The economic future of Argentina

Looking at this chart.

[url]http://www.google.co.uk/finance?q=ARSUSD[/url]

It's better than ever; does this translate into this is the best time ever to visit?

[QUOTE=Sean EZ; 431340]Looking at this chart.

[url]http://www.google.co.uk/finance?q=ARSUSD[/url]

It's better than ever; does this translate into this is the best time ever to visit?[/QUOTE]Well. The dollar might be at a record high, but inflation and higher prices seem to eat up most if not all of your "profit".

[QUOTE=Gandolf50;431343]Well.The dollar might be at a record high,but inflation and higher prices seem to eat up most if not all of your "profit".[/QUOTE]Thanks Gandolf.

[QUOTE=Gandolf50;431330]I have been waiting for the sh*t to hit the fan here for the last two years. But every time I leave the house it seems there are more cars on the road, the malls are full, and there is always a line at McD's. I remember in 2001 thru 2004 things were bad, the malls were empty and there was never any traffic. You could tell there was a major problem. Not like now. I am beginning to wonder if CFK is going to pull a rabbit out of the hat here?[/QUOTE]2001-2004 was a whole different paradigm though. The freezing of accounts, untying from the dollar and resultant devaluation meant that everyone suddenly had a lot less money. The horrendous inflation at the moment means that the best thing to do with your money is to spend it as soon as you get it. Bizarrely,new cars are considered a good investment here. If you haven't got enough cash to buy a property, a car is the next highest value item to sink your money into. The combination of stupidly high prices for second-hand cars and inflation means you can sell a one year old car for more than you paid for it (literally, I've done it). So even during the so-called world-wide turn down in the economy, new car sales continued to rise here.

I think it's unlikely that CFK is going to pull any rabbits out of hats. There's a crash of some sort coming. When and in what form. Who knows! Anyone who could predict that could really make a name for themselves.

[QUOTE=Sean EZ;431350]Thanks Gandolf.[/QUOTE]Lets say something you wanted to barter for in 2010 was 250 pesos or even 300 pesos in 2010. Then you would expect that now based on published rate it would be 1.28 times more expensive or 382 pesos at most now. Every post I have seen lately talks about 400, 400, 1000 etc. Pesos for similarly bartered services. Therefore, the expected return for the same service is outpacing the inflation rate by significant margin. This of course doesn't consider that the relative value of the US Dollar has also dropped since 2010. Put together it is clear that as a vacation location BA has decreased in financial value: unless you can achieve a higher rate of exchange than the published rate.

This is the point really. The good people of Argentina are living in a financial environment that is different than what is being stated by the Argentine government. They are hurting more because their real inflation over the last 2 years has gone up far more than the 5% the exchange rate would claim. As the value of currency drops the cost of "stuff" be it bread, milk, gas or whatever typically goes up by a marging greater than the actual value slip of the currency. Therfore, the government and some banks do less poorly than the population they serve. As a visitor you are asked to not only meet the real value of an item as seen by the citizen but also a slight premium because, in general, they feel the money you spend is extra to you but vital to them. They may not feel that way about someone local who they idenitify as living in the same condition.

Therefore, the value to you as a visitor may just be a calculation of numbers or if more generous one of understanding depending on your personal incliniation and financial condition. The barter is really a summing up of all of these various internal and external issues and not just a look at the exchange rate. The glory of all this is that it is up to you to pick what you value and spend your money there. The smart visitor decides this before they enter any negotiation. Don't decide what a service is during the negotiation or you will almost always spend more than you will think it was worth 2 hours later. Find the place both parties find the value good and things will generally go well.

My 2 or 2.05 cents,

Pete

[QUOTE=Peter Sideburn; 431354]My 2 or 2. 30 cents,

Pete.[/QUOTE]Corrected for real world inflation.

:winky:

If a local may chime in here, there won't be no rabbits out of hats. This has been the same way for at least a half century. Years of high inflation, unions strong enough to kinda counteract it with pay rises mostly matching it, at some point currency is so devalued we drop a couple zeros or get a new one, and eventually everything crashes. Your average argentinian doesn't give a crap about what it's gonna be like in 5 or 10 years, as long as he's got enough cash in his pocket to go through the next month. There's another thread about an article in which the author says "if the government stops actively being stupid", and well, that ain't gonna happen.

[QUOTE=Sidney;431404]Attempting to partly arrest the massive inflation that her inflationary policies have caused![/QUOTE]That is correct and incorrect at the same time Syd. She rose the minimum on taxable income by 20% so that would mean less people would need to pay but as inflation is over 25% and wage increases for this year are expected to be the same it really means that the real taxable income will be 5% lower.