Do you fear a crash similar to 2001?

[wrangler]

I'm asking what would be the right economic plan now considering all the factors? Wrangler and Pizzaguy have mentioned rewriting the tax code.

We are not responsible for having the answers as to what is the answer to create economic stimulus in Argentina. What is certain however, that Macrinomics have failed, and their is absolutely no sign that we are heading in the right direction. Their have been a lot of lies and a lot of missed targets in respect to inflation and economic growth since the Macri Organization has taken over.

 

[MikeB12]

Not saying anyone on this forum is responsible for having answers to economic stimulus lol. Just curious what people think should be done.

 

[wrangler]

Not saying anyone on this forum is responsible for having answers to economic stimulus lol. Just curious what people think should be done.

Some things have already been mentioned. For starters, rewriting the tax code, balancing the budget is another, but there will probably have to be austerity here now thanks to Macri spending like a drunken sailor, and I am afraid as to what that could be the result of that?

 

[perry]

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.

I do not agree that monthly costs in Argentina are sustainable as everyone pays very high expenses and costs to maintain a house . Think 7000 to 10,000 pesos per month for a two bedroom apartment including abl , expenses, water, gas, electricity . This is close to half a minimum wage in Argentina and many people are pensioners who live on their savings . The taxes in Argentina are equal to USA proportionally for the wages earnt . Of course there are many wealthy people in Argentina who owe many apartments but this is 10 percent of the population with most just living paycheck to paycheck .

 

[perry]

https://www.df.cl/noticias/internac...l-sube-la-tasa-a-45-en/2018-08-13/132959.html

https://www.infobae.com/economia/20...a-cancelacion-de-las-lebac-y-subio-las-tasas/

The central bank in a emergency meeting today has once again raised interest rates for its bondholders and the cancellation of new lebac bonds .

Peso is now close to 31 per dollar a devaluation of close to 10 percent in one week .

 

[Churchill]

Recession, even higher inflation, tough times for sure BUT you will find very, very, very few economists here or abroad who believe this will end up like 2001. Now, of course, that doesn't mean it will not happen but I think it is far more unlikely than some on here seem to think.

 

[perry]

Recession, even higher inflation, tough times for sure BUT you will find very, very, very few economists here or abroad who believe this will end up like 2001. Now, of course, that doesn't mean it will not happen but I think it is far more unlikely than some on here seem to think.

Churchill do you believe that crashes have advance warning? Most economists are employed by the governments in charge and of course they will make things look better than the reality . Saying that there has been many well known economists who are speaking out
http://www.ambito.com/930320-carlos-rodriguez-advierte-que-argentina-esta-al-borde-de-la-quiebra

Did you know that in the year 2000 the IMF said that Argentina was a very stable economy and a safe country to invest in . By the end of that year it lent Argentina close too 20 billion dollars and in 2001 it all went to hell in a handbasket . Very eeringly similar to now .

https://www.telegraph.co.uk/finance/2891368/IMF-admits-mistakes-in-Argentina-crisis.html

 

[Churchill]

Some economists have hidden agendas. I get that. Look I'm not an economist, and like you, I don't know for sure how things will play out but based on what I have read over the last few months, it seems that a default is the most unlikely of all possible outcomes. That doesn't mean that things can't still get real shitty though. I have read what Carlos Rodriguez has had to say, his views are very similar to those expressed by his friend Marcelo Trovato. Trovato for sure thinks we are heading for the abyss ( http://www.pronosticobursatil.com/#!/-editorial-semanal/). He writes, tweets in Spanish, but you may want to follow him. He says that after today's events we are now more likely to end up with a scenario like 1989 rather than 2001. 1989 was hyperinflation.

 

[wrangler]

Some economists have hidden agendas. I get that. Look I'm not an economist, and like you, I don't know for sure how things will play out but based on what I have read over the last few months, it seems that a default is the most unlikely of all possible outcomes. That doesn't mean that things can't still get real shitty though. I have read what Carlos Rodriguez has had to say, his views are very similar to those expressed by his friend Marcelo Trovato. Trovato for sure thinks we are heading for the abyss ( http://www.pronosticobursatil.com/#!/-editorial-semanal/). He writes, tweets in Spanish, but you may want to follow him. He says that after today's events we are now more likely to end up with a scenario like 1989 rather than 2001. 1989 was hyperinflation.

I myself personally don't see how we pay back the FMI without further devaluation of the peso. As a result, we shall see more inflation, and people's salaries are not being raised to keep up with inflation. How are we going to contain the dollar and the debt here in Argentina??? With the system that has been implemented by the central bank (supply and demand) for the valuation of the Dollar, the only way to control the dollar is for the PBI (Producto Bruto Interno) to increase, that is, for the country to start producing more goods and services. It was announced today that for the 2nd quarter of this year, the PBI will decrease by 3.5%. This government has had to cut spending big time but has not yet been able to cut anywhere near enough to NOT continue to raise the deficit, and this is why I see turbulent times for a minimum of 6 months, and probably longer.

Tomorrow I am meeting with a really close friend of mine that I met about 30 months ago when I moved to Argentina. He told me that he can't keep up with his bills anymore since the run on the peso. His monthly car loan payment has sky-rocketed. He has two jobs, can't pay his bills, and he is dead tired.... He's asking to see if I can help him, so I am meeting with him tomorrow to try to work something out and help. There are many people here like him.

I am not sure if things will get as bad as in 2001 here in Argentina, but it could still be bad. We shall see.

 

[toongeorges]

I'm asking what would be the right economic plan now considering all the factors? Wrangler and Pizzaguy have mentioned rewriting the tax code.

I think the start of the solution is to stop the deficit, the hard it may be, only this way the situation improves. Difficult, since Argentina is addicted to spend more than it has...