Argentina on the cusp of hyperinflation

[gouchobob]

Well I think that a bit of the bite of the inflation is counteracted by increased public spending, wages etc that are built on the commodity boom. I could be wrong but IF the price of commodities that Argentina exports were to drop, things could get nasty and the wheels on the truck could fall off.

I am just surprised at how there isn't a bigger backlash in Argentina against the rapid increase in inflation.

I always found those lists of most expensive cities in the world fascinating. A lot of the cities mentioned in MorganF's quote are developing countries with large commodity booms such as oil. I was reading an interesting article on Luanda in Angola where the price of a hotel room averages about $500. The things they use to examine the level of prices are uniform for all cities-hotel rooms, price of coffee, rent etc. In the instance of Luanda, it fails to take in that the country is still recovering from a horrific civil war and then suddenly found itself in the midst of a commodity boom. There are not enough hotels etc for the workers, analysts and so forth in the city and the basic rules of demand and supply push the price up. BA seems to have completely different fundamentals.

The inflation in Argentina is the result of the government's headlong pursuit of growth at any cost, massive increases in government spending (and money supply) underpinned by the commodity boom. The commodity boom in turn is driven by demand from China. Two-thirds of the Chinese economy is driven by construction, which requires the importation of all manner of raw materials to fuel. Some believe that the real estate boom in China is a bubble of massive proportions and if it pops the commodity boom will be over. If this happens the countries that supply China with raw materials(Argentina being one) will be hit very hard by a drop in prices and demand. The most recent reports out of China on real estate could be cause for alarm.

http://www.theatlantic.com/business/archive/2011/04/is-chinas-real-estate-bubble-popping/237344/

 

[Joe]

their demands are typically in line with inflation, since union wages are some of the few wages in Argentina actually adjusted for the real rate of inflation in Argentina--not the one fabricated by the government.

And what methodologies are you using to calculate your "real rate of inflation in Argentina"

Remember we have your IP number.

Do you have $500,000 pesos available to pay the fine? No you say, then don't even hint that the government inflation numbers are not completely accurate.

http://www.ft.com/cms/s/0/ac2f3b10-2fc2-11e0-91f8-00144feabdc0.html#axzz1Jk0StTBV

 

[Julia2]

Mayb you could copy this article? I don´t want to register.
Thank you!

 

[notebook.fix]

Argentina Finance Min:Will Cont to Accelerate Growth,No Infl Fears

WASHINGTON (MNI) - Argentina Finance Minister Armando Boudou Friday said the government will continue to work to spur higher growth, fearing unemployment more than inflation.
Speaking to reporters following the Group of 20 meeting, Boudou said he was glad the group recognized the need to improve living standards in the first paragraph of its communique.

http://imarketnews.com/node/29532

 

[marksoc]

The most recent reports out of China on real estate could be cause for alarm.

Without knowing too much about the subject, how the real estate market in China could be a bubble? Goldman Sachs CEOs are there? Did somebody sold MBSs to some Chinese bank? Chinese people get access to weird mortgages? And I tought that they were creating a middle class at lightning speed, which needs space to grow and appartments. A middle class to replace that other one that is dissapearing in another continent. The Chinese government is creating a Titan, authoritarian and seemingly not interested in things like individual happiness outside consumism, and they are not slowing down even one bit. It´s like the good old 1950s USA on crack, government-directed.

 

[AndrewWoodward]

Without knowing too much about the subject, how the real estate market in China could be a bubble? Goldman Sachs CEOs are there? Did somebody sold MBSs to some Chinese bank? Chinese people get access to weird mortgages? And I tought that they were creating a middle class at lightning speed, which needs space to grow and appartments. A middle class to replace that other one that is dissapearing in another continent. The Chinese government is creating a Titan, authoritarian and seemingly not interested in things like individual happiness outside consumism, and they are not slowing down even one bit. It´s like the good old 1950s USA on crack, government-directed.

http://www.nytimes.com/roomfordebate/2011/04/14/chinas-scary-housing-bubble

 

[gouchobob]

Without knowing too much about the subject, how the real estate market in China could be a bubble? Goldman Sachs CEOs are there? Did somebody sold MBSs to some Chinese bank? Chinese people get access to weird mortgages? And I tought that they were creating a middle class at lightning speed, which needs space to grow and appartments. A middle class to replace that other one that is dissapearing in another continent. The Chinese government is creating a Titan, authoritarian and seemingly not interested in things like individual happiness outside consumism, and they are not slowing down even one bit. It´s like the good old 1950s USA on crack, government-directed.

Your right you don't know much about the subject, I would read up, it could have a big impact in the near future on Argentina.

 

[davonz]

A couple of weeks ago i saw a documentry about the chinese building industry. They showed whole cities, shopping centers, apartment buildings.... empty, because people didnt have the money to live there, or they didnt want to live because of jobs/transport/family etc..

I remembered a couple of years ago reading about the worlds biggest shopping mall being built in china, and that was in the documentry - has been finished a couple of years and is empty - no shops open, the only people to go there are the cleaners..

http://www.dailymail.co.uk/news/wor...worlds-largest-loneliest-shopping-centre.html

They were also saying there is millions of unsold apartments in china, developers have build them but not many can afford to buy/rent them, so they sit empty.. i cant remember the exact figure, but 60 million rings a bell, enough for 200 million people..

And someone said there isnt a building bubble in china !

 

[Joe]

But government officials have long denied this to be the case. Instead, they say, the country is experiencing “price dispersion.” Just a few months ago officials said inflation didn’t even exist.
Economy Minister Amado Boudou even went as far as saying that given Argentina’s macroeconmic situation, inflation “could not exist.” He said people should “walk around” to find good prices. (If you’re gonna walk around, try Belgrano. Its tree-lined streets and classic homes are delightful.)

http://www.argentinepost.com/2011/04/argentina-moves-to-control-economists-companies.html

 

[John.St]

Do you have $500,000 pesos available to pay the fine? No you say, then don't even hint that the government inflation numbers are not completely accurate.

There isn't any inflation at all in Argentina - much ado about nothing - it's just “prices distortion and dispersion”.
http://en.mercopress.com/2011/03/09...on-from-official-jargon-inflation-of-synonyms