Shouldn't life get easier after this...

[nicoenarg]

Like the title says...or am I being too naive?

I am, of course, referring to the Boden 2012 payment due tomorrow (August 3rd, 2012).

Naively, I am thinking stuff should go back to normal (at least until January or so next year, before their April 2013 payments are due) and people should be allowed to buy dollars, imports allowed in, etc.

But from experience with reading on political movements and taking part in some, I know that once governments grab power, especially fascist ones, they never let go and never stop.

Not having a lot of experience with Argentine politics personally, and having only been here a little over 6 months, I am not sure which direction this government's going to take.

I am hoping they will ease up but I am afraid they won't.

What do you guys think?

 

[Dublin2BuenosAires]

Very little.

Still locked out of external debt markets with a collapsing local economy (inflation + contracting economy) with dwindling foreign reserves to pay the bills.

The kirchneristas will be looking for our money to pay for this false dawn, economic independence indeed !

Still plenty of unpaid foreign debt and most critically no resolution to the outstanding 10bn (?) worth of Paris Club debt.

 

[Iznogud]

Basic observations on economic cycles:

Expect prices to go up the closer you get to the year's end. They (the powers that be) are always out to grab whatever coins you manage to squirrel for your festivities or holidays. They will also screw you prison style in those days since they can get away with it and people are already thinking of taking a break, not getting organized and complain or do anything significant about it.

Economic activity slows down as the summer approaches and you're left with a bitter sensation but there's no one to listen to your griefs. Then is not the time to react.

By the time the summer break is coming to an end they hit you again when you have to get ready to take your kids back to school.

Has been going like this since I can remember.

This year is going to be much worse. It is already running in smaller and faster circles around the toilet's exit.

So basically, these are the good times. It's about to get much worse.

 

[Johnny]

Like the title says...or am I being too naive?

I am, of course, referring to the Boden 2012 payment due tomorrow (August 3rd, 2012).

Naively, I am thinking stuff should go back to normal (at least until January or so next year, before their April 2013 payments are due) and people should be allowed to buy dollars, imports allowed in, etc.

But from experience with reading on political movements and taking part in some, I know that once governments grab power, especially fascist ones, they never let go and never stop.

Not having a lot of experience with Argentine politics personally, and having only been here a little over 6 months, I am not sure which direction this government's going to take.

I am hoping they will ease up but I am afraid they won't.

What do you guys think?

Unlikely, I'm afraid. CFK seems to have put most of her eggs in a basket run by the recently christened young, zealous, doctrinaire, Chavista-like lefties. I don't think the Boden payoff will turn off the spigot.

And this opinion from a leftie.

 

[Crema Americana]

I don't think things are going to get much better or easier. They may slow down a bit with all the mandates, but Argentina is still in trouble. The government has decided on protectionism and that's not going to change.

While Brazil is letting people buy dollars at bakeries, Argentina decided this week to further shorten the time limit on buying dollars before a trip (after getting governmental approval, of course.) It's still going in the wrong direction.

 

[BASailor]

Don't even know what's a boden.
I think people should work, not playing games with other people's money.
That's the root of almost every human financially related problem. Greed and lack of real work.

 

[nicoenarg]

Don't even know what's a boden.
I think people should work, not playing games with other people's money.
That's the root of almost every human financially related problem. Greed and lack of real work.

Google should help: Boden 2012

 

[BASailor]

Thanks. But I guess that's nonsense. Playing games with people's money, sitting behind a keyboard.

 

[dennisr]

Government used central bank funds to payoff Boden 2012, not a good idea. Plus, 75% of bond holders are foreign, money is leaving the country and will not be reinvested or spent in Argentina. Argentina will loose 10% of their reserves this year paying bonds, GDP warrants and whatever else. Not good.

 

[sesamosinsal]

I don't think things are going to get much better or easier. They may slow down a bit with all the mandates, but Argentina is still in trouble. The government has decided on protectionism and that's not going to change.

While Brazil is letting people buy dollars at bakeries, Argentina decided this week to further shorten the time limit on buying dollars before a trip (after getting governmental approval, of course.) It's still going in the wrong direction.

Brazil has about five times more foreign reserves than Argentina. Argentina embraces protectionism because it doesn't want the foreign debt. If you run a trade deficit too long, you end up like many of the European countries up-to-their-eyeballs in debt. Free trade is a fantasy.

Everyone agrees that things in Argentina are slowing down, but it's no where near a crisis. It's really quite too early to say. Soybean prices are high; Moreno has successfully managed to bring down the trade deficit with Brazil; and this past week they've been busy, busy, busy meeting with the Venezuelans, the Brazilians, the Chinese, etc. about investments, industrial cooperation, etc., etc. Companies are investing too. Telefonica just announced an investment for 4.5 billion pesos. Small businesses are apparently all over these new 15% APR/3-year term loans. With that said, many things are down: real estate sales, employment, new car sales... But marginally.

I read an opinion column earlier this year, and the author said something to the effect that there's a small fire in one area of the house. They have the resources this year to control it. Next year we'll see if it spreads.