Bruce given another lesson!

[Karl]

I must admit the impact is not immediately apparent to me.

The dollar is currently over $71.

What is the impact of stating what the budget WAS predicated on at this time ?

OK!
Questions: - two simple uncomplicated questions:
How large do you think is the size of the informal trading sector that buys outside of the island and sells to the local market?

What do you think persons and or entities (Yup companies and businesses) that use/dabble in that market - Even you know that...and, can come up with many reasons, inclusive of dodging paying of taxes, why that happens? - will now do as it pertains to costing and purchasing of foreign exchange?

Hint! - Do you think? - Revise costing and hoard foreign exchange may be a possibility? Increase prices to hedge against where the dollar may actually go?

What do you think those in the formal market will now do? Go revisit budgets...and, forecast of foreign exchange requirements? Increase prices/revise costing to hedge against cost of foreign exchange needed to purchase/replace goods taken off the shelves?

Just two hints in a long list!

[Karl]

Dollar dilemma - Golding reveals 2007/08 Budget exchange rate, chided by Davies
published: Wednesday | November 21, 2007


Edmond Campbell, News Coordinator

Prime Minister Bruce Golding making his contribution to a debate in Parliament yesterday. - Rudolph Brown/Chief Photographer


Prime Minister Bruce Golding revealed in Parliament yesterday that the former Portia Simpson Miller administration had calculated the 2007/2008 Budget on an exchange rate of J$71 to US$1.

But former Minister of Finance, Dr. Omar Davies, said he was surprised that the Prime Minister had disclosed that information, noting that it had always been the policy of the previous administration and the relevant officials not to discuss that "for obvious reasons".

Mr. Golding, commenting on the $16 billion expenditure that was not included in the Budget, said: "We understand that when you cast a budget that there may be changes, there may be price movements and you have to make adjustments, but we are talking about items that were left out.

"A lot has been said about price movements, a lot has been said about exchange-rate movements. I am (here) to tell this House that the current Budget, which is being pursued to March next year, was calculated on the basis of a US$71/J$1," he disclosed.

Mr. Golding was debating a resolution to transfer nearly $3 billion from the Capital Development Fund to be used for budgetary support.

Cautioned
But speaking with journalists after the sitting of the House, Dr. Davies said he was cautioned by his technicians not to release information on the rate of exchange or interest rate that they had projected.

"I am quite surprised that he (Golding) did and I do not believe that he was properly advised. His financial advisors would not have suggested that that be done," Dr. Davies contended.

He argued that if at the start of a financial year, the Government indicated the exchange rate or the interest rate on which the Budget was cast, this would have negative implications for speculation.

Commenting on the former administration's decision to calculate the budget at J$71 to US$1, Dr. Davies said if a government projected an exchange rate that was too low, "then you would under provide, so you make an assumption and then you manage the economy during the year".
"You would have noted in my 14 years I would never indicate several times the question was asked what is the exchange rate on which you have built the budget and I would not respond," said Davies.

At the start of the current fiscal year in April, the Jamaican dollar traded at $67.81 to US$1. This means that the Jamaican dollar, which now trades at $71.33 to US$1 has slid by 5.19 per cent since April.
edmond.campbell@gleanerjm.com

I cannot think of a reason...but, another side - Did Bruce deliberately let that info slip? Anyone can post a reason for his doing so?

[Muadib]

The Dollar is now over $71.

How does knowing what exchange rate Omar was basing projections on in March impact the Market ?

[Willi]

so the $15b shortfall is not underproviding?

The man has a problem with materiality!

[Lazie]

I cannot think of one...but, another side - Did Bruce deliberately let that info slip for an undetermined reason?

Slip? Do you people think?

If there is an item budgeted for $1 million at 71 in April, what would be the effect of that item at today's exchange rate? If you, Baddaz and Mosiah had read the article in its entirety you all would see that the PM was requesting that 3 billion be transferred from the CDF for budgetary support.

1 million @ 71 =?
1 million @ yesterday's rate is what? The fiscal year ends in MArch suh unuh need to think for a change instead of holding a comrade position.

[Willi]

You can disclose AFTER the fact. The financial year is 3/4 over now.

Again, the real issue is the MASSIVE $15b unbudgetted shortfall.

Keep your eye on the prize.

[Muadib]

Willi can you help me with my question.. not getting a response from the Econ brains Baddaz and Mosiah.. dem laughing mi to scorn but not providing any information.

[Willi]

Hahahahah

Dem blame Bruce for what they planned for.

What a Prekeh if dem did win!

Omar would have unveiled the most egregious tax package in Jamaica's history!

Jamaica lucky bad. The new guys dont have that political capital to do this.

[Willi]

Tell me, what do YOU see as the danger in releasing this info AND how does it compare to the danger of running an unapproved $15b deficit???

[Gamma]

unglaublich!!!!!

[Willi]

Them chatting pure foolishness.

Plain English and bad mannaz.

[Karl]

Slip? Do you people think?

If there is an item budgeted for $1 million at 71 in April, what would be the effect of that item at today's exchange rate? If you, Baddaz and Mosiah had read the article in its entirety you all would see that the PM was requesting that 3 billion be transferred from the CDF for budgetary support.

1 million @ 71 =?
1 million @ yesterday's rate is what? The fiscal year ends in MArch suh unuh need to think for a change instead of holding a comrade position.

...and, he had to release that by specifying the exchange rate used in the 'previously prepared budget'?
massa talk sense!

...he could make comments about budget shortfall...which all of Jamaica had been told about ad infinitum!

...besides he would have, at the most, token resistance from Portia and the PNP - a little trying to score political points then voting him the increase he sought. After all is said, Omar laid the table for doing exactly what Bruce did. If the PNP had won the elections Omar would be the one asking for the increase allocations.

[Assasin]

them say them want transparent government right so them can share the burden of government.

Them get it and them a say him shoulda hide it. Can you imagine if he had not answer the question?

[Willi]

Clearly he is showing the hypocrisy of blaming him for the dollar slippage while THEY planned for it! Be fair, they were mouthing this in every fora for the last few weeks!

Cant have yuh cake and eat it too.

[Karl]

Clearly he is showing the hypocrisy of blaming him for the dollar slippage while THEY planned for it! Be fair, they were mouthing this in every fora for the last few weeks!

Cant have yuh cake and eat it too.

Agree wholeheartedly!
I never tried to run away from that.

You may remember that I have been saying 'deficit spending' for a long time...and, have been saying that is the only way to go - not changing course - given the realities of our current situation.