Do you fear a crash similar to 2001?

#11
Argentinians are being squuezed by the consorcios and this is a huge monthly cost that many cannot afford. In the last year the level of debt to building admins has increased over 100 percent making some lose their homes. In Barrio Norte there are many a property owner with expenses of over 20000 pesos per month if the expenses are too high the property becomes unselleable . Phs with low expenses are now the best properties to sell as people look to cut their costs to the minimum
 
#12
just trolling, great exchange baexpats. you can’t blame trump just like you can’t blame chenny... i mean bush. but as a responible driver of world economics... dont drive drunk or stupid. it will effect someone in the windshield or the rearview mirror
 
#13
Just today I read that they are looking at implementing new taxes on purchases abroad and foreign travel, meaning that this government is well on its way to going full K. So something will go wrong, and I will not be surprised to see the K crew back in power in 2019. Given the direction this government is leading things, not sure anyone will even care. Except that when Nestor Kirchner came to power, there was a soy boom to fuel the country's habits, which meant that it took some time for their craptacular policies to bite. That is not the case this time, so in any event it promises to be lots of fun.
Yes a giant step backwards in my opinion.....used to like Macri as well.

Confirms my long held view that this country will forever remain in economic limbo.
 
#14
I don't believe that Trump has anything to do with Argentina's problems. As for protectionism, Argentina is a lot more protectionist than the US - and the European countries are often protectionist too. Anyway this is NOT the cause of Argentina's problems.

I do believe that the future is worrying. Macri hasn't been able to get inflation under control, nor has he attracted investment. He increases taxes and reduces subsidies making life tougher for most people. If this worked it wouldn't be so bad but it isn't working.

A return to Peronism is very possible and that would mean more populism and zero hope. There is no commodities boom to sustain the country as there was for the Kirchners.

The point about high building fees is true. A lot of people can't manage such high rates. I think real estate could be in trouble. If Peronists get back in they are likely to impose all sorts of currency restrictions and laws making it very hard to get money out of the country. Whatever excitement some expats are feeling about the exchange rate is going to be obliterated by the economic and social turmoil this is bringing to the country.
 

lamarque

Active Member
#16
I agree that Trumps policies will make the us economy implode in the next years. The american dollar is the worlds reserve currency but for how much longer ? Argentina with its massive foreign debt can only hold out for how long before it defaults again ? The bad news is that the world economic situation is not favourable and we will not be able to climb out the same hole as easily as 2001 and by 2003 the economy was on a upward cycle that continued for close to a decade.
Actually the argentinean foreign debt is not massive, is quite manageable, that is not the biggest problem in this particular case. The problem is the deficit on the external balance that is heavily increased by the dreadnought that devastated this year harvest, and as we all know almost half the Argentinean dollar inflows come from the harvest, normally in this time of the year there is a wave of dollars been sold in the market, while this year there are very few sellers, add to that the energetic deficit, and the public deficit and add to that the increase in the interest rate of America (this is really important, maybe if you are not into economy or finance you cannot understand why would that make a difference but it does make a huge difference, really huge), add to that the retroactive tax on lebacs for foreigners and you have all the ingredients for the perfect storm, but argentina is not the only emergent market that is been punished, all of them are, and now as well America and china are going down. This kind of tension add to the money flow to a proven safe refuge that now a days is the dollar.
 

lamarque

Active Member
#17
I would not blame Trump for fking up the world economy. The world economy is over due for a correction in BRICs countries, (Europe) and Argentina due to over printing of currencies and economical cycles (too much good times for the lucky bastards).
Argentines are very resilient people, they can cut down cost and live with the minimum. The system will collapse if the same happens to the US. Many people (in US) pay up to a few thousands dollars a months just for property taxes, when they lose their jobs, sh*t is going to happen. Asian and Europe systems are setup much better to withstand crisis. Many Asian countries have almost no cost of owning their homes, no real estate taxes, and low monthly expenses or none. The cost to keep homes is also relatively low in Europe. US is so fked, it can not afford bad economy. Many people think Americans spend too much, that's why they do not have savings. Wrong! It's the property tax, income tax and mortgage/credit card that make Americans poor. Most people can never get ahead, have debt and taxes right below their chins. The only situations that can revolutionize ones financial situations are : inheritance, stock options, extremely successful in business. Otherwise even you are a successful doctor in US, you still live paycheck to paycheck just like cleaning maids.
Well you dont have a clue how much the interest rate and instability can impact in a country that has a heavy need of external debt to finance itself, trump does have a huge impact in the world economy and as well in american and Chinese economy that indirectly impact the emerging markets, and directly through the interest rate and instability produced by his comercial war it push the money back to dollars punishing all the emerging markets currencies, as no one want to be taking risk when the whole world economy is under treat everyone holding pesos or any currency of an emerging market (riskier market), will flow to a safe refuge (gold, dollars, oil, precious metals, etc) making currencies around the world loose their value, the more riskier the country and the more volatile the more it currency will be punished, a clear example is bitcoin that lost 60% since the start of the interest rate rise, of course it has various other causes but the interest rate is one of them. Now been said that, i do not put down the guilt and the problems inherent to Argentina, this government, and the history of argentina, that add to the effect greatly and the fact that currently argentina really need to take debt until they manage to cut down the deficit, unless they do it at once, but we all know how that worked last time they try to do a deficit 0 law (the law of deficit 0 was the law that obligate all the provinces and the state to cut down the expenditure to the same level of their income without any time to adapt) then it came all the cacerolasos and social caos and we all know how that ended, No market can do a reduction of their deficit from the night to the day without a huge civil unrest that can neutralize all the saving of the reduction, beside all reduction in deficit impact reducing the income tax as there is less to tax so that generates an scenario in where after you cut down the expenses your income reduce and you need to cut down again your expense and you enter into a depression circle, the best scenario would be to do a gradual reduction of your expenses while trying to incentive investment to increase in the other side the economy and compensate for the reduction on the size of the state, but that is really hard to do when all investor are flaying away to safe refuge or to american bonds that are paying 3% free of risk, difficult to compete with that.
I do agree in this been a huge correction as well, as many emerging market where very bullish due to the low american interest rate policies of the last years.
 
#18
I don't believe that Trump has anything to do with Argentina's problems. As for protectionism, Argentina is a lot more protectionist than the US - and the European countries are often protectionist too. Anyway this is NOT the cause of Argentina's problems.

I do believe that the future is worrying. Macri hasn't been able to get inflation under control, nor has he attracted investment. He increases taxes and reduces subsidies making life tougher for most people. If this worked it wouldn't be so bad but it isn't working.

A return to Peronism is very possible and that would mean more populism and zero hope. There is no commodities boom to sustain the country as there was for the Kirchners.

The point about high building fees is true. A lot of people can't manage such high rates. I think real estate could be in trouble. If Peronists get back in they are likely to impose all sorts of currency restrictions and laws making it very hard to get money out of the country. Whatever excitement some expats are feeling about the exchange rate is going to be obliterated by the economic and social turmoil this is bringing to the country.
The scariest scenario that looks now very likely is a return to a very left wing peronismo as the economy in Argentina tanks. Venezuela frightens me as once it was the richest and most middle class country of South America now in complete economic ruin due to inept government
 
#19
what precautions can expats take, Sergio especially the one who dont want to leave.

what will be 2020 like as per u
Someone who is here permanently needs a home, so if you own it doesn't make any real difference if the paper value goes down. The only thing that matters is what it costs to maintain that home. Unfortunately 'expensas' have soared making it hard for a lot of people to get by. I wouldn't keep money in local banks, just enough to pay bills. I remember the last crisis when a lot of friends got seriously burnt.
 

lamarque

Active Member
#20
The scariest scenario that looks now very likely is a return to a very left wing peronismo as the economy in Argentina tanks. Venezuela frightens me as once it was the richest and most middle class country of South America now in complete economic ruin due to inept government
That is the way of the peronism, they always left bombs for the next governments to implode and then they return as the saviors. Always when a peronist gobernment left power is with a terrible economical situation that next gobernment need to fix and take the political impact of doing so, and then a new peronist government come back to power, they have very good timing. In any case Kristina is not likely to come back into power because when she present herself for presidency suddenly a lot of people that is not likely to vote for macri jump to put their votes to macri to avoid kristina coming back into power, so that is a good think, and the sole existence of Kristina divide the peronism so macri is very likely to win the next election anyway, but we will see is still to early to say.
 
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