Hyperinflation ante portas

[camberiu]

A peak into the future.

 

[toongeorges]

The 1,000 pesos bills will be imported from Brazil. They are printing so much money that they have to outsource the production.
Things are looking bleak at Venezuela Del Sur.

The 500 pesos notes would be imported, Argentina would produce the 1000 pesos notes itself. Apparently one of the reasons why bank notes have to be imported is that Kristina blocked the issue of higher denomination notes (and Alberto followed), because if they introduce the 5000 pesos note they would have to acknowledge there is inflation...

 

[antipodean]

The 500 pesos notes would be imported, Argentina would produce the 1000 pesos notes itself. Apparently one of the reasons why bank notes have to be imported is that Kristina blocked the issue of higher denomination notes (and Alberto followed), because if they introduce the 5000 pesos note they would have to acknowledge there is inflation...

If you print higher denomination bills then people feel the devaluation of what is in their wallet. They feel robbed and they won't vote for you next time.

This was the case when K was the president for this exact reason. She did not want bills greater than $100, despite the fact it was the largest denomination and were only worth like US$5-US$7 (despite the fact that many of those $100 peso notes at one point in their lives were worth US$100!) which is the same value that our $1.000 notes have today. Even if we had a $10.000 (US$76) note today, at this "normal" rate of devaluation it would only take a few years before it replaces the value of $1.000 notes today.

The reality is that we already have a "millionaire" currency like Chile, Colombia or Uruguay where even the purchase of a pretty average car runs into the millions of units making its owner a "millionaire". It won't be long until even a small appliance runs for a similar amount.

 

[on the brink]

If you print higher denomination bills then people feel the devaluation of what is in their wallet. They feel robbed and they won't vote for you next time.

Quite right.... Another reason is that not having large bills make cash transactions cumbersome. The Government wants people to "bancarize", the better to know their income, and the better to tax them.

 

[toongeorges]

If you print higher denomination bills then people feel the devaluation of what is in their wallet. They feel robbed and they won't vote for you next time.

If it takes longer and longer to count your bills whenever you make a purchase, you are feeling the inflation as well. Not sure how long they will stay in denial, though denial is one of the strong points of the K's.

 

[antipodean]

If it takes longer and longer to count your bills whenever you make a purchase, you are feeling the inflation as well. Not sure how long they will stay in denial, though denial is one of the strong points of the K's.

Exactly because of that, denial.
Imagine you are an average-joe argentine (in the 40% poverty or 20%+ just scraping-by basket)
If you only see $1000 notes then somewhere in head $1000 still has a value because it is still the biggest and most desirable note, even if you need one extra note this year than you needed last year to pay your tab, it does not feel like such a change because you don't remember how many notes you needed last year anyway... in-fact you may even have the sensation that you have more money in your pocket and life is getting better if they keep telling you it is getting better.
Because it is a gradual change and probably you are not likely to pay attention to dollars since you are not able to buy luxuries or go on vacation anyway, devaluation for you is more of a perception that just creates anxiety.
If you start to see $10.000 notes then you start asking questions and see very clearly that you are using more $1000 notes than last year to pay for your tab and any dreams you have of "saving up" for a better life are dead in the water and you are trapped in poverty for the rest of your life. While you may feel inflation when your income does not make it to the end of the month, a lot of times it is offset by adjustments in your ANSES payments or humble salary, meaning these "pinches" are often just moments in time, unlike say the middle and upper classes whose savings are worth less and lifestyle costs more each time.

 

[Dougie]

 

[on the brink]

What can happen with such enormous growth rate? I'm totally ignorant on this subject - anyone who understands it, please explain a bit...!

 

[jblaze5779]

What can happen with such enormous growth rate? I'm totally ignorant on this subject - anyone who understands it, please explain a bit...!

hyperinflation

 

[on the brink]

Thanks, 5779. People are so poor now that hyperinflation does not seem likely, in the immediate future. I read that about 75% of apartment owners are not paying expensas.

Private schools dues are not being paid, either.