Inflation

[Ries]

I can only assume from your "should" that you do not actually own property- because you are woefully naive about how the real world works.

Property taxes are based on several things in the USA. There is, at root, the appraised value. In my area, for instance, they properties are actually re-appraised yearly, but only by comparing "comps", and only actually looked at in person every 5 years. Comps are NOT falling drastically where I live. In Las Vegas, or Riverside County, maybe. But not here. Also, most properties here are appraised at a good 30% below actual selling prices, sometimes much more. This means appraised values dont drop as much as selling prices have.

Then, there is the fact, which you are completely overlooking, that EVERY local government in the USA is strapped for money right now. Sales tax and state income tax revenues are down. Federal contributions to States and localities are down.

The result is every single state, county, and city is RAISING taxes. So, for instance, on my property in California, the appraised value only went up a little- but the tax went up a fair amount, because the local school levy portion was increased, as were the water bonds portion. This has happened everywhere in the USA- the rate of tax on the local portions has gone up as much as possible, to account for any drop in valuation, which almost always means the final tax bills have gone UP, not down.
I pay 4 different property tax bills in two states- and all went UP last year, and this year.

Same with my local state taxes on liquor, beer, and candy- this, again, has been repeated country wide- every possible local tax, fee, and registration has been going UP, to account for general falling tax revenues.
So prices go UP, but its not counted as inflation, because its technically taxes, not part of the underlying cost of the product.

 

[ReemsterCARP]

I don't like the K's. But anyone thinking that "Pine Tree" Solanas, Solá, De Narváez, Macri, Carrió o Stolbizer will actually change anything, is a fool. The model is set in stone: social democratic corporatism. The only thing that will change is which business groups get fat government contracts and which industries get screwed over by extra taxes on im/export.

And the people with no political connections. Well they just carry on with their life. Aguantando la inflación, la inseguridad y la viveza criolla de los políticos argentinos.

 

[Ries]

I would like to point out another reason for inflation, both in Argentina and in the USA- China.
The chinese economy is growing at a prodigious rate- around 10% per year.

And inflation is rampant in China.
Many sectors of Chinese industry saw wage increases of between 30% and 50% this year alone, which follow increases in the last few years as well.

The chinese export market is down to about 30% of their economy these days, which means chinese prices are being set by internal factors, and are oblivious to a recession in the USA, Argentina, or Europe.

As a result, Chinese prices for many things have been consistently climbing. Many chinese manufacturers have very tight margins, which means when sales volume falls, they cannot just cut prices 10%. They either raise prices, or just go out of business. Between 2008 and 2010, something like 10,000 Chinese toy factories went bankrupt, but US toy prices did not fall as a result.

Every price for almost everything worldwide is affected by energy prices, as well, and China and India are both growing their demand for energy, in all its forms, by the month. So demand, and world energy prices, did not take anything like the freefall one would hope in the last two years- there have been some brief dips, but world oil prices are back up- crude today is MORE expensive than it was in 2006.

This means the transport costs of almost everything, to Argentina or the US, are the same, or higher, than they have been historically, and things that are particularly energy intensive, like plastics, farming, and long distance shipping, have not fallen at all in the recession.
In fact, in the USA, there were pent up price increases that are still coming out- many companies with held raising prices for years, and then the accumulated oil price increases over the last five years, along with accumulated raw materials price increases, mean even now, prices for many things are still going up.

The worldwide demand of emerging economies like India and China is HUGE, for things like steel, plastics feedstocks, coal, oil, paper, precious metals and rare earths for electronics and battery manufacturing, and so on. If demand, worldwide, doubles, as it has and will again, local economies like Argentina or the US simple arent big enough to affect world prices. Every Indian and Chinese wants a cell phone, and that means the world price for the components will stay strong, or, as we have seen, go UP.

This is the real impact of globalisation- that local economic decisions, like those the K's make, have some, limited, local impacts, but global trends mean much more. A lot of the Argentine inflation is caused by wacky local regulations, but a lot more of it is totally beyond the control of the K's or Obama.

 

[gouchobob]

I can only assume from your "should" that you do not actually own property- because you are woefully naive about how the real world works.

Property taxes are based on several things in the USA. There is, at root, the appraised value. In my area, for instance, they properties are actually re-appraised yearly, but only by comparing "comps", and only actually looked at in person every 5 years. Comps are NOT falling drastically where I live. In Las Vegas, or Riverside County, maybe. But not here. Also, most properties here are appraised at a good 30% below actual selling prices, sometimes much more. This means appraised values dont drop as much as selling prices have.

Then, there is the fact, which you are completely overlooking, that EVERY local government in the USA is strapped for money right now. Sales tax and state income tax revenues are down. Federal contributions to States and localities are down.

The result is every single state, county, and city is RAISING taxes. So, for instance, on my property in California, the appraised value only went up a little- but the tax went up a fair amount, because the local school levy portion was increased, as were the water bonds portion. This has happened everywhere in the USA- the rate of tax on the local portions has gone up as much as possible, to account for any drop in valuation, which almost always means the final tax bills have gone UP, not down.
I pay 4 different property tax bills in two states- and all went UP last year, and this year.

Same with my local state taxes on liquor, beer, and candy- this, again, has been repeated country wide- every possible local tax, fee, and registration has been going UP, to account for general falling tax revenues.
So prices go UP, but its not counted as inflation, because its technically taxes, not part of the underlying cost of the product.

Actually I do own property in the states and did appeal my property taxes this year and received a 20% reduction. Every state handles this differently and perhaps you should look into doing this if you are paying ever higher amounts on properties that have probably lost value.

As far as the overall level of taxation in the U.S. has gone down not up as you are claiming. Your personal situation may be different but on average people are paying less. Please read the article linked below.

http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm

 

[gouchobob]

I would like to point out another reason for inflation, both in Argentina and in the USA- China.
The chinese economy is growing at a prodigious rate- around 10% per year.

And inflation is rampant in China.
Many sectors of Chinese industry saw wage increases of between 30% and 50% this year alone, which follow increases in the last few years as well.

The chinese export market is down to about 30% of their economy these days, which means chinese prices are being set by internal factors, and are oblivious to a recession in the USA, Argentina, or Europe.

As a result, Chinese prices for many things have been consistently climbing. Many chinese manufacturers have very tight margins, which means when sales volume falls, they cannot just cut prices 10%. They either raise prices, or just go out of business. Between 2008 and 2010, something like 10,000 Chinese toy factories went bankrupt, but US toy prices did not fall as a result.

Every price for almost everything worldwide is affected by energy prices, as well, and China and India are both growing their demand for energy, in all its forms, by the month. So demand, and world energy prices, did not take anything like the freefall one would hope in the last two years- there have been some brief dips, but world oil prices are back up- crude today is MORE expensive than it was in 2006.

This means the transport costs of almost everything, to Argentina or the US, are the same, or higher, than they have been historically, and things that are particularly energy intensive, like plastics, farming, and long distance shipping, have not fallen at all in the recession.
In fact, in the USA, there were pent up price increases that are still coming out- many companies with held raising prices for years, and then the accumulated oil price increases over the last five years, along with accumulated raw materials price increases, mean even now, prices for many things are still going up.

The worldwide demand of emerging economies like India and China is HUGE, for things like steel, plastics feedstocks, coal, oil, paper, precious metals and rare earths for electronics and battery manufacturing, and so on. If demand, worldwide, doubles, as it has and will again, local economies like Argentina or the US simple arent big enough to affect world prices. Every Indian and Chinese wants a cell phone, and that means the world price for the components will stay strong, or, as we have seen, go UP.

This is the real impact of globalisation- that local economic decisions, like those the K's make, have some, limited, local impacts, but global trends mean much more. A lot of the Argentine inflation is caused by wacky local regulations, but a lot more of it is totally beyond the control of the K's or Obama.

I agree demand from China has increased commodity prices which has benefited a number of countries including Argentina. But it's not one sided as the low-cost goods made in China as a result probably reduced inflation.
I think you are correct about exports falling their main customers are North America and Europe. I don't think they can continue the 10% growth rates you mention, not at least for much longer. A lot if not most of the growth there today is in the form of a building boom driven by real estate speculation. The signs are that the boom is just about over, in fact I think a major crash is possible. If that happens then the demand for commodities is going to fall dramatically, which is going to hurt a lot of countries, Argentina included. If China does crash we are going to see deflation not inflation and a greatly increased possibility of another world-wide depression not seen since the 1930's.

 

[dennisr]

For China,
With the trade surpluses China has, there is an excess of capital (yuan) on the streets of Shanghai. With a fist full of dollars, the Chinese are chasing a finite number of goods and services with an excess amounts of cash. Excess demand is created: inflation.

For Argentina:
Inflation is created through increases in salaries (print more money) and then the subsequent increase in producer costs which will drive up the prices of their goods and services. This will then translate back into higher prices for the wage earners amd consumers. As demands go higher from each side, inflation will continue to rise. Furthermore, increased taxes and taffifs on imported goods inflates costs and here we go again. In my view, this will end in hyper-inflation. To say K and her cronies have no control in this insane economic policy is, well, misguided in my view.

 

[soulskier]

I am spending winter skiing at Las Leñas. Day parking is 60 pesos per day and there is no free option anywhere.

I don't know how the Argies are doing it. I am grateful I can divide by 4, and that is still ludicrous.

 

[davonz]

If it cost 60 pesos for parking, how much for a lift pass for the day per person ?

 

[AlexfromLA]

Between $ 165 - $ 250 Pesos a day depending on the season.

It's worth it.

http://www.laslenas.com/castellano/

 

[soulskier]

If it cost 60 pesos for parking, how much for a lift pass for the day per person ?

165-253 pesos per day, depending on the season.