Questions about US dollar $

Hey Im a newb when it comes to this, so her it goes



Since the current economy on the USA being bad at all and the wall street going down hill and stuff whats going to happen to the US dollar in regards to other currencies?

I mean before it was this bad the dollar was about 1900 pesos (colombian) and now with this eocnomy its 2100 pesos (colombian) so thats good for me that I live in the US and send money to colombia.

My question is if things keep going they way they are is the price of the dollar continue to go up? or will it go down?

Should I convert most of my dollars to pesos right now? or wait to see if it goes up more, Im traveling to colombia ina couple months ^_^

hopefully Tenbagger wil come and own this thread with juicie good info :D

are pesos worth anything anyway

pesos are still ~10:1 iirc? that might have been a while ago


I wouldnt convert my dollars, and especially not to pesos. Mexico relies on the US more than any other country so if our economy fails, theirs will too probably.

the thing is that dollars are worth more pesos now, but i can still buy the same ammount of goods with the pesos, meaning the prices of stuff havent went up, well at least thats what they tell me.

The thing is Im going to travel to Colombia in a couple months, Since now I can get more pesos out of dollars would it be EV+ to convert my dollars to pesos right now since I can get more pesos out of dollar, for my trip, or should I wait a couple months to see if the dollar keeps going up. or is it going to go down instead of going up

On October 06 2008 16:16 SKoT wrote: pesos are still ~10:1 iirc? that might have been a while ago I wouldnt convert my dollars, and especially not to pesos. Mexico relies on the US more than any other country so if our economy fails, theirs will too probably.

colombia =/= mexico

lol we dont have the same currency dude.

it's not his fault, all pesos look alike.

heh my b i didnt see columbian

pesos represent! LOL

if I knew the answer to your question, I'd be a rich man.

I believe the following applies to the currency markets:

http://en.wikipedia.org/wiki/Efficient_market_hypothesis

In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient", or that prices on traded assets, e.g., stocks, bonds, or property, already reflect all known information. The efficient-market hypothesis states that it is impossible to consistently outperform the market by using any information that the market already knows, except through luck. Information or news in the EMH is defined as anything that may affect prices that is unknowable in the present and thus appears randomly in the future.

oh damn I didnt think it would be this complicated... x_x I think im gonna do half and half

On October 06 2008 18:20 TenBagger wrote: if I knew the answer to your question, I'd be a rich man. I believe the following applies to the currency markets: http://en.wikipedia.org/wiki/Efficient_market_hypothesis In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient", or that prices on traded assets, e.g., stocks, bonds, or property, already reflect all known information. The efficient-market hypothesis states that it is impossible to consistently outperform the market by using any information that the market already knows, except through luck. Information or news in the EMH is defined as anything that may affect prices that is unknowable in the present and thus appears randomly in the future.

but how can someone cover their losses, i mean one could argue that land will fluctuate but never depreciate but nobody is willing to wait 20 years for it to come back at its price of the economy fails and nobody wants to build.

So what are options, like saving it in like a bank in switzerland in a foreign stable currency?

On October 06 2008 17:42 Feiticeira wrote: it's not his fault, all pesos look alike.

LOL!

his question was if the peso will go up or down against the dollar

and my answer was that my guess is as good any anyone else's. In fact, I would dare to say that not a single person on this forum has access to any information that would render their guess better than anyone else's. The market price is an accurate reflection of the collective wisdom and knowledge of the market participants, i.e. the entire world. If you are acting purely on public knowledge, then over the long run, you will not be able to extract any +EV. Rather, when factoring in transaction costs it is likely to be slightly -EV. There are some some people that have access to information that is not readily available to the public and they possess an edge, but for the rest of the participants in the currency market, they are either buying insurance or gambling.

That is distinctly different from "covering your losses" as you state Baal. There are reasons why someone would want to convert their money from dollars to pesos that is not related to speculation. For example, if one has relatives that depend on a certain amount of income to live on, then it would be reasonable for someone concerned about fluctuations in the currency market to either make the exchange now or purchase futures contracts that locks in a price. It is basically insurance. If the value goes up, then they suffer a loss in that they miss out on the gains, but they protect against any downside potential. This would make sense in this example because the potential harm in not covering minimum living expenses is greater than the potenial upside of increased value in the peso.

The fundamental concept that I wanted to point out is that the majority of participants in markets are losers. This is due not only to transaction costs (commissions, rake, vig, etc.) but also due to the fact that there are usually a few hugely successful sharks that swallow up much of the profit. Poker, Sports betting, currencies, commodities, options, futures... they all follow this pattern. For every dollar that someone earns, someone else is losing a buck and change. Sure the transaction costs are lower for trading options than they are for poker or sports betting but that is only because poker and sports betting is restricted by the government. So the point being is that if you participate in any of these markets without really knowing what you are doing, chances are that you are the fish and your activities are -EV.

thats some really deep stuff right there... TenBagger you are pretty awesome dude


My question can be simplified as, Today I can get 2100 pesos for 1 dollar and thats good for my trip since I can buy more stuff with less dollars , Because of the US economy going down, is it more likely that in December I can get more than 2100 pesos for one dollar, or that I will get less than 2100.

it looks like no body knows? or at least no one in the public knows? TenBagger, so based on the current economy trends and assuming things will continue to go like this for the next months is it impossible to make a guess? or what would you recommend I do?

I went to colombia on 08/2008 and I got paid 1830 for my US dollar.

well let me correct myself and clarify what I meant by loser.

Let's say there is trucking firm that wants to make sure that they can buy oil at $100 a month from now. If the price were to go higher, then it may cause cash flow problems and might endanger the business. On the flip side, there's an oil company that is entering a contract to purchase huge equipment over the next few months. If the price of oil were to drop, it would affect their ability to pay for the equipment so rather than risking not being able to pay for the equipment, they enter into a futures contract with the trucker on the other side. In this example, since both sides are paying some transaction fees, however small they may be, the net monetary value of this transaction is negative. However, you can say that they both gained tremendously from this exchange. The market played a huge role in hooking up two participants whos both got what they needed.

But if they were pure speculators that entered into the contract with the sole purpose of making money rather than hedging and managing risk, then when you factor in the transaction costs, the overall net result is negative for the market participants. The currency and commodities market both play a vital role is allowing the public to manage their risks and this is a huge benefit to society. However, for the pure speculators, those markets work in a similar way to poker rooms or sports bookies where relatively few participants profit at the expense of the masses.

On October 06 2008 21:33 donjuako wrote: thats some really deep stuff right there... TenBagger you are pretty awesome dude My question can be simplified as, Today I can get 2100 pesos for 1 dollar and thats good for my trip since I can buy more stuff with less dollars , Because of the US economy going down, is it more likely that in December I can get more than 2100 pesos for one dollar, or that I will get less than 2100. it looks like no body knows? or at least no one in the public knows? TenBagger, so based on the current economy trends and assuming things will continue to go like this for the next months is it impossible to make a guess? or what would you recommend I do? I went to colombia on 08/2008 and I got paid 1830 for my US dollar.

as i said, if anyone knew for sure, they would be able to place massive bets in the currency markets and make a killing. the current price reflects what the public knows about "economy trends and assuming things will continue to go like this for the next months". The concern about the US economy going down is already priced into today's price. Since the currency market is heavily traded and extremely efficient, I would put the likelihood of getting more tha 2100 pesos in December at 50% and less than 2100 pesos at 50%.

cool, thanks bro

I heard today at news, that eventhough US is kind of causing the crisis in the world ( for example, US buys lots of products from China and they have to stop), US dollar will be the best way to guarantee your money. actually here in mexico dollar is 11.70 and a few weeks ago was 9.80.
Anyhow, nobody can exactly know what is going to happen, so I'd bet for the euro, their economy is less US dependant than Latin america or Asia afaik

nevermind, the euro is going down, stay with US dollar

On October 07 2008 06:13 gymnast wrote: nevermind, the euro is going down, stay with US dollar

because the extra trillion liquidity in wallstreet creates that mirage, yet remember u have another trillion dollars in circulation, which means the dollar price will go down.