If the dollar floated, then the value would be determined by the free market on a fundamental or technical fashion. For example, since tourism is number one, if tourism would be real strong, then the B$ dollar would rise. If tourism fell, then our dollar would fall too.

Since we don't own the means to our own economic production, even if the B$ dollar floated, it would be wise to maintain reserves.

PS -- there was a time when our dollar did float. We had a currency board instead of a Central Bank. It was run by the UBP.


I'm guessing the reason for holding reserves equal to 50 percent of bank holdings - according to the central bank - is to maintain the B$ to USD parity. If such a parity were abandoned, then a large portion of those reserve holdings would be liquidated. Not all, but certainly 50 percent of bank holdings is excessive for a floating currency regime. Liquidating those reserves, or selling foreign $ for B$ means that the market is in effect and demand for B$ drives the value of B$ up.

Can you clarify your reference to tourism?? Inflation plays a vital part in the value of currency. If the Bahamas demanded more Bahamian dollars, then that would make Bahamian products cheaper for Bahamians and imports more expensive since those would have to be purchased using foreign currency.

Bingo. It would make Bahamian goods & labour more attractive. The Bahamas is losing market share, because our vacations are so bloody expensive. See the Guardian article today about Cuba. If we dropped restrictions, made a freely convertible currency, have the omnibus business license (like the FNM is enacting) , then we would be a very attractive place to do business. Do you remember the FNM third pillar plan from pre-2002? This was their plan to diversify from tourism. And removing currency restrictions is a good start.

There is no reason why Bahamians cannot compete on the international stage using technology like the internet. I am so sick of us begging for crumbs that fall off the table of tourism and financial services.



Yes I read the article. I posted it here and started the thread.

I am in a group partnership with an international group of friends. Sad to say, the group had to pass on the Bahamas for our projects because the labour costs were so high. There was no way we could make a profit. Our margins where less than razor thin. It was very sad for me as I wanted to see the jobs at home.


For my own upcoming projects, I am scared as heck. My business plan is solid, but the unions and business culture at home scares the crap out of me. I will pay more than fair wages, but it seems the more you give the more they attack.

~~~~

I'm guessing the reason for holding reserves equal to 50 percent of bank holdings - according to the central bank - is to maintain the B$ to USD parity. If such a parity were abandoned, then a large portion of those reserve holdings would be liquidated. Not all, but certainly 50 percent of bank holdings is excessive for a floating currency regime. Liquidating those reserves, or selling foreign $ for B$ means that the market is in effect and demand for B$ drives the value of B$ up.
Can you clarify your reference to tourism?? Inflation plays a vital part in the value of currency. If the Bahamas demanded more Bahamian dollars, then that would make Bahamian products cheaper for Bahamians and imports more expensive since those would have to be purchased using foreign currency.


If our currency floated, then it would be traded. Market forces would determine what it is worth in relation to other currencies, like the US dollar, the Euro etc. There are two methods of trading analysis -- fundamental and technical. If I were a fundamental trader in B$, I would look to see if fundamental things were on track. As a fundamentalist, I would check room occupancy, joblessness, etc etc and determine a worth for the B$. On the other hand, if I were a technical trader, I would trade the currency based on its price history and performance. For example, I would say that the B$ has never declined three days in a row in its history, so after the second day of declines, I would buy like hell, because it should rise in value on the third day.

Money is nothing but a commodity, like pork bellies and barrels of oil. It's worth, just like antiques or any other commodity, is worth exactly what others are willing to pay for it. However, if your fundamentals are good, then it becomes more attractive to hold as a hedge against other currency. Domestic supply and demand doesn't play too much in the value of the currency. It what the world thinks of it, that really counts.

Yes I read the article. I posted it here and started the thread.

I am in a group partnership with an international group of friends. Sad to say, the group had to pass on the Bahamas for our projects because the labour costs were so high. There was no way we could make a profit. Our margins where less than razor thin. It was very sad for me as I wanted to see the jobs at home.


For my own upcoming projects, I am scared as heck. My business plan is solid, but the unions and business culture at home scares the crap out of me. I will pay more than fair wages, but it seems the more you give the more they attack.

~~~~


make sure you pick your staff well, cause you will never be able to fire them, even if your place get blown down in a tornado you will still have to pay them ;)

They are yours for life!!

make sure you pick your staff well, cause you will never be able to fire them, even if your place get blown down in a tornado you will still have to pay them ;)
They are yours for life!!


LOL!

It's that bad?

If our currency floated, then it would be traded. Market forces would determine what it is worth in relation to other currencies, like the US dollar, the Euro etc. There are two methods of trading analysis -- fundamental and technical. If I were a fundamental trader in B$, I would look to see if fundamental things were on track. As a fundamentalist, I would check room occupancy, joblessness, etc etc and determine a worth for the B$. On the other hand, if I were a technical trader, I would trade the currency based on its price history and performance. For example, I would say that the B$ has never declined three days in a row in its history, so after the second day of declines, I would buy like hell, because it should rise in value on the third day.
Money is nothing but a commodity, like pork bellies and barrels of oil. It's worth, just like antiques or any other commodity, is worth exactly what others are willing to pay for it. However, if your fundamentals are good, then it becomes more attractive to hold as a hedge against other currency. Domestic supply and demand doesn't play too much in the value of the currency. It what the world thinks of it, that really counts.


There are currency traders that use technical and fundamental analysis??

What has impressed me is that the Jamaicans have pierced the communist barrier in Cuba and have circumvent the pressures of the US in order to opened up a Sandals resort in Havana. That is truly impressive for people living and doing buisness from the Caribbean and moreso a thirdworld country. Do we have any international Bahamian businesses

What has impressed me is that the Jamaicans have pierced the communist barrier in Cuba and have circumvent the pressures of the US in order to opened up a Sandals resort in Havana. That is truly impressive for people living and doing buisness from the Caribbean and moreso a thirdworld country. Do we have any international Bahamian businesses


We have a Goldie's restaurant here in Miami.

We have a Goldie's restaurant here in Miami.

stop that...seriously
what part?
what do they sell?
Is it the same Goldie's like at the Fish Fry?
I always thought Bamboo shack would have franchised...
but right now that company floundering with quality service and product.

stop that...seriously
what part?
what do they sell?
Is it the same Goldie's like at the Fish Fry?
I always thought Bamboo shack would have franchised...
but right now that company floundering with quality service and product.


It's on NW 27th avenue and 114th street (just across from Miami Dade Community College). Man they got all things Bahamian even conch salad and sky juice. I go there to play dominoes at least once a week.
And I agree with you about Bamboo, man when I was in nassau I used to eat it all the time but when I go back I don't think its that great anymore. I don't know what happened.

LOL!
It's that bad?

so it seems ... do like one of my colleagues does, he sub contracts all his employees, so he doesnt have to pay their NHI and can just fire at will :D

In spite of Kareem's idiotic partisan reply, you are wise to question M3 as a money supply indicator. The US Federal Reserve has stopped gathering M3 stats as a cost cutting measure, because in a normal free-market economy, M3 tells you very little. In the case of the US, M3 is M2 + various foreign holdings + eurodollars, which by their definition, never see the light of day in greasing the engine of the North American economy, except in a very indirect way. Remember, money has to be in motion to be economically productive.

So why does the Central Bank in all it's infinite wisdom choose to monitor M3. Because in the Bahamian context, M3 is a component of our 'unnatural' US dollar peg.

Money Supply refers to the legal tender of the Bahamas, the Bahamian dollar, yet it is propped up with reserves, and M3 in the Bahamian context defines reserves and other monies that will not be equilbrated at any given time to the Bahamian dollar. In other words, the excess liquidity will not become truly denominated in Bahamian dollars, because it props up the peg to the American Greenback.

In an economy such as ours where the currency is inconvertible on a free basis on any forex, then M3 becomes a meaningful gauge of money supply.


Yinna fellas dem are enemies of the truth I see. So I gata simpify this for yinna. When a loan is made and the proceed of that loan is deposted into a checking account those proceeds are included in the Money Supply.:hammer: Na why yinna making me think bout basic High school economics is nuts!

The amount of money in circulation. M1 = cash + regular demand deposits + other check-type deposits. M2 = M1 + savings and small denomination time-deposits.


In a structurally open economy as that of the Bahamas M3 is a more accurate measure of the money supply.

Yinna fellas dem are enemies of the truth I see. So I gata simpify this for yinna. When a loan is made and the proceed of that loan is deposted into a checking account those proceeds are included in the Money Supply.:hammer: Na why yinna making me think bout basic High school economics is nuts!
The amount of money in circulation. M1 = cash + regular demand deposits + other check-type deposits. M2 = M1 + savings and small denomination time-deposits.
In a structurally open economy as that of the Bahamas M3 is a more accurate measure of the money supply.


You are so full of crap.

And the truth is a complete stranger to you my friend (of Fred).

Your understanding of economics is non existent if it weren't for Google.

A commercial loan has no effect on the money supply. You obviously don't understand that.

Who are you trying to fool. Money is only created with government debt.

Perhaps you would be so kind as to explain (within the next 15 minutes) as to what M3 really is in the Bahamian context. Bet you can't because like your political cohorts, you are way out of your league, so you substitute lies. Go back to your den of thieves.

Of course, you are PLP, so the truth is the first casualty of your sorry existence.

And the economy of the Bahamas is not structurally open. Any idiot knows that.

Yinna fellas dem are enemies of the truth I see. So I gata simpify this for yinna. When a loan is made and the proceed of that loan is deposted into a checking account those proceeds are included in the Money Supply.:hammer: Na why yinna making me think bout basic High school economics is nuts!
The amount of money in circulation. M1 = cash + regular demand deposits + other check-type deposits. M2 = M1 + savings and small denomination time-deposits.
In a structurally open economy as that of the Bahamas M3 is a more accurate measure of the money supply.


I think you need to go back to high school. The Money supply or the Monetary Base is not M1, M2 or M3 - its closer to M1 than the others, so I could see using M1, but the monetary base or the amount of money in circulation is equal to currency in circulation, vault case and bank deposits at the central bank. Bank deposits at the central bank are equal to deposits times the reserve requirement. If there's a billion dollars in deposits and the reserve requirement is 10 percent, then only 100 million of that is counted as money. So your contention that a loan is money is....ummm, point blank stupid.

M1, M2, MZM and M3 are measures of money. Just like an inch, a foot, a yard and a mile are measures of distance. But an inch, foot, yard and mile are not distances themselves. So using M3 as the money supply is ludicrous. Money has several properties, liquidity, store of value, a means of payment and so on. M3 includes eurodollar deposits and repurchase agreements. Just as M2 includes checking accounts. You can use repurchase agreements and checks as though they were money - but they are not money. You can pay for things using a repo or a check - but a check is a promise to pay, money or currency is legal tender. Or think about what happens to the money supply if you burn 1,000,000 dollars and when you burn a 1,000,000 check. If you burn 1,000,000 dollars, the money supply goes down by the same amount. If you burn a check, not a thing happens. So why use M3, M2, or M1 for that matter as the Money Supply?

So why use M3, M2, or M1 for that matter as the Money Supply?


Ting-um - M0, M1, M2, & M3 are all measures of the money supply.

M0 as you know, is the narrowest gauge -- and not a true indicator. When you add up M0-M2, you have a decent picture of the measure. However when M0 thru to M2 is predicated on M3, then you have a reasonable ground for including M3 in the money supply.

The telling point is the delta between M2 and M3, and the ratio of the efficaciousness of the fiscal and monetary policy.