What Would Dollarization Mean for Expats?

[sergio]

If wages will be lower and prices will increase, how will they help the working class citizen? How much would rent be for a citizen?

During the Menem era ptroperty values were very much lower. The ratio between the price of a property and a middle class salary was not nearly so great. Is it possible that real estate values could drop substantially if dollarisation is implemented? Just asking....

 

[TWB103]

The days of cheap property anywhere in any half liveable city are over...

 

[sergio]

The days of cheap property anywhere in any half liveable city are over...

Probably but all sorts of things can happen in Argentina.

 

[sergio]

This editorial from the Wall Street Journal seems accurate to me. It may not be available to non-subscribers, so I except a passage below the link:

Opinion | Middle-Class Revolt in Argentina

Voters turn to an outsider who wants to close the central bank.

www.wsj.com

Archived Version

"Mr. Milei is an economist who favors limited government and blames Argentina’s economic problems on suffocating taxation, hyper-regulation, special-interest subsidies and protectionism. He wants to open markets, cut public spending, end capital controls and privatize state-owned enterprises. He’s also a social conservative, but his appeal stems largely from his rage against the establishment."

 

[QuilmesSlo]

Probably but all sorts of things can happen in Argentina.

I think you have a decent change of a property dip if a serious reform effort is mounted. You will simultaneously have reduced capital controls, and social dislocation.

 

[Che1990]

Why has rent gone up so much? I've been planning to pay 400-500 to live in BA, but now I'm hearing a lot higher numbers on this site.

This is due to unofficial dollarisation of the market. No one wants to rent their place out with 130% inflation, so everywhere is in dollars and upped. In part due to influx of digital nomads and Russians too.

This will happen to everything if the whole economy is dollarised, except salaries.

 

[sergio]

I think you have a decent change of a property dip if a serious reform effort is mounted. You will simultaneously have reduced capital controls, and social dislocation.

Social dislocation will happen no matter what. The present course can't be sustained and we already have people whose circumstances have been greatly reduced.

 

[sergio]

This is due to unofficial dollarisation of the market. No one wants to rent their place out with 130% inflation, so everywhere is in dollars and upped. In part due to influx of digital nomads and Russians too.

This will happen to everything if the whole economy is dollarised, except salaries.

Would salaries remain at the current dollar value? I think that unlikely. I remember U$S 500 as a common salary for unskilled workers during the Menem years. That is a VERY good salary nowadays.

 

[Che1990]

Milei is an eccentric but what matters is not what he says about selling body parts (which was apparently taken out of context anyway) or other trivia that makes amusing headlines but how he would actually govern on important matters. If elected he'd have to deal with Congress, unions, piqueteros and many others. Dollarization seems to be his core idea. I am not clear about how he could put the Central Bank out of business but maybe what he is really saying is that he wants to end currency manipulation. Wall Street and international bankers are wary of Milei (see the Wells Fargo reports someone posted in this thread) which strikes me as a good thing -- since when are these people interested in the welfare of Argentina and not just maintaining a status quo convenient for investors? I very much doubt that Milei could be elected but the fact that he got so many votes reveals the extent of anger at the current government, especially among youth who see little future.

This is exactly how I see it. He wins the popular vote, but how the hell could he govern?

Kirchnerists would cause enough chaos, like they did with the 2017 pension reform. Trade unions, Congress etc.

Argentina would be paralised.

 

[sergio]

This is exactly how I see it. He wins the popular vote, but how the hell could he govern?

Kirchnerists would cause enough chaos, like they did with the 2017 pension reform. Trade unions, Congress etc.

Argentina would be paralised.

It would be tough but Menem made dramatic changes. Milei would not be able to implement a libertarian programme however, like Menem, he might be able to effect some reforms. Change has to start at some point, no matter how evolutionary.