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Dept. of Int'l Trade

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8/15/2005
Shui Mitsuda on the Magic of International Consumer Prices

I have just come back from T###land. Here are some of the prices I came across on my trip:

The current exchange is approximately BT41 = US$ 1, so in dollars,

The consumer prices are quite attractive, aren't they? But this is not why I chose the word magic. I just listed all the prices in baht. Let me just divide them by 10, and put "$" in front. Do you see the magic?

Aren't these prices more or less what you'd pay in the US? My fellow Singaporeans can substitute "S$" for "$" and they represent our prices. For Japan, instead of dividing the baht by 10, multiply by 10 and then put "".

So what do these magic numbers tell us?

  1. In any country, people spend more or less proportionately to their income, and we all use similar numbers for the same products.
  2. For a majority of people, it's impossible to as earn a lot and spend a little. That's how a healthy society functions.
  3. Forex is mostly emotional rather than logical. It works to the advantage of countries with monetary power. The current exchange rate tells me I am supposed to be five times more productive than a T###, with which I definitely disagree.
  4. Astute consumers will take advantage of this imperfect world, by earning money in countries where the currency is strong and spending it in countries where it's weak.

I have traveled to over 40 countries, and this magic observation is true in all of them except Britain, maybe due to Britain's high income tax and good social security system. Anyway, the British always maintain their own traditions.

10/9/2005
Dept. of International Trade: The Senator Lauds the Land of the Pampas

While traveling the globe these last few weeks (greatly enhanced I might add by being able to stay in touch with the world through "the list") I noted how Shui's price points came into play. The most notable ones were seen on wine and taxi cab fares; the finest bottle of wine I could find in Argentina was 100 pesos (about US$28) while in the States it would sell for $100 and in Italy 100 euros. The cab fares were most interesting: a 20 minute ride in Milan was about 30 euros (in the states that would be about $35) and in Argentina 30 pesos (about US$9). 

Now on to the arbitrage.... dinning in the wine country there one can have a meal comparable to Napa, with seven courses and four different wines for about US$20 per person!  You can buy a four-bedroom house there for under US$80,000, a winery for about US$150,000. The influence is not Latino, it is European. I saw no kids with bones and such through their noses, no graffiti and the guy who shined my shoes took 15 minutes, for about 60 cents gave me the best shoe shine I have ever had...and did not expect a tip...I felt so guilty I broke expectations. Sell here, buy there. I've been every place once, it seems, and most places twice...of all those this massive country represents the best value and lifestyle I have seen.

P.S. The wines were awesome, the dining up to par with any place I have been.

Mr. Krisrock notes:

Reuters reported in April that there is a brand new Argentinian museum.

The reason Argentina is cheap is because they didn't pay back hundreds of billions they borrowed...and worse than that they have done this 90 times in 100 years. What you have there now is stolen money, and that may be OK to visit, but it's an eventual death sentence to capital just like Venezuela has become. If I didn't pay my debts I could claim to be rich too.

Marion D.S. Dreyfus Relates Her Personal Experience:

The theft of personal capital in Argentina is the usual case. My former spouse had millions (dollar denominated) "borrowed" from him, with a vague promise to repay, and it has never happened. He unwisely kept his cash in local BA banks, and he has had to generate more funds elsewhere. Now he banks his funds out of country. Others were not so fortunate, and they had heart attacks and more when the government granted them an 'allowance' of some $150 per week per home, to families that were aristocratic and used to thousands in spending money without a thought. These enforced government handouts of money to the people they illegally 'borrowed' from caused massive dislocation. None of this capital has been returned.

This story is repeated in the millions, so that is why the country can be considered a "bargain," despite contrary prices in comparable countries nearby. My experience of Argentina was it is best to stick with highly accessible country favorites (beef, leather, specialty baubles) and avoid all dealings with government.