Are The Price Increases Affecting You?

[Ceviche]

I sold all my electronics and I only shop at Dia but even that is getting expensive.

I eat about 11 meals a week compared to the 21 you should.

I also haven't bought any clothes since moving here so I wear the old ones that are ruined even, and I
Need new shoes but ones my size cost $700+

You must have strong reasons to live here and that probably ( despite all what you say above) your life here is better than your home country...

 

[steveinbsas]

You must have strong reasons to live here and that probably ( despite all what you say above) your life here is better than your home country...

Perhaps you missed ARbound posting this on June 19, 2012 in the "Plans to leave?" thread:

"I'm stuck here until I can get enough USD
to move to Europe for school as I hated living in Canada and even don't want to go back there now.

Argentina is an expat revolving door I think because of one of three reasons:

a) People think it's a semi-developed country con buena clima y buena gente where you can
get a job just by speaking English and live a quality of life you were used to previously.
(Only one thing is true, here's a hint: It's 71º and the beginning of February).

b ) They're masochists.

c) They ignore all good advice and/or only read stores from pre-2011.

I was A & C and can't wait to leave. As I always say, anyone thinking of moving here reading this:
RUN, RUN AS FAST AS YOU CAN. THIS COUNTRY IS PRETTY TO VISIT BUT HELL TO LIVE IN."

http://baexpats.org/topic/21485-plans-to-leave/page__st__20

 

[scotttswan]

I think it's ridiculous to pay $80 pesos for kitty litter. I told the vet, I'm not paying that much for pebbles for my cat to crap in. It's more expensive than toilet paper for humans to crap in.

http://listado.merca....ar/bedy-wood#D[A:bedy-wood,B:1]

get some delivered, much cheaper to buy in bulk. Plus its not like your cat is going to stop shitting any time soon.

 

[scotttswan]

I sold all my electronics and I only shop at Dia but even that is getting expensive.

My building fees went up by $100.00 this month and even though I earn my pay in pesos
And have a dni I can't get a credit card so No quotas for me. The raise the union got us
At work was a pathetic 36% I think, which means after the devaluation a couple months ago
And the inflation rate on track to hit at least 50% I'm going to have lost around 34% in income
By years end.

The only eating out I can afford is a pizza or McDonalds and I've never been to a restaurant in Buenos Aires.
I don't own a car thankfully.

The price control stuff is nothing I buy except the hot dogs, but all the stores have stopped carrying the
6 packs because people have figured 2 or 4 of them are still cheaper

I only eat lunch and dinner though when possible I skip one to make food and or money last longer.
I eat about 11 meals a week compared to the 21 you should.

I also haven't bought any clothes since moving here so I wear the old ones that are ruined even, and I
Need new shoes but ones my size cost $700+

The sad part is compared to many Argentines my salary isn't terrible.

Seriously man just pack up and leave already. Go work and save up in Europe for college/uni. You'll earn more and costs aren't much more than here.

 

[ARbound]

The issue is I can't afford to leave yet. I'm just accepting that I'll be here until at least October next year, which I'm learning to accept. It isn't great I know, but my hands are tied right now.

 

[Ceviche]

The issue is I can't afford to leave yet. I'm just accepting that I'll be here until at least October next year, which I'm learning to accept. It isn't great I know, but my hands are tied right now.

sad to hear about your predicament.

 

[EdRooney]

Has the accelerating inflation in the last couple years years corresponded to a quicker reduction in unemployment? NO! Even the near worthless official statistics back that up.

I think a lot of people would prefer moderate inflation with and lower unemployment to low inflation and higher unemployment. The problem is 30% and increasing is not what most people would consider moderate. That is destabilizing inflation and destabilizing inflation does lower unemployment, it mainly just screws the middle class.

Felipe,

Your point is well-taken. But I'm not arguing in favour of high inflation; I'm arguing against the usual recipes for bringing it down at the cost of obliterating demand. I am one of the people you used as an example who would prefer moderate inflation and lower unemployment, and Argentina's inflation is far too high and needs to be lowered. I think we all agree on that. The question is how. The IMF suggests (like a broken record everywhere) that gov't spending on health care and education be slashed, that energy subsidies to the poor be cut or that gov't employees be sacked. No thanks. Not only is that an incredibly short term strategy, but it also sabotages growth, as we have seen in Greece, Portugal, Spain and everywhere else it's been implemented (eg here in the 70s and 90s).

Your point about increasing inflation not leading to more employment is odd. I never suggested that increasing inflation would decrease unemployment; I rather said that the usual recipes for bringing inflation down would raise unemployment. Your complaining about the symptoms and I'm complaining about the choice of medicine. Apples and oranges. Furthermore, we all agree inflation is high, but how did you determine it is increasing? There are no reliable statistics on inflation, so I'd be curious how you came to that conclusion.

Lastly about your dulce de leche exporter: your argument might hold water if Argentina's economy was structured like say Taiwan's with a major non-commodity export component, but it's not. The only significant exports are grains and the sector is more than profitable. On the contrary, the main component of the recovery has been based on internal demand, so at least for now monetary policy should stay focused there, not on dulce de leche exports which represent less than .01% of GDP.

That said, to repeat I think you are absolutely right about inflation in the 30% ballpark being way too high and structurally untenable in the longterm.

 

[PhilipDT]

Felipe,

Your point is well-taken. But I'm not arguing in favour of high inflation; I'm arguing against the usual recipes for bringing it down at the cost of obliterating demand. I am one of the people you used as an example who would prefer moderate inflation and lower unemployment, and Argentina's inflation is far too high and needs to be lowered. I think we all agree on that. The question is how. The IMF suggests (like a broken record everywhere) that gov't spending on health care and education be slashed, that energy subsidies to the poor be cut or that gov't employees be sacked. No thanks. Not only is that an incredibly short term strategy, but it also sabotages growth, as we have seen in Greece, Portugal, Spain and everywhere else it's been implemented (eg here in the 70s and 90s).

You can't do it abruptly obviously. If you do it all at once that's when you sabotage growth and raise unemployment but yes, you should be trying to cut spending where spending isn't needed. If you have 5 government employees doing the job that 4 could, or you create some worthless high paying job just because the voters kicked good old boy to the curb what you are essentially doing is assigning subsidies to people who may not need them as much as the people they're taking subsidies away from.

Unlike what our dear president would like us to believe, inflation is a problem which hits the middle class the hardest, by far. She's constantly talking about equality, the number one thing she could do to help equality would be 10% inflation.

Your point about increasing inflation not leading to more employment is odd. I never suggested that increasing inflation would decrease unemployment; I rather said that the usual recipes for bringing inflation down would raise unemployment.

I may have jumped to a conclusion there. Since conventional wisdom is that inflation leads to increased economic activity and consequentially lower unemployment and is a commonly advocated fix for unemployment I thought that was the point you were making.

Your complaining about the symptoms and I'm complaining about the choice of medicine. Apples and oranges. Furthermore, we all agree inflation is high, but how did you determine it is increasing? There are no reliable statistics on inflation, so I'd be curious how you came to that conclusion.

Even the reliably understated indec numbers show increasing inflation. That said, most of the experts I know agree that inflacionverdedara.com is a good reference for the inflacion verdadera. .

Lastly about your dulce de leche exporter: your argument might hold water if Argentina's economy was structured like say Taiwan's with a major non-commodity export component, but it's not. The only significant exports are grains and the sector is more than profitable.

The cereal industry is ok because of this.

Is that the norm or does that look a little bubbly? Who knows... Either way, the fact that agricultural industry is doing fine here is more of an 'in spite of' rather than a 'because of'.

This matters because while exports may only be 20% of the economy, they make up the lion's share of foreign currency ingresses.

It'd also be interesting to get fifs (and others who own tech companies here) input on this. At least in Capital my anecdotal experience is that I seem to constantly run in to tech guys, programers, web designers who tell me that the stagnant exchange rate has doled out a beating to the industry. I don't have any statistics so I won't pretend to know whether this is even true and if it is how much of the pie it affects. That said, if it is true, technology jobs in the developing world are real middle class professional opportunities available to people who previously might have been excluded from such.

not on dulce de leche exports which represent less than .01% of GDP.

I know that, it was just a humorous example to illustrate my point.

 

[EdRooney]

I agree 10% would be a great improvement. Where I think we differ is on the importance of the internal market vs. imports. You state a tautology saying that exports make up the "lion's share of foreign currency ingresses," but you don't say why they should be emphasised at the expense of internal demand. Remember, this is a recovery based on the internal market, and cuts in government spending necessarily mean cuts in internal demand. I agree that there are far more efficient and beneficial ways the govt should be spending, but that may be off topic.

As for the commodity market being bubbly, it's so rife with speculation that it's hard to say it isn't, but how much would a 15% variation in soy prices affect Argentina's overall economy, considering that soy is around 2% of GDP? That equals USD $2 billion in a worst case scenario, i.e., not nearly significant enough to make a major policy change like austerity.

Lastly, about inflation statistics: INDEC is the only body in the country with a staff large enough to run inflation figures on a country of 45m, and they're not going to tell the truth. No website or consultancy with a staff of 12 employees (at most) can perform the necessary price surveys, so whenever you see an inflation figure from anyone, it's always wishful thinking at best.

 

[PhilipDT]

Lastly, about inflation statistics: INDEC is the only body in the country with a staff large enough to run inflation figures on a country of 45m, and they're not going to tell the truth. No website or consultancy with a staff of 12 employees (at most) can perform the necessary price surveys, so whenever you see an inflation figure from anyone, it's always wishful thinking at best.

http://www.pricestats.com/approach/overview

That's the methodology of the website I cited.