Inflation in BA?

[gouchobob]

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?

Argentina as a commodity producer is dependent on the buying countries, just happens China is the biggest player today. Some people think China will continue to grow without pause at 10% basically for decades. To believe that you have to believe the Chinese has eliminated things like business cycles, this by the same people who 20 years ago were more or less on par with North Korea and could barely feed their population. It just makes sense to me this guys aren't any smarter than anybody else. There are lots of signs they are in trouble with their economy today, so some kind of major slow-down or crash is going to occur. When that happens demand and prices for commodities is going to drop and Argentina is going to get hit hard. Part of the problem in Argentina is that every additional tax peso that came in went entirely for more non-productive government spending(up 40% in the last year alone). When the fall comes spending will have to be cut drastically, poverty and unemployment will increase substantially, its not going to be pretty. Will it be as bad as 2001? Don't know, could be worse as there may not be another commodity boom as the last few years to pull them out of the morass.

China and Argentina are going to have downturns in their economies. Does this mean they are finished? No, this is normal, they will both recover in time. However, neither are or will be as successful as they could mainly due to the heavy handed governments they both have. Modern economies are just to complicated to be micro managed by a hand-full of people sitting in some government office. This leads to bad decisions and mis-allocation of resources.

As to where would be the best place in the world for prosperity in the future I would suggest any country that ranks high on the economic freedom index will do well. There are bound to be ups and downs in any country but those that allow their citizens a high level of economic freedom have over the long haul performed much better consistently than
countries with heavy handed governments.