"It Might Be Time To Get Out Of Argentina"

[Churchill]

99% of the economists I have heard speak on the matter in the last couple of days have made it clear that, although this is a crisis, this is very different to 2001. Yes, the IMF will want the govt to reduce the deficit as a condition of the loan but that in itself can only be a good thing long term.

 

[perry]

99% of the economists I have heard speak on the matter in the last couple of days have made it clear that, although this is a crisis, this is very different to 2001. Yes, the IMF will want the govt to reduce the deficit as a condition of the loan but that in itself can only be a good thing long term.

What is different about it? The foreign debt is much larger now than back then and the inflation is much much higher at close to 40% . In many ways the situation prior to 2001 for most working people was much better than now . In those days with a normal wage you could live within your means now you are in continual debt as to pay the most basic expenses .

 

[on the brink]

Like fair-weather friends, bargain hunting expats head for the exits when the going gets rough. Foot loose and fancy free, they don't invest in the host country, nor contribute much to it. Here's wishing a quick exit, and the best of luck, to all departing members - may you find elsewhere what you failed to find here.

 

[Silvie]

What is different about it? The foreign debt is much larger now than back then and the inflation is much much higher at close to 40% . In many ways the situation prior to 2001 for most working people was much better than now . In those days with a normal wage you could live within your means now you are in continual debt as to pay the most basic expenses .

Back then, there we had 1 peso = 1 dolar. People were happily living in Lala Land during those years, people really THOUGHT hat they were living much better but it was at a cost.

 

[Somewhereinba]

I'm telling you a huge part of this problem is the mentality of the people. Inflation is a devil. The people here are so used to it they create it. Think about all the shops and how they set their prices, you think every few weeks they go change all their tags to match real inflation? NO. They have to take a guess and front run it - with an added 'safety net' to avoid being caught out. This then creates more inflation and the cycle continues. When you are an owner making a 2 years rental contract how are you going to set prices for the second year? What about the union bosses negotiating wages for the next year? With uncertainty there is no choice but to add a 'buffer' which then gets another 'buffer' and so on. This country needs its population working in more valuable industries that generate real growth - not drinking mate all day and generating little real output. If the people are not willing to change their lifestyle and stamp down on corrupt practicies then nothing is going to change and the cycles will continue.

 

[notebook.fix]

IMHO the economy of Argentina will crash in 2019 and could be similar to 2001 . The situation on the ground is the worst I have seen since I have arrived in 2004 . Most small business owners are closing their doors as people are not spending but on the essential . Of course for a small group of people who live from large land holdings in the campo their lives have improved in the last years but this is only 5 % of the population . In spite of the downbeat economy the prices for everything is sky high including real estate, cars, household goods ,food etc etc . Real estate prices seem articially inflated with very high asking prices but few solid enquiries . Listings in zonaprop in the last six months have more than doubled and soon people will have to readjust their expectations to the reality of the market . It saddens me deeply that it has come to this but its time to move to greener pastures .

Interesting. I also remember that you were a supporter of Cristina in the early days...do you think Macri is to blame for "the worst I have seen since I have arrived in 2004" .. no malice, I just wonder what your opinion might be.

 

[Churchill]

What is different about it? The foreign debt is much larger now than back then and the inflation is much much higher at close to 40% . In many ways the situation prior to 2001 for most working people was much better than now . In those days with a normal wage you could live within your means now you are in continual debt as to pay the most basic expenses .

Inflation is nowhere near 40%. No offense but you sound like you are either panicking or scaremongering.

 

[garryl]

Back then, there we had 1 peso = 1 dolar. People were happily living in Lala Land during those years, people really THOUGHT hat they were living much better but it was at a cost.


It's exactly the situation in China now.

 

[lamarque]

Jaja, guys you are really something, panicking for a couple of pesos devaluation, common.
Worst case they just let the peso devaluate an ready, this is nothing even close to 2001 where there was a 1 to 1 law and no possibility of actually doing monetary policy in a country that was having a huge external debt and a huge deficit.
Is just one more occasion of a share market that has been growing extremely fast for the last 2 years, and now needs to take profit out, this added to the new tax to financial earns, and the fact that was a terrible season for the soja harvest, to that you add that the interest rate of the federal reserve of america increased several times and you have a whole situation to make a huge impact on the dollar value, this is not even something local, Brasil real just touched a historical record low on it valuation against the dollar today, hell even euro lost almost 8% of it value in the last week against dollar.
In any other country this would have been seen as a normal devaluation due to external factors, but in Argentina people start panicking easily and selling and taking refuge on the dollar. Add to that tv broadcasters going like crazy with 24 hs report on this and talking very few about the actual causes of this and you have an explosive mix.
In any case as soon as things settle down, same money will be heading back attracted to the possible insertion of argentina to the new market category, and as well attracted by the interest rate, overall, not something to panic so much about, and even less if your income is in dollars.
You can see that even today the Argentinean shares market is already extremely green making a huge 5.4% increase in a single day, that is a crazy increase for a single day, and that means that a crazy amount of money is flowing in back to Argentinean shares that in the last days was going in panick away from them.

Hopefully i put some sanity into this insane panicking this society seems to be heading to.

 

[julian63]

Inflation is nowhere near 40%. No offense but you sound like you are either panicking or scaremongering.

Well, even though INDEC may publish inflation rates of less than 40% (like 25+), the banks are paying 40% for time deposits. That is usually sign that inflation is on an upward trend. I'm not sure panicking or scaremongering accusations are valid.