How far will the downturn be in Argetina?

Conorworld

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Gusgutier,
Thank you for response but I have been led to believe that the price of soy has dropped considerably in the last year just like the vast majority of raw resources and materials.

Furthermore I think one can make a lot of comparisons between Argentina, Chile, Venezuela etc when there is a disproportionate amount of government revenue is based on a single or a small number of raw materials, regardless of what they may be. It is how you use those revenues where there can be a divergence. Argentina may not have a giant state revenue entity like CODELCO or PDVSA but is nevertheless heavily reliant on revenue from agricultural exports.

CODELCO and the Chilean government have been prudent in their investment and are now in a much better position than Argentina to weather the storm with a sovereign wealth fund and a fiscally prudent economic policy during the good times. They are in a stronger position to tackle the global slowdown.

http://www.economist.com/research/articlesBySubject/PrinterFriendly.cfm?story_id=13145570

Argentina on the other hand pumped and primed the domestic economy throughout the commodity boom. I will admit that the collapse in commodity prices hasn't fully hit the state coffers yet but in time it will and it is this delay in the crisis fully hitting Argentina that will be interesting.

In relation to my comparison with Ireland. I know it is not exactly great to make such comparisons but it was about my own speculation about a drop in inflation in Argentina. Similar fiscal policies occured in Ireland that have happened in Argentina. An over-reliance on domestic construction and banking had the same effect in many ways to what happened in Argentina in relation to inflation. We had a slowdown before this economic calamity hit the world economy and now it is worse, hence why our government debt is so high now. Other nations are slowly catching up in the race to develop government debt.

The major difference is that Ireland has the Euro and cannot devalue itself like Argentina has. This may prevent a major drop in inflation but a lot of fundamentals are there and since no one can really predict how this will all work out one cannot discard the possibility of deflation. Yes it is highly unlikely in Argentina but no one really knows.....
 

gusgutier

Registered
You`re right :NO ONE REALLY KNOWS .
I shall inhibit myself on giving an opinion on Chile, Perú, U.S.A., Poland or any other country because I slightly know their situation, but probalby Chille can do better than Argntina in front of the crisis.
 

steveinbsas

Registered
I was editing my post when criswkh replied.

I was deleting the "corny" phrase:

"Don't worry,be happy."

My post was:

Live now...no matter where you are.

Life is temporary...

SO...I'll say it again!

Don't worry, be happy!
 

gusgutier

Registered
Mr Shapiro and MS Soderberg are hired lobbyist from ATFA (as says in the last paragraph) so this article is not information but lobby to the american authorities against Argentina. It´s rather crazy that CFK wants a bond emission under american laws.
 

daswamy

Registered
This article slamming Argentina is amusing. The US is well on track to supplant Argentina as the world's largest debt defaulter.
As many commentators point out, the US outstanding debt is $56 trillion - four times the size of its current $13 trillion GDP. It is technically bankrupt.

What has prevented the US from descending into an Argentina-like situation in 2001 so far, is that its debt is denominated in its own currency. As Mr. Ben Bernanke's actions (inspired it seems by the Central Bank of Zimbabwe) have shown, the Fed will get into furious money-printing mode to pay off creditors. The US govt is the ultimate example in the "too big to fail" mantra that has been trotted out to pump money into the likes of Citigroup and Bank of America. Our Chinese and Japanese creditors are not going to let the US govt. declare bankruptcy but at some point will have to throw in the towel and be resigned to its inevitability. Whether that will happen in 1,5 or 10 years is anyone's guess - but it is tough so see how that scenario can be avoided. At that point, the value of the dollar, temporarily strong against other currencies only due to global develeraging and not because of fundamentals, will plummet.

US politicians, in bringing about this state of affairs, have demonstrated they are not much different from their counterparts in Latin America, Africa and Asia in terms of their criminality and incompetence. Channeling Mark Twain "It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress" and "All Congresses and Parliaments have a kindly feeling for idiots, and a compassion for them, on account of personal experience and heredity."
 

sergio

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There are some excellent posts here, especially from Newman and Ernest.

I also agree with this recent comment: "US politicians, in bringing about this state of affairs, have demonstrated they are not much different from their counterparts in Latin America, Africa and Asia in terms of their criminality and incompetence."

I am almost certain that the majority of the readers of this website are highly educated, most probably have university and graduate degrees yet despite this some don't seem to think very rationally. Some make statements based on their emotions, on what they would LIKE to be true but not necessarily on reality.

The entire world is engulfed in the current global crisis. Argentina can not avoid being drawn into it (the fact is that the crisis has already arrived. Just ask anyone who works for or does business with American companies). Chile has good leaders who have set aside money for a rainy day fund. Argentina is quite the opposite. Vast amounts of money have been wasted in order to buy votes. Now the rainy day has arrived. The country is shamefully unprepared.
 

perry

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Chile has 20 Billion dollars in reserves Argentina has over 48 Billion dollars in reserves and Argentina makes 5 times the foreign income per annum than Chile . I do not believe that Chile is safer but it does have the feeling of stability of a popular goverment.
 

Napoleon

Registered
pericles said:
Chile has 20 Billion dollars in reserves Argentina has over 48 Billion dollars in reserves and Argentina makes 5 times the foreign income per annum than Chile . I do not believe that Chile is safer but it does have the feeling of stability of a popular goverment.
The "Argentina makes 5 times the foreign income per annum per capita than Chile does" part can change over night I'm guessing.
 
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