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[QUOTE=Sidney]$600,000,000 pesos for free soccer, but 40% of people are in severe poverty! The Senate approves ''Super Powers'' for 1 more year, fucking over the farmers while July exports declined 30%![/QUOTE]Why didnt you tell that the balance is 78% up from last year?
That's what I read on drudgereport.
[QUOTE=Joe Hernandez]Why didnt you tell that the balance is 78% up from last year?[/QUOTE]I guess you are implying that the trade balance is up on last year and I agree that all the authorities say that. The reasons why that is so are not a pretty story. Exports, (ie. Income) are down over last year by a huge margin. But imports are down even further, thus giving an improved trade balance. Trade balance is not really the best indicator of the state of an economy.
Argento
Argentina just decided to close its markets when the Real declined substantially.
[url]http://www.stratfor.com/analysis/20090212_argentina_brazil_trade_dispute_heats[/url]
If you can't compete, lock 'em out. That always works.
As an outsider who does not speak or write Spanish the following is based upon antedotal and filtered conversations with the local people I have met in BsAs and my reading of modern Argentine economic history as well as the Economist.
Culturally the Argentine people do not believe in themselves. As soon as they get a nickle they send it to Spain, Germany or Italy or the USA (Miami) The Argentine people from what I have observed do not invest in themselves like we do in the USA. Consequently, their rational fear of the local banks and their government prevents the local economy from acquiring capital internally to support national growth unless the risk / reward (I. E. Interest) is extremely high and even then there is distrust in the local banks' or government promises to pay when due.
Without the support of the people in their own economy, growth and internal investment must be supported from abroad. When foreign capital is used, the cost of borrowing is even greater since the repayment generally goes back to the lending source off shore and does not remain inside Argentina which means more money must be borrowed from abroad with the attendant expense.
Until the Argentine people begin to believe in themselves their economy will always be unstable because it will be subject to the international forces and costs associated with external borrowing.
When the USA was growing, the British primarily funded the railroad expansion west and they kept reinvesting their profits in the USA because of our common legal systems. As Americans we have traditionally thought inward because we are all from somewhere else with less desirable or trustworthy institutions and it was better to invest in ourselves than repatriate our savings to where we came from initially. Thus, as we matured most of our funding for expansion came from our own people. (Forget today and our international borrowing. Moreover, generally, as a people we have not defaulted on our foreign debts. Until recently we have been net lenders and not borrowers. We had surplus capital.
This is my theory which is not predicated on any research but is merely an observation.
The attempt to prevent capital flight only hightens the internal insecurity with the Argentine people and thus fuels more attempts to evade the govenment's restrictions on the movement of money which thereby reduces the internal investment or savings. It is a never ending cycle of evasion and distrust in the local institutions.
During the last banking crisis in early 2000 the rich moved significant capital off shore before the meltdown which exacerbated the monetary crisis and that money has not been brought home.
I welcome a critque of this analysis because of its lack of empircal data and possibly faulty logic. A good topic for a roundtable discussion.
[QUOTE=Mbronzini]Culturally the Argentine people do not believe in themselves. As soon as they get a nickle they send it to Spain, Germany or Italy or the USA (Miami) The Argentine people from what I have observed do not invest in themselves like we do in the USA. [/QUOTE]I wouldn't really say that they don't believe in themselves. You'd be hard pressed to find a more collectively narcissistic group of folks. They definitely do not trust each other with money (and, by the way, neither should you!
Other than that, I'd say your analysis is pretty accurate from my perspective.
There are a few on this forum who have had the balls to start businesses here. They can give you their war stories.
As for me, I was crazy enough to get transferred here and paid in pesos. I promptly convert most of that into dollars in country each month, and export it out every opportunity. Just like any good Argentine.
[QUOTE=Sidney]Argentine Corn Crop May Be Smallest in Two Decades (Update1)
By Matt Craze and Rodrigo Orihuela.
Sept. 28 (Bloomberg) -- Argentina, the world's second- largest corn exporter, may plant the smallest crop in two decades as the government delays plans to lift a ban on exports.
President Cristina Fernandez de Kirchner has yet to make good on a Sept. 10 pledge to allow overseas shipments of corn, prompting farmers to plant more soybeans, Martin Fraguio, executive director of corn exporters and grower association Maizar, said in a Sept. 24 interview. The government doesn't restrict soybean exports and they're also cheaper to plant.[/QUOTE]A negotiating tactic I think Sid. At this latitude both don't get planted untill mid November, (optimum soil temperature 16 degrees C) so I guess this is the opening gambit.
Argento
Found this to be an interesting read. Unbelievable to think Argentina will probably will not make the World Cup.
[url]http://timesofindia.indiatimes.com/sports/football/top-stories/Maradona-Symbol-of-Argentinian-failure/articleshow/5067895.cms[/url]
Closing time may be 5:30 am mongers.
[quote]Provincial Government's decision to set a 5.30am close time limit for all night bars and dancing venue.
The Buenos Aires Nightclub Owners Association (ABECB) is asking the government to open the debate and receive their representants at the province's government house. The owners claim that the new law would generate huge losses for them. However, they agree with the increase of controls regarding the age of the clients and the alcohol.[/quote]
[QUOTE=Damman]Closing time may be 5:30 am mongers.[/QUOTE]But only for the province, not for the "Distrito Federal" right?
Cannot really say, but something is in the works for sure.
[quote]'First serious attempt' to control alcohol consumption sent to Congress.
Clubs in Buenos Aires would have to limit their entry time, as well as close earlier and limit alcohol sales.
Buenos Aires Governor Daniel Scioli sent a project to Congress for a law which would regulate nightly activities and alcohol sales, and which would allow for severe sanctions for businesses that go against the new orders.
The project was sent to the presidents of both the Upper and Lower houses by the Social Development Minister, Baldomero Álvarez de Olivera.
The new methods outlined include a time limit for entering nightclubs, with 2 AM being the latest time for entering and 4:30 AM being the latest time to exit.
In addition, the sale of alcoholic beverages would be limited to 4:30 AM in nightclubs, cabarets, bars and other authorized locations.
Minors between 14 and 17 years of age will only be able to attend matinees and will not be able to be at adult locations.
At the same time, businesses that do not follow through will be heavily sanctioned, with owners facing jail time of up to 90 days, as well as fines from 10 thousand to 100 thousand pesos.
Closure of certain locations for serious infractions may also be contemplated.
It was said that this is the "first serious attempt to control the sale of alcohol to minors and to regulate nightly activity."[/quote]
[QUOTE=Damman]Cannot really say, but something is in the works for sure.[/QUOTE]The part about not giving booze to minors is a very good idea, but thinking about the limits in the hours. PPRRRRRT! The only thing they will promote is after hours illegal joints. It has happened in my country and in my city, what do we got? A bored place with tons of illegal shit everywhere.
[QUOTE=Sidney]Comments from BA Herald--''The combination of abusive K control of state funds, fickle politicians, and irresponsible governors seeking to perpetuate themselves, means that the AR political system is head for an epic failure!''[/QUOTE]Could not agree more, except I'd use a stronger term than "fickle politicians".
[url]http://www.bloomberg.com/apps/news?pid=20601086&sid=aRArKQlsc06A[/url]
Buenos Aires Mayor Mauricio Macri sent a bill to the city legislature that would allow it to go forward with a delayed $250 million international bond sale without federal approval, the head of the city's public credit department said.
[url]http://www.bloomberg.com/apps/news?pid=20601086&sid=aRASR54ZrsSw[/url]
Hold on to that old Ipod, it could be worth thousands by the time Cristina get done with her tax hikes. The chic is crazy.
[url]http://www.buenosairesherald.com/BreakingNews/View/16452[/url]
[QUOTE=Tessan][url]http://www.bloomberg.com/apps/news?pid=20601086&sid=aRArKQlsc06A[/url][/QUOTE]Question is: will Argentina or USA default first?
[QUOTE=Hubbster]Question is: will Argentina or USA default first?[/QUOTE]The US never need to default, since it can print as many dollar as it wants. The money supply as gone way up recently with the fed creating money because of the economic crisis.
[url]http://www.chartingstocks.net/wp-content/uploads/2009/03/money-supply.gif[/url]
Argentina borrows in dollars, and it cannot print dollar, so if it runs out of dollars it defaults.
Printing dollars can weaken the dollar, and create inflation. If you look at the spike in the chart I posted, it is suppressing that the dollar has not weaken more.
The Fed promised to pull money out, as soon as the economy start doing well. If you look at the chart, they have already pulled some money out, the chart goes down a little at the end. They say allot of the money is in the form of loans, which do not have to be renewed. They can also stop buying stuff on the open market, and then sell some of the stuff they brought. But this will be hard to do, since the politician in Washington will cry out, when they start to pull money out of the economy, saying they are harming the Economy.
So my answer in short is that the US never has to default, but the dollar might get weak. Argentina will default again, some point in the future. If Argentina can get access to international Markets, it may delay it for a while, until they max out there credit. They system as it stands in Ar now does not work very well.
[QUOTE=Sidney]'' Showing that AR has serious problems in attracting investments[/QUOTE]That this is in fact true on both public and private fronts.
Just been quoted 95 pesos for resoling a pair of shoes. Definitely cheaper in the UK.
[QUOTE=SteveC]Just been quoted 95 pesos for resoling a pair of shoes. Definitely cheaper in the UK.[/QUOTE]Holy crap! For that sum I could buy a decent pair where I come from. Maybe not luxurious but certainly of good quality.
Don't you miss the golden days of the crisis?
[url]http://hotair.com/greenroom/archives/2009/11/21/dont-cry-for-me-america/[/url]
A brief history of Argentina's historic fall from an economic super power.
Exon
[QUOTE=Whiskas]Don't you miss the golden days of the crisis?[/QUOTE]When I first came here early in 2002 there were people banging pots outside banks, but I felt like a thief in the almost empty restaurants, it was so cheap. I cook at home a lot more these days.
Exon.
Excellent history lesson.
Please send a copy to Ricardo and waterboard Ricardo until he reads it. I can't tell you how much I was fed up with Ricardo's 'I'm from the government, I'm here to help' bullshit.
[QUOTE=Exon123][url]http://hotair.com/greenroom/archives/2009/11/21/dont-cry-for-me-america/[/url]
A brief history of Argentina's historic fall from an economic super power.
Exon[/QUOTE]Did you seriously post a link to a site called "hotair." It's at least a good example of oversimplification to prove a point.
[QUOTE=SteveC]When I first came here early in 2002 there were people banging pots outside banks, but I felt like a thief in the almost empty restaurants, it was so cheap. I cook at home a lot more these days.[/QUOTE]As I told before I am mexican, and during my first travel to Argentina in 2004 it was so damn cheap for us that for a moment I remembered old stories about Cuba in the early 90's. As you just said we felt like thieves. A friend of mine even went to Argentina to "study" a law course, he lived the great life for pennies and cheated on his wife until he got tired of it.
Not a whole lot of substance here, but this is a top 10 list of countries most likely to default as measured, at least in part, by the risk tied to their credit default swaps:
[url]http://www.businessinsider.com/the-worlds-greatest-sovereign-risks-2009-12#10-lebanon-1[/url]
Argentina is #3
California is #9 (I realize it's not a country but I think that's why they included 11 on the list)
Who's #1?
According to CDS spreads, it's Venezuela. Couldn't happen to a nicer knucklehead. Next, he's nationalizing the banks. What an idiot. Wait, we've nationalized the banks, too, right?
[QUOTE=Sidney]Cry For Me, America.
In the early 20th century, Argentina was one of the richest countries in the world. While Great Britain 's maritime power and its far-flung empire had propelled it to a dominant position among the world's industrialized nations, only the United Stateschallenged Argentina for the position of the world's second-most powerful economy.
It was blessed with abundant agriculture, vast swaths of rich farmland laced with navigable rivers and an accessible port system. Its level of industrialization was higher than many European countries: railroads, automobiles and telephones were commonplace.
In 1916, a new president was elected. Hipólito Irigoyen had formed a party called The Radicals under the banner of "fundamental change" with an appeal to the middle class.
Among Irigoyen's changes: mandatory pension insurance, mandatory health insurance, and support for low-income housing construction to stimulate the economy. Put simply, the state assumed economic control of a vast swath of the country's operations and began assessing new payroll taxes to fund its efforts.
With an increasing flow of funds into these entitlement programs, the government's payouts soon became overly generous. Before long its outlays surpassed the value of the taxpayers' contributions. Put simply, it quickly became under-funded, much like theUnited States' Social Security and Medicare programs.
The death knell for the Argentine economy, however, came with the election of Juan Perón. Perón had a fascist and corporatist upbringing; he and his charismatic wife aimed their populist rhetoric at the nation's rich.
This targeted group "swiftly expanded to cover most of the propertied middle classes, who became an enemy to be defeated and humiliated.
Under Perón, the size of government bureaucracies exploded through massive programs of social spending and by encouraging the growth of labor unions.
High taxes and economic mismanagement took their inevitable toll even after Perón had been driven from office. But his populist rhetoric and "contempt for economic realities" lived on. Argentina 's federal government continued to spend far beyond its means.
Hyperinflation exploded in 1989, the final stage of a process characterized by "industrial protectionism, redistribution of income based on increased wages, and growing state intervention in the economy."
The Argentinean government's practice of printing money to pay off its public debts had crushed the economy. Inflation hit 3000% , reminiscent of the Weimar Republic. Food riots were rampant; stores were looted; the country descended into chaos.
And by 1994, Argentina 's public pensions - the equivalent of Social Security - had imploded. The payroll tax had increased from 5% to 26% , but it wasn't enough. In addition, Argentina had implemented a value-added tax (VAT) new income taxes, a personal tax on wealth, and additional revenues based upon the sale of public enterprises. These crushed the private sector, further damaging the economy.
A government-controlled "privatization" effort to rescue seniors' pensions was attempted. But, by 2001, those funds had also been raided by the government, the monies replaced by Argentina 's defaulted government bonds.
By 2002, ". Government fiscal irresponsibility. Induced a national economic crisis as severe as America 's Great Depression."
In 1902 Argentina was one of the world's richest countries. Little more than a hundred years later, it is poverty-stricken, struggling to meet its debt obligations amidst a drought.
We've seen this movie before. The Democrats' populist plans can't possibly work, because government bankrupts everything it touches. History teaches us that ObamaCare and unfunded entitlement programs will be utter, complete disasters.
Today's Democrats are guilty of more than stupidity; they are enslaving future generations to poverty and misery. And they will be long gone when it all implodes. They will be as cold and dead as Juan Perón when the piper must ultimately be paid.
References: A tear for Argentina's pension funds; Inflation in Argentina; The United States of Argentina. Cross-posted at: Doug Ross @ Journal.[/QUOTE]These days, does it matter whether it is Republican or Democrat? I think it's more a natural evolution, just look at California. The wealth of America spawned generations that took their wealth for granted, destroyed the family structure, and took consumption to levels of decadence. In a country where individuality and privacy is sacred, and money is God, all you can do, is just hang on to something solid until the storm is over. By the way, that is what Tiger Woods is doing right now.