10 ms·

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

by 101008 5y ago

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)

tigershark 5y ago
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 5y ago
  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 5y ago
    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.
    - dragonwriter 5y ago
      > 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.
      - rndphs 5y ago
        I think you can usually refinance a fixed rate mortgage to an adjustable rate one at any point. Or refinance to a different fixed rate one with lower rates if the opportunity arises.
      - ethbr0 5y ago
        > ... 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.) Is that accurate to say? Because I don't think so. It seems more accurate to say mortgage rates for fixed loans are set by the cost of money at purchase / loan-initiation time. Which makes sense, as that's when funds are actually changing hands (from purchaser's lender to seller). And ultimately, that's banks' cost of money, which means then-current Fed rate + spread, no?
    - JumpCrisscross 5y ago
      > 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.
    - nsv 5y ago
      You can get these low interest rates because the government subsidises them. If it were a "free market" so to speak you would not be able to get such a rate, and possibly would not be able to get a fixed-rate mortgage at all.
- tute666 5y ago
  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 5y ago
  > how would it work for mortgages That's Argentina's secret, there are no mortgages, properties are bought in cash.
- nick_meister 5y ago
  Argentinian here, I built my house about 10 years ago with a fixed rate mortgage subsidized by the government. It was subsidized only for people that didn't own a house already. It was a 16 years mortgage. First year I paid about the same as someone renting a house. Past year I was paying about only 10 dollars per month, so I cancelled it :) But yeah, as far as I know, at the moment there are no fixed rate mortgages.
- sbassi 5y ago
  mostly they don't
- marianov 5y ago
  Most properties are bought cash. That's dollar bills, no bank transfer, no pesos.
NikolaNovak 5y ago
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).
- travisjungroth 5y ago
  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.
  - bombcar 5y ago
    That was during a pretty inflationary time - and even after the Nuevo Peso stabilized people still preferred dollars. Wow it’s down to 20 nuevos per dollar, I remember when it was 3.
  - muzika 5y ago
    Russia did as well, in the early 90s.
- edko 5y ago
  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.
  - askonomm 5y ago
    Have been in Argentina for the past year and honestly the amount of paper cash I need to carry with me for most basic of use is ridiculous, so they're soon going to have to create bigger bills or reset again.
yazantapuz 5y ago
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 5y ago
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).
- Izikiel43 5y ago
  > Is the Argentinian inflation being "fought" by any government program? Nope, the government loves inflation, as it reduces its debts and they can print all the money they want to pay for that. Politicians live in a different world than the average person, inflation is not an issue for them.
  - dudzik 5y ago
    This is only the case if the bonds get issued in the country‘s currency. Argentina doesn’t have that luxury[0]. In the long run, if a government devalues its currency too much, investors lose trust, and the country cannot borrow money in its currency. Not necessarily a problem for current politicians since they will be out of office by the time the trust is lost. 0: https://www.reuters.com/article/idUSKBN26S07N https://www.reuters.com/article/idUSKBN26S07N
- 5y ago
aeyes 5y ago
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 https://en.wikipedia.org/wiki/Unidad_de_Fomento
- 627467 5y ago
  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-alternativa-de-financiamiento-tratamiento-impositivo-13264&lang=en https://www.marval.com/publicacion/creditos-en-uva-como-alte...
  - pietrovismara 5y ago
    Inflation adjusted salaries would have had the same effect in terms of enabling the housing ladder climb. If you only lock interest rates to inflation what you get is a population of insolvents, and richer banks.
    - Izikiel43 5y ago
      Not really, in Argentina salaries get adjusted by inflation all the time, however house prices are in USD (because the peso is worthless), and we are talking over 60K usd for an old 1bed in a not really nice part of buenos aires city, and buying property for locals is impossible. You have to also consider that, last time I checked was late 2019, now it's probably worst, ~90% of argentinians earn less than 300 usd a month, and since there is no credit, buying something is almost impossible without the aid of your parents. A lot of people my age (31) +/- 10 years, middle class, professionals, are leaving the country in droves to Europe, Canada, USA and other LATAM countries as we realize there is no hope things will get better, as it's the same story our parents and grandparents went through.
      - pietrovismara 5y ago
caeril 5y ago
> 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 5y ago
  Currencies don't have inflation rates. Countries do.
  - legutierr 5y ago
    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 5y ago
      Yes they have different inflation rates.
    - lottin 5y ago
      Inflation rates even vary among different regions within the same country.
    - louloulou 5y ago
      nice graphs for eurozone countries https://www.euro-area-statistics.org/inflation-rates?cr=eur&lg=en https://www.euro-area-statistics.org/inflation-rates?cr=eur&...
- kragen 5y ago
  When you need some pesos to go to the dermatologist, pay someone to fix the air conditioner, or take an Uber across town, tuna is harder to resell than dollars. But the optimal level of tuna in your portfolio is nonzero, in part because sometimes the supermarket runs out, or goes on vacation, or gets shut down by the police for a week, or closes because of the rioting, and having some food in the house is a good idea.
ttty 5y ago
Hi! I'm really curious about the wages. What are the average wages now with inflation? In USD terms per hour. I had some people trying to hire they're, but most people request 15usd/hour for basic va skills. I'm impressed how high. So I'm not sure what's the problem and I'm wondering if you could provide some insight.
mandernt 5y ago
rafaelm 5y ago
Venezuelan here: I have personally bought tuna and flour by the case as a way of hedging against inflation and scarcity. Of course, this last factor was the most important.
- orangepurple 5y ago
  Don't forget salt. You can survive a week or more without food but try to do the same without salt and you will be throwing out your (inedible) food in no time.
is_true 5y ago
Argentinian here. I buy coffee, canned tuna, cleaning products, etc in installments without interest whenever I can.
- marianov 5y ago
  Zero interest is a lie. The interest is already on the price
  - is_true 5y ago
    The problem is you pay the same price if you pay in cash
4lb0 5y ago
Argentinian here, 34 years old middle-class with a family of 3 children. I buy lots of pasta and canned food among others goods in wholesalers.
runeks 5y ago
> […] our inflation index goes hand to hand with our USD:ARS, even even below that (intuitevly it may be a problem). The solution seems so simple to me: drop the ARS and use USD as the national currency. Your inflation is just trying to pay for goods and services using an eternally depreciating asset (the Argentinian peso). The reason this doesn’t happen is because it would mean that the Central Bank of Argentina (CBA) would no longer be able to, at will, monetize the debt of the Argentinian government and favored corporations. Ie. the CBA would lose its ability to purchase a government bond in exchange for crediting the government’s account with the face value of the bond — convert debt into money. At the end of the day it’s a conflict of interest: the people want a stable medium of exchange and the government wants to finance its activities without balancing its budget. The economist Melchior Palyi explained this phenomenon in his 1962 book “An Inflation Primer” following the high US inflation of the 1940s: https://cdn.mises.org/An%20Inflation%20Primer_2.pdf https://cdn.mises.org/An%20Inflation%20Primer_2.pdf
- edwcross 5y ago
  Isn't that kind of what Brazil did in 1994 with URV? From Wikipedia: "URVs were quoted in cruzeiros reais and its intrinsic value was pegged to three price indices and had a fixed parity of 1-to-1 to the daily U.S. dollar exchange rate."
  - novaleaf 5y ago
    You would like to listen to / read this planet money episode: https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil https://www.npr.org/sections/money/2010/10/04/130329523/how-...
  - jecel 5y ago
    It was the 1991 Cavallo Plan in Argentina that tied the local currency to the U.S. dollar: https://en.wikipedia.org/wiki/Convertibility_plan https://en.wikipedia.org/wiki/Convertibility_plan The Real Plan in Brazil created a three month period with a combination of the old currency (Cruzeiros Novos) and a new virtual one (URV - Unidade Real de Valor) with an official daily exchange rate between them. This rate was selected to keep the URV at almost exactly 1 U.S. dollar but when both were replaced by a new actual currency (the Real), that was officially allowed to float relative to the dollar. The real did initially get slightly valued relative to the dollar (an exchange rate of 1 R$ = 0.85 US$, for example) but floated slightly up and down until the end of 1998 when it suddenly jumped to 2 R$ = 1 US$ in order to block a huge wave of speculative money that was destroying economies around the world (having previously hit Russia, then the Asian Tigers).
pibechorro 5y ago
The issue is relying on a foreign currency, one which the official exchange rate is like 50% marked up from its real black market value, which is how the economy reaaaally works there. I worry for Argentines (I am one), because the usd is having the same problems the peso has every 7 years, its being printed into inflation oblivion. I would be buying that canned tuna, and also using bitcoin, etc like the surging numbers of people are, because escaping one fiat submarine for another fiat sinking ship is not something I could sleep well with. Besides, the politicians down there are nuts and could easily make holding dollars totally illegal, infact they already do with strict capital controls, withdrawal limits, etc. Its a cash economy.
- cryptoquick 5y ago
  If you're interested in saving in Bitcoín, Strike recently expanded to supporting Argentina, and they have low fees.

by 101008 5y ago

tigershark 5y ago

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 5y ago
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 5y ago
  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.
  - dragonwriter 5y ago
    > 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.
    - rndphs 5y ago
      I think you can usually refinance a fixed rate mortgage to an adjustable rate one at any point. Or refinance to a different fixed rate one with lower rates if the opportunity arises.
    - ethbr0 5y ago
      > ... 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.) Is that accurate to say? Because I don't think so. It seems more accurate to say mortgage rates for fixed loans are set by the cost of money at purchase / loan-initiation time. Which makes sense, as that's when funds are actually changing hands (from purchaser's lender to seller). And ultimately, that's banks' cost of money, which means then-current Fed rate + spread, no?
  - JumpCrisscross 5y ago
    > 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.
  - nsv 5y ago
    You can get these low interest rates because the government subsidises them. If it were a "free market" so to speak you would not be able to get such a rate, and possibly would not be able to get a fixed-rate mortgage at all.
tute666 5y ago
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 5y ago
> how would it work for mortgages That's Argentina's secret, there are no mortgages, properties are bought in cash.
nick_meister 5y ago
Argentinian here, I built my house about 10 years ago with a fixed rate mortgage subsidized by the government. It was subsidized only for people that didn't own a house already. It was a 16 years mortgage. First year I paid about the same as someone renting a house. Past year I was paying about only 10 dollars per month, so I cancelled it :) But yeah, as far as I know, at the moment there are no fixed rate mortgages.
sbassi 5y ago
mostly they don't
marianov 5y ago
Most properties are bought cash. That's dollar bills, no bank transfer, no pesos.

NikolaNovak 5y ago

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).

travisjungroth 5y ago
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.
- bombcar 5y ago
  That was during a pretty inflationary time - and even after the Nuevo Peso stabilized people still preferred dollars. Wow it’s down to 20 nuevos per dollar, I remember when it was 3.
- muzika 5y ago
  Russia did as well, in the early 90s.
edko 5y ago
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.
- askonomm 5y ago
  Have been in Argentina for the past year and honestly the amount of paper cash I need to carry with me for most basic of use is ridiculous, so they're soon going to have to create bigger bills or reset again.

yazantapuz 5y ago

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 5y ago

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).

Izikiel43 5y ago
> Is the Argentinian inflation being "fought" by any government program? Nope, the government loves inflation, as it reduces its debts and they can print all the money they want to pay for that. Politicians live in a different world than the average person, inflation is not an issue for them.
- dudzik 5y ago
  This is only the case if the bonds get issued in the country‘s currency. Argentina doesn’t have that luxury[0]. In the long run, if a government devalues its currency too much, investors lose trust, and the country cannot borrow money in its currency. Not necessarily a problem for current politicians since they will be out of office by the time the trust is lost. 0: https://www.reuters.com/article/idUSKBN26S07N https://www.reuters.com/article/idUSKBN26S07N
5y ago

aeyes 5y ago

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 https://en.wikipedia.org/wiki/Unidad_de_Fomento

627467 5y ago
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-alternativa-de-financiamiento-tratamiento-impositivo-13264&lang=en https://www.marval.com/publicacion/creditos-en-uva-como-alte...
- pietrovismara 5y ago
  Inflation adjusted salaries would have had the same effect in terms of enabling the housing ladder climb. If you only lock interest rates to inflation what you get is a population of insolvents, and richer banks.
  - Izikiel43 5y ago
    Not really, in Argentina salaries get adjusted by inflation all the time, however house prices are in USD (because the peso is worthless), and we are talking over 60K usd for an old 1bed in a not really nice part of buenos aires city, and buying property for locals is impossible. You have to also consider that, last time I checked was late 2019, now it's probably worst, ~90% of argentinians earn less than 300 usd a month, and since there is no credit, buying something is almost impossible without the aid of your parents. A lot of people my age (31) +/- 10 years, middle class, professionals, are leaving the country in droves to Europe, Canada, USA and other LATAM countries as we realize there is no hope things will get better, as it's the same story our parents and grandparents went through.
    - pietrovismara 5y ago

caeril 5y ago

> 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 5y ago
Currencies don't have inflation rates. Countries do.
- legutierr 5y ago
  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 5y ago
    Yes they have different inflation rates.
  - lottin 5y ago
    Inflation rates even vary among different regions within the same country.
  - louloulou 5y ago
    nice graphs for eurozone countries https://www.euro-area-statistics.org/inflation-rates?cr=eur&lg=en https://www.euro-area-statistics.org/inflation-rates?cr=eur&...
kragen 5y ago
When you need some pesos to go to the dermatologist, pay someone to fix the air conditioner, or take an Uber across town, tuna is harder to resell than dollars. But the optimal level of tuna in your portfolio is nonzero, in part because sometimes the supermarket runs out, or goes on vacation, or gets shut down by the police for a week, or closes because of the rioting, and having some food in the house is a good idea.

ttty 5y ago

Hi! I'm really curious about the wages. What are the average wages now with inflation? In USD terms per hour. I had some people trying to hire they're, but most people request 15usd/hour for basic va skills. I'm impressed how high. So I'm not sure what's the problem and I'm wondering if you could provide some insight.

mandernt 5y ago

rafaelm 5y ago

Venezuelan here: I have personally bought tuna and flour by the case as a way of hedging against inflation and scarcity. Of course, this last factor was the most important.

orangepurple 5y ago
Don't forget salt. You can survive a week or more without food but try to do the same without salt and you will be throwing out your (inedible) food in no time.

is_true 5y ago

Argentinian here. I buy coffee, canned tuna, cleaning products, etc in installments without interest whenever I can.

marianov 5y ago
Zero interest is a lie. The interest is already on the price
- is_true 5y ago
  The problem is you pay the same price if you pay in cash

4lb0 5y ago

Argentinian here, 34 years old middle-class with a family of 3 children. I buy lots of pasta and canned food among others goods in wholesalers.

runeks 5y ago

> […] our inflation index goes hand to hand with our USD:ARS, even even below that (intuitevly it may be a problem). The solution seems so simple to me: drop the ARS and use USD as the national currency. Your inflation is just trying to pay for goods and services using an eternally depreciating asset (the Argentinian peso). The reason this doesn’t happen is because it would mean that the Central Bank of Argentina (CBA) would no longer be able to, at will, monetize the debt of the Argentinian government and favored corporations. Ie. the CBA would lose its ability to purchase a government bond in exchange for crediting the government’s account with the face value of the bond — convert debt into money. At the end of the day it’s a conflict of interest: the people want a stable medium of exchange and the government wants to finance its activities without balancing its budget. The economist Melchior Palyi explained this phenomenon in his 1962 book “An Inflation Primer” following the high US inflation of the 1940s: https://cdn.mises.org/An%20Inflation%20Primer_2.pdf https://cdn.mises.org/An%20Inflation%20Primer_2.pdf

edwcross 5y ago
Isn't that kind of what Brazil did in 1994 with URV? From Wikipedia: "URVs were quoted in cruzeiros reais and its intrinsic value was pegged to three price indices and had a fixed parity of 1-to-1 to the daily U.S. dollar exchange rate."
- novaleaf 5y ago
  You would like to listen to / read this planet money episode: https://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil https://www.npr.org/sections/money/2010/10/04/130329523/how-...
- jecel 5y ago
  It was the 1991 Cavallo Plan in Argentina that tied the local currency to the U.S. dollar: https://en.wikipedia.org/wiki/Convertibility_plan https://en.wikipedia.org/wiki/Convertibility_plan The Real Plan in Brazil created a three month period with a combination of the old currency (Cruzeiros Novos) and a new virtual one (URV - Unidade Real de Valor) with an official daily exchange rate between them. This rate was selected to keep the URV at almost exactly 1 U.S. dollar but when both were replaced by a new actual currency (the Real), that was officially allowed to float relative to the dollar. The real did initially get slightly valued relative to the dollar (an exchange rate of 1 R$ = 0.85 US$, for example) but floated slightly up and down until the end of 1998 when it suddenly jumped to 2 R$ = 1 US$ in order to block a huge wave of speculative money that was destroying economies around the world (having previously hit Russia, then the Asian Tigers).

pibechorro 5y ago

The issue is relying on a foreign currency, one which the official exchange rate is like 50% marked up from its real black market value, which is how the economy reaaaally works there. I worry for Argentines (I am one), because the usd is having the same problems the peso has every 7 years, its being printed into inflation oblivion. I would be buying that canned tuna, and also using bitcoin, etc like the surging numbers of people are, because escaping one fiat submarine for another fiat sinking ship is not something I could sleep well with. Besides, the politicians down there are nuts and could easily make holding dollars totally illegal, infact they already do with strict capital controls, withdrawal limits, etc. Its a cash economy.

cryptoquick 5y ago
If you're interested in saving in Bitcoín, Strike recently expanded to supporting Argentina, and they have low fees.