Macri Our Saviour One And Only One Dollar...?

[rrptownley]

Time to stock up on canned food! And wine.

 

[Gringoboy]

Time to stock up on canned food! And wine.

That's pretty much a Walking Dead scenario, but I suppose it's similar.

 

[rrptownley]

I think Argentines would continue hoarding dollars under the mattress even with the collapse of global society and hordes of 'walkers' outside the window.

 

[Ceviche]

This blue dollar is killing me.

 

[ElQueso]

Richard, I think you summed up things quite succinctly.

I'm flat-out worried about things no matter who is in power. As you said, whoever is in power it's going to be hard on them as well as the populace.

What I fear is that no matter who is in power, no matter what steps they take, slow or quick, there is going to be such hell to pay that things could rival 2001-2002, though not necessarily the same exact issues. For example, I doubt there will be a corralito again, or at least not in the same form and with the same problems as last time - particularly since there simply isn't the same amount of USD in accounts here. But more inflation, less capital, more strikers looking for their share of a dwindling economy, etc.

They have to keep the social programs going - hell, even Macri has said he will do so; if he didn't no one would vote for him. Scioli is talking about more money (some $20B if I remember correctly) from Russia and China, but that's blood money as bad or worse than anything else they've gotten themselves involved with and if it's used to float the peso for a longer period and to continue social programs while continuing restrictive economic policies similar to Cristina's, all it means is more debt and/or obligations to other soveriegn entities, which is not fixing anything.

But as far as the patience of the people, I don't know. They seem to still want a savior that will come in and make everything alright without any additional pain and I just don't see how that can happen.

I still think (not that I'm alone in this) that Cristina is setting her party up to take over again after the disaster that comes, as they put the blame on those who inherited her mess when things fall apart. Those who will come after have so many things to overcome, including this desire that the government resolve all problems for the people, and she will be welcomed back with open arms as if by a child with his or head hung low after having done something to upset mama.

 

[sesamosinsal]

I think something that everyone needs to understand in this country is that we have all been living on borrowed money, more exactly borrowed value of our peso.

Sorry, but this is hype and sounds more akin to Alex Jones-style, Zero Hedge doomsday economic blah-blah-blah than anything based in fact.

Modern economies are Ponzi schemes, except this Ponzi doesn't run out of new capital when you have central banks that print it at will at interest rates that they unilaterally set. Thus, as long as a government has control over its central bank, none of what you're saying is going to happen, especially as far as pesos are concerned. Why? The CB will just keep injecting monetary stimulus into the financial system, thereby devaluing debts denominated in pesos. So long as the music keeps playing, no one ever needs to take a seat.

The biggest problem in Argentina isn't the debt the CB, the government or companies have acquired in pesos. It's the USD reserves (biggest cause of hyperinflation). And before someone says "Argentina isn't competitive anymore," realize that the the depletion of USD reserves is a global phenomenon, largely thanks to the recovery that never was in the U.S.

The only thing that will make the national economy collapse is if the next president drastically cuts the government deficit -- i.e. cuts government programs and public sector employment -- and immediately lifts the cepo. This will kill real wages, severely impact demand, kill thousands of small and medium sized businesses, and will throw the economy into a recession, perhaps a depression.

If the next president applies the classical economic theories that we currently observe in the United States, Europe and other parts of the world, your predictions will certainly ring true. However, I hope neither Macri nor Scioli are that stupid to implement them.

 

[ElQueso]

Oh, and talking about the election campaign itself, I was talking with our oldest today after she got home from classes at UADE.

She was indignant at what she saw as dirty campaigning by FpV. Apparently, they had set up booths at school which seemed to be Macri campaign booths. They were handing out flyers which appeared identically formatted as were actual Macri flyers that were handed out before the elections by Macri supporters. However, when one read the flyer, one saw the usual K hysteria. Macri is going to let all the poor die of starvation, he's going to kick out all foreigners, he's going to make sure that no one has jobs, so on and so forth.

I told her that's pretty low and shows desperation, but she shouldn't worry too much about things like this, necessarily. I've seen polls that say some 89% of the Argentine populace have already made up their minds on who to vote for and the debate isn't going to change their decision - probably not so much flyers like this, as these fear-mongering bits of propaganda have been going around for some time anyway..

But what could change their minds (some of them) are truly dirty things like buying votes, or have their minds changed for them in terms of flat-out fraud with the ballots. That's what I worry about when it comes to the election. Anyone who is capable of forcing their own politics down someone else's throat is most likely capable of going further than they already have, as they are convinced they are doing it "for the good of everyone."

 

[Redbeanz]

This blue dollar is killing me.

Why?

 

[scotttswan]

Why?

I expect its because it hasn't changed much in a year yet everything is around 20-30% more expensive.

 

[ben]

I expect its because it hasn't changed much in a year yet everything is around 20-30% more expensive.

Exactly true. Up until last year, anyone whose income (and therefore spending) was dollar-denominated was living with zero inflation. That changed this year.