These prices are killing me

[TatanBsAs]

For Syngirl and Real BA who admire Chile. I’ll give you some statistics. Please tell me where Chile ranks? Where does Argentina rank? And at what cost did Chile even reach that position in the ranking?


http://hdr.undp.org/hdr2006/statistics/


2006 HDI Ranking


1. Norway

2. Iceland

3. Australia

4. Ireland

5. Sweden

6. Canada

7. Japan

8. United States

9. Switzerland

10. Netherlands

11. Finland

12. Luxembourg

13. Belgium

14. Austria

15. Denmark

16. France

17. Italy

18. United Kingdom

19. Spain

20. New Zealand

21. Germany

22. Hong Kong, China (SAR)

23. Israel

24. Greece

25. Singapore

26. Korea, Rep. of

27. Slovenia

28. Portugal

29. Cyprus

30. Czech Republic

31. Barbados

32. Malta

33. Kuwait

34. Brunei Darussalam

35. Hungary

36. Argentina

37. Poland

38. Chile

In other words, even though we have gone through more than four major economic financial crises, Argentina still ranks ahead of Chile.


syngirl, not only do you fail to address the point I am trying to make, but I ask you to please ease up on the cut and paste function. Try to develop your own ideas instead. Taking into consideration that nobody predicted the Argentine economy to grow as fast as it did, nobody predicted that Argentina would have to confront an inflation scenario. What you are saying is simply not true.
Like I said before they are not his "bandaid tactics", in any case they are Lavagna's. Please enlighten the forum and explain why the dollar should be 2,10 (by the way if that were the case surely many of the expatriates would leave...maybe towards Panama). And also considering that you suggest it should be at 2,10 explain what Argentine workers are suppose to do when the local market is flooded with products from other -besides Argentina- third world countries who use slave labor, paying their workers a bowl of rice per day.


Sebastian


PS Elpanada, I am not xenophobe, I just dislike people with stupid nicknames like for example ...Elpanada

 

[rmartinbuenosaires]

Although I am an idiot according to some comments because I simply used a comparison to Peanut Butter always being on the shelves in the U.S., and certain staples even produced or grown here are frequently not in stock....the idea of a 2:1 exchange rate really is not accurate in my humble opinion. Inflation aside, if one looks at the prices in the U.S., things basically cost three times what they do here; hence a 3:1 rate is more justified. Taking into account that local products and choices are quite inferior in many respects to other "developed" countries, if the exchange rate were in deed to drop to 2:1, you will see a large drop in tourism and expatriates here. Now what has not been addressed is the fact that, like it or not, foreigners through tourism and real estate purchases HAVE made a significant impact on the local economy. Furthermore, real estate prices have increased dramatically because of greedy people trying to get more money for their properties from foreigners. I don't blame Argentines. I think that is probably just human nature. Anyway....taking into account inflation, a more accurate exchange rate should be around 4:1 much to the dismay of Argentines. C'mon a peso is not worth 50 cents. Look at the exchange rate in Brazil now...it has fallen from 4:1 to less than 2:1 now. The real is overvalued and the dollar is undervalued, due in part to Brazil's booming economy and the lack of the current U.S. government to intervene to prop up the dollar worldwide. I believe after the U.S. elections in 2008, the dollar will go up worldwide once the current Dictator is ousted.
By the way, this is my own selfish opinion.

 

[Granadaiscool]

In my opinion for longterm growth this country really has got to start investing in mining & exploration. It's ridiculous -- education here still seems to favour arts, law, and accounting, when really they have got to get into engineering -- particularly in oil, gas, and mining.

You are wrong. Argentina does have very little resources and the ones they have they can´t explore because there is no investment.
Chile has around of 200 years of copper left but other then that they are investing in other sectors(like Salmon which is highly succesfull)
Chile has a plan to like double the export of farmer products in the next 5 years and offcourse they will succede because Chile is a serious country.
Argentina does however lot´s of land, but as long there is no industry it doesnt really matter because imports will always win it over 3:1 rate over exports




That's a really good point that i completely agree with. Over here in Chile, around 60% of the country's exports are based on the extraction of copper, other metals and minerals. It's highly lucrative. Argentina has vast metal and mineral reserves, especially in the north west but a complete lack of investment in this area (both in brains and physical machinery) has left Argentina way behind in this market. Chile has major business advantages over Argentina (low corruption, open market, low import-export tariffs, respected and reliable financial systems to name a few) but the fact is that sucessive Argentine governments has ignored this industry. That's both incompetent and irresponsible.

Argentina has the resources to be successful. It has the resources to be far more successful than Chile could ever dream of. But it needs to make some big changes. The structural changes that were made to the Chilean economy and that have allowed the country to succeed in recent years were made during a brutal 17 year dictatorship when the people couldn't complain. God forbid that should ever happen again. But that's the type of environment in which these changes need to be made-when economic experimentation by the government won't be revolted against. That's not an option in Argentina (and hopefully nowhere else) so it's unlikely the changes required will be able to be pushed through without major social upheaval. The government won't ever risk it.

The current administration's stop-gap economic solutions are coming undone. I've been saying that this would happen for a year. Fundamental structural changes are needed in Argentina's economy for the country to leave behind its boom-bust cycle.

And it's not just in mining that Argentina's policies have left the country behind. Due to fixed energy prices there's been virtually no investment in in electrical plants and gas exploration. This has lead to energy shortages that impinge on the country's economic growth. This article in the FT is quite interesting.

http://www.ft.com/cms/s/505ba3c8-1883-11dc-b736-000b5df10621.html

What's needed is a good cultural exchange program...Argentines come to Chile and teach them how to be happy and Chileans go to Argentina to teach them how to run decent financial and economic systems. It's a win-win situation

 

[Grazie]

Sebastian - your name is new at this website/blog. We have seen likes of you in here before. Please do not come here and use this forum to bully people. We got enough of that "side dish" from 2 previous postersin the past and another website was created and solely dedicated to just "dis" this one.Your approach and tactic is not new here.We really frown upon anyone badgering people when they disagree with you. This blog would be so boring if everyone agreed with how FABULOUS Argentina is, all the time - the truth is, everyone's experience here is different- so it is relative and subjective at the very least; remember like beauty everything in this country is interpreted as seen by the eyes of the beholder. And as sweet as it is to hear how great any one place is, a dose of harsh reality keeps and gets everything in proper perspective.
I commend you Sebastian for the nice link UNHP and its content. That is a great link. It's content should speak for itself without further editorializing with side comment. Argentina is 2 numbers higher in placement than Chile according tot he list. It is in black and white and in print. That should be self explanatory - but to argue it to death, takes the brilliance out of the argument. The art of debate is having your proof speak volumes and ultimately trump naysayers; there is never any need to pontificate to the rest of us what it really means and injecting it with personal take on the matters.
Occassionally, we come across people who give this blog a nice shot in the arm. Thank you for dropping by.
Sergio, thank you for starting this thread.
Elpanada, I do not agree with you all the time, I sometimes down right hate what you say - but no one has the right to refer or question anything you choose, like you personal blog name, as st*p*d.
Anyone who resorts to calling other people's choices with bully names is a desire to express their latent ignorance and it is just a manifestation of how some people can appear in some and mirrors as educated with their highfaluten words and statistics but it is just to over compensate for what is really underneath it all - like some bad odor - their true lack of class and proper decorum - it never fails to still rise to the surface.
I do not post this to pick a fight with anyone. I am just tired of people coming to this sight and trying to convert and change how we individually think about Argentina in particular. We respect their opinions though different from ours but how come they cannot respect us, our difference in opinions and the way we go about expressing them.
Sebastian, have you ever considered that Asia is now the source of dirt cheap labor and though not a moral thing to do - it is just maybe, just maybe because partial or fully owned Argentinian company owners are driven by greed and want to maximize profit? When you are a COO and the board of directors of a company says raise profits by 23% this year or your are outta here, you go to the most dispensable part of any company and that is labor. Greed and cold hearted business dollar and cent decisions like this perpetrate the vicious cycle of slave labor.
And as a business adviser and partner to a business firm in BsAs, it is just business and profit, no personal feelings contributes to everyday decisions that directly affect the bottom line. Why do you think Argentinian business owners go to other poverty striken Latin American neighbors for labor- dirt cheap labor sans shipping cost from Asia, Africa and India - it is purely profit. The bottom line is, it is the quest for more, much more of that mightly dollar (and Euros) that drives the flooding of the CHINA made products in Argentina. And this at the expense of Arg. labor and bygone days of good quality products - Brasil can compete for the same market but only a far second.
So unless you really know of a specific company that gets paid a bowl of rice - I need to know because our outsourced companies want US dollars or Euros, weekends off and Chinese new years off 2 weeks, all religious holidays off and more. Where do you come off talking about "cup of rice" as payment for labor?
Do I smell a racist comment here - coz it stinks and it stinks so badly!!!

 

[henryb]

For Syngirl and Real BA who admire Chile. I’ll give you some statistics. Please tell me where Chile ranks? Where does Argentina rank?

I would like to add that if you sort countries alphabetically by name, Argentina will be even higher in the list
Talking seriously, it looks like GDP per capita that is used for HDI calculation is overrated. Do you believe that Argentina has 13 grands US GDP per person? Right after Saudi Arabia on the peak of oil prices? I think they are using "purchasing power parity GDP" that is a creative adjustment of fact that peso level is kept artificially low by the government.If you will use official dollar to peso exchange rate GDP is like 3 times lower according to the CIA Factbook .

 

[JG]

Well, back to the issue at hand. i just got back from the supermarket. WOW, are prices high.Almost no real sales.
BTW, i didnt find Tatans comments off the mark. Some came here because it was cheap, certainly i stayed because it was. But still who isnt going to complain about rising and rising prices? arent the argies complaining, they must be!
Most of the cuts of meat in the market, i wouldnt touch. they seem to like fat and grizzle. The quality of meat id eat back home, here costs alot. And here you cant count on quality. I bought Danica ketchup this week, it poured out like water, not like normal. The Tropicana juice yesterday was made from bad oranges. Ive bought ARcor lentil with rice and its normally fine, yesterday i opened the can (the date was fine) and the rice was black, it looked very weird. I often throw food out here.
Very poor quality control, prices rising with no end in sight, and still the most polluted city Ive ever seen and nothing being done about it. Looked at houses in San Isidro area the past 2 days, old trucks like a 1940s black and white film, just as polluted as the city on main roads, clouds of fumes.
Let me remind new arrivals, that the current exchange rate could change overnight, lots of things have disappeared over night here, even people. So that 11 peso bottle of beer could be 5 dollars, a cup of weak brown coffee could be 4, and so on.

 

[bigbadwolf]

Kirchner's reforms post-crisis were meant to artificially lower the value of the peso and hold it there to encourage foreign investment and hopefully flood the coffers. However in the face of competition Argentina has had to continue these policies for longer than is truly healthy. They say the peso should really be at 2.10 to the dollar, not 3.10, but if this were to happen the herd may turn and run to Brazil, China, and other competitors.

If a currency is undervalued against a basket of other currencies, there are one of two things that generally take place (or a combination thereof): either the currency appreciates against the basket, or rapid domestic inflation takes place, so that in terms of purchasing power it is not undervalued with respect to other currencies. It would appear the latter is happening in Argentina. In three or four years, the peso-dollar rate will look quite natural.

 

[bigbadwolf]

For Syngirl and Real BA who admire Chile. I’ll give you some statistics. Please tell me where Chile ranks? Where does Argentina rank? And at what cost did Chile even reach that position in the ranking?

You are quite right. Chile and Argentina are pretty much in the same boat as far as most of their inhabitants are concerned. The differences lie in the incentives that Chile provides to transnational capital (which, as is generally the case, don't translate into improved standards of living for most of its people). Mining and extracting may enrich the multinational mining companies, and to a lesser extent some of their local junior partners, but it's unlikely to do much of anything for the mass of people.
"Development" doesn't take place in a vacuum and we need to look at the global context it can (or cannot) take place in. The rules of the global game are largely written by G8 and transnational capital. So-called sovereign states are little more than pawns in this game. Neither Chile nor Argentina have any real prospects of becoming developed countries in the present global setup.
Secondly, we need to ask: "Development" for whom? For a rich minority or for most of the people?

 

[ramon]

This is a lively debate and yes its a topic that affects us all who live here fulltime.
People like tatan who have insulted us because we have dare critisize Argentina, need to ask themselves what do you expect people who live with outrageous inflation of close to 20 percent to do . Shut up and accept ?
Rents have increased in Capital Federal over 100 percent in just 3 years and furnished rentals have increased 175 percent . Now thats a huge increase in any language.
To blame foreigners for inflation is the classic line that many use. and very little based on fact.
I remember coming here in the early 1980s and the inflation was over 5000 percent per annum one year . It was crazy and literally you saw the prices change from entering the shop till you left to pay. In those days to see a foreign tourist was rare, Patagonia was like another planet and you literally travelled for 1000s of kms and maybe saw a occasional backpacker.
Foreigners do not create inflation full stop.
What causes inflation is bad economic planning and greed. I see this situation daily with people trying to create London and Paris out of Buenos Aires. They literally want to see their properties valued at 10000 dollars per square metre .
The truth is only a small elite can afford these prices and what will happen is those barrios where prices are spiralling out of control will technically become in the future gated communities losing all soul and character.
Change is not always good

 

[donquixote]

I'll be the first to admit I know little about the Dismal Science. There is a law in economics called the Law of Elastisity which say that if you increase the price of the goods you sell you will make a higher profit on each unit but will sell less units, there is a an optimen price that will maximize profits. If you raise prices out of the reach of the consumer, you are out of business. Lets see how many coffee shops in BsAs close in the future.
Is high inflation a Buenos Aires phenomenon? I will be staying in the same hotel in Mar Del Plata that I stayed at in 2005, I will be paying a lower price now in 2007 then I paid in 2005. ????????
DQ aka Adam Schmit