Politics Ignorance or bliss?

[JaredDown]

The ridiculous Economy Minister Amado Boudou says "inflation only affects the mid and upper class".

Trade Secretary Moreno says 2010 will experience only a 10/11% increase and that the Government economic mouthpiece Indec has the "The one" real way of measuring inflation (not the World wide standard).

Really, are the Argentinos y Argentinas (CFK) that ignorant?? Or are they just living in a state of Government propaganda bliss??

http://www.buenosairesherald.com/BreakingNews/View/50013

Any country with these idiots in office have reason to be very scared.

 

[earlyretirement]

The ridiculous Economy Minister Amado Boudou says "inflation only affects the mid and upper class".

Trade Secretary Moreno says 2010 will experience only a 10/11% increase and that the Government economic mouthpiece Indec has the "The one" real way of measuring inflation (not the World wide standard).

Really, are the Argentinos y Argentinas (CFK) that ignorant?? Or are they just living in a state of Government propaganda bliss??

http://www.buenosairesherald.com/BreakingNews/View/50013

Any country with these idiots in office have reason to be very scared.

..... They are just living in a state of government propaganda bliss. You all didn't expect CFK to change her ways did you? She is still living in the same fantasyland.

This is what happens when you force out of office realistic and educated economists and put people in office that are in your back pocket. When you put a mouthpiece in office you get ridiculous quotes like this....

 

[bwyonsea]

..... They are just living in a state of government propaganda bliss. You all didn't expect CFK to change her ways did you? She is still living in the same fantasyland.

This is what happens when you force out of office realistic and educated economists and put people in office that are in your back pocket. When you put a mouthpiece in office you get ridiculous quotes like this....

Indeed, the dynamics of economic crises can be complex and multifaceted. The 2001 crisis in Argentina, often associated with following economic advice, involved the decisions of well-educated economists. Similarly, historical instances of economic challenges linked to IMF recommendations underscore the diverse perspectives on economic policies.

When discussing realism, it's crucial to acknowledge that different economic schools of thought exist. Argentina's recent economic growth, around 10% per year, might reflect successful strategies based on a particular economic perspective, possibly aligned with Keynesian principles. The effectiveness of economic policies often depends on the chosen framework.

In your mention of ignorance, you rightly point out the intricacies of Argentina's debt situation tied to inflation. The role of INDEC in providing official information that influences interest payments adds another layer to the complexity. The relationship between inflation, the freezing of the dollar, and potential devaluation can be intricate and subject to interpretation.

Economic discussions can indeed be challenging, and perspectives may vary based on one's background and interests. It's clear that economic dynamics involve a mix of factors, and the outcomes are shaped by the policies adopted and the economic theories underpinning them.

 

[bwyonsea]

The ridiculous Economy Minister Amado Boudou says "inflation only affects the mid and upper class".

Trade Secretary Moreno says 2010 will experience only a 10/11% increase and that the Government economic mouthpiece Indec has the "The one" real way of measuring inflation (not the World wide standard).

Really, are the Argentinos y Argentinas (CFK) that ignorant?? Or are they just living in a state of Government propaganda bliss??

http://www.buenosairesherald.com/BreakingNews/View/50013

Any country with these idiots in office have reason to be very scared.

Well, I think that people who live in a country with a huge crisis but with economist and politicians who have the magic idea of...printing money to give them to banks, constinue expending money in very expensive wars and who insist in the same recipe that created the crisis as a way to solve it among some others naive solutions, those people have really good reasons to be very scared.

 

[SantiBouns]

Well, I think that people who live in a country with a huge crisis but with economist and politicians who have the magic idea of...printing money to give them to banks, constinue expending money in very expensive wars and who insist in the same recipe that created the crisis as a way to solve it among some others naive solutions, those people have really good reasons to be very scared.

Sadly, a typical response of many Argentines: shift the responsibility for the current inept government away from ourselves and our bad choices, and focus all attention on that Evil Empire, the United States.

In bad thunderstorms, a lightning rod comes very handy.

 

[bwyonsea]

Sadly, a typical response of many Argentines: shift the responsibility for the current inept government away from ourselves and our bad choices, and focus all attention on that Evil Empire, the United States.

In bad thunderstorms, a lightning rod comes very handy.

Well, you are missundertanding me.
The bad choises are done for the US goverment relation to their own citizens and their own economy. This is a fact that the "well educated" economist failed, so, why to follow their advices?
Regards

 

[earlyretirement]

Well, you are missundertanding me.
The bad choises are done for the US goverment relation to their own citizens and their own economy. This is a fact that the "well educated" economist failed, so, why to follow their advices?
Regards

Many intelligent economists are wrong all over the world. That's true. But very rarely do you have situations around the world where the Economic Minister will give his opinion and then the President fire him and want to totally dominate and control the agenda. That is NOT normal in any country.

I've seen very few economists that are right 100% of the time. But I've never seen what I've seen here in Argentina with Economic Ministers and their interaction with the Executive Branch. It's broken...

And no one is saying things in the USA are going to be rosy either. Things in the USA are broken as well with an effective unemployment rate (when you factor in people that stopped looking for jobs) at 17%. States like California it's as high as 23%. The USA government lies just like the Argentina government lies. But those lies shouldn't be used to somehow justify Argentina's horrible actions and lies. A lie is a lie is a lie.

There will be many problems in the USA as well. You can't keep printing oodles and oodles of money and expect no consequences. But those prepared will be sitting in a really good position.

 

[GerardoNets]

The ridiculous Economy Minister Amado Boudou says "inflation only affects the mid and upper class".

Trade Secretary Moreno says 2010 will experience only a 10/11% increase and that the Government economic mouthpiece Indec has the "The one" real way of measuring inflation (not the World wide standard).

Really, are the Argentinos y Argentinas (CFK) that ignorant?? Or are they just living in a state of Government propaganda bliss??

http://www.buenosairesherald.com/BreakingNews/View/50013

Any country with these idiots in office have reason to be very scared.

They aren't idiots and they certainly know what they are saying is nonsense. They are trying to paint as rosy a picture as possible in setting the stage for next year's elections. Actually I don't see how this strategy will work as their assertions about the rate of inflation are so absurd that nobody believes them. If I were running things I would admit the obvious but tout the growth rate, and tell people inflation will be tamed next. I am announcing my candidacy early next year.

 

[earlyretirement]

Definitely things aren't growing as fast or nice as the government would like you to believe. Granted other countries are having their own issues/problems but here in Buenos Aires it's very obvious to see massive amounts of businesses are closing and going out of business. Just walk around Recoleta alone and you can see tons of kiosko's, corner stores, storefronts that are all going out of business. Some very quickly after they opened. You can't keep up with 25%-30% inflation, forced salary increases, etc and expect to successfully have a business.

I predict you will see more and more businesses shuttering in the next 2 years here. It's an almost impossible atmosphere to run a company here if you want to operate in "white". Even in black many of these places are shutting down and that trend will probably continue.

 

[bwyonsea]

Definitely things aren't growing as fast or nice as the government would like you to believe. Granted other countries are having their own issues/problems but here in Buenos Aires it's very obvious to see massive amounts of businesses are closing and going out of business. Just walk around Recoleta alone and you can see tons of kiosko's, corner stores, storefronts that are all going out of business. Some very quickly after they opened. You can't keep up with 25%-30% inflation, forced salary increases, etc and expect to successfully have a business.

I predict you will see more and more businesses shuttering in the next 2 years here. It's an almost impossible atmosphere to run a company here if you want to operate in "white". Even in black many of these places are shutting down and that trend will probably continue.

This is Argentina, not sweden. This is normal.

 

[earlyretirement]

This is Argentina, not sweden. This is normal.

Therein itself lies the problem with Argentina. People thinking that 27%+ a year inflation is "normal". I'm sorry to report to you that is NOT "normal". I don't care what country in the world you are talking about.

Maybe compared to places like Zimbabwe it's not bad but I hate to report to you that having that kind of inflation is NOT normal.

And your logic that if you have to pay your employees 27% more than you'll just raise your prices 27% more is not good logic. I'm not sure if you are a business owner or not but clearly that logic doesn't hold true. Maybe in the supermarket you can keep raising your prices 27% and it will work but most businesses you simply can't charge 27% more and pass that on to your clients.

It's the reason why you are seeing more and more businesses closing down and why you will see that trend continuing over the next few years if inflation keeps going at those levels.

Somehow some of you try to justify to yourselves (and others) this is somehow "normal" but I'm sorry to rain on your parade....it's not.

 

[GringoGod]

Therein itself lies the problem with Argentina. People thinking that 27%+ a year inflation is "normal". I'm sorry to report to you that is NOT "normal". I don't care what country in the world you are talking about.

Maybe compared to places like Zimbabwe it's not bad but I hate to report to you that having that kind of inflation is NOT normal.

And your logic that if you have to pay your employees 27% more than you'll just raise your prices 27% more is not good logic. I'm not sure if you are a business owner or not but clearly that logic doesn't hold true. Maybe in the supermarket you can keep raising your prices 27% and it will work but most businesses you simply can't charge 27% more and pass that on to your clients.

It's the reason why you are seeing more and more businesses closing down and why you will see that trend continuing over the next few years if inflation keeps going at those levels.

Somehow some of you try to justify to yourselves (and others) this is somehow "normal" but I'm sorry to rain on your parade....it's not.

Absolutely resonate with your sentiments. As a British business owner running a PC shop on the high street for the past two years, I've experienced the relentless rise in the prices of the products I source every month. It's a challenge to maintain a viable business without passing on those increased costs to customers.

While it's essential to ensure the financial health of the business, I understand the delicate balance between pricing and providing technical support or services. It's not just about selling products; the value-added services play a significant role in customer satisfaction.

Navigating through these economic challenges can indeed feel like weathering a storm. It requires strategic decision-making and adaptability to sustain the business in the face of fluctuating costs and market conditions.

 

[bwyonsea]

Argentina isn´t a normal country. In fact, at the economy university they teach economy and study separated japan and Argentina. If you try to use standar economy rules in this country you will fail.
Regards

 

[earlyretirement]

Argentina isn´t a normal country. In fact, at the economy university they teach economy and study separated japan and Argentina. If you try to use standar economy rules in this country you will fail.
Regards

Absolutely, that is something that I totally agree with you on Bajo. You're right. It's not a "normal" country. There are plenty of positive things about Argentina so I'm not trying to portray it as being only negative or totally crazy. There are many beautiful things about the country and it's citizens but I'm afraid being "normal"wouldn't apply as a good adjective to describe the country.

I think it's good to have everyone's perspective on these things. The world would be a really dull place if we all thought the same way about life, love, politics and Argentina!

 

[SantiBouns]

@bwyonsea . I totally disagree with your opinions, but congratulate you on your rational way of presenting them.

It is interesting, as well as healthy, to hear a point of view so different from my own.

 

[earlyretirement]

I totally agree with Santi on this. That's what I love about public forums is hearing other people's intelligent opinions on matters. I often enjoy hearing opinions other than my own. It's what truly makes a great forum allowing people to give their side and opinions and point of view. No matter if it differs from your own.

I think as long as everyone is respectful with one another, there is room for everyone's views on things and it can even be a real learning experience for all.

The point is no one likes to think they are wrong. No one. I remember back before the stock market crashed I presented very clearly how and why the financial sector in the USA was going to crash. So many people that it wouldn't happen and things would keep going up. Those that short sold the financial sector in 2007/2008 made insane amounts of money. Insane. I know lots of people lost money but they never thought they could be wrong and they closed their eyes pretending all but be well. This including some really big financial firms. Guys like John Paulson and other visionary investors that knew the score made billions and billions of dollars. I have personal clients that made 8 or 9 figures short selling the financial sector as I advised.

So it's sometimes good to listen to others opinions on things. There are some great posts on this forum. Some I disagree with but think they are great nonetheless.

 

[FlowRose]

The point is no one likes to think they are wrong. No one. I remember back before the stock market crashed I presented very clearly how and why the financial sector in the USA was going to crash. So many people that it wouldn't happen and things would keep going up. Those that short sold the financial sector in 2007/2008 made insane amounts of money. Insane. I know lots of people lost money but they never thought they could be wrong and they closed their eyes pretending all but be well. This including some really big financial firms. Guys like John Paulson and other visionary investors that knew the score made billions and billions of dollars. I have personal clients that made 8 or 9 figures short selling the financial sector as I advised.


Totally agree. I lived in Dublin through all of the celtic tiger years up to 2002 and at times felt I was part of a circus, with crazy money being spent on eating out, foreign holidays 4X4, brand clothing, summer houses etc...by that sector of the population benefiting from the boom - mostly IT, real estate and financial services - whilst "ordinary" people I knew who worked as firemen or in the public service continued grinding away for the same salary without the inflated bonues, stock options and struggled to live, never mind buy property. That 12+ years of 6-11% growth with <5% inflation was touted as the economic model to follow with the boom being attributed to state-driven economic development, solid relations between government and unions, increased women in the workforce, long term investment in education, a low corporation tax rate making us so attractive to foreign investment...and now Ireland`s slow demise as one of the pigs is the news of the day. Here I am living in another bubble, different country without half of the advantages that made Ireland successful for that period of time and enjoying the best of the country (the people) whilst cautiously cynical that all of this growth is making Argentina an economic powerhouse for the long term.
I`m not a doomsady person screaming the sky is falling - just a realist who knows that all good parties have to end...so best to stash the really good quality booze in a safe place for the next one!

 

[earlyretirement]

The point is no one likes to think they are wrong. No one. I remember back before the stock market crashed I presented very clearly how and why the financial sector in the USA was going to crash. So many people that it wouldn't happen and things would keep going up. Those that short sold the financial sector in 2007/2008 made insane amounts of money. Insane. I know lots of people lost money but they never thought they could be wrong and they closed their eyes pretending all but be well. This including some really big financial firms. Guys like John Paulson and other visionary investors that knew the score made billions and billions of dollars. I have personal clients that made 8 or 9 figures short selling the financial sector as I advised.


Totally agree. I lived in Dublin through all of the celtic tiger years up to 2002 and at times felt I was part of a circus, with crazy money being spent on eating out, foreign holidays 4X4, brand clothing, summer houses etc...by that sector of the population benefiting from the boom - mostly IT, real estate and financial services - whilst "ordinary" people I knew who worked as firemen or in the public service continued grinding away for the same salary without the inflated bonues, stock options and struggled to live, never mind buy property. That 12+ years of 6-11% growth with <5% inflation was touted as the economic model to follow with the boom being attributed to state-driven economic development, solid relations between government and unions, increased women in the workforce, long term investment in education, a low corporation tax rate making us so attractive to foreign investment...and now Ireland`s slow demise as one of the pigs is the news of the day. Here I am living in another bubble, different country without half of the advantages that made Ireland successful for that period of time and enjoying the best of the country (the people) whilst cautiously cynical that all of this growth is making Argentina an economic powerhouse for the long term.
I`m not a doomsady person screaming the sky is falling - just a realist who knows that all good parties have to end...so best to stash the really good quality booze in a safe place for the next one!

Well real estate here isn't anything like the bubble phenomenon like the situation in Ireland, USA, Spain, Portugal and a ton of other places experiencing tremendous pain. In those countries, you had banks and lending institutions that were giving a loan/mortgage out to anyone that had a heartbeat. Often times 0% down. Heck, with many in Ireland they allowed them not only to buy 1 but 2 or 3 all with not much equity. That's why you have a TREMENDOUS number of properties around the world where the owners have absolutely NO equity in them. Heck, I know a guy in London where the bank gave him 110% of the value so he could go out and buy furniture too!

That simply isn't the case in Buenos Aires. Mortgages are almost non-existing here and even when they do have them (which is only 6% off the market) it's 50% down payments over shorter periods of time.

So you can't call it a "bubble" when everyone is paying cold hard cash. I actually always loved the fact that you can't leverage here because it's a true market. Not being able to leverage keeps the pikers out and most speculators out. Those that have the cash don't have any risk of foreclosures. No subprime junk here. So you have to really understand the dynamics of the real estate market here. It's not a bubble when everyone is paying cash, no one has the risk of foreclosures. IMHO.

There simply isn't any other fundamentally sound and safe investment in Argentina besides real estate. Sad but true. Until that dynamic changes I'm very comfortable continuing to add to my portfolio here. In fact I just bought another place a few weeks ago in Soho.

The PIGS countries and the USA is probably the biggest PIG of them all was really horrible. I sold short the financial sector when I saw what was going on there. They were giving out money like candy. I still don't think prices are done falling there. However, I'll start buying there in the USA in 2011 after watching some areas fall as much as 60% from peak. I hope they fall another 10% or more there. There are still over 7 million houses in the USA that really need to be foreclosed on. So many Americans not only have NO equity in their homes. They have NEGATIVE EQUITY in their properties. That simply isn't the case here. All my friends that own here all own free and clear. All the business associates all own free and clear. I love that part of the market here. It's darn tough paying 100% cash but the lesson is you save up and you buy when you have the money. Novel concept. Until then...rent.

 

[FlowRose]

Bubbles come in many shapes and sizes my dear and yes I can agree that it is refreshingñy straight that banks aren`t throwing out 110% mortgages nor easy credit which means this bubble won`t pop in the same way as Ireland..but Ireland wasn`t alienating itself to foreign investment with sharp pay rises and union entrenchment. If CFK can get a grip on inflation as well as the unions Argentina`s bubble could potentially float for many a year. We shall see. Whilst you scour through the US for bargain properties I will focus on Spain - what opportunists we are!

 

[earlyretirement]

Bubbles come in many shapes and sizes my dear and yes I can agree that it is refreshingñy straight that banks aren`t throwing out 110% mortgages nor easy credit which means this bubble won`t pop in the same way as Ireland..but Ireland wasn`t alienating itself to foreign investment with sharp pay rises and union entrenchment. If CFK can get a grip on inflation as well as the unions Argentina`s bubble could potentially float for many a year. We shall see. Whilst you scour through the US for bargain properties I will focus on Spain - what opportunists we are!

Absolutely I agree with you that bubbles come in all shapes and sizes. I do see problems with Argentina. You know the drill ...the crises every 10 year cycles or so. The thing is that I don't know any locals foolish to keep much money in their bank accounts here. And now after 9/11 and the Patriot Act it's not so easy for the locals to open up bank accounts in the USA. True they can go to Europe as many have a EU passport but it's not that simple anymore. And many of them are leary about continuing to keep their funds in Uruguay. The banks in Uruguay are great but there is some talk about Uruguay cooperating with Argentina. I really think the days of "offshore accounts" are essential dead. Most banks are cooperating with taxing authorities around the world.

So that leaves locals to put their money literally under their mattress or buy real estate that is safer than keeping their cash under their mattress.

So while I do see problems with inflation, etc. I think this time in times of crises, it might make real estate here even more attractive. Until there is a viable safe investment here in Argentina (locals really don't invest in the stock market, start up companies, businesses). So the safest place for them is the real estate market.

Besides I'm still making great % renting my properties out. Even accounting for rental taxes to AFIP, utility bills, annual asset/property tax I can't make these kinds of safe returns on anything else. Also, that doesn't even add into the mix that many of these properties I bought after the crash have all doubled in value.

For the locals it all comes down to the standpoint of ...."if I sell what do I do with the money??".

While I do see Argentina experiencing some pains I don't see real estate prices falling significantly. Then again I don't see it going upwards significantly either. But the real estate market even with the worldwide crises has done quite well here, especially in solid areas like Recoleta and Palermo. The reason for that is these properties aren't leveraged. They are all paid in cash.

And when it comes down to it...there isn't an alternative safe investment here for locals. This is something I said would happen since 2003. My only regret is I didn't load up even more on real estate after the crash.

I guess some on the board would call us "vultures". I just call it smart investing.

You made a good point about Spain. The properties there have fallen tremendously! But in Spain keep in mind the banks are more protected because people that stop paying their mortgages the banks can go over for decades. It's not the ponzi scheme type situation where you have "jingle mail" in the USA with people just sending in their keys to the banks. I think it's good to hold some of these people accountable for their poor investment decisions and buying a house that wasn't worth it. I also think banks should suffer as well making idiotic decisions to give so many loans to deadbeats or people that should have never bought in the first place. So many people scammed the system in the USA.