Does anyone else feel there might be a peso collapse this year?

[on the brink]

yes but I have a feeling that the dollar will rise quite a lot with inflation a lot less. Current prices in dollars are totally unrealistic

From your mouth to God's ear.....
I fervently hope!

 

[Che1990]

And most amazing of all, the dollar doesn’t go up (sometimes it actually goes down) and yet the prices in pesos still go up.

There is no hope. The culture of inflation here is so engrained, businesses, property owners etc will always put prices up.

 

[Redpossum]

yes but I have a feeling that the dollar will rise quite a lot with inflation a lot less. Current prices in dollars are totally unrealistic

GOD, I hope so!

 

[devilclam]

And most amazing of all, the dollar doesn’t go up (sometimes it actually goes down) and yet the prices in pesos still go up.

There is no hope. The culture of inflation here is so engrained, businesses, property owners etc will always put prices up.

I sometimes hear folks say "oh well inflation goes up, salaries go up".

I don't think people have prepared thenselves for the scenario where inflation holds, prices continuing to increase based on how someone feels that day, and businesses stop increasing salaries since inflation isn't rising.

Nearly 50-years after Reagan I think we can safely say trickle down economics doesn't work. I'm not sure what laws are in place, but any savvy capitalist that has the opportunity to increase margins without being mandated by the government to increase employee wages is going to do it.

That's why I have a hard time with the idea of 50+% of the population being in poverty being something "temporary" as a result of austerity measures.

 

[LuckyLuke]

I don't think people have prepared thenselves for the scenario where inflation holds, prices continuing to increase based on how someone feels that day, and businesses stop increasing salaries since inflation isn't rising.

Prices can't go up forever. Eventually the "consumer" hits a wall. Falling demand will tilt the economy into recession.

It's hard to think about what exactly shifts Argentina into and out of recession. The US is largely debt fueled and consumer confidence based. Credit cards, car loans, mortgages, interest rates, housing costs, all hamper disposable income. The fed rate is also designed to curtail wage inflation by raising company finance overhead costs.

Gas prices, stock market performance, geopolitical events, national unemployment rate and even news media hit consumer confidence.

The equivalent in Argentina is hard to sum up. Some say drought, but that should only affect the agro sector and ultimately the public sector via tax & dollar inflows, it also only represents 7% of the employment overall.

 

[devilclam]

Prices can't go up forever. Eventually the "consumer" hits a wall. Falling demand will tilt the economy into recession.

One would think. I'm surprised it hasn't happened already, to be honest. But I think there's also a whole generation of people who have learned to spend money as soon as it comes to them, and maybe that's falsely keeping things afloat for now.

 

[Rich One]

The peso will devalue For Sure after the October 2025 elections.

 

[Joddson]

Just as a point of monitoring the news on this; seems like the papers are still tracking the current IMF deal to include lifting the cepo.

Argentina and the IMF – scenarios for a possible new agreement

Milei government and IMF continue to fine-tune a future agreement which is likely to include a remittance of some US$11 billion to bolster Central Bank coffers, allowing Argentina to remove the ‘cepo’ currency and capital controls.

www.batimes.com.ar

That said, if anyone can explain the whole "dirty float" exchange rate concept mentioned in this article, I'd appreciate it.

 

[sergio]

The peso will devalue For Sure after the October 2025 elections.

What if the IMF money arrives before then?

 

[Rich One]

What if the IMF money arrives before then?

Well before then it's 50/50..!