Fabulous article that details how Argentina went from Being the wealthiest country in world to now

[sergio]

I read more than "just a couple paragraphs" but it's all the same. Just a litany of talking points and the usual political boilerplate.

Please state specifically what is inaccurate in the article.

 

[Pierre Smith]

What troubles me is that there are expats who want to sustain the current system because it's to their advantege, no matter how much most Argentines have to suffer.

Yeah, I don't have any real objection to this - why would people not have political opinions that work to their own advantage.

But when you get some goofy people claiming that only Americans do that, or that it's bad for people to do it . . . that's when you know that they're not serious.

Anyway, this one is interesting: “Argentina does not have the dollars to dollarize, and it does not have access to the financial market to obtain dollars. The only thing this would do is inject more Argentine securities into the hands of the international private sector, directly or indirectly, therefore further lowering the value of Argentine securities.”

Alejandro Werner is not particularly credible, and in typical terms if the country does want to dollarize, it will need to work closely with the IMF.

But Milei is proposing something much more radical, which is something approximating gradual legalization of the dollar for domestic transactions (one assumes paying taxes and so forth).

Massa and the critics are definitely correct that it will lead to a giant jump in the cost of some services and almost all products, particularly in conjunction with Milei's plans to cut subsidies across the board.

It will be a very tough time for a couple years, and Argentina will never again be as cheap for foreigners. But ultimately for sure they finally get out of this ridiculous spiral they have been in for so long, and join the rest of the world (particularly Asia) in becoming wealthy again. Dominican Republic is on track, and Argentina has so much more going for it.

 

[sergio]

Yeah, I don't have any real objection to this - why would people not have political opinions that work to their own advantage.

But when you get some goofy people claiming that only Americans do that, or that it's bad for people to do it . . . that's when you know that they're not serious.

Anyway, this one is interesting: “Argentina does not have the dollars to dollarize, and it does not have access to the financial market to obtain dollars. The only thing this would do is inject more Argentine securities into the hands of the international private sector, directly or indirectly, therefore further lowering the value of Argentine securities.”

Alejandro Werner is not particularly credible, and in typical terms if the country does want to dollarize, it will need to work closely with the IMF.

But Milei is proposing something much more radical, which is something approximating gradual legalization of the dollar for domestic transactions (one assumes paying taxes and so forth).

Massa and the critics are definitely correct that it will lead to a giant jump in the cost of some services and almost all products, particularly in conjunction with Milei's plans to cut subsidies across the board.

It will be a very tough time for a couple years, and Argentina will never again be as cheap for foreigners. But ultimately for sure they finally get out of this ridiculous spiral they have been in for so long, and join the rest of the world (particularly Asia) in becoming wealthy again. Dominican Republic is on track, and Argentina has so much more going for it.

How did Panama dollarize? I do not know the details. I know that it would be a process - and I am sure you are right that prices will rise along with wages as they did during the Menem 1-1 era when every taxi driver had been to Disney. Sorry if the expat party has to end.

 

[TWB103]

Yeah, I don't have any real objection to this - why would people not have political opinions that work to their own advantage.

But when you get some goofy people claiming that only Americans do that, or that it's bad for people to do it . . . that's when you know that they're not serious.

Anyway, this one is interesting: “Argentina does not have the dollars to dollarize, and it does not have access to the financial market to obtain dollars. The only thing this would do is inject more Argentine securities into the hands of the international private sector, directly or indirectly, therefore further lowering the value of Argentine securities.”

Alejandro Werner is not particularly credible, and in typical terms if the country does want to dollarize, it will need to work closely with the IMF.

But Milei is proposing something much more radical, which is something approximating gradual legalization of the dollar for domestic transactions (one assumes paying taxes and so forth).

Massa and the critics are definitely correct that it will lead to a giant jump in the cost of some services and almost all products, particularly in conjunction with Milei's plans to cut subsidies across the board.

It will be a very tough time for a couple years, and Argentina will never again be as cheap for foreigners. But ultimately for sure they finally get out of this ridiculous spiral they have been in for so long, and join the rest of the world (particularly Asia) in becoming wealthy again. Dominican Republic is on track, and Argentina has so much more going for it.

There is no painless solution. Those opposed to Milei or Dollarization don't have a viable cure or don't want a cure because they will lose out personally. Maybe it won't work but the status quo evidently doesn't work and hasn't worked virtually ever.

 

[sts7049]

agreed. i don't have any issue with debating the feasibility of dollarizing, it's fair criticism. but what other proposals have been put on the table to reduce spending and monetary issue? what other true, effective measures will be done to actually slow inflation and put an end to market manipulation, price controls, etc?

 

[sergio]

agreed. i don't have any issue with debating the feasibility of dollarizing, it's fair criticism. but what other proposals have been put on the table to reduce spending and monetary issue? what other true, effective measures will be done to actually slow inflation and put an end to market manipulation, price controls, etc?

The problem is that any serious proposal will require discipline to be successful. Argentine politicians are not noted for being disciplined, hence dollarisation would remove the temptation to print more money. There may be better ways out of the mess but they wouldn't be likely to succeed in the Argentine context.

 

[earlyretirement]

What troubles me is that there are expats who want to sustain the current system because it's to their advantege, no matter how much most Argentines have to suffer.

I totally agree! See, these people to me don't truly love Argentina. They don't want to see it succeed. All they care about is their cheap Western Union transfers and blue dollar rates. Systemic change IS desperately needed in Argentina. I'm not sure how anyone that truly loves Argentina can argue against that. The fact that Milei is ahead shows you how desperate people are, especially the young. They want to see systemic change in their lifetimes.

I know it's probably impossible during my lifetime but hopefully for my kids they will see it since they were both born there and love Argentina.

 

[earlyretirement]

It will be a very tough time for a couple years, and Argentina will never again be as cheap for foreigners. But ultimately for sure they finally get out of this ridiculous spiral they have been in for so long, and join the rest of the world (particularly Asia) in becoming wealthy again. Dominican Republic is on track, and Argentina has so much more going for it.

Argentina is very very very cheap now. Especially add in the inflation adjusted dollar -(https://www.usinflationcalculator.com ) and you'll see prices are really low. Argentina will always be a mess unless they get someone in that will change laws and understand things are totally broken. Because without doing that you will have chaos and then fairly relative periods of calm but then it will revert back to chaos without fixing the underlying issues.

 

[Agribotics]

National prosperity isn't rocket science. All you need is a government which creates a stable economic system and a minimally intrusive tax and regulatory structure which allow entrepreneurs to flourish. Even countries with virtually no natural resources can become economic powerhouses if they provide a hospitable environment for their human resources.

What Are the Four Asian Tigers?​

The Four Asian Tigers are the high-growth economies of Hong Kong, Singapore, South Korea, and Taiwan. Fueled by exports and rapid industrialization, the Four Asian Tigers have consistently maintained high levels of economic growth since the 1960s, and have collectively joined the ranks of the world's wealthiest nations.

Hong Kong and Singapore are among the most prominent worldwide financial centers, while South Korea and Taiwan are essential hubs for the global manufacturing of automobile and electronic components, as well as information technology.

Four Asian Tigers: What They Are, Economic Strengths Explained

The Four Asian Tigers define the high-growth economies of Hong Kong, Singapore, South Korea, and Taiwan.

www.investopedia.com