MercoPress. South Atlantic News Agency
Argentina and the price of cooking the books, according to The Economist
History has left Argentines with more than their share of economic trauma. Having twice suffered destructive bouts of hyperinflation in the late 1980s, they are sensitive to rising prices. When they spot inflation their instinct is to dump the peso and buy dollars. Read full article
Comments
Disclaimer & comment rulesIs anyone surprised? I'm certainly not.
Feb 24th, 2012 - 08:09 am - Link - Report abuse 0Lets hope the next Argentine government can be one that is for the people and not like the current government who seemingly do not support the decent majority.
The issue with this problem is at some point it has to come out and the damage done to the Argentina economy by the mis-management of the CFK administration will take many, many years to fix. You simply cannot fix an inflation problem by altering trade deficits and inflationary problems as the Argentine people have close experience of are often terminal to an economies long term health.
I genuinely feel sorry for the decent hardworking majority in Argentina who have to suffer at the hands of a corrupt and self seeking government.
Argentinians don't read the Economist, if they did, they'd find their economy is focked and the only thing they have left to sell is the human hair and shoes that they have in their Swiss bank accounts.
Feb 24th, 2012 - 08:25 am - Link - Report abuse 0Well,here is all the reasons why CFK has been rattling the plastic sabre...and distracting the population by waving the 'Malvinas@ banner. Evita rides again . Give all the money away and then try and justify the figures by corruption. Argentina is in for a rough ride until it has a vast change of government and government ethics. History tells us it will never change !
Feb 24th, 2012 - 09:23 am - Link - Report abuse 0@3 if only it wasn't so obvious. Until the anachronism that is Peronism dies, then the Argies are just stuck in a cycle of being utterly economically f*cked.
Feb 24th, 2012 - 10:09 am - Link - Report abuse 0They're be better off as our colony!
Feb 24th, 2012 - 10:45 am - Link - Report abuse 0Go on, RGs, you know it makes sense!
Who is econonomically f*cked?
Feb 24th, 2012 - 10:46 am - Link - Report abuse 0In 75 we were econonomically f*cked.
In 89 we were econonomically f*cked.
If today you call it being econonomically f*cked, then what is left for those two times? You have no idea what is being econonomically f*cked. 25% inflation is a child's game we all know how to play here.
6
Feb 24th, 2012 - 11:21 am - Link - Report abuse 0It does not take an economic genius to extrapolate from Juan,s post forward to the economic crisis of 1999 -2002 and then another period of 10-12 years (now) to realise that Argentina has one of these mega crisis just about due.
The Economist has some of the best analytical brains on the planet and I would put some money on it when my Falkland oil shares zoom up.
It is such a vicious cycle that they will never fix. In Argentina as a business person and an individual you MUST make as much profit and take as much $ out of your business while the economy is in an uptick so you can survive the downturn.
Feb 24th, 2012 - 12:22 pm - Link - Report abuse 0The problem with the coming crash compared to the others in the last 40 yrs is there was always someone to rescue them. The USA used to need Arg to keep SA stable, now we don't, we have Brazil, Chile, Peru and Colombia fixed and relatively stable now. They could have relied on the IMF but they are so out of compliance they are on the verge of getting kicked out. So it would be years before they get and funds from them. Int'l bonds, nope, The Dart family will confiscate them.
So all of the hard currency is gone all they can do is depreciate the peso as the dying gasp. I'm hearing 10-14/1U$...and they say hyper inflation is not possible....
The problem with inflation is that it effectively taxes people with savings and pensions (pensioners, normal people) and gives the money to those with assets. So initially people buy lots of assets leading to a slight peaking in economic activity, and then once they've run out of cash economic activity with that currency ceases and people resort to alternative currencies, like bartering.
Feb 24th, 2012 - 01:20 pm - Link - Report abuse 0The cycle under peronism should be (as STRAT correctly pointed out) 1975, 1989, 1993?, 2007... so they're overdue a big fall.
They've just had the peak, and it's all about to tank. Kercho knows this and is clawing at anything (malvinas) to rescue the sinking boat.
“When they spot inflation their instinct is to dump the peso and buy dollars”.
Feb 24th, 2012 - 02:14 pm - Link - Report abuse 0Wrong- Their FIRST instinct is to lie about it !
This kind of mediocre analysis doesn't sorprise anyone, actualy this is usefull for those antiargies who type here and who wish my country to fell into a terrible crisis like in 2001, i order to speculate in the market, and pay a low prize for a house, in the centre of buenos aires, there is name of that, it's rata imunda. I wont put my hands on the fire nor for the indec, nor for any private analist, who some of them are just lobbysts of private corporations, i am not economist and i can't assure if the indec counterfeits or not the stadistics, but if the giornal is so concerned about the inflation level, instead of making that so partial analysis, it should tell in the article about the oligopolic groups that we have in the most important sectors of the economy (food, and metal mechanic,) which won so much money with the policies of the government, which dont make enough inverstments, increase the prizes of the products, and send huge remitances to the foreign, there you have the true reasons of the inflation, it will take many years to solve this problem, because it's only an economic issue, it's a cultural problem also. We had many crisis, which destroyed our economy and made loss planty of jobs, and that's why some times bussiness men dont trust so much the economy and prefer to increase the prizes, instead of making enough inverstments. But the diference betwen this moment and the past, is that now we have much more autonomy in our decitions, and a solid economy, in fact in the last 8 monthes, planty of millions of dollars flew from our sistem due to the incertitude for the election time, but our economy didn't collapse in absolut, in 2008 we had the same problem after the crisis with the agrarian corporations and nothing happened finally, in others times of the history of the country, this kind of problems made fell diferent constitutional governments, even dictatorships too. So the question is much more ample, no matter if you prefer to believe it or not.
Feb 24th, 2012 - 02:32 pm - Link - Report abuse 0@11 There is a phrase for anti-argfags, and I'd rather you used it. It's 'normal people'... if you could use the correct reference next time, it would be nice...And your paranoid delusions about the underlying motivations of financial analysts is hilarious, keep it up.
Feb 24th, 2012 - 02:41 pm - Link - Report abuse 0@10 okay, lie about it by saying there isn't such a thing as inflation any more, and then rounding all the inflationary figures down to the nearest zero... actually, just rounding them down to zero.
11. Nothing happened in 2008? How about all of the assets of Anses being confiscated? U$ 24 Billion!! It has kept your economy afloat the last few years and now it's all gone and replaced with WORTHLESS ARG bonds.
Feb 24th, 2012 - 03:02 pm - Link - Report abuse 0I heard you may be striking next week. Didn't you tell me you were middle class, and a teacher, do you make $2800 pesos a month? How do you keep yourself clean on U$ 550?
about time!! The INDEC liess!!! I go every weekend to the supermarket, and every time the prices are higher!!! can you explain that INDEC!!! I cant believe i will have to endure 4 more year of kirchnersim...it feels like asphyxia...:(
Feb 24th, 2012 - 03:19 pm - Link - Report abuse 0GREEK YOGHURT. YANKEEBOY.
Feb 24th, 2012 - 03:52 pm - Link - Report abuse 0GREEK: As mediocre as usuall, i am not paranoid, im just tring to make an ample analysis of the situation, because i dont buy so easily the operations and the so partial analysis of the newspapers.
YANKEE: When i say that nothing happened finaly in 2008, i mean that the economy didn't collapse despite that planty of millions dollars flew from our sistem, because of the big crisis with the agrarian corporations. The best that the country could do, was to nationalize the pention sistem in the end of 2008, it was an amado boudou's idea, he took the plan to c. f. k, it's true that it saved us, but it's a decition which will help the nation in the future also, the fund of anses in 2008 was 75000 millions dollars, and now it's 180000 millions dollars, anyway i know that you wont never accept this because we have very diferent points of view luckilly. Some of the decitions that the government took wont never be accepted by the financial world, but they are necesary, we must realise that the world wont be the same again, and we must protect more than ever our industries, jobs, and exports. We have a huge experience that shows that when the politicians submit their decitions to the financial sistem, we finish like in 2001, or like the sad european situation.
Anyone know what Jorge Lanata says about this ?
Feb 24th, 2012 - 04:10 pm - Link - Report abuse 0@13 I think Axel just justified the theft of $24 billion... leading me back to my statement about Argfags not understanding the legalities of ownership.
Feb 24th, 2012 - 04:35 pm - Link - Report abuse 0Did anyone ever see the $24 billion again? Has it departed this world?
@11. I am a gringo expat living in Argentina. This article is spot on. The Kirshner government is a sham and inflation is completely out of control. To say that housing is inexpensive here is an absolute farce. Housing is actually on par or more expensive than in the U.S. right now! If you wish to defend the current administration then, by all means, do so. The reality is that Argentines like you ARE the the problem. These are the Argentines that can't seem to step back from the real issues and debate rationally about them. Instead, you defend EVERYTHING Argentina without restraint.
Feb 24th, 2012 - 05:15 pm - Link - Report abuse 0Unfortunately, the only choices Argentines have are Peronists. During election years they all debate which party is the MOST Peronist. Argentina will always be a boom and bust economy because there isn't a politician amongst them who wishes to fix the system. It makes them wealthy at the expense of the populace sheep who keep believing their hollow promise.... much like politicians in the United States I suppose....
It does not take a “Lanata” to know that about every commenter here is correct, except for the discourses of AxelArg.
Feb 24th, 2012 - 05:26 pm - Link - Report abuse 0#16: “Anyone know what Jorge Lanata says about this ?”
Feb 24th, 2012 - 05:58 pm - Link - Report abuse 0Lanata had been denouncing the abomination that is the Kirchener's INDEC since at least 2006:
http://www.jorgelanata.com/documentos/editoriales/08-04-06-1-El%20Indec%20de%20Yrigoyen.pdf
Cheers.
There is two sides to a coin,
Feb 24th, 2012 - 06:01 pm - Link - Report abuse 0In this case a double header, minted by her government to implement her policy ?
.
Do they have coins? I would have thought coins would have been sold for their constituent metals and the profits used to install lighting on the new 'nestor kirchner' housing complex on some land K.FC conveniently bought.
Feb 24th, 2012 - 06:13 pm - Link - Report abuse 0The Economist is right on this one, but they are still a garbage publication, towards Argentina.
Feb 24th, 2012 - 06:45 pm - Link - Report abuse 0Axelarg,
1. The irrational protection of every solitary job ends up in the destruction of all jobs.
2. To prevent the destruction of employment by hindering the creation of employment is not a strategy, is a fallacy.
TOBIAS. GREEK YOGHURT.
Feb 24th, 2012 - 07:16 pm - Link - Report abuse 0What kind of irrational protection are you talking about?, if you say that the economist is right on this one, with the so partial analysis that it does about the country, then i can realise what kind of thought you have, i respect it, but dont agree on it, i explain the serious omitions of the article in my comment 11.
GREEK: What kind of theft are you talking about?, respecting the founds that are in the justice of u. s. a, untill this moment we had no so much problems with them, beside there were two interchanges of debt, and we are paying our debts again since 2003.
The torygraph has an assessment of the same nature. Their economy is utterly focked and no one trusts the statistics they produce any more.
Feb 24th, 2012 - 07:43 pm - Link - Report abuse 0I said about six months ago that inflation in Argentina for the twelve months to the end of July 2012 would be 30 to 35%.
Feb 25th, 2012 - 08:38 pm - Link - Report abuse 0It looks like I will have underestimated it somewhat.
Has anyone noticed that we have not seen Ogaga on this topic?
@26ChrisR,
Feb 25th, 2012 - 09:31 pm - Link - Report abuse 0Hes drowning his sorrows in an lrish bar in BsAs,
dreaming of the Celtic Tiger which is now a toothless old moth-eaten moggy.
The economist does have a point regarding INDEC.
Feb 25th, 2012 - 10:14 pm - Link - Report abuse 0However, coming from them it's a bit rich! I mean this is exactly the same journal that has been forecasting that Argentina would be entering a crisis since 2004/5.
They should probably make no statements about what is wrong given their own track record at being wrong themselves. What they should do is probably pass the critique to someone else to state it, given their own poor track record.
Economic forecasting is an inexact science Helber. Still, looking at the fundamentals it's fairly obvious that in the case of Argentina it's not a question of if but when.
Feb 26th, 2012 - 12:15 am - Link - Report abuse 0@27 isn't the Celtic Tiger now Germany's Byatch?
Feb 26th, 2012 - 12:22 am - Link - Report abuse 0Axel,
Feb 26th, 2012 - 01:13 am - Link - Report abuse 0The Economist is right on blasting the INDEC figures. That obviously doesn't make them geniouses exactly, the whole world knows the inflation figures are cooked. I canno stand the Economist as they hate Argentina as a country, they have some sort of vendetta on it since 2001 when their London City buddies didn't get their way with Argentina's debt reestructuring (like they always had previously with all countries), so I fully understand who the Economist represents: they are not a free market magazine, they are banking lobby crony capitalism front.
That doesn't mean they are not correct in calling the INDEC figures into question like everyone else.
As for my irrational protection of jobs, look... I know that a lot of people want to open projects in Argentina but DO NOT, because once they create a job they can never CUT a job. Or you don't see what happens when a company, store, factory, transportation co, etc, try to downsize when they need to? That's why only FULLPROOF things like supermarkets expand, because they will probably never close or shut down once opened.
sure JA Rorberts but is you say Argenitna is going to have a crisis your bound to eventually be right some day. Just like the economist. They 've been saying it since '05. They are bound to be right some year...
Feb 26th, 2012 - 02:19 am - Link - Report abuse 0It's like me saying that you are going to die. Eventually, I'll be right.
The real challenge is getting it right when you say it will occur. The economist said it '05 and every single year since then. And so far, they've been always wrong. Talk about sucking big time at what should be your bread and butter! I mean the are called the economist and they cannot not successfully forecast a crisis but are 7 years off the mark.
@axel arg
Feb 26th, 2012 - 04:56 am - Link - Report abuse 0By chance have you noted that Financial Times correspondent a parent company of The Economist in Argentina is Jimmy Burns?
The guy that wrote the open letter to Sean. http://en.mercopress.com/2012/02/25/falklands-malvinas-an-open-letter-to-sean-penn
So, Dany?
Feb 26th, 2012 - 07:39 am - Link - Report abuse 0Don't you like the truth?
Oh of course, you're a malvinista, naturally you don't like the truth.
You wouldn't even know what the truth is!
Hmm... any other major news outlets that the Argfags want to try to discredit before they have to open their finances to public inquiry and find they haven't got a penny left?
Feb 26th, 2012 - 09:42 am - Link - Report abuse 0The amount of psychic effort being put in by the Argfags to get around the fact that they have hyperinflation is quite astounding.
no need to discredit anyone mate. Forecasting an economic crisis since 2005 and year after year it does not happen. With such poor foresight, they do all the discrediting themselves without anyone else's help.
Feb 26th, 2012 - 10:22 am - Link - Report abuse 0@36 No need to discredit a country that owes the USA $40 billion in unpaid loans, is non-compliant with the IMF, non-compliant with FATF, widely regarded as imcapable of delivering any financial statistics, manipulates their statistics... on and on and on.
Feb 26th, 2012 - 02:18 pm - Link - Report abuse 0I saw this article in hard copy in WHSmith today, it was accompanied with a crude propaganda cartoon of Cristina as a witch cooking the books in a cauldron. Funnily enough even the witch cartoon still looked pretty! But this is part of a pattern, the Economist, journal of the 1%, has had a down on Argentina ever since it defied the IMF, and has been making constant innacurate predictions of doom as noted above. When Cristina was re-elected they even admitted they'd misunderestimated her in the past. I think they have again =)
Feb 26th, 2012 - 06:08 pm - Link - Report abuse 0@38 I think you mean since it stole $40'000'000 from the US investors. Defaulting. Then it became non-compliant with the IMF and FATF. Then the Economist found their financial data was of such poor quality that they decided not to report it. Now they're just to paying something whilst not letting anyone assess the riskiness by looking at their financial statements.
Feb 26th, 2012 - 08:15 pm - Link - Report abuse 0It just sort of compounded really.
@39,
Feb 27th, 2012 - 03:45 am - Link - Report abuse 0Well I for one am very happy to see Argentina be non-compliant with both IMF and FATF! I mean, FFS, what has IMF historically done than ill-advice nations?
I am also glad they do not allow the IMF to assess Argentina's data (even if we have to put up with dogdy INDEC). I'd much rather have the hapless INDEC then the IMF thieves.
In the meantime, ”the economists' keeps on forecasting crisis after crisis, year after year, and getting wrong after wrong. keep tyring mate ;)
your bound to get right one year.....
@11... Hey Axel arg. Surely you must admit that the stupid monetary policies of the Kirchner's are solely to blame for the dangerous economic situation your country is in today. Inflation is a direct result of your central bank printing so much money and forcing the banking sector to put it out on the streets in the form of easily available credit. Everything is bought on credit there, even the weekly groceries. This has made demand go through the roof and has created an enormous bubble that the central bank keeps blowing up. Indebting the people and prepping them for the inevitable bust. Prices in Argentina are way higher than in Chile, just look at some internet catalogues. Soon we will see a massive devaluation of the peso, as the balance of payments deteriorates and chews into your foreign reserves, this will lead to a run on the banks, then bank failures as they don't hold any real reserves, unemployment, massive capital flight as the assemblers depart. The gov will eat into the last cash reserves of the nationalised pension system causing huge hyperinflation and stagnation.
Feb 27th, 2012 - 05:56 am - Link - Report abuse 0Game over, it's ground hog day again in Argentina. I always thought you Argies were a bit of a joke much like your flag where you have a cartoon sun complete with eyes a mouth and a nose.
@39, BTW, I don't give a flying rat's arse about US investors. They speculated, yeah that's right speculated like they do in casinos, and they lost this time around, much in the same way that their fortune was different many times over!
Feb 27th, 2012 - 08:26 am - Link - Report abuse 0S0, as far as I am concerned, tough luck! If they cannot take the heat, they should get out of the kitchen and put their money to work for them more safely such as time deposits.
@42 Seems you don't understand economics, risk and investment then. You're effectively seen as being bankrupt, and when borrowing money for any civil project, your borrowing rate will reflect this.
Feb 27th, 2012 - 09:19 am - Link - Report abuse 0Your reasons for not joining the FATF and IMF are your own, presumably because you're trying to hide the statistical data from your own people rather than anyone else. Either that or you're a haven for laundering money.
What part of Argentina does not need to borrow money are you having trouble grasping? Don't you know that last time Argentina needed to cancel its foreign debt it tapped into its reserves?
Feb 27th, 2012 - 09:43 am - Link - Report abuse 0I want Argentina to live within it's budget so no borrowing as far as I am concerned. Borrowing as far as I can remember has ended up in corrupt politicians pockets so an easy way to put an end to that is to avoid it altogether.
Argentina's reason for not joining the IMF is because they are a load full of idiots that can only provide shit like advice. Believe me, Argentina knows that from experience. I am glad they do not take any advice from the IMF. They are useless tools who only know how to say 'privatize, deregulate, adjust' so on and so forth. So as far as I am concern they can go where the sun doesn't shine!
@44 Which part of Argentina is desperate to borrow money are you having trouble grasping? You don't have any reserves left. You even had to steal money from ANSES bonds that came under a US court ruling not to trade, because of your default. This put you in contempt of court. This is how desperate your country is for funds? Is this tapping into your foreign reserves?
Feb 27th, 2012 - 09:59 am - Link - Report abuse 0The second paragraph is just some nonsense peronist nonsense, given your politicians are more corrupt than ever.
Argentinas reason for not joining the IMF or the FATF is that they demand transparency of fiscal accounting, something that Argentina cannot do because it would show that you're utterly bankrupt and have been for some time.
If the IMF goes somewhere the sun doesn't shine, then lord knows where you folks are going .. with your getting brazil to print money because you cannot print it quick enough. I'm thinking you're either going to 2000's zimbabwe or 1900s late weimar republic.
If you want to believe otherwise, then I understand your motivations.
mate what you've just posted above 'the economist' has been saying it since 2005.
Feb 27th, 2012 - 10:05 am - Link - Report abuse 0So they were wrong for 7 years now!
Put your money were your mouth is and tells us, according your enlightened foresight, when the fark is the the crisis going to hit then? Because up until now, all I see is w@nkers like yourself saying the shit is going to hit the fan, much the same way I can tell you that you are going to die, and I would be right!
So quit beating around the bush and call it otherwise you are just partaking and masturbatathon
Angry little man today, Helber?
Feb 27th, 2012 - 11:02 am - Link - Report abuse 0not really Isolde....
Feb 27th, 2012 - 11:57 am - Link - Report abuse 0just calling like I see it.
Ugo Panizza, from the United Nations Conference on Trade and Development showed that foreign lenders operate in line with Deep Throat's advice in All the President's Men: they “follow the money”, lending in the good times, taking it out in the bad. Griffith-Jones argued this boom-bust cycle is why countries should be very wary of foreign lending.
as long as Argentina can avoid borrowing, all the better as far as I am concerned.
@46 the crisis has already hit.
Feb 27th, 2012 - 12:09 pm - Link - Report abuse 0By borrowing, do you mean selling government bonds? I see they've been selling government bonds for quite a while, mainly to Venezuela who use them as a mechanism in reducing their inflation rate. I think Venezuela has amassed quite a few billion dollars worth of your government bonds (debt).
That's not avoiding borrowing now is it.
They have also been “selling” gov't bonds to Banco Nation, Anses and outright stealing from BCRA. The ran a HUGE deficit last year and this year is going to be even worse. Doesn't matter if we can predict an exact date of the crash, could they in 2001, 90s, 80s...nope but all the signs are there and it is eminent.
Feb 27th, 2012 - 12:54 pm - Link - Report abuse 0Apparently the UK government is giving Argentina over 500 million in aid, [via the IMF ]
Feb 27th, 2012 - 01:57 pm - Link - Report abuse 0Apparently the American government approached the uk government and asked them to stop this payment, until Argentina paid back the 40 odd billion it owes them,
Apparently the UK government is looking into the request, as fury was meant to be erupting when MPs thus found out,.
Of course this report in the papers may or may not be true, as you should not always believe what you read in the papers,
But nonetheless an interesting article is it not
.
51. I doubt the $ is coming from IMF, Arg is out of compliance and is not able to get funds. It could be World Bank or IDB but the USA is going to start slowing or stopping payments from them if they don't get into line shortly.
Feb 27th, 2012 - 03:29 pm - Link - Report abuse 0This summer should be interesting though, the US Supreme Court may find BCRA is not a separate legal entity but is acting as the Arg gov't. If so it will make all of their currency reserves attachable! It is a nightmare scenario for the country!
@51,52 Argland is desperate to have nothing to do with the IMF, trying to restructure it's debts through the Paris Club directly rather than have to open their books. if we are giving them aid, and I think we are, it's probably in the region of 5 million.
Feb 27th, 2012 - 03:53 pm - Link - Report abuse 0It'll be interesting to see if the USA does class their central bank as being a part of the government (it clearly is). All this will just push the Arg folk towards using Venezuela as a source of debt capital. They've become quite dependent on Venezuela really. It'll be interesting to see how that relationship pans out.
54. Venezuela is broke too, people are starving and the cities are collapsing! I don't think Arg has borrowed from them in years. Most of the borrowing has been internal taking hard assets as replacing them with Arg bonds but all the hard assets are gone only thing left is a peso devaluation.
Feb 27th, 2012 - 04:19 pm - Link - Report abuse 0@54 I remember Venezuela were bankrolling them through Nester's years. Makes sense that they're not now. At least Venezuela seems to be able to get to the commodities in order to process them (tar sands and all that), I might be wrong however. So that leaves Brazil, which is a huge market for foreign products and doesn't have the same dodgy political ideology. Have the Argies been begging them for a loan yet?
Feb 27th, 2012 - 04:33 pm - Link - Report abuse 0of course you are right, argentina should not recieve any money,
Feb 27th, 2012 - 11:04 pm - Link - Report abuse 0untill they pay back what they owe, and stop intimidating british people .
Not one cent for Argentina.
Feb 28th, 2012 - 08:55 am - Link - Report abuse 0Commenting for this story is now closed.
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