"It Might Be Time To Get Out Of Argentina"

[Pensador]

It would be hard to even fathom how messed up finances and economics are in this country. That mess spans into every nook and cranny, from labor laws, to banking, importing and exporting, taxation and so much more. Macri inherited an unimaginable mess from the K twilight zone. I would hardly put this on him. But I can say one thing I would not want his job. Fixing it will take more than two years and I would call that an if for sure..

Here you can see the poor resorting to every measure they can to deal with it. There are 5 kioscos and 6 vegetable stands on my block all opened in the last month. Sucked watching one of children in one these places pick up and orange and then watching his mother tell him to put it back, just sad.

 

[RandomS]

I think the answer is to open up competition and stop taxing imported goods so highly in order to protect home produced products which in the most part are sub standard.

With the currency being artificially so strong for decades, it is almost impossible to open up competition in any form.

 

[RichardP]

Argentina always seems to have some surprises up its sleeve. Don't give up just yet.

 

[garryl]

Peso's slide has stopped a bit. Interest rate hiked to 40%.

https://www.reuters.com/article/arg...rate-to-40-pct-peso-strengthens-idUSL1N1SB0JA

A lot can change in the next few hours though.

Dangerous, if you play this market.

 

[Crema Americana]

I think there's a bit of a panic due to the fact that inflation is higher than government estimates and the people are scrapped for cash with all the rate hikes. Things will probably get worse before they get better, but a crash isn't necessary. We’ve been crashing since 2001. I don't agree with Macri’s focus, and there's a lot of ways the government can cut spending (and/or increase revenues) without going after the littlest guys.... But, I'm also wary of those that almost seem to be calling for a crash. Foreign businesses, investers, and those that earn dollars would love a market crash and for Argentina to be dirt cheap again, but that isn't reality either. I question those that are raising a panic over a couple pesos to the dollar.
Granted, prices are still too high... Even for local goods, much of it driven by speculation. That needs to settle a bit, stagnation/devaluation comes with some hardship, but I believe that with long term planning and no knee jerk reactions to Forbes articles, Argentina can keep trudging on.

 

[dennisr]

Once again, the “Financial Bicycle”. Carry Trade: bread for today, hunger for tomorrow.
http://palermonline.com.ar/wordpress/?p=71638

 

[Rich One]

Argentina Numero Uno .. the highest interest rates in the world_O 40% followed by Egipt 18% , other countries in the area less than 6 % . Chile 3.2%..!

 

[gracielle]

I don't know how many expats who live here today experienced first hand the economic debacle that engulfed ARG.

The Argentine Crisis 2001-2002
https://economics.rabobank.com/publications/2013/august/the-argentine-crisis-20012002-/

I was living here that summer arriving on Dec 9, 2001. The monthly expensas on our apt (located on Av. 9 de Julio and Paraguay) amounted to the equivalent of US$10.00 and the cost of the utilities was less than US$5.00. Thanks to our AmExpress card, my ex and I ate every meal at high end restaurants for nickels to the dollar. They were the only places in town that accepted any credit cards. While hungry people ransacked their garbage cans every night after closing hours. None displayed acts of violence but the look of desperation in their eyes was heart-breaking.

I could go on but I'm sure you get the picture. I certainly do not want to see a repeat performance no matter how it benefits my pocketbook.

 

[garryl]

I don't know how many expats who live here today experienced first hand the economic debacle that engulfed ARG.

The Argentine Crisis 2001-2002
https://economics.rabobank.com/publications/2013/august/the-argentine-crisis-20012002-/

I was living here that summer arriving on Dec 9, 2001. The monthly expensas on our apt (located on Av. 9 de Julio and Paraguay) amounted to the equivalent of US$10.00 and the cost of the utilities was less than US$5.00. Thanks to our AmExpress card, my ex and I ate every meal at high end restaurants for nickels to the dollar. They were the only places in town that accepted any credit cards. While hungry people ransacked their garbage cans every night after closing hours. None displayed acts of violence but the look of desperation in their eyes was heart-breaking.

I could go on but I'm sure you get the picture. I certainly do not want to see a repeat performance no matter how it benefits my pocketbook.

However, after that, Argentina enjoyed almost 15 years of recovery and growth. I was in Argentina in 2002, everyone was working. Things were cheap but not that cheap. You also should look at the US in 2009, that was bad, and now it's better. I think crashing is good. it's like someone is getting a bad flu, and recover from it. If you never have a flu, you could die.

 

[gracielle]

Recovery, yes....after hitting rock bottom in 2002. Sustainable growth from 2002-2015???

Argentina Was Not the Productivity and Economic Growth Champion of Latin America
Ariel Coremberg University of Buenos Aires
The author is Professor of Economic Growth and Director of the Center of Studies of Productivity (CEP) at the University of Buenos Aires. The article's findings were presented at the Fourth World KLEMS Conference in Madrid, Spain, May 23-24, 2016. The ARKLEMS series discussed in this article has been included at the Conference Board Total Economy Database and World KLEMS initiative

http://www.csls.ca/ipm/33/Coremberg.pdf
The Kirchner administration (2002-2015) claimed that under their leadership Argentina experienced record-breaking GDP growth. However, this article shows that Argentina's GDP growth was underwhelming. Statistical estimates produced by the new Argentine government support the ARKLEMS project's evidence that the Kirchner administration overstated growth. Distortions were large and discretionary and affected all industries, independent of the downward bias of the Consumer Price Index and the Wholesale Price Index. New stylized facts counter the claims of the Kirchner administration. First, real GDP growth in the 2002- 2015 period was weaker than in the 1990-1998 period. Second, GDP only grew in the subperiod 2002-2007 because of the commodities boom. Third, GDP growth in Argentina was second lowest among ten Latin American countries in the 1998-2015 period. Fourth, GDP growth during the 2002-2015 period was extensive in nature, based on factor accumulation, not total factor productivity, so was not sustainable.

Conclusion The Argentine National Statistics Institute (INDEC) suffered political intervention from 2007 to 2015 during the Kirchner Administration. With a new government installed in Argentina in 2016, INDEC has published revised G D P e s t i m a t e s t h a t c o n f i r m p r e v i o u s ARKLEMS measurements and thus counter INDEK's GDP myths. These new estimates show that INDEK overstated GDP growth (30 per cent instead of 16 per cent) from 2007 to 2015, by discretionary manipulation.