Poverty fell in the first year of Milei

[Che1990]

I suppose until Argentines understand that dollars don't cause domestic inflation anymore than Euros cause US inflation, we will still be caught in this ridiculous debate.

It’s one of the big conclusions I have come to from this year—it’s not just the politics, it’s society.

And sadly, I just don’t think Argentine society will change. Or it will take a long time. Or dollarise.

 

[LuckyLuke]

It’s one of the big conclusions I have come to from this year—it’s not just the politics, it’s society.

And sadly, I just don’t think Argentine society will change. Or it will take a long time. Or dollarise.

I know international trade often gets settled in dollars...but look at this dollar index. Virtually flat on a 3 year chart.



The dollar is simply a preferred storage of value down here. The real change of the blue rate is Argentines observing net foreign reserves against government malfeasance, embezzlement and pilfering the central bank for political hobby horses.

Of course those earning in dollars should feel super guilty about all this, being a privileged class and all... I'm sure you voted in all those corrupt politicians, right?

 

[Rich One]

You do understand that during Alberto, stores couldn't even put a price tag on store items? Builders wouldn't honor price quotes for longer than 48 hours? Adjustments were going up by double digits monthly? What we have now is a placid lake by comparison. I have even seen prices for some items in my area go down in the last few months, carne for example... most likely because of demand destruction. That's not to say that the general economic malaise isn't still awful, but price stability is awfully better than it was.

I meet with several groups and always one individual claims some price in his supermarket came down last week. While the rest agreed prices on many items keep going up. "Some items like carne prices have come down".
What is your Experience?

 

[LuckyLuke]

I meet with several groups and always one individual claims some price in his supermarket came down last week. While the rest agreed prices on many items keep going up. "Some items like carne prices have come down".
What is your Experience?

It's hard to say. An entire supermarket doing down in prices, I doubt it. I've never sat down to study each store. Every store manages their own margins, promotions, and suppliers. Of course there's also seasonal variances. But a year ago a drop in price, even momentary, was probably unheard of. But now you can find momentary price drops cycling between various stores. I think, with demand destruction and inventory expiring, stores are perhaps offering more one off promotions to compete a little more. That's my only guess.

It takes months to confirm a trend and no doubt that trend will slowly inch up regardless. That much is certain in any part of the world.

 

[Ries]

I have been here part time since 2007.
I certainly never saw a store without price tags during the Ks, or Alberto, or Macri.
I do have Argentine friends who worked retail in the 70s, who did, indeed, reprice items every single day.
But in 2019- 2022? Sure didnt happen anywhere I shopped.
Certainly there was inflation. But there were also wage increases.
The real figure to study would be the drop in purchasing power, after subtracting wage increases from inflation.
GDP is pretty meaningless, it looks at the aggregate, without dividing the 1% from the rest of us.
Every Argentine I know suffered much more in the last year than in the previous 4.
And the double whammy of rents tripling due to Milei dropping regulations is not caused by either inflation or fore-ex rates.

The dollar index is based on the dollar vs a basket of the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona.
Which really doesnt tell you much about who values the argentine peso, who needs it to do business, or who is buying and selling in pesos.
It makes sense that stable economies like Sweden would remain pretty much similar in their relation to the dollar.
So I dont see a lot of value in the dollar index.

I always like the UGI index, myself- the study of the prize of a basic fast food pizza in dollars tells you a lot more than how the dollar is faring against the yen.
I tend to use the choripan index.
When I first arrived, a choripan was 3 pesos, and that was about a dollar.
Current prices in my barrio are around 6000 to 8000 pesos, which is six bucks or so.
In 19 years, thats inflation of 500%.
and 120% of that is Milei...

 

[antipodean]

The real figure to study would be the drop in purchasing power, after subtracting wage increases from inflation.

The purchasing power of what exactly, and at what moment?
Wages vs. a limited basket of nationally produced and heavily subsidised or price controlled goods and services?
Wages vs. imported or unsubsidised things like buying a house, car, foreign travel or clothes?
Start of the month when wages are paid or end of the month where wages are still being spent?
Month when paritarias take effect or three months after when waiting for the next paritarias to be agreed and paid?

Unfortunately purchasing power is also a heavily distorted metric in Argentina that will not paint a similar picture for every person, lifestyle, need and habit.

In November 2023 the average salary of a worker in Argentina was US$500 and by September 2024 the average salary was US$1100 - the different possibilities these two hard-currency numbers create are undeniably enormous, while like anywhere the amount disposable income available to make the most of them will depend on individual lifestyle and luck factors (e.g. age and amount of dependents, accomodation arrangements, debt etc etc). For a young person living at home with their parents earning $1100, their lifestyle and future prospects has undoubtedly seen a massive boost while for a single parent earning $1100, renting a home and maintaining dependents it, like $500 before it, just is not enough to even get by.

 

[retiredbanker]

Medio kilo of pan y 6 facturas 6000
this past Wednesday.

Today, same store, same quantity 7100.

 

[LuckyLuke]

I have been here part time since 2007.
I certainly never saw a store without price tags during the Ks, or Alberto, or Macri.
I do have Argentine friends who worked retail in the 70s, who did, indeed, reprice items every single day.
But in 2019- 2022? Sure didnt happen anywhere I shopped.

Did you leave BA from 2019-2022? Maybe you should pay a visit to Neuquen sometime where asking the price meant the cashier yelling it across the store to you. Or the locutorio not even bothering to print their own price sheets and instead just flipping through their supplier's price sheet and adding their margin with a portable calculator. One of my fondest memories was handing each of my kids a scooter in a Ninos Feliz toy store because it had 51,734 labeled on it only to be told that was the SKU number and the actual price in their computer was $120,000 each. Great times.

Every Argentine I know suffered much more in the last year than in the previous 4.

I can't disagree with you there, however not a single person so far has told me they wished Alberto/Massa was still in office. Milei received 3 times more votes than Massa here. I can't tell you which was better to be honest. Redistributing depreciating pesos as subsidies or cutting subsidies and using "appreciated" pesos to reduce inflation. Depends which subsidies & benefits you qualified for I suppose and whether the state was your employer.

And the double whammy of rents tripling due to Milei dropping regulations is not caused by either inflation or fore-ex rates.

Yea, it's all those old greedy landlords that had their rental income depreciated by 211.4% waiting for their once a year adjustment, then realizing their tenant's depreciated deposit didn't even cover repainting the unit while trying to pay for their nose bleed prepagas. Clearly they should disappear so prospective tenants have zero apartments to rent instead.

The dollar index is based on the dollar vs a basket of the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona.
Which really doesnt tell you much about who values the argentine peso, who needs it to do business, or who is buying and selling in pesos.
It makes sense that stable economies like Sweden would remain pretty much similar in their relation to the dollar.
So I dont see a lot of value in the dollar index.

The dollar index does just fine to explain that it magically didn't appreciate causing the blue rate to spike. I'll tell you who doesn't want our pesos, not even our closest neighbors, Chile & Brazil. Please tell me which currency index you prefer to better represent who values the argentine peso.

 

[Rich One]

You do understand that during Alberto, stores couldn't even put a price tag on store items? Builders wouldn't honor price quotes for longer than 48 hours? Adjustments were going up by double digits monthly? What we have now is a placid lake by comparison. I have even seen prices for some items in my area go down in the last few months, carne for example... most likely because of demand destruction. That's not to say that the general economic malaise isn't still awful, but price stability is awfully better than it was.

During Alberto all items had price tags, you are thinking of Alfonsin and the hyperinflation

 

[Jimbob]

During Alberto all items had price tags, you are thinking of Alfonsin and the hyperinflation

I must admit I saw many items in various different shops without prices, especially supermarkets.