When Will The Peso Hit 10?

[trennod]

Ok, let s say you can change the policy about dollars: what would you do?

Thats pretty easy, allow the purchase and sale of dollars (and other foreign exchange currencies), legally. And allow the "official" exchange rate to float properly.

If you want, you can restrict the transaction of these foreign exchange currencies to those that have their house in order with AFIP (I actually wouldnt mind seeing atleast that so a measure to try and reign in tax evasion).

 

[Rich One]

I empathize with Joe's frustration for not possessing Franklin's beautiful face.

 

[Bajo_cero2]

Thats pretty easy, allow the purchase and sale of dollars (and other foreign exchange currencies), legally. And allow the "official" exchange rate to float properly.

If you want, you can restrict the transaction of these foreign exchange currencies to those that have their house in order with AFIP (I actually wouldnt mind seeing atleast that so a measure to try and reign in tax evasion).

Right. What about the consequenses?
Where are thouse dollars come from? The central bank? And what about when the central bank will be empty?

 

[trennod]

The government needs to attack and fix the inflation problem. That is the key reason why people move away from the peso.
Do you notice in Latin American countries with low inflation (yes, our friends in Chile), that people dont even want USDs.

The central bank is continuing to run down its reserves even with these currency controls in place (lost about $6bn last year even with the foreign currency controls in place). Do you know the real reason why it continues to run down? Because fiscal management (ie government spending and management of its finances) is an absolute joke. The Ks need the open cheque book to fund their work programs etc.

How about some responsible fiscal and monetary policies and trying to get access to overseas debt markets again. Closing the doors (Venezuela style) will only end up like Venezuela. The country with basically the worlds largest oil and gas reserves in the world is an absolute basket case thanks to years of economic mismanagement.

 

[Bajo_cero2]

I think we are going to go around in circles here.
The government needs to attack and fix the inflation problem. That is the key reason why people move away from the peso.
Do you notice in Latin American countries with low inflation (yes, our friends in Chile), that people dont even want USDs.

I agree here.
How to do it is the 1 million dollar question.

 

[trennod]

I agree here.
How to do it is the 1 million dollar question.

1 thing for sure is that Venezuelas style (which the Ks have basically adopted) does not work.
They need to be restoring confidence in the system, the economy and the country for one.

 

[Bajo_cero2]

Everybody knows that.
I think it is more complex.
In venezuela like here, there are groups who conspires to give a coup.

 

[camberiu]

I agree here.
How to do it is the 1 million dollar question.

No it is not. The way to do it is very straight forward. The problem is that it is painful and the political cost is immense. Fernando Herique Cardoso in Brazil was willing to pay that political price. Cristina isn't, just like Menem didn't either. That is the crux of the matter.

Most Argentinians think that finding a way to end inflation is akin of uncovering the 3rd secret of Fatima. It isn't. The causes of inflation are evident and so is the way to tackle it. it is just very politically costly. That is all.

 

[Bajo_cero2]

Right, you ask Cristina to become neoliberal. By the way, did the neos won again in Brasil? No.

Menem was a neo and he acchieve to stop inflacion with domingo cavallo as his economy minister. The cost was 90 billion dollars in debt, 2001 crisis and children starving just crossing General Paz.
Guess why neo dogmas aren t welcome.

 

[camberiu]

Right, you ask Cristina to become neoliberal. By the way, did the liberals won again in Brasil? No.

One of the things that crack me up is how Fernando Henrique is referred to as "neoliberal". Anywhere in Europe, US, Canada or Australia, he would be considered a center-left politician. But in LATAM, pretty much anyone who is not a revolutionary marxist is a neoliberal. It is important to notice that he was the creator of the "dependency theory" a concept that many hard core left wingers all over LATAM cling to it to this day. He was also persecuted by the military dictatorship in Brazil and had to flee the country. However, in your view, adopting a policy of stopping printing money automatically turns anyone into Adam Smith reincarnated, got it.

And yes, his party (PSDB = partido da SOCIAL DEMOCRACIA Brasileira, hardly a neoliberal name) never won a presidential election again. That was the political price they paid. However, we can thank Lula and Dilma for adopting Cristina style policies over the past several years. Inflation is creeping back up and we now have the biggest real estate bubble in Brazilian history. When that thing pop, it will be UGLY. And yet, somebody, somewhere will still blame neoliberalism for the economic blunders committed by communists such as Dilma and Lula.