Inflation in BA?

[dr__dawggy]

City girl has a point but you can often find furnished apartments that aren't designed for foreigners for a fraction of the price of the ones that appear on craigslist. You will usually have to negotiate around the garantía though, but that can often be handled w/ large cash upfront.

Also echoing others, bs as isn't cheap. It isn't expensive either though. Rather it's the difference in the relativity of the prices that throws you. For example if I were to take the equivalent of a what is 70 (USD 17) peso taxi ride here back in the us I would spend U$d70 (ar280) EASILY. But then for that same $70 dollars in the us I could buy two bottles of grey goose which here would cost me 660 pesos or U$D 165!!!!! Not to mention that for the difference in the price of an iPad you could fly to the us and buy one there.


Here are unordered lists of cheap and expensive.

Cheap:

• Labor - plumbing, construction, illegal immigrants to clean your house,etc
• Transportation - Except for gas which is the same as the US if not a bit more, taxis are very cheap (though not as cheap as a few years ago). buses, subways and trains are practically free.
• Rents - I'm renting a large 1600sq, beautifully furnished, expenses included, 4 bed 2 bath townhouse with a huge roof terrace, for 1100USD/month. Thats pretty good next to most big cities in the US. Not sure about utilities and prop taxes but I've heard both are still cheaper than the US.
• Fine Dining - Not THAT much cheaper but still cheaper than equivalent food in other cities.
• Museums - Most are FREE.
• Arg fast food - USD 0.62 for an empanada? USD 6.00 for a grande pizza napolitana?
• SOME GROCERIES - Bread, pasta, cow meat, in season vegetables, gross processed ham and cheese...
• Most Argentine wines - I was tempted to just put argentine wines with out the qualifier but there are quite a few good argentine wines that sell for less in the US than they do here, but most of them are cheaper here. Plus, in general, argentine wines are some of the best values on the market. A real treasure.
• Undrinkable local liquors - 1L of vodka for USD 2.50? Have fun!
• Unsmokable paraguayan weed - I never was much of a stoner in the states but had enough friends who were to know what a gram goes for back there. The prices here blew me away or the did till I saw what ever it was they were calling weed.
• Hookers and blow - Or so I've heard, I'm way way too scared to go near something that has sex for 25 pesos an hour.
• Local cheep beer - USD 1.25/L
• Some tailored clothing
• Dry Cleaning
• Private spanish lessons - I'm paying USD 8.75/hr for lessons from a girl with a masters in linguistics
• Eggs
• Red Bull
• I'll edit more in as I think of them.

Expensive

• Things that run on electricity - I already mentioned the iPad example but it goes all the way down to things like rice cookers, available in the US for USD 35+ starting in argentina at USD100
• Liquor - Gave the grey goose example already but its all like that. Expect to pay at least 150% of normal prices.
• Wine from anywhere except Argentina - Expect to pay 200-500% of the list prices of wines from the exterior and the selection sucks.
• Drinking at bars - Some exceptions but generally much pricier for crappy cocktails.
• Mexican Restaurants - And they mostly suck.
• Sushi - And it mostly sucks.
• Cheese - And it mostly sucks, plus the selection is abysmal.
• Jamón Crudo - and some (bout half) of it sucks...
• Salmon
• Duck - if you can find it
• Tabasco - 4-5x US price
• GOOD COFFEE - unless you like crappy nearly unroasted sugar coated coffee beans, expect to pay 2-3x US prices for coffee.
• American Fast Food - McDonalds is pricey here and the food still sucks just the same
• Olive Oil
• Most Quality Clothing
• Cars - HOLY CRAP!!!! Most cars i've seen are nearly 2x the price of the same car in the US
• Cinema
• Recreational Vehicles - Maybe I should have just put things that run on gasoline right after things that run on electricity
• Milk - More than double the US price
• Nuts - Plus I can't find pine nuts anywhere
• I'll edit in more as I think of them

Good list....I agree with most of the points you raise.

I have been particularly interested in the wine issue....I find it very curious that wine from Mendoza is often less in the USA than in Buenos Aires.

I do not know the current price in Argentina but here are a few examples of the cost of Malbec in the USA...

• Luigi Bosca Reserva 13.50
• Nieto Senetiner Reserva 7.98
• Luigi Bosca DOC 16.40
• Bodega Norton Privado 16.50
• Michael Torino Don David Reserva 13.00
• Broquel 11.00

There is a 10% discount for purchasing a mixed case.

 

[gouchobob]

Here´s the picture emerging to me:

The Argentine government actually do a good job (if it wasnt for beaurocracy id say very), but
this is completely undermined by a wholly separate and more powerful entity that is printing money.

- just like in other countries

Only here, the history of fiat currency is even more extreme and has been for ages.

The Argentine response to this has mostly been to resort to the dollar.
...and of course, the Uruguay safe deposit box.

What amazes me is that I can see few other attempts to defend against inflation. No local currencies, timedollars, no trade schemes, only 4 bitcoin.org nodes seen here. Nothing like this developed even with people dying on the streets in 2002?
Perhaps I miss something with Argentine strong philosophical movement, were such inflation defence responses repressed? -or seen as immoral?

All those rolled up dollars under the argentine are going to be worthless as they really start to depreciate in 2011-2020. Will people start to address the problem head-on or just switch to another fiat currency like the Euro, only for the same thing to happen again and again until even the Bancor and no doubt on again from there.


I notice if you live the good life, the simple life you can get by very well. Generally anything a luxury is expensive, though increasingly I would say that electrics and gasoline is not a luxury any more. Employ a personal cook and use the Bolivian verdurias, I say.
However, this is coming from someone who has moved here recently. The main idea for many in the past for coming here was to live it up on a stronger dollar. That, I think, is not the way its going.

I already cant stop thinking about how to get a affordable car... in the UK you can get a working car for less than 2000 pesos. Here its at least 1000 dollars.

I think most of what you have written is backwards, but as you state you are new to Argentina, allowances can be made.

I am confident that the prosperity in Argentina will be short-lived. I believe the economy in China is close to crashing which will crash commodity producing countries including Argentina. I think Argentina will prove to be particularly vulnerable to the coming crash.

When the crash occurs the dollar will go up and not down. We will also realize that command economies like China don't work in the long run. Economies like Argentina that rely on heavy government intervention in all phases will be shown not to be any better. Problems like inflation, shortages, and other distortions are evidence of the governments mismanagement today, with a lot more negative consequences to come.

People will also realize that free economies like the U.S. are a lot more dynamic and resilient than they thought.

 

[Johnny]

I think most of what you have written is backwards, but as you state you are new to Argentina, allowances can be made.

I am confident that the prosperity in Argentina will be short-lived. I believe the economy in China is close to crashing which will crash commodity producing countries including Argentina. I think Argentina will prove to be particularly vulnerable to the coming crash.

When the crash occurs the dollar will go up and not down. We will also realize that command economies like China don't work in the long run. Economies like Argentina that rely on heavy government intervention in all phases will be shown not to be any better. Problems like inflation, shortages, and other distortions are evidence of the governments mismanagement today, with a lot more negative consequences to come.

People will also realize that free economies like the U.S. are a lot more dynamic and resilient than they thought.

Agreed pretty much in full, though I'm not so sure the day of reckoning in China is just around the corner. Not all that far off I would guess, but these things ordinarily take alot longer to play out than we think.

Despite the hysterical forecasts about the dollar, it will continue to be the currency of last resort for years to come. There will be a day of reckoning for it as well if the USA doesn't get it's house in order, but it ain't gonna be any time soon.

 

[duanestorey]

Agreed pretty much in full, though I'm not so sure the day of reckoning in China is just around the corner. Not all that far off I would guess, but these things ordinarily take alot longer to play out than we think.

Despite the hysterical forecasts about the dollar, it will continue to be the currency of last resort for years to come. There will be a day of reckoning for it as well if the USA doesn't get it's house in order, but it ain't gonna be any time soon.

Both China and Japan are in far better financial shape than the US. Given that other countries are already starting to negotiate trade deals in local currencies instead of the US dollar (China and Russia recently negotiated one), it's time as the reserve currency is limited. With the approaching 14.7 trillion dollar debt ceiling in the US, things are getting pretty desperate there.

The inflation that is occurring in other countries is due a lot in part to the loose monetary policy of the US. Due to being the currency of international trade, the US has the luxury of being able to export its inflation to others, which is partially responsible for the rising commodity and food prices in the world. As soon as other countries stop buying US debt (which is already occurring, the US treasury just became the #1 holder of US debt last week I believe), that inflation is going to impact the US in a big way. The rise in prices of gold and silver is partially due to the belief that US monetary policy is going to continue to erode the value of the dollar (which it has been doing since the creation of the Federal Reserve - the US dollar has lost over 97% of its purchasing power since that time).

You may want to watch Peter Schiff's video from two weeks ago where he talks about the absurdity that the US has a higher credit rating than both Japan and China:

http://www.youtube.com/watch?v=t_pjcedzqVQ&feature=player_embedded

 

[gouchobob]

Both China and Japan are in far better financial shape than the US. Given that other countries are already starting to negotiate trade deals in local currencies instead of the US dollar (China and Russia recently negotiated one), it's time as the reserve currency is limited. With the approaching 14.7 trillion dollar debt ceiling in the US, things are getting pretty desperate there.

The inflation that is occurring in other countries is due a lot in part to the loose monetary policy of the US. Due to being the currency of international trade, the US has the luxury of being able to export its inflation to others, which is partially responsible for the rising commodity and food prices in the world. As soon as other countries stop buying US debt (which is already occurring, the US treasury just became the #1 holder of US debt last week I believe), that inflation is going to impact the US in a big way. The rise in prices of gold and silver is partially due to the belief that US monetary policy is going to continue to erode the value of the dollar (which it has been doing since the creation of the Federal Reserve - the US dollar has lost over 97% of its purchasing power since that time).

You may want to watch Peter Schiff's video from two weeks ago where he talks about the absurdity that the US has a higher credit rating than both Japan and China:

http://www.youtube.com/watch?v=t_pjcedzqVQ&feature=player_embedded

I don't watch videos that much I read. Japan is not in good shape, very high debt levels, low growth, aging population. My opinion on China is that it has grown at unsustainable rates. What going on there today is just a gigantic mis-allocation of resources which is overheating their economy which is going to end in a crash( and soon I believe). Don't drink the Peter Schiff cool-aid it will be bad for your financial health.

 

[duanestorey]

I don't watch videos that much I read. Japan is not in good shape, very high debt levels, low growth, aging population. My opinion on China is that it has grown at unsustainable rates. What going on there today is just a gigantic mis-allocation of resources which is overheating their economy which is going to end in a crash( and soon I believe). Don't drink the Peter Schiff cool-aid it will be bad for your financial health.

Well, if you want to actually watch the video and talk about it, I'm game. But given that he was one of the few people who predicted the sub-prime mess when almost everyone else missed it, you may want to put one of your books down and see what others are saying from time to time.

I read a lot too, and I think the US is in worse shape than either China or Japan. The savings rate in the US is next to nothing, so there is nothing to tax - at least Japan has a high domestic savings rate. The current debt to GDP ratio for the US is officially around 95%, but that doesn't include any of the long term liabilities such as Fanny Mae, Freddy Mac, Medicare and Social Security - if you take those into account, estimates range from 500% to 1200% for the actual debt to GDP, which completely dwarfs everyone else.

 

[gouchobob]

Well, if you want to actually watch the video and talk about it, I'm game. But given that he was one of the few people who predicted the sub-prime mess when almost everyone else missed it, you may want to put one of your books down and see what others are saying from time to time.

I read a lot too, and I think the US is in worse shape than either China or Japan. The savings rate in the US is next to nothing, so there is nothing to tax - at least Japan has a high domestic savings rate. The current debt to GDP ratio for the US is officially around 95%, but that doesn't include any of the long term liabilities such as Fanny Mae, Freddy Mac, Medicare and Social Security - if you take those into account, estimates range from 500% to 1200% for the actual debt to GDP, which completely dwarfs everyone else.

Tell you the truth I'm not a big fan of Peter. Seems like his main talent is fear mongering to enable his self promotion which he does a lot. I am sure he is right about some things but I don't think he is a particularly credible on economics or finance.

 

[duanestorey]

Fair enough. I agree that since having a podcast and what-not that he's been a bit more self-promotional, but I still value his opinions on financial affairs as most of them seem rather spot on. Time will tell!

 

[jago25_98]

I am confident that the prosperity in Argentina will be short-lived. I believe the economy in China is close to crashing which will crash commodity producing countries including Argentina. I think Argentina will prove to be particularly vulnerable to the coming crash.

So, Argentina is not as independent to the crash as I thought?

Just wondering, going offtopic a bit but if not Argentina, then where do you think is the most isolated, yet prosperous place in the world to be?

 

[duanestorey]

Define "prosperous" The country of Bhutan measures the Gross National Happiness, which is a measure of how happy everyone is. Instead of focusing on making a large economy, they focus on making everyone happier.

http://en.wikipedia.org/wiki/Bhutan

I'm heading to Serbia in the summer to visit a friend, and I've been told that a one bedroom apartment for a foreigner goes for around $300/mo USD. Plus it's a gorgeous place to be in the summer. So, I think there are many places with great deals to still be had and a relatively stable economy.