Is Argentinas Economic Collapse Imminent?

[Davidglen77]

I've never wished bad on any country, even those whose politics I don't agree with. I've said this before and I'll say this again, the country, its residents and the government are separate issues. Nobody agrees with everything the government does, but why wish bad things to happen to an entire population? The only reason I can think of is pure selfishness, people hoping for those cheap bottles of wine and steaks bought for their dollars. I hear it over and over again. I hope you all enjoy Argentina, all it has to offer and hope for everybody's sake it's around in its current form for many centuries to come. This is not a temporary holding station. It's a 200+ year old nation with hopes and dreams like all of the other 249 countries on this planet.

 

[ben]

I've never wished bad on any country, even those whose politics I don't agree with. I've said this before and I'll say this again, the country, its residents and the government are separate issues. Nobody agrees with everything the government does, but why wish bad things to happen to an entire population? The only reason I can think of is pure selfishness, people hoping for those cheap bottles of wine and steaks bought for their dollars. I hear it over and over again. I hope you all enjoy Argentina, all it has to offer and hope for everybody's sake it's around in its current form for many centuries to come. This is not a temporary holding station. It's a 200+ year old nation with hopes and dreams like all of the other 249 countries on this planet.

Many people 'wishing' collapse - I use quotes because I think it's the wrong term here - do so not for the cheaper steaks. It's because a collapse may in some ways be comparable to painful, risky surgery - while both painful and risky, there is no better way available to root out the disease.

The disease, in this case, is an unholy mix of a government that lives off the support of the economically untrained and dependent, and a large segment of the population that is content to stay that way, consequences be damned - until these consequences arrive. There is no way to remove the day of reckoning, only to perhaps delay it - and it's worth asking if the delay helps matters.

Will a total crash help things? Not necessarily, particularly if rather than go for lasting change, people blame whoever will at that point have been in power for all of a month and a half. Then again, what option is out there?

I can't help but think back to what someone said to me once, "Chile had an honest dictatorship. Brutal, but honest - they wanted to change things, and they did. Argentina's dictatorship wasn't an honest one, and nothing truly changed". Simplistic? Certainly. Totally wrong? Who knows?

 

[fuccolini]

i'm not really sure that if the economy "collapsed" you would be able to tell the difference from a normal argentinian economy…

 

[EdRooney]

I have question for those of you predicting collapse:

Could you please be more specific? What would constitute a "collapse"?

A sovereign debt default?
A return to mass-unemployment?
A devaluation like the one in January (i.e., it's already happened, or a bigger one is coming)?
A corralito?
Mass social unrest a la 2001?
Overthrow of the government?
A Chinese take over?
Suspending of elections?
Long-term McDonald's catsup shortages?

Just so we can be clear about what it is we're talking about here....

 

[ajoknoblauch]

I have question for those of you predicting collapse:

Could you please be more specific? What would constitute a "collapse"?

A sovereign debt default?
A return to mass-unemployment?
A devaluation like the one in January (i.e., it's already happened, or a bigger one is coming)?
A corralito?
Mass social unrest a la 2001?
Overthrow of the government?
A Chinese take over?
Suspending of elections?
Long-term McDonald's catsup shortages?

Just so we can be clear about what it is we're talking about here....

Perhaps looking at "cat soup" - plenty of raw material in the Jardín Botánico.

 

[Joe]

A collapse would be constituted by BAexpats enjoying a gourmet group dinner of Bife de Chorizo around the fireplace at 100 pesos a head (or US $1) whilst the locals, outside in the freezing rain, are eating Choripan made by the Botanical Garden Sausage Factory. The Palermo Bosque Show and Tell moves to outside the walls of the Recoleta Cemetery. And finally, the vegetable stands are all forced to sell Kale to survive.

 

[ajoknoblauch]

Many people 'wishing' collapse - I use quotes because I think it's the wrong term here - do so not for the cheaper steaks. It's because a collapse may in some ways be comparable to painful, risky surgery - while both painful and risky, there is no better way available to root out the disease.

The disease, in this case, is an unholy mix of a government that lives off the support of the economically untrained and dependent, and a large segment of the population that is content to stay that way, consequences be damned - until these consequences arrive. There is no way to remove the day of reckoning, only to perhaps delay it - and it's worth asking if the delay helps matters.

Will a total crash help things? Not necessarily, particularly if rather than go for lasting change, people blame whoever will at that point have been in power for all of a month and a half. Then again, what option is out there?

I can't help but think back to what someone said to me once, "Chile had an honest dictatorship. Brutal, but honest - they wanted to change things, and they did. Argentina's dictatorship wasn't an honest one, and nothing truly changed". Simplistic? Certainly. Totally wrong? Who knows?

Chile did not have an "honest dictatorship" - after Pinocho was arrested, they located several secret bank accounts of his at Riggs Bank in DC: http://www.washingtonpost.com/wp-dyn/articles/A50222-2004Jul14.html. All that said, the Chileans have managed to maintain economic stability since the dictatorship ended, while Argentina continues to make the same mistakes over and over again.

 

[ajoknoblauch]

A collapse would be constituted by BAexpats enjoying a gourmet group dinner of Bife de Chorizo at 100 pesos a head (or US $1) whilst the locals are eating Choripan outside the window made at the Botanical Garden Sausage Factory and the Palermo Bosque Show and Tell moves to outside the walls of the Recoleta Cemetery.

Gotta do something about those cats - I would suggest an after-hours Rottweiler security patrol in the Botánico.

 

[bigbadwolf]

I have question for those of you predicting collapse:

Could you please be more specific? What would constitute a "collapse"?

A legitimate question. Orlov sees collapse as a five-stage process and you can read more here:

http://cluborlov.blo...f-collapse.html

This essay was subsequently expanded to book form and Orlov briefly describes the book here:

http://cluborlov.blo...f-collapse.html

And this is a review of the book:

http://www.resilienc...by-dmitry-orlov

 

[EdRooney]

A legitimate question. Orlov sees collapse as a five-stage process and you can read more here:

http://cluborlov.blo...f-collapse.html

I don't have time to read the whole book right now (onto the list it goes), but the blogpost talks about 5 stages, all of which are losses of faith in institutions. By that measure, not only is Argentina permanently in collapse, but the US has been even more severely collapsed since 1974. This may or may not be the case, but I would like to get to a less abstract definition if we could.

Joe at least set some kind of physical evidence as his criteria. As for the rest of you predicting collapse, do you have anything kind of actual criteria you would call collapse beyond seeing kale in the verdulerías? or is it just some kind of nebulous concept?

For what it's worth, IMHO it's very easy to make the argument that the US is in a long term financial crisis (depressed labour market, decreasing household wealth...), but I would be more inclined to call that a crisis rather than a collapse.