"It Might Be Time To Get Out Of Argentina"

[lamarque]

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.

The banks interest rate is not a valid indicator in this situation, as long as someone is willing to take a loan for that amount they will charge it, regardless that interest rate of 40% in a particular situation of fear is not a valid indicator of what will the inflation be like. You need to let things settle down a little before making an estimation like that, right now interest rate is high because of uncertainty, when things settle down interest rate will be more near to what the inflation should be.

 

[Churchill]

Comparing this crisis to 2001 is panicking or scaremongering. I stand by that.

 

[perry]

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.

Number one I never have been a supporter of socialism nor Cristina as I believe in capitalism 100% . Savage capitalism is another question and what I am seeing now are signs for an exit . Small business are the backbone of a economy and they are not making ends meet due to being priced out of the market due to exhorbitant costs and restrictions . Capitalism means creating hope and giving everyone a chance to get ahead . Hope is sadly lacking in the population atm and a good leader is the one who steers the ship to a safe port . Argentina is now a ship without sails with no clear destination

 

[perry]

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

I am sorry but the real inflation is 40% when you consider many basic expenses have gone up over 200% in less than a year . I keep a steady record of all costs and the current inflation rate is higher than reported . This is a common problem in all societies where real inflation figures are less than the reality

 

[lamarque]

I am sorry but the real inflation is 40% when you consider many basic expenses have gone up over 200% in less than a year . I keep a steady record of all costs and the current inflation rate is higher than reported . This is a common problem in all societies where real inflation figures are less than the reality

Wrong, sorry but this is not how inflation is measured. Neither you can just make a definition of what inflation should be based on your singular consumption preferences and the change on price experimented on them.

 

[perry]

Wrong, sorry but this is not how inflation is measured. Neither you can just make a definition of what inflation should be based on your singular consumption preferences and the change on price experimented on them.

Most independent analysts say this is the real inflation rate as most compulsory items payed by the inhabitants have gone up over 40% since last year . Inflation must be based on fundamental purchases not on non essential items that create a lower figure that benefits the goverment in charge . For example condo fees, rental prices in pesos, gas, electricity, water and food have gone up much more than 40% since 12 months ago. These items are the essentials of life and must be the basis of genuine inflation .

 

[lamarque]

Most independent analysts say this is the real inflation rate as most compulsory items payed by the inhabitants have gone up over 40% since last year . Inflation must be based on fundamental purchases not on non essential items that create a lower figure that benefits the goverment in charge . For example condo fees, rental prices in pesos, gas, electricity, water and food have gone up much more than 40% since 12 months ago. These items are the essentials of life and must be the basis of genuine inflation .

Please first study how is the inflation calculation mechanism and then you can talk all you want about it, you have no idea what you are saying. Inflation calculation is pondarated on the consumption of the average population, so, let say rent is 35% of the monthly spenditure of a person, you make a ponderation of how much rent has changed on the last month and you multiply that for 35%, and you continue like that with every item until you have the 100%. that gives you a generalised and valid inflation rate for the country, of course there are some specific inflation rates that are more usefull for other activities and are mesured as well, like the one used for construction and other activities. But when you talk of the inflation rate you are talking of the best mechanism you have to do a generalization of how much the total cost has change for an average person (of course is an average, not everyone is impacted in the same way, as not everyone consumes the same). The kischners fired the people that was working on the indec, to cheat this mechanism so they could lie about inflation, so that was not a valid inflation rate. Now a days the indec is back to normality now. So the indec is what you should look at to know the real inflation rate, no private institucion carries a real general index of inflation.

 

[perry]

I agree that the inflation figures by the Kirchner govement were a farce but facts are facts essential items that are paid every month have gone up more than 40 percent since last year. How governments calculate inflation today are completely skewed in their favour creating favourable statistics. I am sure if you ask most argentinians if their food costs. rental costs in pesos, condo fees , electricity ( over 100 percent) gas ( over 100 percent) water ( over 100 percent) have gone up less than 30 percent they will laugh at you . The real inflation rate is much higher that quoted as the items that are calculated are not all essential items skewing the figures . This is not an argument about left or right as socialism for me is a terrible cancer . This is an argument about humanism and doing things correctly for the common good . I also voted Macri as I wanted a positive change but it has not happened due to no clear plan of actions being implemented to generate employment and stimulate business. Real capitalism works from the middle class to help them to prosper and give them hope . Creating a casino economy where hard work is not respected but speculation is has destroyed many economies worldwide . The USA has done the same with its middle class shipping all its industrial base to China and leaving its heartland decimated. Now yes in the big cities of the USA there are many wealthy people but go to the Midwest and industrial cities famous for their production and they are a shadow of their former self . Capitalism means creating jobs, creating incentive to open businesses , minimizing beaurocracy , having fair tax rates , and keeping inflation and especulation in check . When you do this a country prospers and investors rush to be a part of the action. Argentina has the best potential in the world but I feel that the vicious cycle of boom and bust is being perpetuated by the political class and the middle class are who suffers . A society lives on its middle class who comprise of 90% of the population . When they have hope, when they invest in small business, when they have money to spend, a economy can only prosper .

 

[Silvie]

I am sorry but the real inflation is 40% when you consider many basic expenses have gone up over 200% in less than a year . I keep a steady record of all costs and the current inflation rate is higher than reported . This is a common problem in all societies where real inflation figures are less than the reality

Are we counting services that were being subsidized by the State Government in the past? Those subsidies everybody was getting.... Even the public transportation fares have been subsidized by the Government. The free ride is over.

 

[rickulivi]

Are we counting services that were being subsidized by the State Government in the past? Those subsidies everybody was getting.... Even the public transportation fares have been subsidized by the Government. The free ride is over.

I have to congratulate Lamarque for his earlier comments. He seems to know what he's talking about and has a stable head. Now, let me illustrate the main components of the inflation index in Canada, which I would guess are very similar to the one used in Argentina. Food and beverages 20%, Housing 26%, household operations 13%, clothing 6%, transportation 20%, medical care 5%, recreation 11%, (all figures rounded). These figures should help this debate over inflation.