Is Argentina on the verge of another crisis?

[mariano-BCN]

I've been for a while and don't really believe the stories about an imminent devaluation of the peso.
I wish I was wrong so this country could be affordable again but I'll go away in April 'cause it's bloody too expensive and services and goods are of a low quality.

 

[nicoenarg]

"If I remember what I read there was a time when Argentina had an inflation over 350% or so (old currency)?"

Inflation actually topped 4000% in the late 80s...bananas!

citation: http://bit.ly/A7IcPU

Thanks for the link but the paper does not seem to cite any credible references for that number. I might have missed it if they did but all I see is, "inflation dropped from 4000% to 0%".

That's too vague to be used as a credible source of information.

 

[John.St]

Hi
I am a newcomer to this forum. I have toyed with the idea of moving to Argentina for a few years. I have been looking at recent posts to get a feel for the current situation.

What I have read does not install much confidence in making this move.

It appears that inflation is running out of control. The official government statistics on inflation can not be believed. Bloomberg a major financial organization has recently taken the unprecedented step of no longer publishing the Argentine government inflation statistics because they don't believe them.

The latest decision to ban imports seems like a last ditch effort to control inflation by pretending it does not exist. After all, how would you know toothpaste for example has risen a lot in Pesos, if no toothpaste is available to buy.

The recent changes in taxes on real estate investments seems punitive to foreigners, essentially designed to trap their capital in the Peso, and prevent the free flow of capital in and out of Argentina.

What's next currency controls, changes to the residency rules, new punitive taxes aimed at expats.

I can't help thinking sadly a new crisis is on the horizon if you only read the signs.

1. Inflation is not running out of control, it has been 21-28% for the last three years and seems to have stabilized at that level.

2. The reason for the import ban is that imports are growing (33%) much faster than exports (25%).
http://http://en.mercopress.com/201...w-restrictions-to-slow-consumer-goods-imports

3. The Argentinos themselves are not very confident, capital outflow in 2011 reached 21.5 bio. US$, 8.443 bio. in 3rd quarter alone.
http://en.mercopress.com/2012/02/21...n-2011-capital-outflow-reaches-21.5bn-dollars

Come and experience the country and don't worry as long as you

Have a return ticket.
Are paid in a foreign currency.
Don't keep your money in an Argentine bank account.

 

[solerboy]

1. Inflation is not running out of control, it has been 21-28% for the last three years and seems to have stabilized at that level.

Only slightly higher than the 2.9% in the US !

 

[steveinbsas]

Only slightly higher than the 2.9% in the US !

And the source of the 2.9% figure is?...

Are your there and have you filled up your gas tank lately?

Does the "official" inflation rate in the US include the cost of fuel?

 

[Crema Americana]

Is the bottom about the fall out? Probably not. December 2001 is a ways off yet. Things are holding together for now... no massive shortages yet, no wheelbarrows full of money to buy a loaf of bread, and you can still get your money out of the bank (with limits.)

But things will continue to get more expensive (20% yearly inflation may not be catastrophic, but it's very high and it hurts those on fixed incomes)... the limitations on being able to move money are a sign that the government fears capital flight and a further devaluation of the peso... and certain products are getting to be much harder to find.

In any case, I don't think expats (or even immigrants) are being targetted... I think the government is just trying to hold this thing together with marshmallows and toothpicks. It will hold for now, but eventually there will be a correction (who knows when.... End of the year? Two years? Five?). That, or we just slowly slide down next to Cuba.

 

[citygirl]

Solerboy would be using the CPI I would guess. Which does have questions about validity but in the other direction - the complaint is usually that the CPI overstates the inflation by up to 1% as it doesn't take into account variables such as access to lower priced substitutions, wholesale shopping centers, increased product longevity thus cutting down the need to replace, etc.

 

[John.St]

and the source of the 2.9% figure is?...

INDEC? :d:d:d

 

[citygirl]

And do you own a car here? I would not ever complain about gas prices in the US! It cost be 300 pesos to fill my tank 3/4 of the way, not even full. And I have a Bora, hardly some gigantic car or gas tank.

 

[solerboy]

And the source of the 2.9% figure is?...

.

http://www.rateinflation.com/inflation-rate/usa-inflation-rate.php