Global recession: An Argentine expat view

[deeve007]

...ask a question to redirect/focus...

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[Barney]

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-Global recession - How do you think this will affect the expats in BA/Argentina?

Will the long term expats stay because they can atleast have some kind of job/income in a (not yet) expensive big city?

1500 to 2000 dollar still gives you a good lifestyle or will they jump on the first plane to get a job in the first world?

Or aren't there any jobs for people who have been away 2 to 5 years?

Will the richer expats start to invest in properties eventhough there is high inflation and high risk?

Will they start buy homes to protect them from the economic crisis?

Will people with cash move to BA/Argentina and buy lands/properties because it gives them the option to lay back and make a relative safe investment?

Will Argentines and other south Americans move back even more?

Will south Europeans move to the south for a few years?

How do you think everthing will play out in the next 1 to 3 years?

 

[steveinbsas]

Will people with cash move to BA/Argentina and buy lands/properties because it gives them the option to lay back and make a relative safe investment?

I moved to BA five years ago and was not thinking about a global economic downturn. I had enough money to buy an apartment in Recoltea and lived a decent life on less than $1000 U$D per month.

In late 2008 my assets in the USA plummeted in value and my income declined by 20%.

In 2009 I moved from my apartment in Recoleta to a PH in Nunez. Rising food prices and increased monthly apartment expensed were the two major factors.

In 2010 I moved to my present home in the south of Provincia Bs. As. Concerns about a global economic catastrophe and chaos in the city were two major factors. I can grow far more vegetables than I can eat and I can heat my house with wood that grows in and around the property.

I won't have my own chickens until it is cheaper to have them than buy eggs from my neighbors.

I am more physically active (fit) and happier than I have ever been.

And I worry less about the future than ever.

 

[Barney]

Thanks, you recon there are going to be more First world immigrants who snap up land and a home and try to live like you?

 

[Philsword]

Wouldn't be better to just focus on this topic and about predictions for the economic future somewhere else?

First off the economy in Argentina isn't really tied that much to the U.S. or Europe. Most of what they produce is shipped to China or Brazil(Brazil economy also depends on China). Argentina largely avoided the effects of the economic crisis because China didn't slow down. So what's happening in the U.S. and Europe today isn't all that relevant. If you believe China is going to continue strongly growing then you should believe Argentina is going to continue to do well economically. The moment that growth falters and commodity prices fall there will be a problem.

As far as expats go the situation back home indicates more a probability of deflation not inflation if the economies really tank. In this environment most assets prices including gold, real estate, you name it are going to decline not increase. In this scenario I think many people would stay home for financial reasons and the fact that their home countries will become less expensive relatively.

Another scenario would be for China to tank, commodities would fall significantly, this would take out many of the emerging market countries with it(those that depend heavily on commodities). Lower costs for the developed world could fuel new growth and economic recovery, while the countries that avoided the effects of the financial crisis would be hard hit as they get much less for what they produce. This might be good for expats as their currencies would probably increase in value and the local cost of living would tend to decline.

 

[jb5]

Agree pretty much with your analysis Philsword.

AR is dependent on China and Brazil. There is no question that China will have economic problems in the near term. As for Brazil the fact that the Real is being devalued, and the Brazilian govt wants it that way, is just another indicator that the AR Peso will follow without extreme govt intervention which is just not workable for much longer.

I think AR is likely to see more young expats now as good job possibilities in their countries remain elusive. I'm hearing of a lot of young American college grads looking for global adventure tied to a job.

Though I'm betting those who come and teach English or take a job paying pesos won't last
long. I think they'll largely enjoy a year here but not enjoy the lifestyle on their salaries enough to make it worth staying.

The segment of expats AR has lost most appeal for is the fixed income retiree. Makes no sense to go to AR for a cheaper life unless you're coming from a major international city with very high cost of living. And those folks have lots of choice.

A significant devaluation will bring some retirees back and bring more foreign investment which will yield more expats making dollars and Euro.

 

[Barney]

China exports à lot to the US and the EU so if there is à big slowdown it would affect China and Argentina.

 

[Barney]

Steve, it all depends on location probally. There are just not many people interessed in the lifestyle and climate that Bahia blanca offers

 

[steveinbsas]

Steve, it all depends on location probally. There are just not many people interessed in the lifestyle and climate that Bahia blanca offers

You are 100% correct. I moved to two other places in my life that didn't interest many people at the time:

Park City, Utah (1975) became the site of several venues of the 2002 Winter Olympics as well as the "home" of the Sundance Film Festival.

Sayulita, Mexico (2000) is now in the top ten list of the Lonely Planet Guide for family tourist destinations in Mexico. When I first visited in 1986 there was only one retail store and no restaurants (now there are well over 100).

I am confident (and grateful) that this won't happen where I am now.

 

[Barney]

Steve, I think you must change your picture in other to show your facebook pics