55% Inflation. New Era Of Honesty???

[ajoknoblauch]

One of the "foreign newspapers nobody knows" is the Financial Times, which is the world's preeminent English Language daily newspaper reporting on finance and economics. It wildly surpasses the credibility of Miguel Bein, who appears to be little more than Cristina Fernandez' butt buddy. I haven't been able to find a single scholarly article published by him via scholar.google.com.ar, nor can I even find evidence of his economic credentials online (aside from on his own website) which seriosuly puts his Economic credibility into question. I would recommend seeking opinions from economists that have no political affiliations to avoid bias. Obviously the economist hired by the president will not contradict her opinions publicly...


Regarding the Inflation statistics, the are difficult to estimate because our brains are not designed for statistics. We are likely to to be overweighting the large price increases and underweighting the lower price increases to be arriving at an estimate that is slightly higher than the official rate because it is in line with our expectations. It's a natural bias that all humans succumb to.

It is also unfair to annualize a monthly inflation figure because it essentially is projecting forward January's inflation rate which is highly skewed due to the devaluation in the official rate. However, most people are projected a further decrease of over 20-25 percent in the official rate in 2014 so persistently higher inflation will continue. Furthermore, the full extent of the devaluation is probably not yet present in all prices, as old product stocks are probably still being depleted, and have yet to be replaced with new imports.

What bothers me about the debate is that nobody seems to be mentioning the role of the central bank in all of this. Price controls are always doomed to fail, history has served as a precedent for that over and over. This country needs some major monetary tightening.

Oh, and also, now that INDEC is reporting the real inflation rate, will they backdate it and modify all the economic statistics that are highly influenced by inflation? I'm thinking GDP for one which has been overstated wildly due to falsely low inflation statistics. Poverty rates are another statistic which will be wildly wrong assuming 10% inflation over the last several years. The GDP item is particularly damning because the government is currently paying out billions of dollars on GDP-linked government bonds. Interesting considering the GDP statistic is wildly inaccurate due to the underestimation of inflation. (Note GDP needs to be "deflated" by inflation - the inflation rate in economics is also referred to as the "GDP Deflator"). It makes you wonder why the government would choose to payout billions in unnecessary interest payments on a class of bonds due to a statistic they modified, especially at a time when debt payments are a large burden for the nation. Unless of course those people in government were major investors in those bonds....

GDP also overstated due to absurd official exchange rate

 

[wild_horses]

Its really not that hard to get a rough sense of what the inflation is - just compare what that ''basket'' of groceries you bought 6 months ago or even last month is costing you today - I would say that 50% sounds about right to me - there isn't much we are not paying at least DOUBLE the price for now compared to say this time last year... Even cigarettes are up big time - my carton of dunhill reds now costs me 160 pesos and I *know* I remember paying less than 100 pesos for it last year...

Hi,

First, to start a discution about inflation, you should know hot to calculated. You cannot say: "ohh, my peannut butter in the Barrio Chino went up 50%, so that is the WHOLE country Inflation Index".

To groceries you have to add utility bill, transpor, taxes, etc.

Every single item will not have an increase in % like they had in January. That is a fact.

Cheers!

 

[wild_horses]

One of the "foreign newspapers nobody knows" is the Financial Times, which is the world's preeminent English Language daily newspaper reporting on finance and economics. It wildly surpasses the credibility of Miguel Bein, who appears to be little more than Cristina Fernandez' butt buddy. I haven't been able to find a single scholarly article published by him via scholar.google.com.ar, nor can I even find evidence of his economic credentials online (aside from on his own website) which seriosuly puts his Economic credibility into question. I would recommend seeking opinions from economists that have no political affiliations to avoid bias. Obviously the economist hired by the president will not contradict her opinions publicly...


Regarding the Inflation statistics, the are difficult to estimate because our brains are not designed for statistics. We are likely to to be overweighting the large price increases and underweighting the lower price increases to be arriving at an estimate that is slightly higher than the official rate because it is in line with our expectations. It's a natural bias that all humans succumb to.

It is also unfair to annualize a monthly inflation figure because it essentially is projecting forward January's inflation rate which is highly skewed due to the devaluation in the official rate. However, most people are projected a further decrease of over 20-25 percent in the official rate in 2014 so persistently higher inflation will continue. Furthermore, the full extent of the devaluation is probably not yet present in all prices, as old product stocks are probably still being depleted, and have yet to be replaced with new imports.

What bothers me about the debate is that nobody seems to be mentioning the role of the central bank in all of this. Price controls are always doomed to fail, history has served as a precedent for that over and over. This country needs some major monetary tightening.

Oh, and also, now that INDEC is reporting the real inflation rate, will they backdate it and modify all the economic statistics that are highly influenced by inflation? I'm thinking GDP for one which has been overstated wildly due to falsely low inflation statistics. Poverty rates are another statistic which will be wildly wrong assuming 10% inflation over the last several years. The GDP item is particularly damning because the government is currently paying out billions of dollars on GDP-linked government bonds. Interesting considering the GDP statistic is wildly inaccurate due to the underestimation of inflation. (Note GDP needs to be "deflated" by inflation - the inflation rate in economics is also referred to as the "GDP Deflator"). It makes you wonder why the government would choose to payout billions in unnecessary interest payments on a class of bonds due to a statistic they modified, especially at a time when debt payments are a large burden for the nation. Unless of course those people in government were major investors in those bonds....

Hi there,

I just readed untill "One of the "foreign newspapers nobody knows" is the Financial Times" I stoped there because it is obvious that you let your emotion come out when someone have a different opinion.

Please, before quoting what I wrote, read the comment again (especially the second line), if the is something that you do not understand, keep reading it untill you get it.

Cheers and have a great day!

 

[Reneige]

Hi there,

I just readed untill "One of the "foreign newspapers nobody knows" is the Financial Times" I stoped there because it is obvious that you let your emotion come out when someone have a different opinion.

Please, before quoting what I wrote, read the comment again (especially the second line), if the is something that you do not understand, keep reading it untill you get it.

Cheers and have a great day!

Thank you for your admission of willful ignorance. Since the article was quoting Axel Kicillof, I could only assume that you either had not read the article, or were attacking the publication itself. Here is the first paragraph from the article to help you out a little:

Argentina’s economy minister said on Thursday that prices rose by 3.7 per cent in January, in what was widely interpreted as a tacit admission by Axel Kicillof that the government had been underreporting inflation figures for years

 

[thorsten]

Oh, and also, now that INDEC is reporting the real inflation rate, will they backdate it and modify all the economic statistics that are highly influenced by inflation? I'm thinking GDP for one which has been overstated wildly due to falsely low inflation statistics. Poverty rates are another statistic which will be wildly wrong assuming 10% inflation over the last several years.

INDEC decided not to publish poverty data based on the actual inflation - I wonder why...

 

[wild_horses]

Thank you for your admission of willful ignorance. Since the article was quoting Axel Kicillof, I could only assume that you either had not read the article, or were attacking the publication itself. Here is the first paragraph from the article to help you out a little:

Argentina’s economy minister said on Thursday that prices rose by 3.7 per cent in January, in what was widely interpreted as a tacit admission by Axel Kicillof that the government had been underreporting inflation figures for years

Again,

Please read the second line, if you do not understand it, read it again, if you still not get it, ask politely what the writer means.

Who wrote the article?

NZ Herald: By ALMUDENA CALATRAVA

FT: By Benedict Bander.

Cheers!

 

[ajoknoblauch]

Again,

Please read the second line, if you do not understand it, read it again, if you still not get it, ask politely what the writer means.

Who wrote the article?

NZ Herald: By ALMUDENA CALATRAVA

FT: By Benedict Bander.

Cheers!

So unofficial sources are not qualified to report on anything Argentine?

 

[Inferno.]

55% inflation? How did you came out with that number?

3,7% inflation during January was because of devaluation. Inflation this year will be between 30-35%

Stop posting misleading information.

Pathetic.

The problem is not being ignorant, it's believing one is right on subjects one clearly doesn't fully understand -while fighting others if I may add-. First, that number is explained in a two sentence paragraph that you didn't read or didn't understand. If you know anything about economy, you would known 55% is the inflation annualized, obtained by doing 1,037^12 which gives you 54,64%. They actually explained this, unless you did not understand that small sentence when they said "[..] if Argentine prices were to continue rising at this rate throughout 2014 [..]". Your argument was based on those "two foriegn newspapers quoting people that nobody knows" when in fact is just a simple mathematical calculation based on January, not an opinion.

Second, the inflation wasn't caused due to the devaluation. It is a dumb thing to say as we already had a high inflation (check 2005-2008) with a steady exchange rate, showing that relation doesn't need to exist. Third, the inflation number you said is just a guess, because we may have 40-45% or 70-80% if things don't improve. So, it would be a good thing to follow your own advice and "Stop posting misleading information".

 

[thorsten]

Come on, its pretty simple how to judge a source:
Not a K --> ridiculous neo-liberal lier that tries to destabilize the government and steal the Argentines money - you don't even have to read/listen to the argument.

 

[germano]

Have any of you monitored the prices for new cars? I have bought a new car about half a year ago and exactly the same make and model now costs 40% more than when I bought it. It is a cheap car made in Brazil (so it has no extra tax for "luxury cars"). I had to look up the new price for the insurance.