Ignorance or bliss?

[Lucas]

Sorry that you have such a superficial understanding of the matter. Enjoy the bliss.

To those who said things as 'enjoy the bliss' there wasn't any enjoyment in these times of desperate and hopeless circumstances for the people of this country, except for the mercenaries who sell themselves to the highest bidder and with that the opportunity to make a quick buck for themselves.

Why do USA print money frenetically?

Then those who seek to seduce imbalances recorded capital inflows to order that account. In the case of U.S., as well as a determining factor, gives the universally accepted currency that allows a privileged area of crisis management. To which is added a constant absorption of foreign capital to purchase their debt. While the power of the dominant currency is fully exercised, as demonstrated this week by announcing a megaemisión 600 billion dollars to buy Treasury bonds, this action results in a deliberate weakening of the dollar. In that instance the heart of the conflict emerges that has been exposed in public debate as the "currency war", but expresses the problem of global imbalances and current account as a resolution to aspiring powers. Devalue their currencies to the time pressure for the assessment of the surplus countries, China and other developing economies, with the risk of precipitating a trade war. In simple terms, this means the desire to transfer to the periphery of socio-economic costs of the crisis seated in the center, which today has its dramatic testimony in an average unemployment rate of 10 percent, peaking above 20 percent in Spain.

....more- read and learn about your bliss

 

[yayayo]

On the subject of inflation, I don´t think CFK is entirely right or entirely wrong in ignoring it as a subject. While it is true that there has been a steady price hike for a while now, it is also true that it is not a structural inflation caused by monetary or fiscal mismanagement. It has more to do, in my opinion, with the way the competitive structure adapts to perceived growth in disposable income. Traditionally, the small and medium sized entrepeneur has favored high profit margins and low sales volume. To persuade the median consumer to allocate an ever increasing portion of its income to basic goods has been the purview of marketing and one that is favored with surprising unanimity by the middle class merchant and entrepeneur. Were ventures at lower margins but wider customer base to appear, the growth in disposable income would not be offset. But in order to provide reasonable quality at competitive prices, one would have to abandon to a large extent the influence that culture and marketing or cultural marketing has had over the years, particularly how it has skewed consumer perception away from basic goods and towards luxury ones, often projecting the latter as being as absolutely necessary as the former.

 

[gouchobob]

To those who said things as 'enjoy the bliss' there wasn't any enjoyment in these times of desperate and hopeless circumstances for the people of this country, except for the mercenaries who sell themselves to the highest bidder and with that the opportunity to make a quick buck for themselves.

Why do USA print money frenetically?

Then those who seek to seduce imbalances recorded capital inflows to order that account. In the case of U.S., as well as a determining factor, gives the universally accepted currency that allows a privileged area of crisis management. To which is added a constant absorption of foreign capital to purchase their debt. While the power of the dominant currency is fully exercised, as demonstrated this week by announcing a megaemisión 600 billion dollars to buy Treasury bonds, this action results in a deliberate weakening of the dollar. In that instance the heart of the conflict emerges that has been exposed in public debate as the "currency war", but expresses the problem of global imbalances and current account as a resolution to aspiring powers. Devalue their currencies to the time pressure for the assessment of the surplus countries, China and other developing economies, with the risk of precipitating a trade war. In simple terms, this means the desire to transfer to the periphery of socio-economic costs of the crisis seated in the center, which today has its dramatic testimony in an average unemployment rate of 10 percent, peaking above 20 percent in Spain.

....more- read and learn about your bliss

I guess this is the standard response when you don't have anything to say i.e., make some statement that doesn't make much sense, followed by something about the U.S. which makes even less sense and is unrelated to the topic at hand.

 

[Bajo_cero2]

If you have the same wealth to distribute [although I don't get the choice of the word 'distribute"] and more people than you had 50 years ago then you have the perfect formula for "no real growth" AKA poverty. Wealth should be measured in "Wealth Created" and not "wealth distributed".

I mean wealth per capita (per person), this is not the same to have 300 billions among 40 million than among 10 millions. Norway is a good example of how a country with low population becomes rich on the wealth per capita.
I am talking about micro economy.

http://www.zonaeconomica.com/producto-interno-bruto
See the map.

And you are talking about macroeconomy. Please don´t confuse macro and micro economy.

But it grew based on the exact same product mix that it exported to the world 100 years ago because nobody developed new technology or built new factories or developed marketable services that sold on world markets.

Well, our industry was destroyed by Menem´s government but it rised againg with this government. Now both, the farmers and the industry are doing very well.

Regards

 

[perry]

Economics is easy to understand if you spend time to research the topic . I am most grateful that we have people on this forum that do understand and can express their ideas succinctingly . Bajo-cero is one of our best posters and he expresses the points clearly and with a depth that very few can .

 

[Bajo_cero2]

Long on ideology, short on facts.

Well, YPF was sold in 4.310 billions (see the second link). The profit per year of the company is 4.528 billion dollars.

http://www.europapress.es/00136/200...pf-gano-2448-millones-septiembre-77-menos.htm

(This articles is in euros and for 9 months. So, I divided by 9 and multiply by 12, after that I multiply by 1.3874)


There is an interesting chart regarding the argentinian debt (http://creepace.com.ar/notas/20030123-sec_pet.htm
). After 40 years of inflation debt was 8.280 billion, nothing. Fist time neoliberal politics were used in this country was during last dictatorship government. As I mentioned the debt was 8.280 billion, when democracy came back the debt was 45.289 billions.
The second time the neoliberal politics were used was with Menem, he sold the state´s competitive companies, created private retirement insurance and no printing money.

So, he destroyed the 3 free ways for financing this country. So, the debt was 62 billion when he arrived and 147 billions after 10 years of neoliberal economic´s politics. So, It was dumm to ask money borrowed when you can print money, have your own profitable companies and you can use public retirement insurance´s money, isn`t it?

My point is, neoliberal politics are a disaster in this country no matter how do they work somewhere else. The main reason, without any political ideology, is that our economy works 50% black 50% white. To solve this was a priority for this governmen but with a practical and realistic approach. So, tax collecting was never so efficient.

On the other hand, Cavallo´s brilliant idea was to force the economy to be "white" from sunset to sunrise (salaries musted to be paid by bank, no payment over $1000 pesos was able to be done in cash, only through banks), the consequences was 2001 riot and its crisis we all well know.

So, is inflation so terrible? I think not.
Are we in crisis? No way.

You asked for facts, here they are.

Regards

 

[citygirl]

Bangs head. No - an economy that operates 50% in black and 50% in white doesn't work. What it does is create an undue burden on those who try to operate in white, eventually forcing them to go in black. Which lowers the available pool of people and companies to pay taxes which means the amounts collected will shrink & stretch an already taxed economy to a breaking point. The government's response tends to raise taxes on the ever-shrinking pool of those who do pay taxes which again, forces even more to chose to go en negro. Rise.lather.repeat.

But if you think the economy is great, if you think Argentina is trucking right along as a model of effective economic policies and you think that 20%+ inflation is normal and that it will have no adverse repercussions - I am truly at a loss.

I can only say that personally, as a small-to-mid sized employer, the economic pressures, the taxes and the inflation have already caused us to decide not to hire another team of 10 plus people here. I also know several succesful entrepeneurs who have decided they will be closing their business operations here. I know several others who have switched from "en blanco" to "en negro" because they simply can't afford to be en blanco anymore. But hey - who cares right?

 

[Bajo_cero2]

Bangs head. No - an economy that operates 50% in black and 50% in white doesn't work. What it does is create an undue burden on those who try to operate in white, eventually forcing them to go in black. Which lowers the available pool of people and companies to pay taxes which means the amounts collected will shrink & stretch an already taxed economy to a breaking point. The government's response tends to raise taxes on the ever-shrinking pool of those who do pay taxes which again, forces even more to chose to go en negro. Rise.lather.repeat.

Right. Can it be solved from sunset to sunrise? No. But this % now is lower that 50%.

But if you think the economy is great, if you think Argentina is trucking right along as a model of effective economic policies and you think that 20%+ inflation is normal and that it will have no adverse repercussions - I am truly at a loss.

What do you expect? We were never better during a world wide crisis since WWII.

I can only say that personally, as a small-to-mid sized employer, the economic pressures, the taxes and the inflation have already caused us to decide not to hire another team of 10 plus people here.

Only a foreigner might think to hire somebody a year before elections, no offense.

I also know several succesful entrepeneurs who have decided they will be closing their business operations here. I know several others who have switched from "en blanco" to "en negro" because they simply can't afford to be en blanco anymore. But hey - who cares right?

Well, so what? There is a world wide crisis escenario. I saw a lot of bussisness closing at NYC. We are isolated but not in anoter planet.

Only a foreigner works 100% "white" in this country, no offense, you cannot compete that way.

Regards

 

[gouchobob]

Well, YPF was sold in 4.310 billions (see the second link). The profit per year of the company is 5 billion dollars.

http://www.europapress.es/00136/200...pf-gano-2448-millones-septiembre-77-menos.htm

(This articles is in euros and for 9 months. So, I divided by 9 and multiply by 12, after that I multiply by 1.5)


There is an interesting chart regarding the argentinian debt (http://creepace.com.ar/notas/20030123-sec_pet.htm
). After 40 years of inflation debt was 8.280 billion, nothing. Fist time neoliberal politics were used in this country was during last dictatorship government. As I mentioned the debt was 8.280 billion, when democracy came back the debt was 45.289 billions.
The second time the neoliberal politics were used was with Menem, he sold the state´s competitive companies, created private retirement insurance and no printing money.

So, he destroyed the 3 free ways for financing this country. So, the debt was 62 billion when he arrived and 147 billions after 10 years of neoliberal economic´s politics. So, It was dumm to ask money borrowed when you can print money, have your own profitable companies and you can use public retirement insurance´s money, isn`t it?

My point is, neoliberal politics are a disaster in this country no matter how do they work somewhere else. The main reason, without any political ideology, is that our economy works 50% black 50% white. To solve this was a priority for this governmen but with a practical and realistic approach. So, tax collecting was never so efficient.

On the other hand, Cavallo´s brilliant idea was to force the economy to be "white" from sunset to sunrise (salaries musted to be paid by bank, no payment over $1000 pesos was able to be done in cash, only through banks), the consequences was 2001 riot and its crisis we all well know.

So, is inflation so terrible? I think not.
Are we in crisis? No way.

You asked for facts, here they are.

Regards

Actually the privatization of YPF has been a big success. Don't no much about the deal but even you are correct is was sold cheap it doesn't mean it was a bad idea. Oil production climbed dramatically until 2004 when the current government capped prices which discouraged production. According to you Argentina tried free market policies for a few years in the 90's and it didn't work and so it should never be tried again. This of course ignores the last 60 years in Argentina when government policies have been a complete disaster for the country. The current government is continuing the failed policies of the past. The government here is the problem not the solution. Sooner or later the reality is going to catch up with them. More trouble lies ahead it a matter of when not if.

 

[citygirl]

Bajo - the businesses I know of aren't closing because of the economic crisis. they're taking their toys and setting up shop elsewhere because of the inflation, enormous tax burden and general anti-business climate here. These are/were successful businesses but it has become cost-prohibitive to be here. So they're leaving.

And re hiring people here in an election year - thanks for the advice but my global clients don't really care that it's an election year here. Like I said, no harm to us, we're putting the project in the US instead. And maybe Argentina won't miss the tax dollars we pay and maybe the employees we would have hired don't care either. But if there are a lot of companies like us, than yes, it might start to matter.

But again, you're obviously convinced everything is great. I applaud your optimism. I don't share it - at all.