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Buenos Aires

On my first morning in Argentina, two crisp $100 bills bought 64,600 pesos at a currency-exchange office in a fashionable neighborhood. The sign outside advertised the official exchange rate: 130 pesos to the dollar. I got the unofficial, black-market rate: 323 pesos. My wad of 129 500-peso notes was too fat to fit in my wallet, so I stuffed some into my pockets and returned to our apartment, feeling as if I’d just completed a drug deal.

“You’ve arrived in Argentina at a historic time of hyperinflation,” our tour guide, Celeste, said. On July 2, Argentina’s centrist economy minister, Martín Guzmán, resigned. The peso’s value plummeted 26% in the next 26 days. Three weeks later, President Alberto Fernández, a left-leaning law professor who took office in December 2019, sacked Mr. Guzmán’s successor.

The official inflation rate is now 64% and economists forecast it could reach 90% by December. Wages haven’t kept up, and the gap between the official and black-market exchange rates hasn’t been this wide since Argentina’s hyperinflation crisis of 1989-90, when inflation soared to 2,600%. Celeste told us that Argentina was one of the world’s seven richest countries at the turn of the last century thanks to its agricultural abundance. “People used to say someone is as rich as an Argentine.”



Buenos Aires’s elegant boulevards and Parisian-inspired architecture, built during those heady times, are still beautiful. But bad governance has taken a heavy toll. More than a third of Argentines live in poverty and tens of thousands of small businesses closed during the pandemic. Celeste, like nearly every young person we met, is plotting an escape to Europe or North America.

Mr. Fernández and his powerful vice president, Cristina Fernández de Kirchner, who was the country’s first lady (2003-07) and served as president (2007-15), imposed lockdowns for more than eight months, lasting into 2021. Like many U.S. politicians, Mr. Fernández flouted his own decrees, hosting an unmasked birthday party for his wife and welcoming numerous guests, including a dog trainer, to the presidential palace.

Celeste showed us a memorial in the city’s Plaza de Mayo—thousands of stones bearing the names of Covid victims. The embarrassingly large tribute was initially removed by the government, but after a demonstration, it was left in place. Some 91% of Argentina’s citizens have received at least one dose of the vaccine, yet nearly 130,000 have perished from the virus. The country’s per capita Covid mortality rate is the eighth-highest in the world, according to Statista.

Argentina ranks 126th in the World Bank’s ease of doing business index and 96th on Transparency International’s corruption perception index, behind developing countries like Ethiopia, Tanzania and Kosovo. A bloated public sector weighs down Latin America’s third-largest economy. Roughly half the country either works for the government or depends on it for social welfare benefits.

A large table full of recent college graduates we met in San Antonio de Areco, in the country’s gaucho heartland, spoke of plans to use long-dead ancestors to gain European Union passports. Argentina’s universities are free, even for foreigners, but getting a job that pays enough to move out of mom and dad’s house is daunting for those without connections, they said. No one I met had confidence in the Fernández administration, but few held out hope that opposition parties would do better.

Mr. Fernández closed the country to foreigners from March 2020 to November 2021, crippling the important tourism sector. Even now little is being done to attract tourists. And while his predecessor sought to isolate Nicolás Maduro, Mr. Fernandez re-established diplomatic relations with Venezuela in April, arguing that human-rights violations have been “dissipating.” At the recent Summit of the Americas in Los Angeles, the Argentine leader chastised the Biden administration for excluding Venezuela, Cuba and Nicaragua.

The left’s mistakes in Argentina—hypocritical and ineffective lockdowns, profligate social spending, high taxes, and too many restrictions on commerce—are eerily similar to the priorities of the American left. Argentina is a beautiful country with proud and resilient people who deserve better leadership.

Jorge Luis Borges (1899-1986), the country’s best-known writer, was a believer in individual liberty. Perpetually mistrustful of government, Borges ran afoul of Juan Domingo Perón, whose eponymous Peronist movement still dominates Argentine politics. Perón sent him a letter in 1946, informing him that he was being “promoted” from his job as a librarian to poultry and rabbit inspector at a public market. Borges later wrote, “I believe that in time we will have reached the point where we will deserve to be free of government.” Words that ring true today.

Mr. Seminara is a former diplomat and author of “Mad Travelers: A Tale of Wanderlust, Greed & the Quest to Reach the Ends of the Earth.”

LINK: https://www.wsj.com/articles/a...-market-fernandez-so

Bump for 0-0.

Thank you for bringing this up.

Will write a longer post once i get back home to a better internet connection.

Have shared a few thought with a couple of members already but i’m so shocked that I’ve crawled under a rock these past days.

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I am looking forward to reading more, thank you.

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LINK: https://www.wsj.com/articles/a...-market-fernandez-so

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I'm not surprised that Fernández de Kirchner has weaseled her way back into a position of power. Her hand-picked candidate's loss to Macri in 2015 might have given Argentina some hope but didn't when he lost his reelection bid in 2019 putting her in the VP spot.

I always thought the only South American countries I'd like to visit were Argentina and Chile but will probably skip both now.

First part, can’t cut a long story short so here are some basics.

Mine is a rich country with poor people.
The entire society is so corrupted that politicians can always find some interesting way to get rich, powerful and untouchable, way above any law.

If you look at the map, you’ll note that our territory goes almost from the tropics to the South Pole, we have extensive coastlines, plains, mountains, you name it. Resources are also plentiful, mostly mismanaged, wasted, sold for a song, victims of corruption too, for example, we actually pay foreign mining companies to take our gold from us. The gold is extracted from locations on both sides of our border with Chile, Some of our gold just walks over the borderline, some of it is extracted for a cheaper than dirt concession fee lasting for centuries but the company collects money from the State for actually exporting to he gold, you get the picture.

So, our current predicament is the the Vice president, hand picked a minion to be our President.
The guy would not get enough followers to organize a poker table but he got elected.
Some days, feeling presidential, he dared take a few decisions that were almost immediately countermanded by the seat of the real power.
Us sitting on our hands for two years by presidential orders did not improve our already failing economy. It is still a disaster, no way out of it.

Will go on tomorrow…

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My heart goes out to you and all the ordinary citizens of Argentina.

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Mine is a rich country with poor people.
The entire society is so corrupted that politicians can always find some interesting way to get rich, powerful and untouchable, way above any law.

Isn't this the way the world over? Mexico and name almost any country in Africa for example.

Back in the early 90's, I spent a lot of time in both Chile and Argentina. Fabulous as were the people.

As one of my Latin friends put it, they all learned their corruption from the mother country.

This is a long-shot idea, but the only solution I can think of for Latin America is to start childhood education in English, and conduct all business in English.

That MIGHT induce the ability to think like a high trust society, at least in business circles.

I think populations where the high drive leave, suffer.

I think it’s part of why Latin America seems to be going backward, and part of why Europe is collapsing.

0-0 thank you for your comments and insight.

In Peron’ s times, the railroad union was very powerful, they connected the most faraway places thank to tracks mainly developed by the Brits.
During the 90’s, another leader, elected under the peronist banner, shunk the railroad operation to almost nil, leaving the entire country at the mercy of another growing union, the Teamsters.
Menen, also sold the national utilities companies, an administrative nightmare, to foreign companies, choosing those willing to pay the imposed bribe fee over those that chose not to go that way. That is how American companies got excluded.
Basically what happened is that we called the plumber to fix the sink and he left being the owner of the whole kitchen, same with electrician, etc. Those companies sent their experts to fix the main issues and the companies started making HUGE profits in no time. But they were no longer ours and the money left the country.

Our industries are a lie. We can’t make a single item without needing to import something. Yet any imports are heavily taxed. Now we are practically banned from spending foreign currency. Be it an industry item or a Netflix monthly subscription.
Everything has almost 100% tax attached to it.
That means that we have less access to much needed technology that would help us make a difference.

As a rule of thumb, i’ve always told you that what we pay for goods is twice your MSRP on a 1/4 income or less,
Inflation has been running around 50%/Y. In 2018 i was making 40k pesos, more or less $1k.
In 2019 i got no raise, so it was still 40k pesos, now worth $400. Starting 2020, when the pandemic arrived, i was still at 40k pesos. Seing it was no time to ask for a raise and hadn’t collected my money in 1 1/2 month with no response to phone calls, messages or emails i decided it was time to quit. Respect had been lost and my griefs were too many and too old to keeps working there. Had been the lone IT guy at the company for 30 years.

During lickdown, you could not use public transportation to go to work unless you were essential and had drawn a daily permit. Businesses could not open unless essential, you could not let go your employees and were to pay them to stay at home. Our economy, already exhausted took another powerful hit. Most list they job because it simply vanished. Owners list their investment in heavy debt.
Those who were found partying, gathering or traveling during lockdown were condemned by public opinion through mass media.
Then we foind that our President, while enforcing his lockdown decree on us, was having a bday party for his gf at the presidential residence.
HE decided that paying a fine was enough of a slap on the hand for him and his guests.

When the pandemic was declared, our then Health Minister decided it was not yet time to worry. That would “save a few bucks”. His delayed reaction eventually resulted in our country picking the obscure Sputnik V vaccine over the other more accepted and well documented alternatives.
I lost a lifetime friend, a priest and a holy man, that agonized over 80 says at the ICU just trying to breathe until his body gave up and wonder what savings were made. The russian vaccine made us unwelcome at a bunch of countries. Then promises were not kept and the flow stopped. Time for other vaccines but we were not welcome to buy them because of the original mishandling of the negotiations with those manufacturers.
We were promised the vaccine would be manufactured in Argentina to be sold to the rest of Latin America. It was delayed time and again. When a first batch was finally produced it was sent to Mexico to be bottled. Mexico gad no vials so they shipped it to the US but there no vaccine could be exported while the emergency was in effect. So we got screwed in more ways than one.

Will continue

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Thank you for taking the time to write this. Look forward to your next post.

Our current mess…

The people now in charge, decided 20 years ago, to turn unemployment money into a social class.
By now, we have at least 4 generations of people that have never worked in their lives and live of government cash.

Between them and the government, new organization s have grown as middlemen and managers of the government “plans”. They collect a compulsory fee from the non workers and can exclude them from the plans at will. Making them their hostages.
Those non workers are the ones that interrupt traffic and march on our streets. Turns out that the money they receive is not nearly enough. And they are not willing to get a job. Why would they?
Grandpa never worked, father either, numerous brothers, sisters, friends, neighbors, etc also never did, so why the fuck should i?

As inflation runs uncontrollably, the government keeps printing money to throw at these people. Get the picture?
Now they are functional and actually work for these organizations, no longer responding to the government that created the new class.

The answer seems to be overtaxing time and again the agroindustry

Will go on

quote:

Originally posted by Tn226:

quote:

Mine is a rich country with poor people.
The entire society is so corrupted that politicians can always find some interesting way to get rich, powerful and untouchable, way above any law.

Isn't this the way the world over? Mexico and name almost any country in Africa for example.

Back in the early 90's, I spent a lot of time in both Chile and Argentina. Fabulous as were the people.

I was going to say something similar. Not that we're dismissing the issue or we're just accepting the status quo, but it's been the way of the world since civilization started. Someone wants to be king and be rich at the expense of everybody else.

So, how do you beat inflation in our way of life. You buy bricks, you try to own your own place. Problem is real estate is bought and sold in US dollars. You need a lot hard to get dollars to climb your way fromnothing, to a small car then hopefully but not certain, to your own place.

Any savings you can squirrel away will likely turn to dollars. Your currency is our safety net, sometimes.
But leasing has attracted the attention of our government and the latest law screwed everyone. Made uncertainty the rule for all parties involved. I rather keep my place empty, even if a money pit, than to lease to someone that i might not be able to get rid of , collect rent, or anything else related.
Since rent is based of a dollar investment, it was a small percentage of the dollar value of the property, not the peso.
Unable to lease with any legal safety net, there’s little or no new construction work planned or in progress. The construction worked does not have a regular income, seasonal at best. So at the bottom of the pyramid and at the top, we are royally screwed and a major industry is toast.

Agroindustry sells abroad and brings dollars. But the State takes those at official rate, half of street value. If you export, after paying all taxes, get pesos and if you change those to real dollars (illegally), you will get half of what you received after exporting.
All prices you pay on your daily life are tied somewhere to the unofficial dollar, not the official one.
Even those allowed to import at official rates, after taxes, they will sell you at unofficial dollar rates.

A perpetuated lie is that the mean dollar keeps going up, while reality tells you that the peso sinks constantly.

So, this past month, our ruling VP looked at our President sideways and we had a major political crisis. Regardless of facts and situation, the peso took a dive and in no time, everything i have is worth almost half of its value early July. Dollar went from 200 pesos to 300 pesos. A third of the value of things was lost over a two adults frowning at each other.
Insane.

For almost two weeks stores were unable to trade, not knowing restock prices.
With that bump, the non workers took the streets demanding more money. The workers suddenly realized work wasn’t enough to pay the bills.

We had a national census lately, questions were more oriented to know what are our living conditions. Property value, etc. The more commonly expected questions about human socio economic factors were pretty much absent.

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Sooner or later, ants have to get rid of the grasshoppers. Whether the grasshoppers are “nobility,” “cronies” or the parasite voter class.

Nicky,

Thanks for taking the time here as well in private emails to address the insanity. I continue to wish your circumstances permitted your family to relocate to a more favorable situation but understand that it simply isn't a possibility as things exist.
Facing the prospects for over 90% inflation this year is beyond daunting. You have my prayers and best wishes.

--Bob

I am financially ok for the time being. Been rich and dirt poor, unable to take my kids for a stroll and buy them a pop soda. That is how it is in this roller coast of a country.

What i have, i owe it to my elders. If i own an apartment it”s only because i got lucky years ago. Had a customer who had no money but i kept his computer working regardless of him bein able to pay me or not. He won the lottery and gave me enough to pay the mortgage of the apartment just before the economy crash of 2001. From rags to riches to rags, the 10 million USD he won disappeared swallowed by banks and State mismanagement. The bank, that kept the 1/4 million USD he kept for balancing his multiple CC, a deck of them, actually called him and told him to bring cash.

I just made an emergency purchase of an Xbox, a toy to keep my head busy since i quit working 2 years ago. The internet price was pesos 169k on Friday when things got out of hand. Rushed to the store where the last unit was pesos 200k. They had been out of stock, nationwide, since 2019.
On Monday, the new price was around pesos 300k.
This is just a toy, imagine those who were after important items. One lady sold her sawing machine, her working tool, only to find that the replacement had gotten beyond her possibilities. Just an example.

Usually takes me 3 years between the time i decide i want something and the time i can afford it. Happened with the 19’ computer monitors around Y2K, a certain rare (here) pistol, my replacement receiver, after using one for 20 years, and now the xbox.
These ate just toys, pats on the back after facing and overcoming much serious situations that are mostly possible because of the chaos we live in.

It is such a beautiful and rich country, run by the worst possible kind of people. You are all welcome to come visit

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