When Will The Peso Hit 10?

[PaulZ]

Price controls are not, never were and never will be a viable way to combat inflation. Also, rising prices is a symptom of the problem, not the cause. To combat inflation you need to go after the cause, which are:

1) Money printing
2) Unbalanced public budgets

In a normal economy you are 100% right, the price increase is a symptom of the problem. However if you increase your prices because you think the inflation will be a certain level, then the increasing prices are not only a symptom but also a cause...

 

[camberiu]

In a normal economy you are 100% right, the price increase is a symptom of the problem. However if you increase your prices because you think the inflation will be a certain level, then the increasing prices are not only a symptom but also a cause...

I disagree. That is a symptom of absolute lack of confidence on the currency. And you do not restore confidence on a currency by implementing price controls. That actually has the exact opposite effect.
The solution to the problem is the restore faith on the currency. Not putting caps of prices.

 

[PaulZ]

How can this (any) Argentine government restore faith in the currency (in the near future)?

 

[camberiu]

How can this (any) Argentine government restore faith in the currency (in the near future)?

Here is the secret formula:

 

[Rich One]

Two new dollars emerge, the Dollar Colonia and the Dollar Concierge.

The Concierge Dollar is what foreign tourists obtain at the Hotel....!!!

 

[Ceviche]

Rich one, u r funny! enjoy yr posts!

 

[trennod]

How can this (any) Argentine government restore faith in the currency (in the near future)?

In a normal economy you are 100% right, the price increase is a symptom of the problem. However if you increase your prices because you think the inflation will be a certain level, then the increasing prices are not only a symptom but also a cause...

Do some reading on Brazil. They had exactly these problems and overcame them.
Its not going to happen overnight but it can be done and wouldnt take that long.

The thing is, this government doesnt have any interest in putting in the work to stop inflation. Its core popularity stems from runaway public spending.

And, those in the government it doesnt impact, anyway. They can all still buy dollars (at the official rate) and they just steal what ever they want.

Plus, to keep the people happy (so they stay in power), they just continue to print the money and hand it out. The majority of the 54% that voted for the Ks dont understand any of this, unfortunately.

 

[camberiu]

Plus, to keep the people happy (so they stay in power), they just continue to print the money and hand it out. The majority of the 54% that voted for the Ks dont understand any of this, unfortunately.

There are many university graduates and even lawyers that don't understand any of that. And it is not only in Argentina.

 

[sesamosinsal]

Price controls are not, never were and never will be a viable way to combat inflation. Also, rising prices is a symptom of the problem, not the cause. To combat inflation you need to go after the cause, which are:

1) Money printing
2) Unbalanced public budgets

Printing money is also not a cause. It is also a symptom.

 

[camberiu]

Printing money is also not a cause. It is also a symptom.

Ultimately, yes.