Do you fear a crash similar to 2001?

[London2Baires]

An interesting bit of economic analysis here, enjoy! :

https://m.ambito.com/santangelo-hemos-cambiado-el-cepo-cambiario-el-cepo-crediticio-n5010373

 

[PoorSoul]

Argentina is just a weak economy facing the effects of a global economic slowdown. Certainly, Argentina has huge issues. But, these issues were unmasked by the global environment. When the ocean tide withdraws it becomes apparent who is swimming naked. Argentina is just the first to be exposed. Many others will follow.

 

[London2Baires]

An interesting article today, talk of dolorization on the horizon. -.-

https://m.ambito.com/por-que-es-imposible-dolarizar-argentina-n5013459

 

[steveinbsas]

An interesting article today, talk of dolorization on the horizon. -.-

https://m.ambito.com/por-que-es-imposible-dolarizar-argentina-n5013459

If I understand correctly what I just read, talk of "la idea de dolarizar la economía" has already surfaced and this is a response to the idea.

The title of the article indicates the subject is why it is impossible to dolarizar the Argentine economy.

The two most important points (IMO) of the article are:

One: It would be unconstitutional.

Two: It would require at least a 300% devaluation of the Argentine peso.

PS: Imagine the dolor that would cause.

 

[London2Baires]

If I understand correctly what I just read, talk of "la idea de dolarizar la economía" has already surfaced and this is a response to the idea.

The title of the article indicates the subject is why it is impossible to dolarizar the Argentine economy.

The two most important points (IMO) of the article are:

One: It would be unconstitutional.

Two: It would require at least a 300% devaluation of the Argentine peso.

PS: Imagine the dolor that would cause.

Yep, that sums it up pretty well. Though the veracity of the assertions and related analysis in the article are of course debatable.

Interesting that this is even being talked about though.

That in itself may be telling.

I don't really see any ways out of the current domestic, and macro, economic/political situations.

The general population will for sure be having a lot more dolor as things progress, unfortunately.


There is a saying out here that gets banded around now and then; "la esperanza es lo último que se pierde" ... I suspect that's all the majority will have left to hold onto soon.

Though I very much hope to be wrong.

Cheers!

 

[TWB103]

Yep, that sums it up pretty well. Though the veracity of the assertions and related analysis in the article are of course debatable.

Interesting that this is even being talked about though.

That in itself may be telling.

I don't really see any ways out of the current domestic, and macro, economic/political situations.

The general population will for sure be having a lot more dolor as things progress, unfortunately.


There is a saying out here that gets banded around now and then; "la esperanza es lo último que se pierde" ... I suspect that's all the majority will have left to hold onto soon.

Though I very much hope to be wrong.

Cheers!

'All' Argentina needs is some humilty. Once they realise that they are not and have never been that significant in the grand scheme of things

 

[Joglide]

If I understand correctly what I just read, talk of "la idea de dolarizar la economía" has already surfaced and this is a response to the idea.

The title of the article indicates the subject is why it is impossible to dolarizar the Argentine economy.

The two most important points (IMO) of the article are:

One: It would be unconstitutional.

Two: It would require at least a 300% devaluation of the Argentine peso.

PS: Imagine the dolor that would cause.

Love the phrase 'anarco-capitalistas' in discussions of neo-liberal (aka gonzo) solutions to the economic lock-jaw of Argentinian political-economy! Chile could attempt such experiments because Pinochet had soldiers on every corner and even then it couldn't deliver what the Chicago monetarists projected. Dolarisation (or de-dollarization) experiments and massive devaluation would surely lead to civil insurrection in Argentina? As you imply. Short-term fixes are likely to precipitate crises rather than solutions, as we know. The choices seem to be brutal: either attempt to dismantle the corporate economy by discrediting major players (as Macri has tried to do with the labor unions), but this is likely to take a decade or more and face serious backlash from powerful interests; or for a pro-corporatist leader such as Peronist to carry through austerity and market reform measures that few conservative governments could pull off. But then the leftists need to feel they are getting something in return for accepting such sacrifices, such as productivity incentives that deliver real wage growth for improved outputs. Either way the IMF would have to be willing to structure untenable debts into the VERY long term (20 years or more), on condition of delivery of reforms and improvements. Unpalatable as it seems, we may have to accept crooked politics, in some measure, to achieve any kind of legitimacy for any kind of significant reforms?? Finally, Argentina does have some comparative advantages in natural resources, produce such as wines, handicraft production, tourism and some services, that it could strengthen massively by effective macro-economic incentives....

 

[sergio]

I don't know how much the peso would have to be devalued to introduce the dollar as the currency of the nation but there is more than a little "dolor" nowadays and it is getting worse every day. It seems to me that the pain of dollarising would be offset by the gradual establishment of some stability. There is simply no way that a society used to instability, to constant improvising and chaos can progress until a draconian reform is seriously implemented. There is absolutely no discipline in Argentina in any sector of the society. During the Menem era the peso was pegged to the dollar but the government did not respect the law. Overspending led to a financial crisis and after Menem left office provinces started printing their own Monopoly money (Patacones etc). It would be unconstitutional to dollarise? Since when has the law prevented anything in Argentina? And the constitution can be changed if necessary, especially if there is a deep crisis - and there is one! I see no other way out than dollarisation and strict adherence to it.

Someone quite rightly commented that a little humility would go a long way. I don't know how the Argentines got as arrogant as they are. It's not that Argentina has not produced talented people but not enough to make it a leading nation and its abysmal history of dictatorship and lack of the rule of law, especially judicial security, is far from inspiring. When Argentina appears in international news it's invariably because of financial problems. To most people in the world there is no difference between Argentina and countries like Bolivia. I don't think that more than a small minority of the world's population thinks of Argentina as in any way superior to anyplace else in Latin America but in the Argentina psyche Argentina is at the top of the heap and the rest is pure rubbish. Maybe Venezuela makes Argentina look good but the fact is that Argentina is not all that far behind - and if serious measures are not taken (if it's not already too late) Argentina will soon catch up with Mr Maduro.

 

[Joglide]

I don't know how much the peso would have to be devalued to introduce the dollar as the currency of the nation but there is more than a little "dolor" nowadays and it is getting worse every day. It seems to me that the pain of dollarising would be offset by the gradual establishment of some stability. There is simply no way that a society used to instability, to constant improvising and chaos can progress until a draconian reform is seriously implemented. There is absolutely no discipline in Argentina in any sector of the society. During the Menem era the peso was pegged to the dollar but the government did not respect the law. Overspending led to a financial crisis and after Menem left office provinces started printing their own Monopoly money (Patacones etc). It would be unconstitutional to dollarise? Since when has the law prevented anything in Argentina? And the constitution can be changed if necessary, especially if there is a deep crisis - and there is one! I see no other way out than dollarisation and strict adherence to it.

Someone quite rightly commented that a little humility would go a long way. I don't know how the Argentines got as arrogant as they are. It's not that Argentina has not produced talented people but not enough to make it a leading nation and its abysmal history of dictatorship and lack of the rule of law, especially judicial security, is far from inspiring. When Argentina appears in international news it's invariably because of financial problems. To most people in the world there is no difference between Argentina and countries like Bolivia. I don't think that more than a small minority of the world's population thinks of Argentina as in any way superior to anyplace else in Latin America but in the Argentina psyche Argentina is at the top of the heap and the rest is pure rubbish. Maybe Venezuela makes Argentina look good but the fact is that Argentina is not all that far behind - and if serious measures are not taken (if it's not already too late) Argentina will soon catch up with Mr Maduro.

Really like most of these points though I worry about analyses that echo Catholic penance as cure: I think Argentinians realise that their politics is shameful but can't work out what to do about it. Populism has thrived on politicians telling them that The People can have what they want if only they demand it loudly enough.

 

[TWB103]

'All' Argentina needs is some humilty. Once they realise that they are not and have never been that significant in the grand scheme of things

...then the country will move forward and is in a better position than most to do so with its natural resources.