Is the Argentine Economy Going to Collapse?

[davejohnson333]

I recently read this about countries which are in danger of possible economic failure. What's your take on this? Is Argentina's economy going to collapse?

http://finance.yahoo.com/news/10-Countries-in-Deep-usnews-14971805.html;_ylt=Ak1lSVVBUQ09er6915epvacazJV4?.&.pf=real-estate


If this is true, then why bail out of the U.S. and go to Argentina? It seems you are heading from the frying pan and into the fire.


Dave

 

[perry]

The chances of the Argentine economy collapsing are close to zero. The basic fundamentals of the Economy here are very good and Argentinas foreign reserves are high at close to US $ 50 billion .

The price of cereals and grains have skyrocketed of late once again creating a windfall in foreign reserves meaning that any chance of Argentina defaulting on its foreign debt for 2009 and 2009 are extremely slim.
These are the crunch years and by 2011 our foreign debt will be more manejable .

The negative aspect of the World economic downturn has been the loss of tourism to Argentina and especially Brazilian Tourism who now have a weaker currency meaning Argentina for them is more expensive . I believe that this is a short term problem as the Brazilian Real will increase in value in the near future meaning the largest part of Buenos Aires tourism market ( 60 per cent ) will increase to pre crisis levels.

In regards to Christina Kirchner and the Kirchners in general I see that there is a lot of negativity about them in the foreign press as well as the local press ie. LA Nacion, Clarin, and of course the Buenos Aires Herald. This to me is unjustified in the main as they have changed Buenos Aires and the provinces for the better in the last 7 years. The city of Buenos Aires has seen most of these improvements ie. Better services, increased employment , new housing for the working classes. and many other positive changes especially in the area of human rights.

I know many of you will disagree with me about Christina Kirchner especially in the light of the farmers strike of 2008 which had huge support amongst the upper middle classes and media conglomerates. Unfortunately Christina did not handle this dispute well from the beginning meaning that it became an uncontrollable train of discontent turning her majority support to below 40 percent today.

The biggest negative for me in the last few years in Buenos Aires has been the increase in crime. I see this being a consequence of the Paco epidemic ( Paco is a highly toxic low quality cocaine deriative ) . To me this is a national tragedy as it has caused untold misery to many families of all classes. Crime is much more prevalent in the Capital Federal now . This has caused a backlash against the national government.

Saying all this Buenos Aires is a vibrant cultured city that will captivate most visitors and newcomers alike. In the main neighbourhoods of Recoleta, Palermo , Belgrano, Barrio Norte you will feel safe and comfortable as anywhere else in the World . Cafes and restaurants are still full on many nights and the theatres and cinemas are thriving. Argentines on a personal level have been less affected by world wide events and it shows . Economically they are spending and mainly in cash and there is a quiet optimism here that we will be less affected by World wide events.

Overall I share this belief of quiet optimism and believe that the Congresional elections in 4 weeks will bring stability to the country . I see that Nacha Guevara is on the Government ticket and have to say I admire her very much as she is a politician with hope and ideas.
Argentina has and will have enormous potential in the coming decades and with a committed govenment most challenges facing our society can be overcome.

 

[sergio]

The Argentine economy will not crash as it did during the last crisis. The banking system has already been seriously reduced and is not likely to contract much more. Bank accounts will not be frozen as they were before and people's money robbed. What is happening, though, is a gradual slowing of the economy. Foreign companies are cutting back; anything reliant on the US or Europe is being adversely affected. As for default, one never knows here. The 50 million figure may not be true. The statistics bureau, INDEC, is notoriously unreliable (by order of the current administration), so one has to wonder if the amount of reserves stated by the government can be correct. Overall, I believe Argentina will suffer a slowdown of the economy: increasing unemployment, "controllable" inflation in the 20 +% range, drop in tourism affecting the overall economy, etc. Not a huge crash.

Anyone coming here to escape a greater crash in the US economy is being silly. As many have stated here, it is extremely hard to earn a living in Argentina, even if you have legal status. Most people living on the local economy find their standard of living gradually declining despite their hard work. Almost all the expats I know live on money that they have made in the US or elsewhere or continue to make in the US or Europe. Without this money they would find life a nightmare in Argentina and would quickly jump ship.

 

[criswkh]

Lets see..who has farther to crash US (full of individual credit/debit) or Argentina (mostly individual cash)? I believe the US will evolve into an Argentina if it keeps printing money at their current rate and if China stops buying US debt. Argentina's economy is slowing down but not to the extend as others. The problem that Argentina faces is making laws/rules more business friendly so company's can start-up or relocate down here. Argentina needs to get a grip on the inflation that is occurring. Argentina is having to compete with Brazil and Columbia in this aspect.

 

[syngirl]

This to me is unjustified in the main as they have changed Buenos Aires and the provinces for the better in the last 7 years. The city of Buenos Aires has seen most of these improvements ie. Better services, increased employment , new housing for the working classes. and many other positive changes especially in the area of human rights.

...

Overall I share this belief of quiet optimism and believe that the Congresional elections in 4 weeks will bring stability to the country . I see that Nacha Guevara is on the Government ticket and have to say I admire her very much as she is a politician with hope and ideas.
Argentina has and will have enormous potential in the coming decades and with a committed govenment most challenges facing our society can be overcome.

I think you're mistaking what the City government does for BA versus the federal government. Those improvement projects have all been put in place by Macri and Micelleti, not Cristina.

Nacha Guevara is NOT a politician -- she's an actress whose only on the ticket because she played Evita on the stage for the past 6 or 8 months and the public delude themselves into thinking that she IS Evita. She's NOT. She's an ACTRESS. She doesn't have an ounce of political knowledge and if you watch her at any of the political rallies all she does is cobble together speeches from plays and movies and tries to deliver them in the form of a Cristina / Evita. She has no platform, she is a sheep.

 

[soulskier]

I consider the two economies like wildfires. ARG has a fire every 10 years, therefore there is not a ton of fuel to burn. EEUU hasn't had a big fire in many years, and will likely burn out of control.

 

[perry]

I think you're mistaking what the City government does for BA versus the federal government. Those improvement projects have all been put in place by Macri and Micelleti, not Cristina.

Nacha Guevara is NOT a politician -- she's an actress whose only on the ticket because she played Evita on the stage for the past 6 or 8 months and the public delude themselves into thinking that she IS Evita. She's NOT. She's an ACTRESS. She doesn't have an ounce of political knowledge and if you watch her at any of the political rallies all she does is cobble together speeches from plays and movies and tries to deliver them in the form of a Cristina / Evita. She has no platform, she is a sheep.

I believe these comments to be harsh about Nacha Guevara
http://en.wikipedia.org/wiki/Nacha_Guevara

I suggest that you read up on her and you will see she has had strong convictions all her life.
Am I the only one to find your comments ironic Quote She's NOT. She's an ACTRESS.
Evita Peron was also an actress without any political background but today she is known as the most famous Political woman of the last century.

The most important factor to have in politics is the desire to make positive changes in society and work for this.
Many people unfortunately have too much political knowledge and have absolutely no interest in politics but their own interests.

 

[tangobob]

Nacha Guevara is NOT a politician -- she's an actress whose only on the ticket because she played Evita on the stage for the past 6 or 8 months and the public delude themselves into thinking that she IS Evita. She's NOT. She's an ACTRESS. She doesn't have an ounce of political knowledge and if you watch her at any of the political rallies all she does is cobble together speeches from plays and movies and tries to deliver them in the form of a Cristina / Evita. She has no platform, she is a sheep.

Wasn't Evita just an actress? oh and Ronald Regan an actor? sounds like a good starting point in politics to me.

 

[Fettucini]

What is so sickening is all the press that comes out saying how bad Argentina should get back on track with the saintly IMF and get more debt. Although i'm no economist and could be wrong in my views, i think it's disgusting how the IMF gets praised as being some sort of saviour when they are really just a bunch of loan sharks who have probably caused a huge amount of harm to a lot of third world countries.

Who does everyone want to win the Argentine mid term elections? Looks like Christina is now making every effort to get as many loans as possible which is not a good sign, especially after her speech on winning the election to say she wanted to get the country out of debt.

 

[fedecc]

Pericles i think you have being reading to much government media.

It's true however that economy is not likely to collapse, but this is mostly beacuse there is no much left to collapse.

The improvements you mentioned in your post are simply non existant. The current government enjoyed the world's most economicaly prosperous five years in a long time. Now that the party is over, what does the government has to show, what improvements?.... Simply none, the debt is just as high as it was back in 2001 and poverty is even higher at 35% and stuck there. Instead we have corruption galore, crime running rampant, the worst foreing politicys we have ever had with terrible relations with most countries (even with Uruguay, only this government could manage that), and a level of hatred among argentinians that i only used to read in history books.

And im sorry to burst your bubble, Nacha Guevara (her real name is Clotilde Acosta by the way) is just an oportunist, she too enjoyed good relations with the governmet in the 90s that granted her a place in the state's TV channel. Her comitment is just as big as the profit or position she can get for it.

As far as the IMF, it's far from being a perfect institution, but it has being extremely demonized here, as argentinians are fond to do so often, so we don't get to take responsability for our own actions. The truth is the IMF provides the cheapes loans avaliable in the market. In return it ask for a minimum control and transparent numbers, both things whch the current government refuses to provide. Instead it chose to take loans from Hugo Chavez at a interest rate of 15%. Im no economist either, but i'll take the IMF anytime.

Anyway, sory for the rant....