What a difference a few years makes

[sesamosinsal]

Now with the dollar blue: possibility to buy airplane tickets to Europe/US paying in pesos after exchanging them on the black market (instead of paying 1.200 USD on Air France to Paris = pay 950 USD --> could be a clever trick for expats making an income in pesos btw = make a deal with foreigners wishing to fly here and paying locally in pesos while getting paid outside of Argentina in EUR/USD = gain for both parties...).

For those flying to the states: You can easily pay in pesos for any flights purchased through Lan.com at a Pago Fácil. If you transfer dollars to Xoom, you can get a R/T ticket to NYC for ~$910 USD.

 

[solerboy]

This may change soon enough... but really, the people shouldn't have to go through these painful crazy cycles.

These things wont change, if there is a devaluation then the prices will fall when compared to the outside world. But for the people paid in pesos? It will not effect them except with more inflation as a result of higher import costs.

Prices wont go down.

 

[Argento]

These things wont change, if there is a devaluation then the prices will fall when compared to the outside world. But for the people paid in pesos? It will not effect them except with more inflation as a result of higher import costs.

Prices wont go down.

Can you help explain something? I wonder how actual prices marked on store items, menus, utilities, etc. could actually go down, slightly different from what was just quoted, but still wonder this nonetheless.
What I mean specifically is if the companies are already getting these prices from people, and by fairly good amount of people (i.e. restaurants still show to have lines and busy tables), grocery stores still busy, wouldn't the companies say to themselves "why lower prices if we are already getting people to pay the prices now."

Yes if there are fewer customers due to people not being able to afford the prices, then I would think the companies would be forced to lower the prices, but seems many people are still paying the high prices.

Not really sure how it works. Could anyone expand on this.

And certainly, the way Argentina could become better priced again for people using outside currencies ($, €, etc) would be if say there ends up being an exchange rate of 1:10 and the prices stay as they are now.

Otherwise, I wonder how things could become better priced for the category of people just mentioned.

Thanks for any explanation of this.

 

[captainmcd]

Inflation is a tax, an unfair tax, that is the result of poor government economic policy. This is not something new, Over 30 years ago the dollar was pegged artifically low against the peso, and living in Buenos Aires was really expensive. Then the hyper-inflation brought on by the War in the Malvinas and other economic disasters brought the cost of living (in dollars) artifically low, as they were ten years ago. Large fluctions in the cost of living in "hard" currencies are the norm for Argentina.

 

[domthegreat]

A parrilla for two persons (morcilla, asado, chorizo, chinchulines) + a bottle of a reasonably good wine (Chateau Vieux) was 17 pesos back in november 2003.

For that price, you just buy two coffees nowadays.

2 coffees? More like one...maybe you can get two from a guy on the street! I remember when I first got here in 2008 I was trying to live as cheaply as possible, and I had to fight so hard not to only eat choripan for 3 pesos each...I still remember empanadas for less than 3 pesos too!

 

[expatinowncountry]

Inflation is a tax, an unfair tax, that is the result of poor government economic policy. This is not something new, Over 30 years ago the dollar was pegged artifically low against the peso, and living in Buenos Aires was really expensive. Then the hyper-inflation brought on by the War in the Malvinas and other economic disasters brought the cost of living (in dollars) artifically low, as they were ten years ago. Large fluctions in the cost of living in "hard" currencies are the norm for Argentina.

Argentina had two episodes of hyper-inflation: 1989 and 1990, hardly any direct connection with the War that took place in 1982. Yes, the war helped increased the external debt due to the fiscal imbalances and high debt may have been one of the determinants of hyper-inflation. However, the fiscal irresponsibility of the Argentine government is something that happened before, during and after the war.
But yes, in Argentina the real exchange rate varies a lot and therefore living cost measured in dollars do as well.

I think people need to keep in mind that there are two things going on here, the first one is the real appreciation of the peso in the last five years (inflation rate higher than devaluation of the peso, therefore inflation in dollar terms) and the second one is the global trend: food prices have doubled worldwide in real terms in the last seven years.