Fausta's Blog

American and Latin American Politics, Society, and Culture

Archives for March 2013

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Peru’s definitely not Cyprus

Last Tuesday in Rick Moran’s podcast I mentioned that the flight of capital from the EU might make emerging markets very attractive.

Well, look at Peru:
Peru intensifies currency fight (emphasis added)

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For the eighth time in 10 months, Peru’s central bank has raised deposit requirements on dollar-denominated accounts to stem the flow of hot money into its fast-growing economy and dampen currency appreciation.
With the sol approaching a 16-year high, Peru’s central bank said that as of April 1, the reserve ratio will rise 0.25 percentage points. The bank, which has ruled out Brazilian-style capital controls, has also been aggressively buying dollars in the spot market to slow the trajectory of the sol.

So far, its strategy has worked, with the sol weakening 1.33 per cent against the dollar this year, after appreciating 5.7 per cent in 2012.

The Peruvian bank’s struggle to rein in its currency is shared by fast-growing neighbour Colombia, which last week said it was willing to double its spending on dollars, to $10bn, this year to take some of the steam out of the peso.

Both countries are enjoying the fruits of years of prudent economic management – but rapid economic growth and low inflation have come hand-in-hand with the kind of current appreciation that makes exporters squeal.

Hmmm. . . Prudent economic management.

Are you listening, Paul Krugman?


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Meanwhile, over in the country with the strictest gun control laws in our hemisphere,

Thousands of armed vigilantes takeover Mexican town, arrest police and shoot at tourists after ‘commander’ is killed and dumped in the street. Tierra Colorada is in the southern state of Guerrero on the way from Mexico City to Acapulco

‘Community police’ arrest former director of security in Tierra Colorado [sic]
They allege he took part in killing of their leader, 28, for criminal cartel
State prosecutors agree to investigate official’s links to organised crime
Vigilantes have been stopping traffic at checkpoints and searching homes
Tourist injured after vigilantes opened fire because he failed to stop his car
Takeover comes amid growing ‘self defence’ movement against cartels

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Obama heading to Mexico and Costa Rica

On May 2-4, “to take up trade, economic growth and immigration”

The trip comes as Mr. Obama is pressing Congress to pass a broad immigration overhaul that would provide a path to citizenship for the estimated 11 million people living in the U.S. illegally— many of them Mexicans.

An estimated 60% of all illegal aliens are Mexican.

“We’re fully cognizant of your current political calendar and agenda vis a vis immigration reform,” a Mexican official said. Mr. Peña Nieto “has expressed in the past his willingness to work in whatever ways we can to move help move these processes forward.”

And gun control, too, even when Eric Holder is still mum on Fast & Furious.

Over at the border,

REPORT: OBAMA ADMIN LEAVING BORDER UNATTENDED, ‘NAKED’ FOR HOURS AT A TIME

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Venezuela: Maduro vs Lechuga

If you disseminate currency exchange information on the internet, Maduro will have you jailed and indicted:
Venezuela interim president Maduro takes on currency exchange website

Video in Spanish,

Venezuela’s interim president, Nicolás Maduro, came out Tuesday fighting the acute depreciation of the bolivar against the U.S. dollar by ordering the indictment and jailing of the creators of lechuga.com, a popular website that thousands of Venezuelans consult everyday to check currency exchange quotes in the parallel market.

Maduro issued the order as part of his government’s effort to contain the impact on the economy of the two back-to-back devaluations of the Venezuelan currency. The first one — of 32 percent — was announced on Feb. 7, when the exchange for special sectors went from 4.30 bolivars per dollar to 6.30 bolivars. The second one took place five weeks later, with the decision of auctioning foreign currency for another group of sectors.

Of course, Maduro blames the “capitalist oligarchy” for the state of the economy, rather than the disastrous Chavista mismanagement. Last month the annual inflation rate rose to 22.8%, the highest in our hemisphere.

Lechuga.com is gone, along with its Twitter and Facebook accounts. As of the writing of this post, no one had been arrested.

DollarToday, however, is still up.

Related:
The Puzzle of SICAD: First Auction Result Above Bs. 10 Per US$

Venezuela Stays Mum on Rate at Auction

Le maduro la lechuga…

UPDATE:
Linked by Hot Air. Thank you!


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