Exclusive hotels are going out of business?

[BlahBlah]

Thanks for that but I do know how inflation works in theory as you basically have pointed out (in theory). What I want to know why inflation is happening here in Argentina now & in the last few years. If the peso is pegged to the US$ they why is it keep falling against it?

Also, I don't understand why things that have already been purchased keep going up? Why do used goods continue to raise in price even though there are more & more goods on the market?

Sure, I can understand SOME things going up. Things that are imported NOW with a lower peso value or things made with components ingredients, whatever bought NOW at the lower peso rate. Those things that are imported or made with stuff that has been imported.

My question is more about this idea that some item that has been in your shop for the last 3 years (or more), unsold, should keep going up in price? No one wanted it at the original high price. Why would they want it at the even higher price?

Also, inflation in Argentina has been at 30% longer than the US has been doing it's "economic recovery plan". So I don't necessarily buy that connection.

You were talking about a antiques table I think but the one who owns the store probally has a lot of cash, low cost and uses the store as a hobby. If she buys anything which is special she just waits for the right person to buy it and as long she is not in financially difficulities and has enough cash to buy what she thinks is valuable for her store she will keep the item untill the right price is paid.

In Europe this mainly works the same for antiques, there is not really a market for that and it surely does not work as a market

As for consumer goods like cars it's often cheaper to buy new products then to buy used because it's a very small internal market

If there someday would be a Mercosur internal market prices would go down but Argentina would probally only be competive with farm products

 

[mini]

You were talking about a antiques table I think but the one who owns the store probally has a lot of cash, low cost and uses the store as a hobby. If she buys anything which is special she just waits for the right person to buy it and as long she is not in financially difficulities and has enough cash to buy what she thinks is valuable for her store she will keep the item untill the right price is paid.

In Europe this mainly works the same for antiques, there is not really a market for that and it surely does not work as a market

As for consumer goods like cars it's often cheaper to buy new products then to buy used because it's a very small internal market

If there someday would be a Mercosur internal market prices would go down but Argentina would probally only be competive with farm products

I'm not talking about antiques. I'm talking about USED items.

I think Soulskier has the right idea.

 

[enjoyingmylife]

Re: inflation:

Prices are a function of supply and demand, with some other human elements thrown in as well, since we don't live in a perfect market inside a vacuum. The Kirchner governments have been printing lots of money and distributing it to their constituencies in order to win elections. When you have more money in the system, there is more demand for goods at the same price. When there is more demand for goods at a certain price, prices go up. Essentially, the government has been mortgaging the country's future (again) to win (re)election.

Combine that with the Argentine refusal to lower prices to get people buying more items, and you have rampant inflation. Folks here have seen too much inflation to be comfortable actually lowering prices. It may eventually happen, but let's hope it's not b/c of another collapse (wholly possible, since the gov't may default again on its debt next year)

Here's a good article (though maybe a bit technical for some) from four years ago explaining and predicting the current situation:

http://www.offnews.info/verArticulo.php?contenidoID=1792

As mentioned earlier, another factor of inflation is a weakening currency, since many goods are imported, and a weaker peso makes a foreign good more expensive. I dont agree that the govt has been printing money to keep the peso on par with the dollar, though. As also mentioned earlier, the AR$ would be weakening on its own due to lower commodity prices, a la NZD and AUS, reducing demand for the currency in commodity transactions. I'm pretty sure the reason for this inflation is a combination of irresponsible gov't spending and a mass refusal to accept that lowering prices (or NOT RAISING THEM SO MUCH) may be better than not selling something AT ALL.

Looking in my crystal ball, I also think that we may see prices actually going down in the US, Europe, Aus/NZ if (as I believe) the crisis deepens again after false hopes for a quick recovery are dashed, BEFORE we see eventual rapid inflation again further down the road (which I also expect). If that happens, Argentina will be in even worse shape (likely gov't default) and prices will stop rising (or even come down) in dollar terms. Unfortunately, that will be because things are very bad for the majority of folks here, much like in 2001.

For the sake of our friends an neighbors here, let's hope it doesn't work out that way.

 

[BlahBlah]

But in SS case the place was sold.

I don't know about what kind of item you are talking but I am sure it's a item that is not easy to find and/or has a special interest

 

[John.St]

... if you follow the Austrian school of economics http://mises.org/ which both Ron Paul and Peter Schiff are educated in - you'll learn that inflation is purely a matter of Money Supply. the more physical money that is created, digitally or printed into circulation, equals more money chasing the same amount of goods, thus prices increase. you can have other things affect prices such as shortages, increasing manufacturing costs...etc but we're just talking about general terms here.

When I was studying national economics (ages ago) we were tought - and I feel sure that this still holds - that inflation is what results, when the real value of produced goods is below the amount of circulating money, that superfluous money supply as e.g. increasing salaries not equalled by a raise in production, causes inflation.

 

[BlahBlah]

The main reason for inflation in Argentina besides the lack of competition is state-subsidies

 

[John.St]

Where do I get an analyzer?

If you have a spreadsheet it is my guess that is has a number of statistical functions to fill daily needs.

You may of course buy a Posix compliant one like trafAn, which I use professionally (thus also need a UNIX operating system). It is rather expensive but then you'll be able to perform an enormous number of tasks you'll never need

 

[mini]

But in SS case the place was sold.

I don't know about what kind of item you are talking but I am sure it's a item that is not easy to find and/or has a special interest

BlahBlah you are killing me here!

I meant specifically this quote by SS:

Logic doesn't exist in Argentina as best I can tell.

I'm talking about all the items you need to furnish a house. These are not out of the ordinary items. Anyway, it doesn't matter. Let's move on.

 

[BlahBlah]

But before that he said they sold the house at the higher rate. Seems worthwile to wait in this country without logic

 

[katti]

This one lakefront property went from 250K to 280K to 320K and then sold (not sure for how much).

Logic doesn't exist in Argentina as best I can tell.

Sometimes (if you can afford it) you must just wait for that one crasy person that falls in love with the house or the setting and would pay whatever. This has nothing to do with logic, but with emotions- If you fall in love with a house, your reason fades. And this is universal , fortunately for the seller, a bit less for the buyers wallet.