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I'm Argentinian. This is cultural. Not from today, nor yesterday. It has always been like that. Every single other country I've travelled so far thinks in its o

• qerqe32452 3y ago
  "There's absolutely no coherent and/or constant consensus where to head the country from let say today to 20 or 30 years." mmm, quite the opossite, there's is an obvious cabal of private and state actors pushing relentlessly for more inflation, more fiscal deficit, actually creating the cycles you mention. This not cultural, this a plan, a method, for a clear benefit: cheap dollars financed by the BCRA, this entity - playing along with the Minister of Economy - pushed by the mentioned cabal of political and economic actors to continuously create and sustent the required measures to keep the inflation increasing till the cycles ends (hyperinflation), and they cash out all the pesos and dollars they amazed during the cycle by buying very very cheap dollars first - this is ongoing, you can see it playing it right now in the argentine markets - but mostly by massive adquistion of cheap assets valued in pesos (giant holdings, thousands of otherwise valuable stock market stuff, sold by penies by investor trying to cut their loses having missed the chance to get out before the cycle's end), acquired in dollars cheaply gotten previously. Then cycle restarts. Most of the assets are kept for a while, till the economy jumps back from nothing to something, and those assets got revalued to a lot more of their adquistion prices because of the expected exponential grow of consumerism - and earnings - financed with a new wave of money printing by the BCRA and new dollars now available - through refinanced debts- in the same BCRA (this is the mentioned cycle restarting).
  • kwanbix 3y ago
    How is inflation or fiscal deficit helping private sectors? The only governments that has cheap (read official) and expensive (read real) are the peronist governments. The problem is (besides corruption and not fit for the roles) that we keep giving money for "free" to anyone. Just an example, we have to hire people to keep company of my dad. He is fine, but just forgets things, so he might just forget to turn off the oven. One of the girls who has been with him the most time told me, "my sister has 3 kids, between the plans (money from the gov) that she has, the one that her husband has, they don't need to work. If they want to buy something more expensive, they work some days, and make the difference. The rest of the time they scratch their balls". That is what populism gets you.
    • 234235dfasdf 3y ago
      "How is inflation or fiscal deficit helping private sectors?" A bunch of private actors are closely entrenched with state actors who allows them to access massive amounts of cheap dollars easily, the currently named "dolár oficial". There are several ways in which private actors get a premium over the "blue" dollar by accessing cheap dollars ("oficial") - Granted massive imports by the BCRA (which are usually fraudulent, just actually importing a little of the declared goods, the Aduana has A LOT to do with this) - A closed market which allows the private actors (in conjunction with government officials), to do not compite with cheaper imported goods, and also allows them to fully control the market, increasing the prices even more (because by all means, they are the only sellers, so if they reduce the offer, they increase the prices inside the country). - The state actors are actually almost the 50% of the demand in most of the country for every given good at sell (because public employed people are close to 50% of the formally employed consumers in almost every state - "province" - in Argentina). So, many private actors are actually - not in front of the public opinion - playing along with state actors to keep the state salaries high or pushing for them to be raised to meet the inflation levels. - The (probably worst) private actors cashing out from the state and the inflation cycles, are the direct providers for the state infrastructure ("obra pública"), which are an internationally known source of corruption (by overpricing work, good, whatever they provide to the state), illegal enrichment, an obvious way to wash money from every other illegal activity inside and outside the country. There are probably more (clever) ways in which private actors enrich themselves greatly by pivoting over the inflation cycles (i.e. financial schemes everywhere). The cycle of inflation in Argentina is just a too good source of money for everybody except the citizens, that its probability of going away are little to none. Argentina has lots of money, because of soja and now minerals and oil, and the inflation gives some main private actor a way too clever way to confiscate money from the actual owners of those earnings (i.e. taxes and dollar to pesos automatic conversion for exported goods, which effectively legally steals money in several ways, from the real owners of the goods and the earnings). But beside the exported goods regulations to extract money, there are lots of internal regulations at all levels, which pivot over inflation to keep the money flowing from workers and not-involved private actors (mostly PyMES), to the rober barons - private actors - and their partners, the state actors (politicians in executive positions mostly, but not exclusively).
• jasmer 3y ago
  Given that knowledge, why does any business use Pesos? Why not use USD only? If someone buys in Pesos because the state forces acceptance of it, charge price for it and immediately convert to USD. Touch pesos only momentarily. This is bad because Argentina loses monetary control to a foreign state, but that's a much better solution than using toilet paper. The thing I find odd, is that even greedy capitalists know that, and powerful greedy self serving capitalists (I'm being overly cynical here to make a point) will want a 'stable currency' because these shenanigans do not benefit anyone. The only people that can survive money printing are a very, very small number of politicians, how is there not a revolution backed by all sorts of groups? I find this odd.
  • Jtsummers 3y ago
    The Argentine government has severely restricted the rate at which people can convert ARS to USD. I'm not sure the current limit, but a while back it was something like $200/month for most individuals. Not sure about the restrictions on businesses. Greatly messed up my mother-in-laws plans to visit us in the US.
  • bluepoint 3y ago
    Because most people get paid in pesos and access to USD is controlled by the government. And probably because US banks would not give loans in dollars to argentine businesses.
  • qerqe32452 3y ago
    "how is there not a revolution backed by all sorts of groups?" This already happened across the decades by different groups inside and outside the law, but the cabal of private and state actors that thrives on inflation cycles controls the outcome of those movements and takes back the ownership of the government eventually (even few months after some groups got "decisive success" influencing the change of pro-inflation policies). Social control make the rest of the work. Most of the citizens are just used to live in poverty - likewise some Africa countries in the 70s,80s - and have no will to organize themselves, nor to embrace any kind of overthrowing of the cabal. Some even got to the government, like Macri, but didn't get much farther, eventually becoming just another puppet of the cabal, effectively sustaining - albeit conceived from the general population by extensive use of propaganda and disinformation campaigns- the policies and measures required to continue and/or make the cycle of inflation continue towards the hyperinflation goal (the "cash out moment" for many of the cabal's long term "investors" and/or members).
• frankreyes 3y ago
  > On the other side it is a really sad story because we have beautiful country and we have everything to become a developed country. I'm Argentinian. And I agree with you, and that's why I left to live somewhere else ten years ago. But. When I've said this in the past the answer is, why would we want to be that? People don't care. It is the classic joke of Luis Landriscina: Para qué? https://youtu.be/5qJLElHpfDk https://youtu.be/5qJLElHpfDk
• naveen99 3y ago
  Do you get any interest on checking accounts or is it 0 like in the USA? What about money market funds ?
  • MichaelZuo 3y ago
    Yeah a 97% interest checking or savings account at the local Argentinian bank doesn't sound too bad at all.
    • costco 3y ago
      Not when underlying inflation is over 100% and there is severe capital controls. See https://en.wikipedia.org/wiki/Carry_(investment)#Currency https://en.wikipedia.org/wiki/Carry_(investment)#Currency