October Elections, Inflation And Capital Controls

[sesamosinsal]

As has already been mentioned who know's what will happen if and when any of the above candidates assumes control, but at least there is something to go on.

Politicians are going to say whatever necessary to get elected. Remember that before Cristina won in 2011, she never campaigned on implementing capital controls and only announced that there was (allegedly) a run on the FX reserves lasting several months after she won. Thus, Macri will say that he'll take back the capital controls to rally his base, but there's no way he's going to pull them back all at once and return to a floating currency regime. (That said, if he wins, it's a possibility that in the last couple of weeks in power, CFK's administration pulls them back before he takes office...)

I think it's wise to look at the global economic panorama. We are in a crisis. Who knows how or when it will hit its peak (maybe it already has), but we're seeing a major drop in demand and thus devaluations around the globe. The devaluation of the USDARS using official numbers has been approximately 12 percent this year, no where near the 50% or so we've seen in Brazil, the 80% in Russia, etc. If this will continue is anyone's guess, but the world's economic engine (The U.S.) is essentially deflationary, and the US balance of trade hasn't dropped further into negative territory (no pickup in imports). Hence, my guess is that there's more room to the downside (globally-speaking). The Fed/USG will eventually step in with helicopter money.

Consequently, the biggest issue for Argentina is the price of its exports, not imports or local demand for dollars because it can use other policy measures to control local demand for dollars. It cannot force countries to pay for pricey Argentine exports. In January 2015, for example, exports hit record lows.

Better questions might not be centered around politics, but rather around two econ questions: 1) Will Argentina's major trade partners continue to devalue, and 2) can the value of the USDARS keep pace to prevent Argentine exports from collapsing? Regardless of who is president, the necessary steps will be taken to answer those two questions with positive results.

 

[Gringoboy]

I read that Scioli had withdrawn from the TV debate, leaving the other two main candidates to slog it out with the rest of the so called opposition.

 

[Rich One]

I read that Scioli had withdrawn from the TV debate, leaving the other two main candidates to slog it out with the rest of the so called opposition.

Correct and without Scioli most likely there will be no Debate, to be confirmed .

 

[Gringoboy]

It would be a total sham anyway without any real opposition such as a rep from FPV.

 

[Redbeanz]

Still, the fun that could be had with that empty chair....

 

[glasgowjohn]

Still, the fun that could be had with that empty chair....

And over to Mr Scioli to hera his views on how to combat inflation...

Oh no answer from him , what a pity....

 

[thorsten]

You could make 2 signs: 'The project needs to continue' and 'We will keep progressing and change what's necessary to change' - I think that would summarize his whole post-election program pretty well, at least I haven't read anything more concrete in any interview from him.

 

[Gringoboy]

I get the impression that Scioli is so arrogant, thinking he's got the whole election in the bag that he doesn't feel he needs to say anything anyway.
On the other hand, Massa is the definition of eloquence in saying absolutely nothing, except by banging on about security cameras ad nauseum.
Macri would like to say a lot more, but he's not sure if he should.

 

[sesamosinsal]

I get the impression that Scioli is so arrogant, thinking he's got the whole election in the bag that he doesn't feel he needs to say anything anyway.
On the other hand, Massa is the definition of eloquence in saying absolutely nothing, except by banging on about security cameras ad nauseum.
Macri would like to say a lot more, but he's not sure if he should.

All three are dreadful, if you ask me.

 

[Gringoboy]

Argentina Independent's take on this:
http://www.argentinaindependent.com/currentaffairs/an-alternative-guide-to-the-argentine-presidential-election/