Do you fear a crash similar to 2001?

[jbeas176]

i think putting a peronist back in office is a death spiral. i also remember when clintin took office in the US, the economy was already primed and ready to run from george senior. he was smart enough to stay out of the way and remember greenspans book talking about not being able to control the economy without debt. moving forward, trump was handed a primed economy ready to run and it has. he although is starting trade wars that will make personal cost of living higher with no bennefit to the people. the unemployment rate is below 4% and workers are hard to find. bring back jobs to what? factories that have been using robotics for the last 10 years. education is at an all time high in cost and is provided for through unforgivable student loans. this looks really good right now on the streets but can only end very badly. so, going forward you print your way out of the soaring debt and the dollar becomes worthless for those of us that tried to save for retirement. to me, it sounds like the problems in argentina. god help us all

 

[Bajo_cero2]

Well, Lagarde is asking to go back to CFK economic policies...

 

[pizzadreams]

Due to the large number of delusional individuals lacking any sort of common sense, I will attempt to clear up some things in a brief and concise way, leaving aside ideologies and conspiracy theories very much embraced and loved by argentines.

Although everything seems to be possible in unpredictable Argentina, a 2001 does not loom in the horizon. At least not in the short or medium term. That said, however, history repeats itself In this country, who is hell bent on tripping on the same stone a thousand times.

The root of Argentina´s problems, beyond an evident cultural one which its catalyst, is the not so popular idea among the also delusional and deeply corrupt- like the society it rules over- political class: an unsustainable fiscal deficit. In layman´s terms, just like you cannot spend more than you take in, the same logic applies in a government. Well, you can, but you can only hide the squandering and irresponsible spending for so long. When you face the numbers and decide to confront reality, you can finance that fiscal deficit in two ways: One, by printing money, which leads to inflation, like it happened during the last administration. Second, by borrowing, which is what the current government has been doing ever since it took office.

All this said, the government ended up seeking an unprecedented loan of 50 billion dollars (25% of the IMFs budget) Now, will this be sufficient to stay afloat for a while- even if the IMF has only released 15 billions for now? Probably. Now, what´s the issue, then? What do you do after you've been overspending at home and can´t keep up with the unsustainable lifestyle anymore when the bills start showing up? You panic (or you should) and begin cutting down on expenditures in order to avoid an even deeper deterioration of your situation.

See where this is going?

The government has a MASSIVE (in caps) fiscal hole it inherited that somehow needs be drastically reduced. Yes, going to the IMF is ugly, but you- Argentina- wouldn´t have had to resort to that had you not gotten in debt because of capricious spending for years. The IMF, in fact, has every right to impose the conditions to you when YOU are the one that got yourself in that mess in the first place. Easy to understand, hard to accept.

Do you think an irresponsible and immature society like that of Argentina will -or can- in any way, shape or form, understand this situation enough and accept the need for structural adjustment, which obviously means less purchasing power and tightening of their daily budget?


Food for thought

 

[pizzadreams]

Due to the large number of delusional individuals lacking any sort of common sense, I will attempt to clear up some things in a brief and concise way, leaving aside ideologies and conspiracy theories very much embraced and loved by argentines.

Although everything seems to be possible in unpredictable Argentina, a 2001 does not loom in the horizon. At least not in the short or medium term. That said, however, history repeats itself In this country, who is hell bent on tripping on the same stone a thousand times.

The root of Argentina´s problems, beyond an evident cultural one which its catalyst, is the not so popular idea among the also delusional and deeply corrupt- like the society it rules over- political class: an unsustainable fiscal deficit. In layman´s terms, just like you cannot spend more than you take in, the same logic applies in a government. Well, you can, but you can only hide the squandering and irresponsible spending for so long. When you face the numbers and decide to confront reality, you can finance that fiscal deficit in two ways: One, by printing money, which leads to inflation, like it happened during the last administration. Second, by borrowing, which is what the current government has been doing ever since it took office.

All this said, the government ended up seeking an unprecedented loan of 50 billion dollars (25% of the IMFs budget) Now, will this be sufficient to stay afloat for a while- even if the IMF has only released 15 billions for now? Probably. Now, what´s the issue, then? What do you do after you've been overspending at home and can´t keep up with the unsustainable lifestyle anymore when the bills start showing up? You panic (or you should) and begin cutting down on expenditures in order to avoid an even deeper deterioration of your situation.

See where this is going?

The government has a MASSIVE (in caps) fiscal hole it inherited that somehow needs be drastically reduced. Yes, going to the IMF is ugly, but you- Argentina- wouldn´t have had to resort to that had you not gotten in debt because of capricious spending for years. The IMF, in fact, has every right to impose the conditions to you when YOU are the one that got yourself in that mess in the first place. Easy to understand, hard to accept.

Do you think an irresponsible and immature society like that of Argentina will -or can- in any way, shape or form, understand this situation enough and accept the need for structural adjustment, which obviously means less purchasing power and tightening of their daily budget?


Food for thought

Didn´t find the option to edit. Meant to say you can only hide fiscal irresponsibility by printing money or taking in debt before you need to confront reality. It came out confusing in the original post

 

[sergio]

Didn´t find the option to edit. Meant to say you can only hide fiscal irresponsibility by printing money or taking in debt before you need to confront reality. It came out confusing in the original post

So...sounds like another crash.

 

[pizzadreams]

So...sounds like another crash.

The tragic thing is the crash itself would -ironically- reinforce people´s belief that adjustment, such a taboo word in these places, is what lead to it.

 

[rickulivi]

Pizza dream: congratulations on your excellent analysis. I think politicians understand the deficit issue very well; it's just not in their best interest to admit it! Politicians love power; they have to get elected to gain it. The problem is, what Trojan Horse can they build that will get them elected? Promise bounty, not hardship is the usual answer because it works. In the USA, Trump promised tax cuts; he delivered. How did he pay for it? By borrowing, not by cutting spending!!!! He took lessons from Argentina's politicians.

In my household, I manage the finances, my wife the household. Years ago we got into a period of deficit spending, so I sat with my wife at the kitchen table and told her she had to cut spending. No, she replied. You just have to make more money. End of civil conversation.

A week later, we sat again at the kitchen table, and I mentioned that she was spending a lot on clothing. Her reply? "But I thought you always wanted me looking good!". Silence from my side. Later I mentioned that our grocery bill was big; she asked that I eat less! Finally, I got my message thru. No spending, No, No, and No. She got it. I won, or so I thought. A few days later, I approached her and suggested we have sex. Her answer? No, no and no. I got it too!

Cutting is very tough. Having been in a bind myself more than once, I realized the answer is not necessarily trying to make more. Often it's out of your hands. The key is always to cut spending but that is sooo hard to do. I know from personal experience.

 

[Bajo_cero2]

I fear a Rodrigazo.

 

[Bajo_cero2]

Pizzabullsh...t, the government has foacal holes that were inherit? They got a fiscal supervatit and the governemnt are the serial tax evader. WTF are you talking about?

 

[pizzadreams]

Pizza dream: congratulations on your excellent analysis. I think politicians understand the deficit issue very well; it's just not in their best interest to admit it! Politicians love power; they have to get elected to gain it. The problem is, what Trojan Horse can they build that will get them elected? Promise bounty, not hardship is the usual answer because it works. In the USA, Trump promised tax cuts; he delivered. How did he pay for it? By borrowing, not by cutting spending!!!! He took lessons from Argentina's politicians.

In my household, I manage the finances, my wife the household. Years ago we got into a period of deficit spending, so I sat with my wife at the kitchen table and told her she had to cut spending. No, she replied. You just have to make more money. End of civil conversation.

A week later, we sat again at the kitchen table, and I mentioned that she was spending a lot on clothing. Her reply? "But I thought you always wanted me looking good!". Silence from my side. Later I mentioned that our grocery bill was big; she asked that I eat less! Finally, I got my message thru. No spending, No, No, and No. She got it. I won, or so I thought. A few days later, I approached her and suggested we have sex. Her answer? No, no and no. I got it too!

Cutting is very tough. Having been in a bind myself more than once, I realized the answer is not necessarily trying to make more. Often it's out of your hands. The key is always to cut spending but that is sooo hard to do. I know from personal experience.

Agreed. Indeed it is, but it has to be done. Just as with household finances, it cannot be avoided.

Funny, a former minister of Argentina said Trump is a peronista. Says everything, doesn´t it?

Pizzabullsh...t, the government has foacal holes that were inherit? They got a fiscal supervatit and the governemnt are the serial tax evader. WTF are you talking about?

You fit in perfectly in the description of delusional individuals I mentioned. You are part of the problem in Argentina. Like so many, you´re anything but a pragmatist. An ideologue, really. Based on the countless ridiculous posts of yours I´ve had the misfortune of reading and cringing over over the years (just decided to sign up today) none of what you said can or should be taken seriously by anyone save for other paranoid countrymen like you. Nevermind how hard it is on the eyes to read so many posts ridden with abysmal English after all those years. You´d be better off leaving your conspiracy theories aside and bettering your English skills, even if a little. My native language is Spanish, before you make wrong assumptions. I´m open to have a discussion with anyone on anything. In fact, I´ve learned a lot from this forum, which is partly why I decided to start contributing. However, when common sense is out of the equation so am I, and you have undeniably shown you´ve a higher deficit in that than the one inherited from the corrupt politicians you love to defend in spite of the numerous evidence many members have shoved in your face on this forum. I´m extremely critical of this government, but you´re a carbon copy of the very Argentina this country needs to overcome. This is my first and only post to you because I didn´t come here to waste my time.