyuV8


Okay.. so exactly how do Wall Street speculators pump "hot money" throught the BCR? Did you know that Peru has very strict controls on temporary capital?

And a news clip video talking about credit cards being geared towards adolescents is proof of a credit bubble?
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Re: Firefighters struggle as country’s economy booms

Postby alan » Wed Apr 11, 2012 10:36 pm

Jimmy111 wrote:Yes in the mountains they have housed built of natural materials. But most of the ones I have seen are adobe with metal roofs. . Again fireproof.


Im not against fire departments or rescue units. Just against the government being involved.



Your argument about the housing materials makes a lot of sense. Good point. On the other hand though, the roads here are a nightmare, so firefighters probably serve an important role as first responders to vehicle accidents (and other accidents for that matter).
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Re: Firefighters struggle as country’s economy booms

Postby chi chi » Wed Apr 11, 2012 11:56 pm

Alan wrote:. On the other hand though, the roads here are a nightmare, so firefighters probably serve an important role as first responders to vehicle accidents (and other accidents for that matter).


Roads in and around Tarapoto are new and in excellent condition. Much better than in Belgium where you better drive a 4X4.
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Thu Apr 12, 2012 7:45 am

Alan wrote:
JoshuS wrote:
They're even replicating the housing and credit bubble, of course in a much smaller scale and without the derivatives. Here's another proof of how a financial bubble is being exacerbated by EZ credit, through "hot money" pumped through the BCR by Wall Street speculators et al. To think Peru is "progressing" is delusional

http://youtu.be/qVrL9VOyuV8


Okay.. so exactly how do Wall Street speculators pump "hot money" throught the BCR? Did you know that Peru has very strict controls on temporary capital?

And a news clip video talking about credit cards being geared towards adolescents is proof of a credit bubble?



Where do you think the money for the banks comes from?
There are only 3 sources of it.
1. Deposits. (there arent much)
2. Investors (Investors dont invest in housing loans. There is no money in it. They invest in Business loans)
3. Government.
The government dosent have the money to cover the loans. Neither do the banks. They run on the same principle as the Western banks. They loan 10-20 times as much money as they actually have invested in their bank. However Peru does not have tha capital to cover this like the states did. The credit crnch will come to Peru probably this year and it will be horrible.

How can you possibly trust the Peruvian government in preparing reports based on money when you wouldnt trust the average Peruvian businessman or politician with holding your wallet. There will be money missing when you get it back, if you get it back. It is the way it works in Peru.
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Thu Apr 12, 2012 8:08 am

Alan wrote:
Jimmy111 wrote:Yes in the mountains they have housed built of natural materials. But most of the ones I have seen are adobe with metal roofs. . Again fireproof.


Im not against fire departments or rescue units. Just against the government being involved.



Your argument about the housing materials makes a lot of sense. Good point. On the other hand though, the roads here are a nightmare, so firefighters probably serve an important role as first responders to vehicle accidents (and other accidents for that matter).



First responders are the people.
You would be suprised on just how many people die in traffic accidents that would have lived it someone had just thrown them in the car and taken them to the hospital.
Spend the money on basic first aid training for the people. instead of creating a dependant populace and a elite cadre of overpaid self rightous people whos funding will continiously increase due to wastful spending on unnecessary and expensive gizmos and whos ranks will swell due to their never ending need for superiority.
In Peru most traffic deaths are from busses in the mountains or head on collisions where someone is passing when they shouldnt. Emergency crews would be far away in any case and you would die long before they arrived anyways.
But even if they managed to stabilize you the horrible conditions in most hospitals would kill you.

Like I said before. Im not against energency services. Just ones that are run by the government. The government has no acountability in what they do with your money and will just spend,spens,spend untill there is no more to spend then borrow untill there is nothing left to borrow.
It is a pyramid scheme that will always leave the people paying for it on the bottom of the heap and end up with other people telling you what is best for you and forcing you at gunpoint to comply with what they tell you to do.
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Re: Firefighters struggle as country’s economy booms

Postby goingnowherefast » Thu Apr 12, 2012 8:13 am

I was reading an article the other day saying how most of the actual cash sitting in Peruvian banks is money that's being laundered.

Makes sense too. I buy dollars all the time from casas de cambios and literally every time the dollars are crinkled, torn, etc and small notes like 5's and 10's are pretty common. You can tell the dollars come directly from the streets in the States (as opposed to nice flat dollars in good condition that would come from the banks here).
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Re: Firefighters struggle as country’s economy booms

Postby alan » Thu Apr 12, 2012 8:28 am

Jimmy111 wrote:Where do you think the money for the banks comes from?
There are only 3 sources of it.
1. Deposits. (there arent much)
2. Investors (Investors dont invest in housing loans. There is no money in it. They invest in Business loans)
3. Government.
The government dosent have the money to cover the loans. Neither do the banks. They run on the same principle as the Western banks. They loan 10-20 times as much money as they actually have invested in their bank. However Peru does not have tha capital to cover this like the states did. The credit crnch will come to Peru probably this year and it will be horrible.

How can you possibly trust the Peruvian government in preparing reports based on money when you wouldnt trust the average Peruvian businessman or politician with holding your wallet. There will be money missing when you get it back, if you get it back. It is the way it works in Peru.



The banking sector in Peru is actually pretty healthy and growing, and mortgage rates are dropping. Deposits in the Peruvian banking system are also growing and that money is circulating. Mortgages are becoming a more competitive game as more banks are getting serious about attracting the home buyer market. Scotiabank and BBVA are now offering rates as low as those offered by the smaller, more specialized banks.

I find your other comments way out of line. Peruvian reports cannot be trusted? Neither can the average businessman or politician? Pretty crass generalizations in my view.
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Re: Firefighters struggle as country’s economy booms

Postby alan » Thu Apr 12, 2012 8:34 am

Jimmy111 wrote:
Alan wrote:
Jimmy111 wrote:Yes in the mountains they have housed built of natural materials. But most of the ones I have seen are adobe with metal roofs. . Again fireproof.


Im not against fire departments or rescue units. Just against the government being involved.



Your argument about the housing materials makes a lot of sense. Good point. On the other hand though, the roads here are a nightmare, so firefighters probably serve an important role as first responders to vehicle accidents (and other accidents for that matter).



First responders are the people.
You would be suprised on just how many people die in traffic accidents that would have lived it someone had just thrown them in the car and taken them to the hospital.
Spend the money on basic first aid training for the people. instead of creating a dependant populace and a elite cadre of overpaid self rightous people whos funding will continiously increase due to wastful spending on unnecessary and expensive gizmos and whos ranks will swell due to their never ending need for superiority.
In Peru most traffic deaths are from busses in the mountains or head on collisions where someone is passing when they shouldnt. Emergency crews would be far away in any case and you would die long before they arrived anyways.
But even if they managed to stabilize you the horrible conditions in most hospitals would kill you.

Like I said before. Im not against energency services. Just ones that are run by the government. The government has no acountability in what they do with your money and will just spend,spens,spend untill there is no more to spend then borrow untill there is nothing left to borrow.
It is a pyramid scheme that will always leave the people paying for it on the bottom of the heap and end up with other people telling you what is best for you and forcing you at gunpoint to comply with what they tell you to do.



You might well have a point that the private sector could do better. Just want to clarify though that most accidents (the ones that are reported anyway) take place in Lima. The busses are a serious problem and get the headlines, but statistically, most accidents happen in the urban areas. There are some interesting links found on this page: http://www.mtc.gob.pe/portal/estadistic ... lacion.asp

cheers..
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Thu Apr 12, 2012 9:10 am

There is a big difference between accidents and injuries. Yes, driving in Lima is like driving in a bumper car game. Ive done it for many years and never got in a single accident. But I saw many.

I have been involved in business in Peru for decades. My statement is based on experience. Not on a missguided notion that all people are good. They are not. I have met few businessmen and politicians who are honest. And I know a lot of them. Many are in the news every day.
The Trump for them is more delightful than the profit. But the profit is very important too. The ones in power are the best of the best of the Trump players. It is very hard to have a long lasting profitable relationship with most big business in Peru.
Just ask any Peruvian.
I remember a similar discussion when I made a comment about how the US economy would collapse in 2007. That happened.

The economy of Peru is a Economy of Debt. Not a Economy of Wealth.
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Re: Firefighters struggle as country’s economy booms

Postby JoshuS » Thu Apr 12, 2012 9:07 pm

Alan wrote:
JoshuS wrote:
They're even replicating the housing and credit bubble, of course in a much smaller scale and without the derivatives. Here's another proof of how a financial bubble is being exacerbated by EZ credit, through "hot money" pumped through the BCR by Wall Street speculators et al. To think Peru is "progressing" is delusional

http://youtu.be/qVrL9VOyuV8


Okay.. so exactly how do Wall Street speculators pump "hot money" throught the BCR? Did you know that Peru has very strict controls on temporary capital?

And a news clip video talking about credit cards being geared towards adolescents is proof of a credit bubble?


The world economy is based on debt, in case you didn't know, and so it's that of Peru's. BCR is not a sovereign central bank, no central bank is anyway, Peru's BCR follows orders of the western international elite banking cartel. With "hot money", cash comes in for speculation in real estate and currency, then flees at the first sign of trouble. A nation's reserves can drain in days or hours, and after that happens, to seduce speculators into returning a nation's own capital funds, the IMF usually, demands on these nations to raise interest rates to 30%, 50%, even 80%. Higher interest rates will demolish property values, destroy industrial production, if any, (Peru doesn't really has it) and drains national treasuries. The illusory Peruvian "economic growth" brought about by rising commodity prices, fallen domestic interest rates and of course EZ credit, as exemplified in the video, is temporary. Once external factors change, Peru's economy will plunge into serious crisis, and guess who will be holding the bag.
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Re: Firefighters struggle as country’s economy booms

Postby renodante » Thu Apr 12, 2012 9:11 pm

is this thread about firefighters or the Illuminati's evil plan to keep us all in debt? I'm confused.
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Re: Firefighters struggle as country’s economy booms

Postby rama0929 » Thu Apr 12, 2012 9:31 pm

renodante wrote:is this thread about firefighters or the Illuminati's evil plan to keep us all in debt? I'm confused.


Evil Illuminati firefighters and their plan to keep you all in debt. Try to keep up. :P
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Re: Firefighters struggle as country’s economy booms

Postby JoshuS » Fri Apr 13, 2012 5:14 am

renodante wrote:is this thread about firefighters or the Illuminati's evil plan to keep us all in debt? I'm confused.


http://youtu.be/Dc3sKwwAaCU

http://youtu.be/_9wYu1SR1Wk

http://youtu.be/IWYmj7Q_uYs

http://youtu.be/ZYcIQvSAHZ8
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Fri Apr 13, 2012 7:27 am

Its about firefighters and how to pay for them.
One side says Peru had plenty of money. Which they dont. They have just debt and the firefighters will have to be paid by incurring more debt. And as Joshus said economies are cyclical. Yet governmental budgets dont take this into acount. When they have plenty of income they base their budgets on that point of maximum income not the minimum income. This always leads to an eventual crisis when taxes must be raised to pay form the loss in projected income.

Why do you think that most of the countries in the world are in trouble financially. It dosent mater how much money their economies produce. They are all broke. Ane once a governmental job is created it is difficult to remove.

In Peru when the people dont like what is going on they tend to strike and actively rebel.
The salaries and expenditures for governmental paid employees will soon just like in other western countries rise above and beyond what is sustainable. Then when the government tries to cut back there will be major rioting in the streets.

I say if you want firefighters than pay for them out of your pocket. If you have no money create a insurance program that includes fire and rescue protection. The problem with governmental run programs is that you never have the option to opt out or say no. They will come and get you if you dont pay your taxes, There is no competition so the price just increases and increases to the point of in sustainability. It is happening everywhere all over the world as we write. Keep Peru a nice place to live.
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Re: Firefighters struggle as country’s economy booms

Postby goingnowherefast » Fri Apr 13, 2012 8:25 am

Funny how all this anti-establishment talk is coming from a dude wearing the Anonymous mask.
Last edited by goingnowherefast on Sun Apr 29, 2012 8:37 pm, edited 1 time in total.
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Re: Firefighters struggle as country’s economy booms

Postby tomsax » Fri Apr 13, 2012 12:11 pm

Jimmy111 wrote:Its about firefighters and how to pay for them.
One side says Peru had plenty of money. Which they dont. They have just debt and the firefighters will have to be paid by incurring more debt.


According to wikipedia which references the IMF, (horror of horrors) Peru has US$ 23 billion of debt. This is only 15% of GDP and tiny compared to the debt of most western developed nations. On the other hand it has US$48.5 billion of foreign reserves. So basically it could pay off its soveriegn debt twice over tomorrow if it wanted to.

This is completely different to the financial situation you are referring to in your post which relates to what is happening in the US, Europe and other indebted countries.

There may be private debt problems and lots of other economic problems to consider, but government debt is obviously not one of them. They could buy fire engines for Peru and the US and most of Europe with their balance sheet.
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Re: Firefighters struggle as country’s economy booms

Postby rama0929 » Fri Apr 13, 2012 12:34 pm

goingnowherefast wrote:Funny how all this anti-establishment talk is coming from a dude wearing the Anonymous (known FBI trap) mask.


Almost as funny as knowing that Time Warner gets a cut from every Guy Fawkes mask sold, as they own the rights to the image, thanks to V for Vendetta (the comic and movie based on the comic)...
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Re: Firefighters struggle as country’s economy booms

Postby falconagain » Sun Apr 15, 2012 4:55 pm

Any growing economy has an ever increasing demand for well paid qualified
workers which become consumers and sustain a demand for good and services
because the money that they earn is through wealth creation (useful goods
and services) and not through speculation.

The majority of the wealth in Peru is through speculation in housing and the
stock market. It can crumble any day. Unless real wealth is created.
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Re: Firefighters struggle as country’s economy booms

Postby alan » Sun Apr 15, 2012 7:15 pm

falconagain wrote:
The majority of the wealth in Peru is through speculation in housing and the
stock market. It can crumble any day. Unless real wealth is created.


If people are investing in the stock market and real estate is BECAUSE they already have wealth and are reinvesting it. Have a look at Peruvian export figures which have all doubled or tripled in the past ten years and you will have part of the answer where this money is coming from. There are also billions of dollars of foreign investment coming in, not to mention a couple billion dollars per year in remittances that add to the stock of wealth in Peru.
Cruise around this site and find lots of info: http://www.proinversion.gob.pe/
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Re: Firefighters struggle as country’s economy booms

Postby craig » Mon Apr 16, 2012 11:27 pm

tomsax wrote:Peru has US$ 23 billion of debt. This is only 15% of GDP and tiny compared to the debt of most western developed nations. On the other hand it has US$48.5 billion of foreign reserves. So basically it could pay off its soveriegn debt twice over tomorrow if it wanted to.

It is interesting to think what the results might be of doing that.

The foreign reserves are mostly in dollars and euros (bonds, actually). The debt is in soles. So in order to pay off the debt with the reserves the BCRP would have to buy over $20 billion worth of soles. Now that would really goose up the value of the sol! Maybe then the exchange rate would be 1:1. And the sol prime interest rate might fall to, say, 2%. :)
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Re: Firefighters struggle as country’s economy booms

Postby tomsax » Tue Apr 17, 2012 6:27 am

craig wrote:
tomsax wrote:Peru has US$ 23 billion of debt. This is only 15% of GDP and tiny compared to the debt of most western developed nations. On the other hand it has US$48.5 billion of foreign reserves. So basically it could pay off its soveriegn debt twice over tomorrow if it wanted to.

It is interesting to think what the results might be of doing that.

The foreign reserves are mostly in dollars and euros (bonds, actually). The debt is in soles. So in order to pay off the debt with the reserves the BCRP would have to buy over $20 billion worth of soles. Now that would really goose up the value of the sol! Maybe then the exchange rate would be 1:1. And the sol prime interest rate might fall to, say, 2%. :)


That's very interesting. I assumed it all the debt was in US$ still.

I suppose you think they should do the above or buy gold with their foreign reserves. I must say with risks for the euro it might be worth doing a bit of either!
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Tue Apr 17, 2012 6:02 pm

Well. Metals are on the way down. They have already dropped 10% since the beginning of the year and probably wont stop untill it reaches half of what it was last year at this time. That will be a huge loss in the Peruvian Economy. Not to mention all the Mining concessions that have been bought up by the Chinese refiners who are just getting ready to come online and start shipping their mineral. They wont ship it at market price. They will ship it at cost. This will also greatly reduce the IGV income.
The forest products are also down and dropping rapidly. People just cant afford the exotic woods at the moment.
Peru only has an economy today due to the horrible economy in Europe and the states. People want somewhere safe to put their money. So they have invested it in Peru But that will probably change this year as the mining slows to a crawl and the losses start to pile up. The investors will pull out and just sit on their money. As I said before Peru has no real economy. The economy is entirely speculitive.
Unfortunatly the government thinks that the money will just keep on flowing in.
If I was you guys I would only keep a minimal amount of money in the banks.
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Re: Firefighters struggle as country’s economy booms

Postby craig » Tue Apr 17, 2012 8:04 pm

tomsax wrote:
craig wrote:The foreign reserves are mostly in dollars and euros (bonds, actually). The debt is in soles. So in order to pay off the debt with the reserves the BCRP would have to buy over $20 billion worth of soles. Now that would really goose up the value of the sol! Maybe then the exchange rate would be 1:1. And the sol prime interest rate might fall to, say, 2%. :)

That's very interesting. I assumed it all the debt was in US$ still.

I think, as a result of the recent upgrading of Peru's credit rating, they issued (a trivial amount of) dollar denominated bonds just to prove they could do it. Before that no foreign buyers would dare to loan money to Peru. They remembered Garcia's 1st term.

Also, the government does not really need or have any use for the money. The only reason the BCRP issues sol denominated debt is that doing so gives them a tool by which they can control the interest rates. By putting enough bonds on the market they can drive up the interest rates as high as they want.

tomsax wrote:I suppose you think they should do the above or buy gold with their foreign reserves. I must say with risks for the euro it might be worth doing a bit of either!

Yes. If I had my druthers they would pay off all their debt, buy gold and silver with all the remaining reserves, mint it into coin and make the coin available to the Peruvian people. That would enable Peruvians to put their savings into something other than dollars so they would not lose it all in the next few years when the dollar collapses.

It would also get the government out of the interest rate setting business. Then the rates would be set by the balance between savings and (economically sound, non-governmental) borrowing in the market.

The resulting readjustment of the exchange rates and interest rates would be a wrenching and disruptive change but it would put Peru on an economically sound footing by purging the Peruvian economy of the worst government meddling.
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Re: Firefighters struggle as country’s economy booms

Postby tomsax » Wed Apr 18, 2012 8:56 am

craig wrote:I think, as a result of the recent upgrading of Peru's credit rating, they issued (a trivial amount of) dollar denominated bonds just to prove they could do it. Before that no foreign buyers would dare to loan money to Peru. They remembered Garcia's 1st term.



Surely if they remembered Garcia's 1st term creditors wouldn't want to loan soles - dollars would be less of an issue? I imagine the Peruvian government prefers debt in Soles as it means they can print money and devalue their debt later on if ever required. Either that or they are like the majority of Peruvians who think that it is still best to incur debt in soles and keep savings in dollar cash, though I agree with you that that idea is outdated.

craig wrote:The only reason the BCRP issues sol denominated debt is that doing so gives them a tool by which they can control the interest rates. By putting enough bonds on the market they can drive up the interest rates as high as they want.



I wish I understood how that works! (not saying it doesn't)

craig wrote:Yes. If I had my druthers they would pay off all their debt, buy gold and silver with all the remaining reserves, mint it into coin and make the coin available to the Peruvian people. That would enable Peruvians to put their savings into something other than dollars so they would not lose it all in the next few years when the dollar collapses.

It would also get the government out of the interest rate setting business. Then the rates would be set by the balance between savings and (economically sound, non-governmental) borrowing in the market.

The resulting readjustment of the exchange rates and interest rates would be a wrenching and disruptive change but it would put Peru on an economically sound footing by purging the Peruvian economy of the worst government meddling.


I for one wish that there was a least one country that would put your ideas into action and then we could all see if it would work. With a growing economy and no debt I must admit I don't know why it wouldn't.
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Re: Firefighters struggle as country’s economy booms

Postby Jimmy111 » Wed Apr 18, 2012 9:20 am

Something my mother in law In Peru said a while ago.

10 years ago I could sit in my house and not worry about the future. I just retired and after working my entire life I saved my money, paid all my bills and taxes and I was ready to relax and enjoy my life.

I only had a few bills to worry about. There was only a small municiple tax to pay for the local park. 30 soles or so. I could go to the market and buy some food and there was no tax. My electricity bill was 20 soles, gasoline was expensive but I if I didnt drive my car it didnt cost me anything
The banks offered me good interest to use my money so I took my savings from the house and put them in the bank and it returned enough money for me to live on. I was happy.

Today everywhere I go they want a minimum of 19% tax and many places even more when I buy something.
The cost of the food has trippled. there is tax after tax after tax on my car even if I never drive it.
And the bank uses my money to offer others credit cards at 20% interest and wont even pay me 2% for it. And if I withdraw more than a certain amount of money from the bank someone from the government shows up at my home and wants to know what Im doing with MY money. They call me a criminal and threaten to take my money and my house from me.

And what did I get for all this tax?? Nothing I just pay and pay and pay and the future looks dimmer and dimmer and dimmer. My money is taken from me in the form of taxes and goes to others who do nothing.They sit at home and enjoy food paid for with my money. Clean water paid for with my money. Seeds paid for with my money that they just sell to others instead of planting
I cant even buy good food anymore. It costs me too much.

I was free but now I am a slave to others. Others who threaten to take away everything from me if I dont give them a large percentage of what I have.
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Re: Firefighters struggle as country’s economy booms

Postby craig » Wed Apr 18, 2012 1:21 pm

tomsax wrote:
craig wrote:I think, as a result of the recent upgrading of Peru's credit rating, they issued (a trivial amount of) dollar denominated bonds just to prove they could do it. Before that no foreign buyers would dare to loan money to Peru. They remembered Garcia's 1st term.

Surely if they remembered Garcia's 1st term creditors wouldn't want to loan soles - dollars would be less of an issue?

That is why Peru has so little foreign debt. Foreign creditors are not going to buy sol bonds and until recently dollar bonds were unsellable too.

The BCRP buys and sells sol bonds in the domestic credit market.

tomsax wrote:I imagine the Peruvian government prefers debt in Soles as it means they can print money and devalue their debt later on if ever required. Either that or they are like the majority of Peruvians who think that it is still best to incur debt in soles and keep savings in dollar cash, though I agree with you that that idea is outdated.

Unlike the US, UK etc., Peru does not sell bonds to raise money. They don't need the money. They do it to manipulate the interest rates.

Sometime, they could repudiate the debt by inflating it away as you sugggest. But since they are not hard up for money that is not a strong motive right now. After all, as you pointed out, they can buy it all back out of reserves. In contrast, the US and UK have a strong motivation, even necessity, to repudiate their debt through inflation because it is mathematically impossible for them to ever be able to pay it off.

The BCRP is inflating the sol (by printing soles to buy dollars). But the purpose of that is to moderate the appreciation of the sol against the dollar not to repudiate debt. Selling sol bonds tends to reduce the sol inflation they seek for this purpose so they have a reason not to sell any more than they have to to push up the interest rate to their target.

tomsax wrote:
craig wrote:The only reason the BCRP issues sol denominated debt is that doing so gives them a tool by which they can control the interest rates. By putting enough bonds on the market they can drive up the interest rates as high as they want.

I wish I understood how that works! (not saying it doesn't)

It is easy enough to understand. It is just supply and demand. Increasing the supply (selling more bonds) drives down the price needed to clear the market. In the case of bonds, a lower sales price is a higher interest rate.

Since the BCRP is not economically motivated (they have no need to make a profit and are happy to steal as much from the Peruvian people as necessary) and can print as much money as is needed to pay the interest they can (and do) just keep selling until they drive the interest rate up to whatever they want, no matter what economic mischief it causes.

tomsax wrote:
craig wrote:Yes. If I had my druthers they would pay off all their debt, buy gold and silver with all the remaining reserves, mint it into coin and make the coin available to the Peruvian people. That would enable Peruvians to put their savings into something other than dollars so they would not lose it all in the next few years when the dollar collapses.

It would also get the government out of the interest rate setting business. Then the rates would be set by the balance between savings and (economically sound, non-governmental) borrowing in the market.

The resulting readjustment of the exchange rates and interest rates would be a wrenching and disruptive change but it would put Peru on an economically sound footing by purging the Peruvian economy of the worst government meddling.

I for one wish that there was a least one country that would put your ideas into action and then we could all see if it would work. With a growing economy and no debt I must admit I don't know why it wouldn't.

Make that two. :) If there was such a place I'd move there. [However, the current advance towards world hegemony makes the possibility of such an outlier more unlikely than any time in history.]

"Good" politics and good economics lead to opposite results. As long as politicians make economic policy there will never be sound economic policy. Good economic conditions usually only occur through some historical accident that temporarily limits the degree of political control. However, all economies are everywhere and always undergoing systematic destruction by political processes.

The only prospect for improvement is that this is an unstable process. Eventually the politicians cause so much damage to their host society that they can no longer extract from it sufficient means to maintain their power. At that point the parasites die off and society begins to recover. Eventually, the recovery produces enough prosperity so that systematic looting is possible again. But it takes time for the politicians to take advantage of this opportunity. It is in this transitory period that a society can prosper.

Peru is somewhere in the recovery stage of this cycle. However, I fear that Humala may bring a premature end to the recovery phase and cut short Peru's opportunity to flourish. It will take another year or two to see how much of an Evo Morales he ends up being.

Craig
--
It is error alone which needs the support of government. Truth can stand by itself. -- Thomas Jefferson
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tomsax
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Re: Firefighters struggle as country’s economy booms

Postby tomsax » Wed Apr 18, 2012 3:53 pm

craig wrote:The BCRP is inflating the sol (by printing soles to buy dollars). But the purpose of that is to moderate the appreciation of the sol against the dollar not to repudiate debt. Selling sol bonds tends to reduce the sol inflation they seek for this purpose so they have a reason not to sell any more than they have to to push up the interest rate to their target.

tomsax wrote:
craig wrote:The only reason the BCRP issues sol denominated debt is that doing so gives them a tool by which they can control the interest rates. By putting enough bonds on the market they can drive up the interest rates as high as they want.

I wish I understood how that works! (not saying it doesn't)

It is easy enough to understand. It is just supply and demand. Increasing the supply (selling more bonds) drives down the price needed to clear the market. In the case of bonds, a lower sales price is a higher interest rate.

Craig


I guess I need to learn more about how bonds work and their relationship with base rates.

Why do they have a high interest target rate? To control price inflation or is there some other reason?
Tom

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