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> Is the Argentinian inflation being "fought" by any government program? Another Argentinian here :) Yes, the current and past governments took different acti

> Is the Argentinian inflation being "fought" by any government program? Another Argentinian here :) Yes, the current and past governments took different actions to reduce inflation. But, they weren't successful. It's a complex topic. I'm not an economist, but from my limited knowledge: - People don't trust ARS because they fear devaluation (like in 2001) or hyper-inflation (like in 1989). It means that many prices are tied to the ARS/USD exchange rate. When the dollar goes up, merchants that depend on imported goods raise prices to cover their stock in the future. (and it generates a domino effect) - The food production chain is not so dependent on imported goods, but it's one of the main products for export. When international prices go up, domestic prices rise as well. - Printing money is also a way to finance your economy when you have tons of debt (Ray Dalio has some easy-to-understand videos about it): Argentina has tons of debt. The current government did a lot of price control of certain products (mainly food and services). But, it's not working. I guess they cannot avoid printing money without causing other issues.

anikuni 5y ago
>The current government did a lot of price control of certain products (mainly food and services). Unfortunately, this seems to me like a populist/demagogic measure. We have tried it (a lot) in Brazil, and whilst it made some people seem better off (such as richer regions, like the SE) whilst others lost a great deal of purchasing power, it also caused massive shortages and the rise of a black market for common goods, with pretty hefty mark-ups and waiting times. > The food production chain is not so dependent on imported goods, but it's one of the main products for export. When international prices go up, domestic prices rise as well. Good point! It was (and still is) a major issue here. For example, today our domestic prices for fuel (gas and ethanol) and all commodities that we export (sugar, soybeans, iron ore, etc) are very correlated to the international prices. > Argentina has tons of debt So did we during our inflationary years, and both private loans as well as loans for public expenditure of all spheres, which were made so as to not raise taxes, and even to pay salaries (not even to make investments). Looking back this sounds absolutely bonkers. Today our debt is rising fast, but it's mostly internal (BRL-denominated bonds). I wonder how much more of it (and combined with what else) would kick off the inflationary process again.

anikuni 5y ago

>The current government did a lot of price control of certain products (mainly food and services). Unfortunately, this seems to me like a populist/demagogic measure. We have tried it (a lot) in Brazil, and whilst it made some people seem better off (such as richer regions, like the SE) whilst others lost a great deal of purchasing power, it also caused massive shortages and the rise of a black market for common goods, with pretty hefty mark-ups and waiting times. > The food production chain is not so dependent on imported goods, but it's one of the main products for export. When international prices go up, domestic prices rise as well. Good point! It was (and still is) a major issue here. For example, today our domestic prices for fuel (gas and ethanol) and all commodities that we export (sugar, soybeans, iron ore, etc) are very correlated to the international prices. > Argentina has tons of debt So did we during our inflationary years, and both private loans as well as loans for public expenditure of all spheres, which were made so as to not raise taxes, and even to pay salaries (not even to make investments). Looking back this sounds absolutely bonkers. Today our debt is rising fast, but it's mostly internal (BRL-denominated bonds). I wonder how much more of it (and combined with what else) would kick off the inflationary process again.