[HN Gopher] In Argentina, inflation is a way of life ___________________________________________________________________ In Argentina, inflation is a way of life Author : argentinian Score : 124 points Date : 2022-01-27 15:15 UTC (7 hours ago) (HTM) web link (www.washingtonpost.com) (TXT) w3m dump (www.washingtonpost.com) | argentinian wrote: | Fortunately, lately I don't see any new article from the USA | praising MMT. | uejfiweun wrote: | Unfortunately, it's because the acolytes of MMT already won. | The national debt has completely exploded and there's no | putting that genie back in the bottle without hyperinflation. | wbsss4412 wrote: | MMT is not, nor has it ever even the dominant ideology of | those who are actually in control of monetary policy. | | I know it's a popular boogeyman, but it's pure fantasy. | uejfiweun wrote: | Gotcha. Well, whatever the name of the theory is that says | it's OK to just rack up a ginormous national debt, that's | what I am against. | wbsss4412 wrote: | That theory is called "starve the beast" wherein tax | hawks seem to believe shrinking the federal budget is | simply a matter of cutting taxes and engaging in | brinksmanship, despite the fact that their ultimate goal | of cutting SS and Medicare has been a political non | starter for decades. | uejfiweun wrote: | Yeah, I don't really get why you would pre-emptively cut | taxes in anticipation of future spending cuts. If there's | one thing we can bank on in history, it's that | governments always get bigger. Spending cuts are just | very unlikely to happen. | wbsss4412 wrote: | Seems to be good politics I suppose. | | The thing about MMT, is that it's not about racking up | gigantic debts _per se_ , their thesis is that deficits | and debt don't matter in an absolute sense, but in | relation to other monetary factors. Eg. _once_ inflation | picks up, _then_ it becomes necessary to cut budget | deficits. | notch656a wrote: | Then a new goal is needed. Allow anyone to opt out of | SS/Medicare for life, cutting themselves off from social | aid in exchange for not providing it. | wbsss4412 wrote: | I mean, that isn't a different goal. | netcan wrote: | _The acolytes of MMT_? | | Sheesh! How come anything touching on "what is money" gets | goofy immediately? | | Most of the world's monetary systems have been run under | Monetarist theories for 40-ish years. Theory is now entirely | at odds with observed realities. New theories gain ground. | | National debts "exploded" a long time ago. Japan's exploded | over a generation ago and most of western economies | "exploded" 10-15 years ago. Except these explosions aren't | explosions. Central banks continue to decree whatever | interest rates they want, with no market pushbacks. | | The monetarists and goldbugs have been screaming "inflation" | constantly for 25+ years. That does not mean that their | theory of inflation (national debt) is true. It isn't. | anm89 wrote: | Not clear to me what is "goofy" here. You dislike the word | acolytes? | | > Japan's exploded over a generation ago and | | And how did that go? | | > Most of western economies "exploded" 10-15 years ago. | | Sure and they had 15+ years worth of runway to lower rates. | So seems about right that they didn't have an issue while | their strategy was still viable. | | > That does not mean that their theory of inflation | (national debt) | | What does this even mean? Debt to GDP is ~130%. Seems like | what most of them have been consistently predicting for | years. | uejfiweun wrote: | I think it's less that inflation is caused by the national | debt, and more that it will be nearly impossible to _pay | off_ the debt without massive inflation. Certainly the Fed | is in a box with the debt, as it can 't raise interest | rates without massively increasing US Government debt | payments. The only solution seems to be to keep rates low, | which results in inflating away the debt. | mullingitover wrote: | > ...it will be nearly impossible to pay off the debt | without massive inflation | | Isn't it the opposite, that it's impossible to pay off | the debt without massive _de_ flation? 'Paying off the | debt' means reducing the money supply, which means money | later is worth than money now. That never ends well. | uejfiweun wrote: | Well my understanding is "paying off" the national debt | amounts to reducing the amount of value that is owed. You | could do this in two ways. | | Way 1 is what you described, which is directly paying off | the debt. This is the path of austerity, high taxes, | spending cuts, etc. Agreed that this never ends well. | | Way 2 is that you reduce the value of the debt by | reducing the value of the currency it is held in. This | isn't really an option for most countries, but the US is | unique in that it controls the world reserve currency and | can directly print the debt away. This would be a far | politically easier option as inflation is a complex | phenomenon that can't simply be blamed on harsh austerity | policies. | | It does strike me that they are going to go with option | 2. The political conditions for this aren't quite there | yet, but you can see it forming with articles like the | OP. | mullingitover wrote: | > but the US is unique in that it controls the world | reserve currency and can directly print the debt away | | This doesn't seem like a real option, though. The United | States doesn't simply print money, we issue debt to | increase the money supply. If we just started literally | printing new, unbacked money we'd immediately lose our | reserve currency status and it would likely be the end of | US global hegemony. Maybe the end of the US, period. | | Meanwhile, using our standard practice of issuing debt to | pay for it wouldn't work here because that would be | exactly counter to the thing we're trying to do: reduce | our debt. | argentinian wrote: | > Most of the world's monetary systems have been run under | Monetarist theories for 40-ish years. | | Argentina's monetary system hasn't. | wbsss4412 wrote: | It hasn't been run under MMT either, given that it's an | entirely new academic theory. | netcan wrote: | Both true. | | I'd even say that "theories," is probably the wrong term. | More "school of thought." | | I would also point out that the USD/EUR/GPM/Yen/etc _are_ | "run under MMT" in the basic sense. They simply have | different ideas about inflation. | | Broadly, MMT thinks same year spending is the main | inflationary mover. Monetarism thinks cumulative national | debt is what impacts inflation. | wbsss4412 wrote: | Agreed in the sense that MMT theorists assert that their | theories describe what happens in practice. | | I disagree if the assertion is that policy makers have | been consciously crafting policy under MMT this whole | time. | sleepingadmin wrote: | >Fortunately, lately I don't see any new article from the USA | praising MMT. | | UBI certainly died as a subject as well. The "basic income" | benefits wasn't even universal and exactly what everyone said | would happen has happened. | | I still think a fiscal conservative with an army of accountants | could figure out UBI and make it work. Effectively it would | greatly punish anyone who works under the table. | anm89 wrote: | > I still think a fiscal conservative with an army of | accountants could figure out UBI and make it work. | | This is totally lost on me. Why? I don't see how any of the | issues with UBI are accounting based. We already can spend | money we don't have in the short term so nothing prevents | transfer payments of any size in a purely logistical sense. | | The issues with UBI are regressive redistribution, long term | effects on the labor market, and long term effects on the | currency. None of those are accounting issues. | Proven wrote: | bravura wrote: | I have a friend living in Argentina. His father-in-law is a | businessman with a factory. Like many successful people in | Argentina, he is a master at exploiting chaos for personal | benefit. The father-in-law praised inflation, explaining it was a | useful tool for people like him, and offered the following story: | | I was walking down the street and found my wares being sold in a | shop that doesn't retail for me. Doing some digging, I found | incontrovertible proof that my foreman of ten years---ten | years!!!---had been stealing from me. | | Did I fire him? No. It is impossible to fire your employees, even | for provable malfeasance. | | Did I sue him? No. You lose 95% of these kinds of cases. | | Did I tell the police? No. You can't get the police involved with | anything important, like my business, they are too corrupt. | | So what did I do? I simply told him I would never give him a | raise again. And he understood that---due to radical inflation--- | his salaried buying power would keep dropping and dropping, until | it was chiseled away to nothing. So he quit. | | [edit: I am in no way suggesting that FIL was the moral actor in | this story, I don't know if he was or wasn't screwing his foreman | into poverty before the theft. What I found fascinating about | this story was how things were systematically _fucked_ in across | so many possible dimensions, that individual instances of | corruption and inefficiency and lack of faith are intertwined. | i.e. there 's a whole rat's nest of problems to untangle and a | point intervention is unlikely to prompt broader change. Also see | interesting discussion below about root causes of the inflation, | which connect to some of the anecdote above: | https://news.ycombinator.com/item?id=30101931] | dominotw wrote: | Is your friend's FIL ceo of my company? This is my employers | current strategy to increase profits. | nate_meurer wrote: | Is this likely to result in employees leaving the company? | dominotw wrote: | i put in my 3 week notice last week. I don't understand | ceo's logic here, just counting on inertia? | nate_meurer wrote: | Ha! Well there you go. | | I worked for a large company that was perpetually being | (and being prepared to be) sold. Three acquisitions in | three years, each preceded by a company-wide dictate to | increase the company's cash value by lowering costs. | | My director told me their most powerful cost-cutting | lever by far was to lower headcount. So that's what they | did. Then after the sale they'd be desperate to hire and | train new engineers. The churn killed productivity for | years afterward, due to the technical nature of the work. | After a year there I still wasn't up to speed. | | Sometimes the folks in charge are just shortsighted and | incompetent. | l30n4da5 wrote: | > Doing some digging, I found incontrovertible proof that my | foreman of ten years---ten years!!!---had been stealing from | me. | | > I simply told him I would never give him a raise again. And | he understood that---due to radical inflation---his salaried | buying power would keep dropping and dropping, until it was | chiseled away to nothing. So he quit. | | Just to play devil's advocate here, and I'm not saying that | stealing is wrong by any means, but this just makes me feel | like the reason he was stealing to begin with was that his | income was too low to live off of. | DoctorDabadedoo wrote: | Difficult to say without having background for such | situations. As a latin american myself I think it's not far | fetched to say that in LA there is an ominous sensation that | there is always someone taking advantage of you: your boss, | your employer, your government, your politicians, the police, | etc., so taking advantage yourself, although immoral, is "par | for the course". Theory of broken windows and a way to carry | on. | danlugo92 wrote: | My family ate beef/chicken leftovers (from butchers and such) | when they moved to my city. | | They never stole. | | Stealing is never OK. | monsieurbanana wrote: | We should all be clamoring that stealing is never OK. But | NOT with examples of poor people scraping for food. | | Stealing is a deep problem in our society, and poor people | have nothing to do with that. | frgtpsswrdlame wrote: | Stealing is okay in all sorts of situations. Many things in | life are more important than the rule of property. | mgh2 wrote: | Scale up this mentality, you have South America | frgtpsswrdlame wrote: | But I didn't say all stealing was okay, I said some | stealing definitely is okay. I still think that's true. | Some things in life are more important than property. | kortilla wrote: | Like what? Having a nice watch? Some Nike shoes? | nybble41 wrote: | > Some things in life are more important than property. | | If the property isn't important, why are you stealing it? | | Personally I don't really care whether you think it's | moral or not to steal, as long as you acknowledge that a | victim of theft has an equally moral right to "steal" | _back_ what was taken, and to use a similar justification | to steal a proportional (additional) amount from | perpetrator. "Turnabout is fair play" and all that. | nate_meurer wrote: | Out of curiosity, what are some things that are _not_ | more important than property rights in your opinion? | QuercusMax wrote: | Intellectual property rights? | bananabreakfast wrote: | Please specify some of these important things that you | clearly feel would be okay having stolen from you | personally. | | Or did you mean it's okay to steal as long it's from | _other_ people? | Grimburger wrote: | Stealing food to survive and not die of hunger while | there's abundant waste all around is not "ok"? | | I'd imagine that strong allcaps viewpoint would change in | certain circumstances. | MomoXenosaga wrote: | Yeah stealing food so that you can sell it on the black | market lol. | | Most poor people are not thieves, they are decent | hardworking people and don't want to be associated with | crime thank you very much. Stop glamourising theft | mgh2 wrote: | Dumpster diving or getting "waste" to survive is not | stealing, is being resourceful. It is like "hacking" vs. | "cheating" the system, subtle difference. | | Nobody "owned" it since it was thrown away - unless you | think racoons have rights... | 8note wrote: | It's still owned by the person while it's in their trash | can, til the trash is collected. | | It's stealing; just not stealing the owner is likely to | care about. Sometimes they do, and put locks in their | dumpsters though | tick_tock_tick wrote: | No most countries consider trash abandoned property and | free for anyone to grab. | mgh2 wrote: | Maybe they lock dumpsters because of liability | https://www.avvo.com/legal-answers/if-i-give-a-homeless- | pers... | nate_meurer wrote: | Around here, dumpsters are often locked to prevent | dumping. The apartments across the street are plagued by | dumpers who come at all hours and fill the dumpsters, | mostly with construction debris it seems. Residents end | up just piling shit on the ground around them. | loceng wrote: | You can't imagine any circumstance where it's okay? | munk-a wrote: | Lets say that the manager's incontrovertible proof proves | to be incorrect and neither party has committed a moral | fault. The system the manager has leveraged for enforcement | is protected from any sort of rebuke (I assume you can't | sue someone for failing to make CoL adjustments in | Argentina) so freezing someone's salary essentially just | comes down to a form of wage theft. | | Bear in mind that in America, I'm not certain about | Argentina, wage theft is the most expensive crime (summed | across all instances) worse than burglary, stealing office | supplies, or even robbing your employer. | | I agree that stealing is generally not OK - but maybe lets | start by addressing the most prevalent form of stealing - | by the powerful against the powerless. | maxilevi wrote: | With that logic the one doing the wage theft is the | goverment for causing the inflation in the first place | and not allowing other currencies to be used. | nate_meurer wrote: | No, if CoL adjustments were not built into an employment | agreement, then it's not wage theft in any sense. | [deleted] | exolymph wrote: | Stealing is sometimes okay, but usually the kinds of people | who try to justify it do so because they infantilize | criminals, which is maddening. | XIVMagnus wrote: | This is a Hispanic country, so the traditional morals and | ideologies of regular people are not the same. I come from a | hispanic country and lived in Miami almost my whole life. | (take a guess where I'm from lol).. Basically what I'm trying | to convey is that hispanics are hustlers, almost by nature. | Due to living in relatively poor countries and forced to | figure out new ways to survive. Not saying that Argentina is | so terrible that you need to be hustling this hard, but | sometimes people want a bit more. For example, my friend | which was born in Argentina recently went to visit and | explained to me how prices for goods that come from the U.S. | are extremely expensive but rent+food is extremely | affordable. Just from that little bit of detail alone, I'm | guessing anyone who is hustling for more money. Is doing it | because they want to live a more 'luxurious' life style. Less | humble maybe? | chespinoza wrote: | I think your comment is shamelessly racist and ignorant, to | be honest, have you been to every hispanic country to treat | hispanics like that? you'll see hustlers everywhere and in | every culture and country, also Argentina is not the only | Hispanic country so please try to make more educated | comments, and if you feel the way you describe it as for | Hispanic people, please talk about yourself and don't | generalise. | anthk wrote: | I am from Spain. May I introduce you to the old | "picaresca" from The Lazarillo of Tormes? | | We Hispanics gave the world great people, but we got lot | of hustlery and bribery since the Roman Empire. Italy is | like that too. | RedBeetDeadpool wrote: | This perspective of blaming the motive of the perpetrator | instead of the perpetrator itself leads to blurred lines of | judgement that makes establishing common rules impossible. If | you have ever caught someone doing something evil, you would | know just about any crime can be morally justified for a | cause of some sort. | kamarg wrote: | There's plenty of well off people that steal because they | want more. The fact someone is stealing doesn't lead to the | conclusion that they don't have enough income to live off of. | And if things in Argentina are really as bad as the business | owner claims where you can't fire employees and you can't go | to the police, theft is probably seen as an extremely low | risk activity. For many people, increasing your income by a | significant amount through actions that are highly unlikely | to have a negative outcome wouldn't require much | consideration. | Izikiel43 wrote: | > things in Argentina are really as bad as the business | owner claims where you can't fire employees and you can't | go to the police, theft is probably seen as an extremely | low risk activity | | This we call Monday in Argentina | edko wrote: | That seems unlikely. That foreman most probably belongs to a | union. Unions in Argentina are very powerful and they negotiate | at the National level. Whatever increase they negotiate, your | friend's father-in-law will have to pay. | jsiaajdsdaa wrote: | Time to sell the business and move to a better country. | jfroma wrote: | > So what did I do? I simply told him I would never give him a | raise again. | | It is true that salary have been always losing purchasing power | but don't forget also that employees have compulsory raises. | This comes from two sources: 1. minimum wage raises 2. believe | it or not, unions negotiate with the gov the raises, those are | called here "paritarias". | | Everything is broken here, laws favor the employees always and | that's why no one wants to start a business. When you talk with | small businesses this is their number one fear. | | Half of the population is convinced that business and owners | are the devil, and that they need to die in fire. | | And as for inflation, there is nothing to praise. | FredPret wrote: | I moved from a broken society to a first-world one. I'm | supremely lucky in this. | | There are many interlinked systems that have to work for a | society to progress. It's nearly impossible to line up all | the required factors at the same time. Makes it rather | frustrating when first-worlders shit on their own cultures. | berns wrote: | This is obviously false. First, employers can't just stop | giving raises. Raises are governed by law and by collective | agreements (although they are often below inflation). Second, | no one just quits, especially a crook. Why? Because you can | always force the employer to fire you. How? In general, nothing | too obvious, you just stop working too hard. Until your | employer offers you to leave and is forced to make an | arrangement and pay you compensation. | | > Did I fire him? No. It is impossible to fire your employees, | even for proven misconduct. | | > Did I sue him? No. You lose 95% of these types of cases. | tester756 wrote: | >This is obviously false. First, employers can't just stop | giving raises. Raises are governed by law and by collective | agreements (although they are often below inflation). | | You mean minimal wage? | distances wrote: | I don't know about Argentina specifically, but in many | countries unions negotiate salary raise percentages for the | whole sector. If the country follows universal collective | bargaining, this may also be a binding minimum raise for | non-unionized employees in the same sector, even in | companies that aren't members of the trade union that | bargained the deal. | wslh wrote: | No, for example in IT they are connected to the "commerce | union" but it doesn't include an agreement to adjust by | inflation. Obviously IT has strong market forces in favor of | the employee but this is an example. | | Also many unions lost against inflation. | maxilevi wrote: | > No, for example in IT they are connected to the "commerce | union" but it doesn't include an agreement to adjust by | inflation. | | Most factory jobs do have those agreements though. | [deleted] | irfwashere wrote: | It's going to be really interesting to see how Jack Mallers' app | Strike now entering Argentina is going to change things in the | country. | tute666 wrote: | Why would anything change? There is a dozen apps/bank analogues | and fintechs that deal with crypto. They are all subject by and | large to argentine banking law. | achow wrote: | https://archive.fo/nRK7O | mercy_dude wrote: | Not surprised to see the good old liberal outlets like WaPo | changing the narratives and trying to tell us how inflation is | all normal and to suck it up. Guess what serfs, Argentina has it | way worse. | | I guess after 5yrs of covering Trump and spreading wokeness, WaPo | forgot what struggle really feels like for people here. | empalms wrote: | It's been a while, but I vaguely remember an economics | professor of mine stating that it's not inflation which is the | core issue for people, firms, and economies, but an increased | price volatility which positively correlates with high | inflationary rates. The take-away was that when people can | reasonably predict what inflation might be MoM, or QoQ, | businesses and individuals are able to price transactions and | required rates of return accordingly. | | So yeah, by that understanding, inflation can be normal in a | healthy functioning economy. It is uncontrolled/unpredictable | inflation that's problematic.* | | *Grain of salt, I'm not an economist and it's been some time | since I've seriously studied the subject matter. Commenting to | join the discussion | collegeburner wrote: | No, prices and wages are stickier and often don't move as | fast as you think, even with digital communication. Menu and | shoeleather costs remain serious harms of inflation even if | you have some system where it is predictable. Anyway, it is | not, look at how many macro people say for months "inflation | is transitory" but no. | remarkEon wrote: | Wages are "sticky", and do not adjust as fast as prices for | goods and services, and certainly don't change much MoM/QoQ | outside maybe a few niche industries. | | That's the problem with high or relatively high inflation. | | The professor is correct, though, that consistent and | predictable inflation is at least less bad than inconsistent | and unpredictable inflation. | bko wrote: | There are huge inefficiencies with high inflation, even if | predictable. | | For instance, if you know your dollar is worth considerably | less every day, you're more likely to go spend it on things | that you may not need as long as they retain value. Barter is | inefficient as well. You'll be willing to wait on line as | soon as you receive your paycheck. You'll fill up your tank | more often. There's expenses with adjusting people's pay to | account for inflation and keeping track of what a | "reasonable" price should be or whether you're getting | fleeced. I agree uncertainty is a huge problem, but even high | anticipated inflation is a huge pain in the ass. | | That's not even considering the capital controls that are | often put into place that prevent you from holding stable | assets. So you're stuck holding this depreciating asset or | you're bending over backwards to buy as much stuff as | possible to retain you wealth. | jayski wrote: | My take away from the article wasnt that inflation is normal | and suck it up, it was: inflation sucks we cant allow it to | keep increasing | throwaway0a5e wrote: | The really infuriating part is that these same damn people were | just screeching insistently about how "pulling yourself up by | your bootstraps" is unrealistic. The kind of savvy it takes to | not slip backwards in a high inflation environment is exactly | the same kind of savvy it takes to pull one's self up by your | bootstraps. | | Regardless of how realistically achievable you think the latter | is does not change the fact that the cognitive dissonance is | apparent. | | This will come back to haunt them. People don't like economic | uncertainty but they can't do much about it so they just deal. | People really, really don't like spineless shysters that change | their opinions to whatever is convenient that minute and they | can marginalize said shysters in response. | | Where is the captain of this ship? Why isn't there someone with | a longer than next week timeline saying "hey let's stop | lighting our credibility on fire like this"? | dang wrote: | Please don't take HN threads into political or ideological | flamewar. It makes discussion repetitive, tedious, and nasty. | We're trying to avoid that here. | | https://news.ycombinator.com/newsguidelines.html | chespinoza wrote: | this is nothing, a lot of comments I've seen are already | flamewar and even racist, nasty generalizations, suddenly | everyone is an expert in hispanics countries as if they would | be all the same or as if they would share the same currency | or economical situation, a lot of ignorance. | [deleted] | totalZero wrote: | WaPo always seems to support leftist political forces in South | America, even where there is no parallel domestic narrative in | the US. For example, they supported Evo Morales in his bid for | a fourth consecutive presidential term despite the Bolivian | constitution limiting presidents to two consecutive terms. | | https://www.washingtonpost.com/politics/2020/02/26/bolivia-d... | kobalsky wrote: | > There's a long tradition here of purchasing U.S. dollars as a | hedge. | | There's a 200 usd quota per month shared between products, | services and currency exchange. If you buy something that exceeds | your monthly quota it means that your quota for the next months | will be affected. | | It's a system designed so that no one who can save money can buy | dollars. When poor people started selling their quotas the | practice got quickly stopped with taxes that got its price above | illegaly traded dollars. | | So basically if you need to buy dollars here you are a criminal. | noduerme wrote: | Ah but I heard if you worked for the government during | Cristina's presidency when the official price of pesos was | artificially kept low, you could get paid 20% of your salary in | USD at the government rate! | [deleted] | mgh2 wrote: | "Criminal" is strong word here, there is no "rule of law" in | Argentina, it is not one of the country's values. | | Crime is the norm, not the exception, starting with the | government and trickling down to the people. | | It is the wrong culture: "If higher ups cheat to get ahead and | get away with it, why shouldn't I?". | | Result: scaled up crime - corruption, tax evasion, robbing, | slacking, etc. | piva00 wrote: | The same in Brazil, mi hermano... | | It's incredible how similar Latin American corruption is | across countries, I feel that every time I met another Latin | American here in Europe/Sweden there's this instantaneous | bond on how fucked up our governments (and everyday | corruption) are. | | I decided to leave and believe it's been the best thing I've | ever done for my life, I miss the people I love but I don't | miss life back there. | everybodyknows wrote: | Uruguay is said to be better -- true? Not true? | user-one1 wrote: | Yes, corruption in Uruguay is way lower and the country | is more stable. But also it's a very small country, so | not many opportunities around for most people. | f00zz wrote: | Yes. Low corruption, low taxes (zero corporate tax for | income received from outside the country), and you can | even open bank accounts in foreign currencies. | iqanq wrote: | >It's incredible how similar Latin American corruption is | across countries, I feel that every time I met another | Latin American here in Europe/Sweden there's this | instantaneous bond on how fucked up our governments (and | everyday corruption) are. | | Catholic vs. protestant culture. | cpursley wrote: | Yep, same reasons Orthodox Christian countries are way | behind. It's an uncomfortable topic, but Protestant | dominant cultures are generally more equitable and less | corrupt. | mgh2 wrote: | Exactly: https://trendguardian.medium.com/in-data-we- | trust-2978dacc8c... | | _"Culture is religion externalized."_ - Douglas Phillips | brnt wrote: | The main thing to understand about protestant culture is | that it can afford a beter PR machine. Think 1984 vs | Brave New World. | wslh wrote: | > Crime is the norm, not the exception, starting with the | government and trickling down to the people. | | I agree with the starting with the government but I am lost | when you blame the people (except for obvious crimes): | literally there is not law in Argentina, tax evasion is not a | crime because it is impossible to have a business without | evading taxes (a friend told me) because the system is a trap | where everyone could be attacked by the force of law based on | ambiguous arguments. | | And in Argentina is easy to bribe judges and move the "law" | to the direction you want, more if you are powerful. | f00zz wrote: | When I was in Argentina a few years ago there were money | changers peddling dollars on every corner in downtown Buenos | Aires, at a time this was illegal (Cristina was president). | maxilevi wrote: | Funnily enough they are called "arbolitos" (small trees). | Because they are stationary and have green leaves (dollars) | [deleted] | technofiend wrote: | I can still hear them chanting "Cambio, cambio, cambio" and | it's been a few years. ATMs give hardly anything and charge | a large fee per transaction as well, so it's no surprise | people go to arbolitos. | bradstewart wrote: | You'd also get a better exchange rate from the arbolitos | vs the ATMs. | | If I remember correctly, it was referred to as the "black | rate". If you paid a vendor in USD directly, you got the | "blue rate". Both of which were much better rates than | the ATM. | maxilevi wrote: | In reality most people don't use "arbolitos" because | their rate has a big spread. | | Instead people who need to exchange regularly go to | "cuevas" (caves) which are just hidden and illegal | currency exchanges that have much more volume. | [deleted] | xtracto wrote: | This is crazy, no wonder a lot of people in there are turning | to cryptocurrencies, particularly stablecoins. | mgh2 wrote: | Crime begets crime | maxilevi wrote: | Buying stablecoins is not illegal though. | retrac wrote: | It probably is in countries with capital controls, if you | use it as a means to circumvent those capital controls. | bally0241 wrote: | as if capital controls are not a crime in of | themselves... | mgh2 wrote: | "crime" here means that crypto incentivizes crime itself, | not that it is "illegal" in the country: pump and dump, | scams, cybercrime, tax evasion, etc. | MrPatan wrote: | Why, when presented with an article like this, do we discuss the | content of it, but seldom why does it exist in the first place? | | Why would this newspaper want to say these things precisely now? | | What prompted the editor to pick this story and this angle? | | Nobody finds that question interesting? | lamontcg wrote: | Making everyone very, very concerned about inflation and | starting to talk about it. | | The USA could probably use a decade of double digit inflation | (with coupled wage-inflation so a nice wage-price-spiral) to | adjust asset values and wealth disparity back down to more | reasonable levels. It would come with economic stagnation but | that will be better than the alternative. | | What all the talk about inflation is doing is getting people | very worried about any uptick in inflation and prepared for | austerity measures to prevent it, which will probably lead to a | depressive spiral and lancing the long-term bubble that we're | in. If the "Great Resignation" trend of workers having power | over wages continues, then I suspect you're going to see a | large degree of inflation panic pushing for austerity. | | I don't think it'll land this year, though, this is just the | warm up act. The Fed policy changes this year will likely be | insufficient and its more likely that this time next year it | really starts to ratchet up (and I don't know what'll happen in | the midterms exactly other than the Republicans will make gains | which makes austerity even more likely). Things will likely be | getting exciting again in 2024. Sooner or later we're likely to | have a post-pandemic party for a bit, then I think policymakers | will start to seriously panic about inflation and workers | demanding raises and drive the economy into a depression. I | could be off in the timeframe, but after 2-3 years of workers | having negotiating power I think policymakers will start to | think that it is intolerable. | | The inflation messages, though, are clearly the manufacturing | of consent for what is likely to come. | nate_meurer wrote: | It all depends on how the pandemic goes. As Bill McBride says | over and over, _the course of the economy is dependent on the | course of the pandemic._ | | https://www.calculatedriskblog.com/2021/10/early-q4-gdp- | fore... | | I'm particularly interested to see how long supply | disruptions in China persist, as effected as they are by | China's zero-COVID strategy. | fuoqi wrote: | >The USA could probably use a decade of double digit | inflation | | It's a very thin ice to walk on. High inflation threatens | USD's global reserve currency status and it's in addition to | using financial control for political pressure of opponents | (e.g. threats to ban countries from SWIFT). When (not if) | this status will be lost you will get serious additional | inflationary pressure from foreign governments and private | investors dumping USD-denominated assets. In the best case | scenario it will be a prolonged multi-decade process as with | GBP, but in the worst case scenario unwinding can be quite | fast, especially considering China's reserves (i.e. it can | start selling USD-denominated assets as a form of financial | attack). | lamontcg wrote: | I think the depression we hit due to austerity could also | severely threaten the global reserve currency status. | | Although that's another good argument as to why | policymakers are going to panic over inflation. | otikik wrote: | I think you might enjoy this video from Tom Nicholas, "The Myth | of a Free Press: Media Bias Explained" | | https://www.youtube.com/watch?v=v-8t0EfLzQo | 101008 wrote: | Argentinian here, 30 years old, middle-class. Yes, we have a big | inflation problem and what the article says is correct, except I | don't know anyone who buy tuna or pasta or whatever to store | because of inflation. In fact, anyone who would do that wouldn't | be smart at all, would be pretty stupid. A few ways to fight | inflation is buying dollars and selling them later: our inflation | index goes hand to hand with our USD:ARS, even even below that | (intuitevly it may be a problem). So it makes no sense to buy | things to store later. What we do is buy stuff such as | electronics in isntallments payments, even if the interest rate | is high. Quick example: If I buy a computer in cash, its price is | 100. If I have to pay 12 installments, each installment is 20 | (240 in total). However, in one year, due to inflation, 20 may be | nothing compared to what i earn (salaries are also raised to try | to keep up with inflation), so big payments we usually do that. | But almost no one get groceries in installments, etc (also: your | credit card / bank imposes you a limit on installments payment, | so it doesn't make sense to waste them in daily things and you | try to save it for when you need it, such as electronics or | emergencies) | caeril wrote: | > In fact, anyone who would do that wouldn't be smart at all, | would be pretty stupid | | Can you expound on why this would be "stupid"? | | Holding dollars to exchange for later incurs a 7% (current | dollar purchasing power loss rate) loss on top of exchange | fees. The can of tuna retains its food value exactly as-is for | years, with no currency exchange costs. Seems to me that the | tuna beats holding dollars handily. | lottin wrote: | Currencies don't have inflation rates. Countries do. | legutierr wrote: | Do two countries that share the same currency have | different inflation rates? Are El Salvador and Ecuador | experiencing different inflation rates than the United | States? | noselasd wrote: | Yes they have different inflation rates. | lottin wrote: | Inflation rates even vary among different regions within | the same country. | yazantapuz wrote: | Argentinian here, 37 years old, middle-class. I known a lot of | people who bought all the non-perishable food they can like | tuna, and others good because the rampant inflation. Myself | included. | anikuni wrote: | Is the Argentinian inflation being "fought" by any government | program? I've studied a lot of Brazil's hyper-inflationary | period, and boy was it difficult to overcome it. Basically, | once the industrial growth went below the inflation-rate | everything went (slowly) belly up. It happened at two distinct | times: one at Kubitschek's presidency, and the other during the | military junta. Trouble is that our economy became "indexed" | everywhere, so people would mark-up their prices at | inflation+x%, then the _actual_ inflation would be the | forecast+x%, which is an exponential process. After two decades | of failed attempts, the solution was found via a financial | reform, done all throughout the 90s, and then a modern copy of | Germany's anti-hyper-inflation Rentenmark program, which | created the Real. The solution (or so the mainstream history | says) was to create a price "anchor" for everyone, which was | pegged to the dollar (one of the main culprits were the large | devaluations vis-a-vis the USD, a vicious cycle of | inflate->devalue->inflate->...), and at the same time | attracting foreign investment via a large real interest rate | (far above the remaining inflation). What we are going through | now in Brazil is a slow reversal of that, inflation is picking | up again, and the central bank's actions are seemingly slowing | down the economy and not being able to control inflation (so | long, Phillips Curve). | tigershark wrote: | I'm trying to understand how would it work for mortgages. I | guess that you have no fixed interest mortgages and they are | all tied to the inflation rate + some spread, otherwise I don't | see how the banks would want to lend you money for a house. | marcosdumay wrote: | Everything is linked to the inflation rate. Fixed interest | lending does not exist at all. | | Even then long term lending can easily go both ways, and | become too cheap or too expensive very quickly. | | (I lived my childhood with hyperinflation, not in Argentina, | but that doesn't actually change from one place to another.) | ed25519FUUU wrote: | Variable rate loans make a lot of sense. It's still strange | to me that in the USA I can get a 30 year FIXED mortgage at | 2.75% when inflation was 7%. | | Makes "inflated" housing look cheap. Doesn't really make | sense that it's even offered. | JumpCrisscross wrote: | > _Doesn't really make sense that it's even offered._ | | Nobody serious is betting inflation will remain at 7%. | That was an annualised rate from a single reading. | dragonwriter wrote: | > It's still strange to me that in the USA I can get a 30 | year FIXED mortgage at 2.75% when inflation was 7%. | | A variable 2.75% with inflation at an unusually high 7% | would be weirder than a fixed; a variable rate loan has a | rate based on current conditions, a fixed rate loan has | rated based on expectations over the lifetime of the loan | (both in terms of value of money and risk of loss.) | | Now, it may seem weird that you can get a 30-year fixed | loan _at all_ , but once you accept that, having the rate | below current inflation when inflation has been at a | unusually high level for a shirt period of time isn't | particularly odd. | tute666 wrote: | Argentinian here. | | Personal credit lines are almost nonexistent or have rates | which supercede inflation, (inflation+10% is not out of the | ordinary). Credit card yearly interest rate for 2 years ago | was >= 70% | | There are preeexisting credit lines for property, but they | are government subsidied mortgages with very a specific | target audience. ie: salaried mid income families looking to | buy their first property. | Izikiel43 wrote: | > how would it work for mortgages | | That's Argentina's secret, there are no mortgages, properties | are bought in cash. | NikolaNovak wrote: | Before civil war in my old country a quarter a century ago, | people were doing the same thing: buy something big and | expensive in installments. First couple would suck. Last few | were negligible. | | Another story that seems surreal to me now (having lived in | Canada 25 years): My grandma and virtually everyone her age was | habitually 3 order of magnitude off when it came to money. | She'd give me a 2 million dinar note and say "here's 2 | thousand". | | Every now and then there was a reset - basically you'd print | new money and lop of some digits. | | I was <12 years old through this so only have vague memories | but man, what a crazy way to live -- and yet it was fairly... | "normal". Is what it is. Human brain adjusts to anything | (including to a certain degree the civil war that followed). | selimthegrim wrote: | When the civil war started (presuming this is ex-YU) did rate | of inflation really go up that much compared to before? My | understanding is it was bad in the late 80s, very bad 89, | stabilized in 90 thanks to Markovic, and then resumed going | up once the war kicked off. | sasawpg wrote: | Inflation stabilized very briefly, but the situation was | unsustainable and it quickly resumed. I was pretty young at | the time, but I remember that many people went for | weeks/months without getting paid. Some government | positions fared better than others, but overall the economy | struggled. | | Then the war kicked off in 1991 and everything fell apart. | selimthegrim wrote: | Someone commented elsewhere on the thread with a video | clip of Markovic talking to the Federal Assembly. | kingofpandora wrote: | Turkey did a 1,000,000:1 conversion a while back. Before that | you could almost say that the local currency was millions. | | - "How much is this book?" | | - "9 million" | | - "Here's 10 million" | | - "And one million in change, sir" | | OK, so that only worked up to a certain value. No one would | say their rent was "1,000 million". In that case, the | currency was billions! | travisjungroth wrote: | Mexico did a 1000-1 reverse split in the 90s. You still see | the old bills sometimes. You just treat a 20,000 pesos bill | as a 20. | edko wrote: | Since Argentina started having its own currency, it had to | reset it 5 times, dropping a total of 13 zeroes. I have | memories of two of those resets and, similar to what you say | about your grandma, I remember older people translating to | the older currency for a while, until they fully adapted to | the new one. | sasawpg wrote: | Unfortunately there were plenty individuals/businesses that | exploited inflation (among other things) during the war (and | leading up to it) for massive gain. They'd borrow heavily, | buy up as much staple as possible then quickly sell at a | discount. By the time original debt was paid back, high | inflation ate away at the original value of debt. So despite | originally selling at a loss, it was still a profitable | business. | | That of course is assuming they even bothered to pay anything | back. Often enough it was a game of survival | (business/personal). Nothing to pay back if the person is | dead or business gone. | aeyes wrote: | Let's hope for you guys that some government genius doesn't | come up with the system Chile has: Inflation adjusted loan and | contract payments, obviously excluding salaries. | | https://en.wikipedia.org/wiki/Unidad_de_Fomento | 627467 wrote: | There has been such thing[0] and it unlocked affordable | mortgages in a country where in the past years (decades?) it | was basically impossible to get (and thus, climb the housing | ladder). | | [0] https://www.marval.com/publicacion/creditos-en-uva-como- | alte... | [deleted] | [deleted] | kerneloftruth wrote: | Odd how the author doesn't even touch on the causes of | Argentina's persistent inflation. Rather, it's presented as | though it came from nowhere, and the only real story is how | people deal with it. | uejfiweun wrote: | The Washington Post is no longer concerned with giving readers | interesting and useful information. Instead, the entire | newspaper is devoted to fearmongering, spin, and propaganda. A | quick Google search for "Argentina Inflation Cause" yields the | following result: "the price increase in Argentina was fueled | by rapid expansion of the money supply". The WaPo very | explicitly wants to rapidly expand the money supply in order to | redistribute wealth and achieve "equity" or whatever the | buzzword is today. I'd guess that this is likely the reason why | they don't touch on this in the article - they want to distract | you from what's currently happening, and instead are | conditioning you to accept the outcome. | gruez wrote: | >The WaPo very explicitly wants to rapidly expand the money | supply in order to redistribute wealth and achieve "equity" | or whatever the buzzword is today. | | Considering that they're owned by jeff bezos, why would bezos | want this? | caeril wrote: | > why would bezos want this? | | Easy answer: The Cantillon Effect [ https://en.wikipedia.or | g/wiki/Richard_Cantillon#Monetary_the... ] | | Whenever Central Banks print money, they don't load up | helicopters and distribute the funds evenly among the | populace. They work through close relationships with | Primary Dealers. The money enters the system through asset | purchases. But when banks' assets are replaced on their | books with cash, they have to _do_ something with that | cash. What do they usually do? Buy _other_ assets. Like | corporate debt. Like stocks. Money is fungible, and unless | there are specific regulations preventing it, the first | place freshly printed money goes is to the banks. The | second place it goes is whatever those banks buy. Think | index funds. Think AMZN. | | Even in open-market operations, the money still finds its | way to AMZN. Example: The Fed pins the 2y-7y maturities | down by buying in OMO. SOMEONE is selling. Usually, it's | some sort of institutional fund with variable capital | controls. With the TSY prices too high for their desk, they | look for somewhere else to park their cash, like AMZN, or | the SPY. | | The first at the trough always wins. The second at the | trough wins really big as well. Hacker News readers with | their FAANG incomes, RSUs, and 401ks, are pretty big | beneficiaries, too. The guy that raises your pastured free- | range eggs, though? By the time he's buying coop materials | and fencing, most of the purchasing power has already been | sucked dry from Bezos and you. | tomp wrote: | Because he has real wealth (Amazon stock) that isn't | affected by inflation (stocks rise as money loses value). | thebean11 wrote: | So who is wealth being redistributed from? | otikik wrote: | It's not the middleclass. | | It's _everyone that isn't rich enough_. | MrPatan wrote: | You | thebean11 wrote: | Unless I happen to have a mortgage, or other dollar | denominated debt.. | jaywalk wrote: | The middle class. | option_greek wrote: | Its not a distribution. Its a dilution. The rich gets | richer as they have most of their savings and capital in | form that is not taxable and also set to rise with | markets and real estate. The poor and middle class have | much smaller percentage of income working for them and | not usually have access to high growth opportunities. | uejfiweun wrote: | It's always the middle class that gets screwed, dude. | Happened with the income tax, happening now with | inflation, and will happen again once well-intentioned | but naive people pass a wealth tax. | itsumoiru wrote: | Whoever has the most USD cash. (In proportion to their | total wealth) most certainly not the "rich". | tomp wrote: | People with cash savings. | | Employees with salary. | | Owners of fixed income securities (government & corporate | bonds, mortgages). | | Even owners of capital that sell stock (inflation causes | imaginary "capital gains" and the corresponding taxes). | beiller wrote: | Seems like it could be the bread and butter for Amazon's | new fintech startup - BNPL loans which is perfect for | hyperinflation based economies! Coming soon to a country | near you! | [deleted] | kgin wrote: | That's a lot of big claims about a very specific agenda. What | are you basing this on? | everybodyknows wrote: | > fearmongering, spin, and propaganda | | You're missing the biggest one, the first commandment of 21st | century journalism: | | Thou shalt not criticize the culture of another people, | howsomever much all evidence of a trouble's causes may point | in that direction. | harpiaharpyja wrote: | It's pretty bizarre. | steelstraw wrote: | That is curious. What are the causes? | pmcollins wrote: | gov't insiders printing money | hogrider wrote: | We print money like there's no tomorrow lol. | betwixthewires wrote: | Examining your statement literally is also very | illuminating. They literally treat the money like tomorrow | does not exist. | missedthecue wrote: | They are printing so much money that they had to outsource to | foreign printing presses -- their domestic facilities are | already running 24/7 at full capacity. | | http://mriguide.com/argentina-plans-to-outsource-currency- | pr... | oneoff786 wrote: | Why wouldn't you just print larger denominations | notch656a wrote: | Because that would be admitting there is a problem. Do | you want to be the politician that authorizes change in | denomination while simultaneously explaining why you | haven't addressed why that is required. I'm guessing the | politicians don't want to touch inflation with a 10 foot | pole, because solving inflation is painful in the | beginning so it tends to be very bad for anyone elected | on any timespan less than a decade. | | Milton Friedman called inflation like alcoholism, great | at the start but quitting is long and painful and most of | the rewards of stopping are delayed with only pain up | front. | edko wrote: | I would add to your excellent answer an anecdote about | the tricks of a previous government (with mostly the same | people as the current one) to hide inflation: the | Secretary of Interior Commerce (a complete thug) forced | McDonalds to freeze the price of the BigMac, so that | Argentina would look good on the BigMac Index. The prices | of all other burgers were more or less free to increase. | edko wrote: | Fiscal deficit. The public sector grows and grows by hiring | friends, family, and party members. In addition to that, | every government contract is overpriced for kickbacks, and | the government meddles in everything seeking opportunities | for corrupt personal profit. All of this spending and | corruption is financed by very high taxes that oppress the | private sector, and by debt. When you cannot increase taxes | anymore (in some cases, Argentina taxes are over 100%) and | when nobody lends you money anymore, the only solution is to | print money. But everybody knows that money is not worth | anything, thus creating very high inflation. | ajot wrote: | IANAE, but I'll say it's mostly seigniorage to fill up for | the fiscal deficit. | | And if you try to cut the money printer (without taking | some.huge debt), you have to squash the deficit, which is | mostly subsidies to electricity, gas and public transport, | and non-contributive retirements. You can't, politically | speaking (and maybe legally too), cut the retirements, so you | have to cut the subsidies, which will increase the measured | inflation, at least for a few months. | Izikiel43 wrote: | > You can't, politically speaking (and maybe legally too), | cut the retirements | | Funny enough, that's what the current government did. They | removed a law from the previous government which ensured | that pensioners would be paid inflation + x% so that their | real income won't decrease, and now the government decides | on a whim what the pension raise would be (the pensions | have been increased by very little very sparsely), | effectively cutting retirements, as inflation eats through | them. | | They can't cut subsidies because most of their voters are | poor, and if they touch that, shit hits the fan, whereas | they don't give a shit about old people, since they lose | them money and don't vote for them. | | I'm so happy to have moved to the us and have a 401k and | ira accounts the government can't touch. | sleepingadmin wrote: | I don't know the answer, I never invest in south america so I | haven't really checked. So let's look together. | | Inflation seems to have been a problem since around 2002. | From 2006 to 2015 it was kind of stable but bad. The currency | then dropped out. | | GDP across that entire period seems collapsed. They | constantly are dipping into recessions. Their manufacturing | industry seems to be in decline since ~2012. Agriculture is | suspiciously flat. Mining is in decline for that entire | period. Seems to be whole economy collapse to me. | | Labour participation rate is steady around 45% suggesting not | much tinkering with employment numbers. Which looks also | steady about 42%. Unemployment is pretty steady from about | 2006 to present around 6-8%. So their productivity is poor. | They'll very likely always be a second world country. What a | sad outlook. | | Central bank balance sheets are all the rave, they only go | back to 2012. It looks as bad as any other country as of | late. | | Money supply is sky high. They probably have ~300-600% | inflation locked in here. Holy. | | Interest rates are in the 40-80% ranges? But real yields are | negative for sure. You cant save a dime in this environment. | | Balance of trade is good since 2019 or so, but that probably | lines up well with collapse of their economy. Probably means | poverty on the rise bigtime? Otherwise has been bad for years | and has been in decline in scope. | | Tourism died long before covid. Roughly in 2016 something | happened to kill their tourism industry. | | Government credit rating is trash. Yet government debt is | rising. | | Argentina's military spending had been bad since the 1990s. | | No surprise to see their economic competitiveness is nearly | lowest ranked in the world. | | household debt to gdp? Argentina has no household debt? You | cant get a mortgage at 40%+ interest rates. Therefore you | cant have debt. Their people have no debt and they are sitll | in collapse? | | Corporate tax rate is recently down from an outrageous 35% to | a slightly less outrageous 25%. Personal tax is 35%, Sales | tax at 21%. So a total tax burden of easily well over 80%. | Argentinian people work for the government at least 80% of | the year. Does the government provide 80% back in services | and goods? I highly doubt that very much. | | Since the problem has been ongoing so long. Politically it | can't be solved. I must admit I know nothing about their | politicians but if I were to shoot from the hip, their | current leadership is not ideologically aligned with fixing | it. | | So easy prediction without crystal ball? They have at least 3 | more years of absolute collapse. We're talking probably 20% | of people will enter poverty before this ends. It's going to | be very bad for the argentinian folks. | valcron1000 wrote: | As an argentine this is a spot on summary. We are in a | shitty situation and things are just gonna wet worse | notch656a wrote: | Given that large businesses are taxed and impeded to hell | and employees are taxed to the bone, is there any leg up | for those running a single man sole proprietorship | running business informally? As a total outsider I feel | like there's a special niche area left for 1 man run-his- | own-business opportunities to make a living here by | exploiting the structural problems that weaken the | marketability of larger business. | Izikiel43 wrote: | > From 2006 to 2015 it was kind of stable but bad. | | Just an FYI, the government at that time (which is the | current government) fudged the official inflation numbers | to pay less interest and to say there was no inflation, so | if your inflation numbers are from official sources for | that period, they are not true, inflation increased every | year since 2002. | mgh2 wrote: | They have a history of defaults, but mainly gov. corruption | | Crypto fans like to compare to the US, but there is a key | diff: the work ethic. | | Money printing + no production = stealing + inflation + | defaults | | The US has the production and work ethic to compensate so far | victorcharlie wrote: | It's a combination of factors but, basically: Populism and | its mania with expending more money than what it generates in | stupid ways. | | An obsession from a big part of the society to sustain | obsolete and uncompetitive industries with state money just | to avoid "losing jobs". | | Draconian taxation for productive and competitive industries | (Ag mostly, IT affected too). Slow, confusing and corrupt | bureaucracy requiered for starting a new bussines. | | A hecktonne of social assistance that barely keeps the | persons from starving but don't provide real social | ascension. | | Obscene subsidies to electricity and natural gas (think about | rich people warming their pools during winter). | | Sorry that I don't provide raw numbers, I'm in my lunch break | and really don't want to sour it. | culopatin wrote: | I took my American girlfriend to my hometown this winter (summer | there) and we both realized that what Argentina needs is a Nelson | Mandela of sorts. | | There is SO MUCH to do. But everyone has just given up. | | It's a psychological and social problem more than an economical | problem now. | | I tried to generate business for people paying for things in | dollars and the mistrust is so high that no one wants to do | anything because they think you're about to scam them. And they | have reason to. But no one is starting a business there, why | would you? | | The entrepreneurial vibe of HN is absolutely nonexistent in | Argentina. So much that when someone young opens a business that | is mildly successful the news dedicate an article to them. "Look, | Argentinians generating jobs!" | | It's sad and I bang my head everyday at how I can go back home | while creating jobs and fighting the stupidity of the government | [deleted] | nate_meurer wrote: | What would you want Argentinian Nelson Mandela do to try to | turn things around? | culopatin wrote: | People need to believe that they can change the situation | they are in. They need to think of what they are capable of | working on and feel like other people will join them to do | good, not to fuck with them. | | Things as simple as not dumping trash outside of where you | live. Or getting together with your neighbors to clean up | your block to make it look nice. | | Helping each other is no longer a thing in Argentina from | what I can see. Everyone is so used to having to protect | everything they have that they have isolated themselves in | their pockets and everyone else can go fuck themselves. You | can't get up and go work like that. | | I think Argentina needs a social leader that will make them | think this way. | cjbgkagh wrote: | South Africa is on my watch list for a failing state. Not | sure if Argentinians situation could be improved by | emulating it. This is what happens 'when money dies'. I | worry that there is now a false nostalgia,a simulacrum, for | communism without an understanding of the damage it does. | In Eastern Europe I unexpectedly bore witness to the scars | left on the human psyche from those who lived it. Even long | removed from it they are still very damaged by it. There is | no analog in the west so it is hard to explain, it's like | chunks of their soul were removed. Their specter has | haunted me ever since. What's happening in Argentina was | entirely predictable and unfortunate. | nate_meurer wrote: | Is there any hope? That is, are there any people currently | in Argentinian politics who might be credible agents of | change? | Izikiel43 wrote: | Not really. There are new libertarian congressmen making | waves (Javier Milei and Jose Luis Espert), by demanding | taxes be lowered and public spending reduced as people | can't afford to live anymore (Argentina spends waaaay | more than it makes, hence inflation and debt), but they | are still small parties in the national scale. | | The big ones (Peronismo, which is a national socialist | fascist leftist communist party (yes, it's weird, but | it's that), and Cambiemos, which is Peronismo light | mostly) are more or less in accordance to keep the status | quo as politicians and public employees like how life is. | mistermann wrote: | This describe much of the western world at this snapshot in | time, if to differing degrees. | | In Canada for example, it seems many people are treating | real estate like the lady in the story treats cans of tuna: | buy as much as you can afford. And, our government seems | similarly disinterested in the problem. | | It's very tempting to conclude that this is all by design | (this sentiment is picking up a lot of steam in Canada, and | I wouldn't be surprised if it is partially true), but I | think what's more realistic is that this is simply | emergence in action: a system such as the one we live in | (Earth, humanity, etc) combined with particular forms of | governance (representative democracy) eventually produces | the phenomenon we are now seeing more or less globally: | concentration of wealth and power, at a constantly | increasing rate. | | I think it's possible for leadership to change this, but I | do not personally believe that representative democracy is | necessarily capable of discovering such a leader and | allowing them to advance through the ranks. Perhaps in | anomalous situations someone could slip through, but my | intuition is that anyone with righteous populist goals | (maximizing well being for all people) would make it | through the many sophisticated filters that exist, one of | the main ones being the media. | Atlas667 wrote: | You seem to have a pretty idealist notion of societal | development. Did you ever think that maybe your business did | not inspire confidence? | | What you see in your country is true of any nation in distress | and has nothing to do with the individuals moral or mental | capacity. It has more to do with the economic policies and | conditions of the nation. Industry lackey politicians from | every side and the IMF have more to do with this than the | people's lack of entrepreneurial spirit, I'm surprised the | article didn't even mention them. | | "Men make their own history, but they do not make it as they | please; they do not make it under self-selected circumstances, | but under circumstances existing already, given and transmitted | from the past." | | "...the final causes of all social changes and political | revolutions are to be sought, not in men's brains, not in men's | better insights into eternal truth and justice, but in changes | in the modes of production and exchange." | CountSessine wrote: | It sounds like what Argentina needs is Paul Volcker, not Nelson | Mandela. What would Nelson Mandela do? | ABraidotti wrote: | I spent 9 months in South America in 2012-2013, 5 of which I | lived in Palermo Hollywood, Buenos Aires, aka the hipster ex-pat | neighborhood. I loved it -- for the most part. I recall a few | salient aspects of everyday life related to money: | | - sometimes when I'd buy something at the chino (corner store run | by Chinese immigrants), I'd get candy instead of my change back, | due to the coin shortage. No arguing with them about that. | | - I would get empanadas down the street at a bakery almost every | day, and the woman who owned it would complain and almost start | crying if I brought a bill that was too big (like a 100-peso | note). I would occasionally buy fewer items than I wanted because | I had smaller bills. I think she was happier that way. | | - the best exchange rate for American dollars was the downtown | grey market on Avenida Florida, where tourists would frequent. I | would just walk down and guys would notice me as a tourist, and | say "cambio alla" and point me around a corner, where I could | trade American dollars for whatever the rate in pesos was that | week. There was an official unofficial exchange rate, better than | the official exchange rate. | | - across the river, Uruguay just straight up abandoned their own | peso and used American dollars instead. Same with Ecuador as I | later found. | | - when I got tired of wine, I'd get beer at this brewery in | Palermo -- Orion, I think it was called. I can't remember. But I | do remember in October 2012, beers cost about 24 pesos and were | about 36 pesos by spring 2013. Cheaper for me since my wallet was | backed by USD, but that just meant I drank more beer. :) | | I really miss BA sometimes. | msoad wrote: | I'm in Palermo right now. As FAANG engineer I'm making so much | more money than average Argentine. Life is good! Beer in a bar | is $200 peso now. Still less than $1! | dakial1 wrote: | Brazil hyperinflation case is a great read, both on the | instruments that appeared to take advantage of it (and ultimately | put more gas on the fire) and also on how Brazil managed to | tackle it (it was more a behavior science thing than economics). | | https://www.npr.org/sections/money/2010/10/04/130329523/how-... | | Interesting things that I remember from that time: | | - Hypermarkets made a boom, because people would make big monthly | groceries purchases right when they got their salaries, and avoid | small frequent purchases (as the money would lose value with | time, very quickly) | | - Price freezes were very frequent and very ineffective as | companies would simply stop producing/selling, generating product | shortages everywhere. | | - A financial device called Overnight, were you would convert | your brazilian currency (had many names) into USD at night and | then convert it back to BR on the next day | | - Government would try to control USD exchange rates and this | simply created a black market that got so widespread that the | black market (called "parallel market") had its rates published | at newspaper and TV like a normal thing. | matheusmoreira wrote: | The value of the old currency approached zero, so we created a | new one. This is a pretty standard solution really. This is the | fate of all inflationary currencies. What's impressive is how | they managed to manipulate the population into believing _this | time_ everything would be different. Inflation was not | controlled, it continues to this day, only slower. | | At least we don't have presidents stealing everyone's money | anymore. That's the sort of insanity that cryptocurrency was | invented to stop. | bosie wrote: | How does a cryptocurrency prevent a president from stealing | money from the population? Public records of all currency | transactions? | matheusmoreira wrote: | They depend on the banks to enforce policy. If you get rid | of the banks, there's very little they can do. That's what | cryptocurrency was supposed to be all about. In practice we | ended up with pseudobanks called exchanges running this | space. | | There were people who saw it coming and withdrew their | funds before the president ordered accounts frozen. | Everyone thought they were insane because interest rates | were sky high. They became richer overnight. | option_greek wrote: | > A financial device called Overnight, were you would convert | your brazilian currency (had many names) into USD at night and | then convert it back to BR on the next day | | Who eats the loss from the fluctuations in this case? Any idea | how the providers used to hedge against the risk. | The_rationalist wrote: | msoad wrote: | I am in Argentina right now. in the two weeks that I've been here | I exchanged dollars for 196, 206 and 210 Pesos in each few days. | I can't believe the rate changes this quickly. | | Tip: if you're planning to visit Argentina make sure you're | bringing cash. Using your credit card would mean paying double | the amount due to the difference between official and "blue | dollar" exchange rates. | anovikov wrote: | In Russia, a period of high inflation in 1990s and early to mid | 2000s made people simply think in dollars. Whatever price or | income you get, you just convert into dollars in your head and | now you know what it's worth. Saving were only USD cash. Although | inflation is long gone, people over 35-40 still think this way to | this day | | In Belarus, where there is no high inflation, but just periodic | (once in 3-7 years) sudden devaluations of the local currency, | people always think in dollars, and many employers set salaries | in dollars too. Even government sets rent on government property | and some taxes in dollars or euros just to avoid the hassle of | recalculating it too often. After a while, people got used to it | and it's not a problem at all - no one but government employees | who get salaries in local currency, is even worried about the | exchange rate (and those employees can't survive on salaries | anyway - they are dependent on bribes as salaries are laughable - | and bribes are in USD). | marcodiego wrote: | We had what we called "hiper-inflacao" (hyper-inflation) in | Brazil during the late 80's and early 90's. My father | calculated the prices in gasoline liters. | throwaway22032 wrote: | > Although inflation is long gone | | Well, you say this, but then there was that time in 2014 when | the ruble went from about 40 RUB/USD to 60-70RUB/USD... | anovikov wrote: | That's true, but there wasn't any super major inflation | spike. Everything just became cheaper in dollars. | foobarian wrote: | In ex-Yugoslavia, due to large numbers of people guest-working | in Germany, we ended up de-facto pinned to Deutschmarks. | | One of my favorite memories is watching the news where Ante | Markovic announced the denomination of the dinar, where they | basically ran out of room on the bills for all the zeros and so | just declared that henceforth they would print "new dinars" | which are same as "old dinars" but without the trailing 4 | zeros. Markovic waved one of those bills in front of the | parliament, started laughing with joy, and there was applause. | [1] | | [1] https://youtu.be/G3dSOfoQiaY | | Of course what I didn't understand at the time is that they | also officially pegged the exchange rate to the German Mark, | which made the currency convertible and stabilized the | inflation rate. Now I see that deleting the zeros was mostly | showmanship (though it helped lessen the confusion). | keiferski wrote: | Bosnia still has the mark. It's an interesting link to the | past. | | _Initially the mark was pegged to the German mark at par. | Since the replacement of the German mark by the euro in 2002, | the Bosnian convertible mark uses the same fixed exchange | rate to euro that the German mark had (that is, 1 EUR = | 1.95583 BAM)._ | | https://en.m.wikipedia.org/wiki/Bosnia_and_Herzegovina_conve. | .. | foobarian wrote: | That is amazing. Straight out of an episode of Top Lista | Nadrealista. | sasawpg wrote: | Don't think I ever expected to see that reference here!! | selimthegrim wrote: | Well, that clears things up. | spuz wrote: | This is known as currency substitution or dollarization and can | be done officially or unofficially. But what happens when the | world's currency also inflates? | | https://en.m.wikipedia.org/wiki/Currency_substitution | adventured wrote: | > But what happens when the world's currency also inflates? | | It's a relative premise of course. The USD Index [1][2] | (currently over 97 and rising) indicates the USD isn't being | debased at a faster rate than the other major currencies. The | EU, China and Japan have debt & spending problems every bit | as bad as the US (with the EU and Japan having far worse | growth problems), choking at their economic and political | systems persistently and requiring forever interest rate | games. So if, this decade, Argentina's currency debases at | 20% per year and the USD debases at 5% per year, and there | are no superior alternatives in the currency realm (eg the | other major currencies are doing something similar), you'll | largely mentally disregard the USD inflation, as all the | major boats are getting the same tide, and your USD choice is | still the right one vs the local currency. And if you can, | you may properly choose to diversify whenever possible into | inflation hedging assets with surplus cash, trying to balance | holding enough transactional USD vs inflation hedges to limit | some of the USD damage. | | [1] https://finviz.com/futures_charts.ashx?p=d1&t=DX | | [2] https://www.investopedia.com/terms/u/usdx.asp | gabythenerd wrote: | Venezuela sounds exactly like Belarus, bribes are expected for | common state procedures, even with those that the government | already set in dollars like getting a passport. | deadalus wrote: | Venezuala ranks 177th out of 180 in the latest Corruption | Perceptions Index (CPI) : | https://www.transparency.org/en/cpi/2021 | totalZero wrote: | This article paints a pretty picture of how Argentine people | manage persistent inflation, but reality in the interior of the | country (ie not Buenos Aires) is much less clever and functional | than what is depicted. Not everyone can buy peanut butter on | credit. Rather than seeking arbitrage opportunities and investing | in nonperishable goods, many people are fatigued by inflation. | Some live hand to mouth. Shopkeepers don't always move their | prices when the currency moves. The national bank publishes | currency bid/offer numbers that falsify the offer side of the | market for pesos. Surrounding nations have seen an influx of | projects from Argentine investors who seek to take money into | more functional economies. | | Meanwhile, people in Argentina have cultural characteristics that | I found surprising. The more bohemian people have an anti-work | culture yet they blamed Macri and other capitalists for not | having promptly repaired the damage done by leftist predecessors. | Some indigenous groups enjoy receiving free seeds and ignore | other factors that may affect their prosperity. When the country | brought Kirchner back, the foreign investment community recoiled | as evidenced by the overnight devaluation of the currency. Many | strategic subsidies exist, and some people don't realize that | subsidies and handouts in a nation that can't afford its debt | service are not a sharing of wealth, but rather a cause of | inflation. Past lockdowns of foreign exchange under Kirchner | spooked outside investors, so in some industries such as mining, | foreign companies tapered off their projects in mid-2019 when it | became clear that Alberto/Cristina would take power. | | Resigning yourself to weird survival tactics in a place where the | economy doesn't function is not "a way of life." Argentina | sustains itself because of its substantial domestic production | (which insulates certain markets from exchange rates) and the | fact that people depend on government handouts. Hoarding | toothpaste may save a few bucks, but it's not paying the bills. | The only other countries in the Americas with such a problematic | currency situation are the ones facing economic sanctions. | aunty_helen wrote: | >The only other countries in the Americas with such a | problematic currency situation are the ones facing economic | sanctions. | | Chile has economic sanctions? Colombia? Mexico? | | Inflation is just a fact of life here to the point that in | Colombia there's an inflation adjustment applied to prices on a | lot of things as the new year ticks over. | | If you look at the USD / Latin American currency pair you'll | find none of them are stable but each is at a different stage | in the 0-Bolivaries journey. | | If you want an anecdote, friends bought a car last year. They | can now sell it for a higher price used than what they bought | it for. Isn't that great!? They think so. | travisjungroth wrote: | None of those countries are anywhere close to the inflation | of Argentina. And the car story isn't just about inflation | but a global shortage on cars. | aunty_helen wrote: | >you'll find none of them are stable but each is at a | different stage in the 0-Bolivaries journey. | | 2 years ago Argentina had similar inflation to what other | South American countries are now. They had just had an | election and change of govt and that's when currency | controls kicked back in, the blue rate started again etc. | | Colombia has an election this year and one of the | favourites often gets compared to that guy in the | neighbouring country. | | I would also expect locally produced and sold cars to be | somewhat less impacted by this. Literally can't sell these | cars in first world markets due to them being stripped out | of saftey features, etc. | travisjungroth wrote: | How would you define "stable" so that no Latin American | currency matches? MXN has been 3-7% inflation for 20 | years. CLP had a big swing with the global financial | crises and more recently but is otherwise around 5%. COP | has been under 10% for 20 years, mostly around 5%. I | think what you're saying just doesn't fit the facts. | | The claim that they're all at different stages on a | 0-Bolivares journey is unfalsifiable. You can always say | it's going to happen later. | | The car market is global. Colombia imports about half of | its cars. A rise in import prices is going to increase | domestic demand and prices as well. And the cause of the | shortage is the global computer chip shortage, and | Colombia imports those. | | None of your anecdotes about inflation are unique to | Latan America or Colombia. Everywhere has seen car prices | spike and everywhere people update prices every year. And | just look at the charts if you want some data. The point | you dismissed about only sanctioned countries have worse | inflation seems correct. | aunty_helen wrote: | >The car market is global. Colombia imports about half of | its cars. A rise in import prices is going to increase | domestic domains and prices as well. And the cause of the | shortage is the global computer chip shortage, and | Colombia imports those. | | This is becoming very arm chair critic. Cars that are | produced locally are shitty Renaults, Nissans Chevolets | etc. These cars as I mentioned, can't be sold into | markets with normal safety standards, so aren't competing | for export sales. | | Colombia imports things like Mercedes / BMWs and other | brands that a different class of people buy. It's very | common here to have a market split between cheap local | and expensive, highly taxed imports. Cheese would be | another thing example of this. Perhaps that wasn't well | represented on your chart. | | As for the other points, inflation over 20 years. If you | have 12 'good' years and then the most recent 8 have been | spiraling out of control does that make the 20 year | figure a good representation? You can smooth the recent | high inflation out over 20 years just like icing on the | cake? | | If you want, I'd like to take a long bet with you. You | win, I'll pay you in COP, I win you pay me in USD. | pvarangot wrote: | > The only other countries in the Americas with such a | problematic currency situation are the ones facing economic | sanctions. | | Argentina is not receiving economic sanctions but it's pretty | much cut out from international credit. Last time the country | had access to good credit mostly from other Latin American | countries it was not doing that bad. That stopped when | Venezuela and Brazil crashed. | | Maybe the huge interest rates and being cut out makes sense | because "we don't pay", maybe it doesn't because some of that | credit was taken by a dictatorship or by wildly unpopular and | corrupt governments, but it does work pretty much as an | economic sanction. | | Honestly I used to think this was unfair in the later 90s early | 2000 when most of that debt came from lending by a US backed | dictatorship or from a corrupt government that was basically in | the pocket of big corporations. But it's true that as | Argentinians there was not much we did against the former | dictators, who most got pardoned or only saw consequences in | the last years of their lives. Oh and the president from the | corrupt government died a senator and only saw some years of | house arrest from selling weapons to Ecuador when they were | sanctioned. It's not clear for me if "the Argentinian people" | are really ok with that or not anymore. | marcosdumay wrote: | Being cut from international credit isn't something that | creates inflation anyway. The situation is actually that | Argentina is cut because of the same bad administration that | got you the inflation. | | Getting access to international credit also will not stop the | inflation. It can help a competent administration to survive | the change into low inflation, but credit by itself is not | something good (it's actually a bit bad), it's only helpful | when invested competently. | wbsss4412 wrote: | Without access to credit, the only way to run a budget | deficit is to print money. It is false to assert that | having access to reasonably priced credit would have _no_ | effect on inflation. | totalZero wrote: | Corruption is one major problem with foreign loans to | Latin American nations. | | In theory, money that is borrowed gets put to use for | programs that generate revenue. That revenue may result | in taxes or may support the treasury directly in some | cases, but either way the notion is that the loan | generates a return that pays the debt service (or bridges | the borrower over to a future cashflow that can pay the | debt service of the new loan). | | That return can't be generated if the money is not put to | good use. As a result, loans that come due are often | either refunded further out, or forgiven/restructured | with certain concessions. By "concessions" I mean the | country makes domestic and foreign policy changes that | benefit the lender in some way. | | Argentina tapped IMF funds during Macri's presidency | despite the 2014 default. I see the 2020 default as a | negotiation tactic. It's a little unreasonable to assert | that a country that owes hundreds of billions of dollars | lacks access to credit -- and if indeed we describe them | as lacking access to credit, it's only because they have | over-accessed credit in the recent past. | | Lending a country more money under such circumstances | often compromises their ability to support self- | beneficial foreign policy, and kicks the debt can further | down the road. It trades a big problem today for a bigger | problem tomorrow. | MomoXenosaga wrote: | IMF handouts. I suppose the rest of the world can't let | Argentina turn into a failed state so they'll be bailed out. | | I wonder if Argentinians feel shame or humility? | tute666 wrote: | Just a scorching hate for our politicians. | CountSessine wrote: | ...and yet you voted for those politicians? | tute666 wrote: | a majority of people voted for this govt in particular, | yes. Thats how democracy works. Its the same system that | voted for bolsonaro, trump, etc... | CountSessine wrote: | So clearly some people _didn 't_ hate them? In fact, | maybe the majority? | ajot wrote: | As I read on Twitter the other day: this is the country where you | buy home appliances in 24 monthly payments (without interests) | but you buy a house in one payment, cash only. | victorcharlie wrote: | Cash = USD. | alexpotato wrote: | This reminds me of the "fake money" story NPR did a while back | about why the Brazilian currency is called the "real" (pronounced | "reh-al" but literally "the real"). | | It's a fascinating story on how to approach inflation using a | combination of classical and behavioral economics | | https://www.npr.org/sections/money/2010/10/04/130329523/how-... | [deleted] | gtirloni wrote: | I don't understand why Argentina doesn't just do like Brazil did | [0] to fix its inflation. | | 0 - https://en.wikipedia.org/wiki/Unidade_real_de_valor | diego wrote: | Study Argentine history. They have tried everything imaginable, | and managed to control inflation for a while. Look at the 1-1 | peg between the peso and the dollar that lasted 9 years. It's | much more complicated than you think. | Izikiel43 wrote: | I mean, they tried everything, except the measures that | actually work, i.e., reducing public spending, raising | interest, stop printing money for a few years. | | Every country that did that got inflation under control, the | problem is Argentina doesn't want to spend less, so they | print like there is no tomorrow. | fuoqi wrote: | The peg was one of the main reasons why Argentina got into | this mess in the first place. | diego wrote: | That is an opinion. The 2001 crash caused a crisis, then a | recovery, then two decades went by with many ups and downs. | The entire peg might have never happened and Argentina | might still be where it is today. Are you old enough to | remember the hyperinflation of the late Alfonsin period? I | lived through it. No peg preceded it. | maxilevi wrote: | Except reducing the fiscal deficit, seems like no goverment | wants to try spending less than what they have. | marcosdumay wrote: | They never tried a program like the Real. | | Currency pegs are one of those things that known to fail | every time, by the way. | | Anyway, the answer to the GP is that the government will need | to severely cut their spending. That's the same reason on | every country with high inflation. | diego wrote: | Exactly. The reason inflation happens is that the | government overspends, then prints money because it can. | There are no magic tricks to stop inflation if you're | constantly devaluing your currency. | [deleted] | tute666 wrote: | This resolves the psychological inertia component of inflation. | Its not a solution on its own. It also requires political | compromise, reduction of govt expenditure and ,at the very | minimum, curtailing expansion of the monetary base. | cmusfan wrote: | Is this better or worse than Bitcoin? Not an an economist, or | Bitcoin invester, just curious. | RedBeetDeadpool wrote: | Inflation as a way of life is living with a mercurial | definition of a measuring stick for the promise of economic | stability provided by someone else. | | Personally I'd say its a lot worse. | thesausageking wrote: | I've hired a lot of contract developers in Argentina over the | years and most now ask to be paid in Bitcoin. If I wire them USD, | between fees, loss from the "official" exchange rate, and | inflation, they lose 15-30%. | pera wrote: | It's actually much more than 15-30% if you go with the | official/legal way: I would say you likely lose ~70% at the | moment. Most people doing contract jobs in Argentina have a | bank account in Uruguay, the US or Europe, and use | cryptocurrencies or travel to bring cash. | anm89 wrote: | That's pretty astounding. Would you be willing to breakdown | how 70% gets lost on a transfer? | edko wrote: | You will be compelled to exchange your dollars at the | "official" exchange rate (which is about 1/2 of the real | market value), so you lose ~50% there. On top of that, you | have to pay taxes. | emi420 wrote: | When a company sends USD to a bank account in Argentina, | the bank must to convert that amount to "pesos argentinos" | (ARS), using the "official rate". You can't get USD | transferred to your account from other people than yourself | (or a company owned by you). | | Right now the "official rate" is 110,5 ARS for each USD, | but if you sell your USD (using crypto or in the "dark | market") and get ARS, you'll get 222,5 ARS for each USD. | | And that's before the taxes. | yazantapuz wrote: | And you can't bought more than 200 USD per month at the | official rate, so the need to bought the USD through an | exchange or in a "cueva". | gabythenerd wrote: | I currently live in Argentina, the loss rate is much higher, | between fees and the official exchange rate you lose about 65% | of any income you perceive. Aside from crypto, Payoneer is also | popular (you go outside the country regularly to get cash). | Izikiel43 wrote: | > 15-30% | | What a weird way to write 60-70% (you are forgetting taxes) | wbsss4412 wrote: | Do taxes only exist in Argentina? Are you advocating tax | evasion here? | Izikiel43 wrote: | In Argentina, tax evasion is a way of living, everyone | there, young or old, rich or poor, looks for a way to avoid | taxes, since taxes coupled with inflation make life very | expensive, no matter your income -\\_(tsu)_/- . | | The best way to live in Argentina is to be a ghost. No bank | accounts, nothing declared, everything you own should be on | someone else's name, earning usd in a foreign account and | you should live on cash (converting usd to pesos as | needed). | wbsss4412 wrote: | Tax evasion is likely what's causing the inflation. | | Not saying I don't get why an individual does it, but | without the ability to reliably collect taxes, there's no | way to stop rampant fiscal deficits. | berns wrote: | But don't forget that no matter the amount of taxes | collected, politicians will find a way to spend more, so | there will always be a deficit and more money will always | have to be printed and whoever wants to reduce the | deficit will be accused of "tightening" (ajustar) the | Argentine people. | | Argentina leads a ranking of world tax pressure: | | https://www.ambito.com/economia/impuestos/la-argentina- | lider... | maxilevi wrote: | Not really. Tax collection from the Argentine goverment | grows higher than the inflation rate year by year. | | The problem is over spending. | Izikiel43 wrote: | No, spending more than you earn like there is no tomorrow | for 20 years has caused inflation | 627467 wrote: | Is tax evasion worst than trading on unofficial channels? I | guess it depends on the jurisdiction doesn't it? | sbierwagen wrote: | It's a failed state. The taxes don't go to schoolteachers | or whatever, they go into the offshore account of the local | boss. | mgh2 wrote: | Video: https://m.youtube.com/watch?v=sWr-Ht1S_4U | cardosof wrote: | I used to work with team members in Argentina. They received in | local currency, so they had salary raises every now and then. It | sometimes didn't match inflation, though, and the moment the | members started talking about missing eating premium meat or | going to restaurants, I knew the company was running late to one | of those raises. | Jtsummers wrote: | The raises are often negotiated months to a year in advance | based on predicted inflation (and other factors). This means | they can easily fall short. When inflation rises enough faster | than expected, there may be additional raises put in to | compensate, but it isn't guaranteed. | wolfgang000 wrote: | I'm Venezuelan and today argentina's inflations look like the | venezuela's one in 2014~2016 and as you may already know that | only got worse and worse, hopefully, that is not going to happen | this time but looking at this trend I believe the best course of | action would be to be prepared to leave the country before all | collapse | tute666 wrote: | Whilst similar, you need to take into account that there is a | diversity in argentine economic activity that never existed in | venezuela. If there is some redeeming quality that can be | gleaned from argentine history is that it rebounds rather | quickly. | asabjorn wrote: | And it's the same kind of ideology that ruins both countries in | spite of both being extremely rich in natural resources. | | My impression is that the various offshoots of Marxism, e.g. | Chavismo in Venezuela or wokism in the US, is a means for a | coalition of mostly upper middle class people to replace the | current ruling coalition with something that is effectively | feudalism with themselves on top. These people seem to feel | like they have the right to occupy the most powerful roles, | either due to the excellence of their ancestors or envy of | those that are perceived as their superiors, but doesn't | because they are mostly mediocre and often have wealth as well | as position through inheritance. That's why prosperity | typically fall after their takeover, as these are primarily | motivated position and not by an obsession about what the job | entails. | | Has this been your experience with the Venezuelan ruling class? | mrjangles wrote: | If you read history, you quickly realize that this is what | socialism always was, even back in the mid 1800's: A counter | revolution against the capitalist emancipation of the world. | gabythenerd wrote: | It's interesting that Argentina is in the same decline | Venezuela was in (and still is), just with some years of | latency. Both countries are in the same economic region, one | would think someone would learn from having a hyperinflation | near them. | | A lot of Venezuelans immigrated to Argentina years ago, and are | now leaving Argentina and immigrating to other countries. Some | are even going back to Venezuela now that everything there is | in dollars and the situation seems to be stabilizing. A | somewhat popular opinion is that the country is very corrupt | but you can live with it if you earn in dollars. | betwixthewires wrote: | Well what is there to be done about it really? You stop | printing money and servicing debt and you wind up in default, | now unable to import goods, which you rely heavily on because | you wouldn't be in this situation in the first place is your | domestic production was strong. So you get... prices going | sky high on imported goods. Either way you dice it, they're | fucked. It's an entire country stuck in a debt trap. The only | outcome is economic collapse, and all the government can | really do is fudge the numbers to slow it down. | notch656a wrote: | It's my understanding Argentina actually isn't heavily | dependent on imports. Not only are taxes high on imports, | they have a net trade surplus. Argentina also is extremely | lucky like US they have extremely diverse environment | including excellent farm ground, natural resource, and | coastal access. Defaulting on debt might be a good option. ___________________________________________________________________ (page generated 2022-01-27 23:01 UTC)