Is Argentinas Economic Collapse Imminent?

[Musicman]

What are the Argy expats view on this? How long before the collapse or could Argentina somehow escape a meltdown and if so what could possibly save the country?

Will we see an expat exodus and what's likely to happen to real estate prices?

 

[steveinbsas]

Please define collapse.

A significant devaluation of a country's currency could be considered a collapse and this has already happened.

What will happen when the government runs out of dollars?

Will "they" continue printing pesos at an ever increasing pace to pay the subsidies as well as all of the other expenses?

Will the people continue to accept pesos in exchange for anything or will we have to revert to a barter system of trade?

Is hyperinflation on the horizon?

Perspiring minds want to know.

 

[Joe]

No, economic collapse is NOT imminent (except if international collapse occurs - see below). There is still a years worth of reserves at the current burn rate.

The Captain and Cristina just need to convince the farmers to sell their crops for the precious foreign reserves.

Real estate is inflation insurance so the prices will remain elevated until currency controls are eliminated and no one knows when that will be.

Argentina will continue to muddle through until there is a major collapse in the developed world or China which would kill Argentina's export market.

International financial markets are tanking now - if that continues then the doomsday scenario comes into play.

 

[GS_Dirtboy]

If Argentina can secure an outside loan they might be able to forestall a serious collapse. As crazy as it sounds, there are some credit houses in conversation with the government about a massive loan.

If they can't get outside credit they will need to continue to print money to "devalue" their Peso-denominated debts. Their Dollar-denominated debts they will ultimately need to re-negotiate. The real question is whether the people here will put up with increasing inflation and / or austerity measures (aka cutting off one's favorite government subsidy program).

Any way you cut the cake the people of Argentina will be getting poorer in the foreseeable future.

 

[HenryNisental]

Yes, the boat is sinking, but we do not know whether it will sink to the bottom of the sea or the seawter will only get to the deck. They are disputing who will take the fall and pay the political price.
At any rate, it will be paradise for foreigners (again). House prices may tumble a litle for a while, but the market is already dolarised, and is not indebted in US dollars as in 2001, so I do not expect big losses.
This happens when you let a country to be run by young Marxist gurus with no free enterprise experience watsoever, they only know Marxist fables lernt in school and student cofffehouses.
God help us!!!

 

[Davidglen77]

I think people who are hoping for a collapse so they can change their dollars for a few more pesos every month really suck eggs. Yes you will have a few more pesos in your pocket but thousands of people get poorer and poorer on a daily basis don't have that luxury. Some of us settled here because we like the country (maybe not the government though) which are 2 separate things. And there are people really hoping for things to bottom out so they can eat cheap steak dinners. Nobody is going to stop changing dollars on the black market after reading this post, and I don't expect them to. But how about hoping that things recover so 41 million people can live a decent life and not have to worry about their and their familiy's lives on a daily basis?

 

[thorsten]

Thousands of people get poorer and poorer on a daily basis anyway - thanks to the current government. Even though I agree that hoping for a collapse is kind of weird, the problems Argentina is facing are home made. And honestly, I'm not sure if they actually might need another collapse to understand that their basic economic system just doesn't work and caused the low welfare of this country.

 

[Kate101]

The folks of the USA are getting poorer and poorer by the day as well. Hence the migration to BA. After the 2008 debunkel here I cant make 1/3 of previous years. So why not head to BA and live off want I saved? There are many poor people here and its not getting better either. Our middle class is dropping like fly's. Check out the last week on NYSE. Average savings loss of 7%, just when we had bounced back after 6 long years.If you could hold out and not cash in your chips at 50%. Dont cry for me Argentina, we have 3 more years of Obama to weather out.

 

[kemer84]

Thousands of people get poorer and poorer on a daily basis anyway - thanks to the current government. Even though I agree that hoping for a collapse is kind of weird, the problems Argentina is facing are home made. And honestly, I'm not sure if they actually might need another collapse to understand that their basic economic system just doesn't work and caused the low welfare of this country.

Your source of information about what you are writing?

I do not think you have one. I have lots of them that are saying quite the oppsite. IMF, WB, OXFAM, CEPAL, CARITAS, UN, Juan Carr, and so on.

 

[ajoknoblauch]

I think people who are hoping for a collapse so they can change their dollars for a few more pesos every month really suck eggs. Yes you will have a few more pesos in your pocket but thousands of people get poorer and poorer on a daily basis don't have that luxury. Some of us settled here because we like the country (maybe not the government though) which are 2 separate things. And there are people really hoping for things to bottom out so they can eat cheap steak dinners. Nobody is going to stop changing dollars on the black market after reading this post, and I don't expect them to. But how about hoping that things recover so 41 million people can live a decent life and not have to worry about their and their familiy's lives on a daily basis?

Expecting a collapse and hoping for one are two different matters. I'd like to see a stable Argentina with functional institutions whose government doesn't make things up as it goes along, but I'm not very sanguine about that scenario.