Argentine Economy

Found an amusing article on Argentine economy [URL]http://www.bloomberg.com/news/articles/2015-08-20/only-in-argentina-where-minus-3-bond-yields-are-all-the-rage[/URL].

The Blue Peso has finally made International news.

[URL]http://www.bloomberg.com/news/articles/2015-08-20/argentina-s-black-market-peso-falls-to-weakest-in-10-months?cmpid=yhoo[/URL]

Tres3.

I am in Europe now with an argentinean friend and she has 10.000 pesos with her. Prior to our trip, the conversation went like this:

Argie: Should I bring pesos with me to exchange in Europe for euro?

Me: No, you will not be able to exchange pesos in Europe. Exchange pesos for euro before you leave.

Argie: (Looks at me sideways dog-head). Should I bring my ATM card?

Me: No, your ATM card will not work outside of Argentina because of the currency restrictions KFC (I call CFK KFC because her neck wattle makes her look like some type of fowl) has imposed.

Argie: (Looks at me sideways dog-head).

Fast forward to Spain:

Argie: I am going to use the ATM to get some euro.

Me: <crickets>.

Argie: The ATM won't give me any money.

Me: <crickets>.

Argie: I am going to go inside Santander Bank (her argie account is at Santander) and get some euro that way.

Me: <crickets, big smile>.

Argie: They are telling me my ATM card is no good here.

Me, fantasy reply: Boluda, I told you that twenty times before we left.

Me, actual reply: Ay ¡qué lástima!

Fast forward to Italy:

Argie: I am going to go to Western Union and they will exchange my pesos.

Me: (no they fucking won't) Dale.

Argie: Western Union won't take my pesos.

Me: (Duh) No, and neither will anyone else. They are worthless outside of Argentina and a few neighboring countries.

Argie: (Hateful look, tiny feet stamping on the ground). Why?

Me: Detailed explanation of KFC's restrictions (argie hates KFC because 'she gives everything to all those boliguayos and nothing to me'), the default on the debt, Argentina's international reputation for defalcation, etc.

Argie: Why would KFC do that? Isn't that really stupid?

Me: I have no fucking idea and yes it is insanely stupid.

Argie: Well, down by the train station there are a bunch of money changers and banks and I will go there and someone will exchange them, but you need to come with me because I don't feel safe walking around with 10.000 pesos.

Me: No, I will not go with you because you are wasting your time and there are better things to do in this beautiful city.

Argie: Hate face, fume, tiny feet stamping, malas palabras, and so forth.

Six hours later:

Argie: I went to six banks, three exchange offices, and drank twenty mates with a bunch of stupid little crackers I dragged all the way from Argentina and no one will take my pesos.

Me, fantasy reply: Meanwhile, I went to three beautiful museums, four gorgeous parks, and had some gelato.

Me, actual replay: ¡Qué lástima!

Imagine the futility of spending six hours trying to exchange worthless toilet paper. Then further imagine doing so while carrying a backpack containing: your mate, half a kilo of 'zherba,' half a kilo of sugar, a heavy jacket in case the temperature drops below 25 C, a cell phone that does not work in Europe, all your makeup and perfume so the maid won't steal it (because the maid is black), and god knows what else.

I mention that Macri says if he gets elected he will remove the restrictions immediately but that Scioli says he will he will remove them gradually.

Argie: Scioli es un hijo de rrrre mil puta de la mierda y me cago en él y encima es rengo (has only one arm) (at this point the zhizhing and slurring became so pronounced I lost track but none of it sounded very positive towards Scioli) and if he gets elected I will rip off his other arm and stuff it up his [I]culo[/I].

Me: Vamos a comer algo?

Argie: ¡Ojalá! Estoy rrre cansada.

Later she stated with relative certainty that she will be able to exchange the pesos in Germany.

Denial is not just a river in Egypt.

[QUOTE=Dickhead;445865]Denial is not just a river in Egypt.[/QUOTE]What a closer!

Instead of the word 'rengo' (someone who limps) in my last post, the word should have been 'manco' (someone with one arm). I think she said 'rengo' meaning he is crippled but that is not right. Maybe she said 'manco'.

Argentina must turn up the printing presses to make up the difference between the world price of oil and the Argentine price. Someone needs co clue CFK that try as she may, Argentina cannot print dollars. Has no one in the current government studied economics 101? Someone needs to make them truly believe that there is no free lunch.

[URL]http://www.bloomberg.com/news/articles/2015-08-25/oil-at-77-argentina-marches-to-a-different-drummer?cmpid=yhoo[/URL]

Tres3.

Argentina: Great Economists, Awful Economy.

By Noah Smith.

[URL]http://bv.ms/1SHmcwF[/URL]

Bloomberg View.

The below link appeared in today's Miami Herald. Oppenheimer is a well respected, bilingual, and well connected, columnist who writes a syndicated column about Latin America.

[URL]http://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article38452695.html[/URL]

Tres3.

Arbitrage theory tells us that the price of a product can only differ in two markets by the difference in taxes and transportation cost. I don't drink much wine but I like Trapiche Malbec. When I was in Argentina this year it sold for about 90 pesos in Cotto, about 7 dollars at the time in the blue market.

So I am in Portugal now and I see it for 4,65 euro which is about $5.20 US. What's up with that? The tax (included in the price) is a whopping 23% on most imported products here = stupid, but only 13% on this wine. So I don't really understand.

Then I am thinking, how did I get two bottles of it, and a liter of OJ, and a chocolate bar, and a pint of Spanish beer taxed at 23% for 13 euro? I looked at the receipt and the two bottles of Trapiche rang up as some local wine for 3,69 euro so the item was not entered correctly in the system.

But wine is heavy and expensive to ship in bottles. How can this be? Then I remembered that argie law allows the producer to prevent the retailer from discounting. But this did not appear to be a sale price. As an economist, I am puzzled but as a drunk I am happy. Super cheap to drink in Italy, Spain, and Portugal. Drinking age is 16 in Italy and in Portugal you can drink beer and wine, but not spirits, at 16 as well. 18 for everything in Spain.

Portuguese wine sucks though. I have had no refrigerator for eight days now so have been favoring wine over beer and wine is about half the price per unit of alcohol. Portuguese beer is not very good either so argie wine seems like a good alternative.

So what does the election results mean to the expats in Argentina? How will this effect the blue rate? Is this good or bad for us?

[QUOTE=HotRod11;446453]So what does the election results mean to the expats in Argentina? How will this effect the blue rate? Is this good or bad for us?[/QUOTE]For one thing, I think it's safe to assume that somehow the dollar will get stronger.

Jajajajajaja!

Jax

The presidential candidate for the Lets Change (Cambiemos) coalition Mauricio Macri has told businessmen this afternoon that if he wins the October elections, he expects Central Bank Alejandro Vanoli to resign. Vanoli considered the statement a threat.

As President, I would want a steady trade rate. I would lower export taxes, which would boost agro exports and, in turn, lower inflation by increasing dollar reserves. In this scenario, I think the current Central Bank director should present his resignation, said Macri, considering Vanoli to be a different kind of Central Bank director than his presidency would need.

President Elect Macri told the Central Bank Boys to resign yesterday and will name a 6 person committee to head the economy today.

Seems like a good start to me.

Sunday night / Monday morning around 4am while we were at Excedra we watched the armored cars full of the votes driving down Macri's personal 9 de Julio Metro Bus line. Complete with police escorts.

It was a beautiful sight!

I was told that the opposition Did steal votes but not enough to win because that would have caused a riot. They did it to make sure that Macri would not win by more than 54%.

The honor still held by KFC.

Unreal.

TL.

Seems like we have a lot of smart economist on this site. Help me with a question. If our economy is growing at 2.5% why would we consider raising interest rates. Inflation doesn't seem a factor here. We need a little inflation. If we raise interest rates wouldn't this slow everything down? If our GDP drops below 2.5 This could be a problem.

In the past week, asphalt roofing shingles here in Buenos Aires have jumped 100 pesos a bundle. Currently selling at $750 pesos a bundle, up from $650 the week before. Prices in the states ( Using Home Depot pricing as a reference ) continue at $21.70 or there abouts. Using the current Blue price of around 15 to 1 they should cost around $320 pesos. What a privelage to live here and pay double for everything and at the same time you get to earn less!!!! :-).

[QUOTE=Gandolf50;446473]In the past week, asphalt roofing shingles here in Buenos Aires have jumped 100 pesos a bundle. Currently selling at $750 pesos a bundle, up from $650 the week before. Prices in the states ( Using Home Depot pricing as a reference ) continue at $21.70 or there abouts. Using the current Blue price of around 15 to 1 they should cost around $320 pesos. What a privelage to live here and pay double for everything and at the same time you get to earn less!!!! :-).[/QUOTE]A few years ago, Cristina told the country that if inflation were truly 25% or more (like economists outside of her government believed), the country would explode and "disappear into thin air." Spending her days by bald ass lying about CPI and dangerously doing nothing to dampen inflation but doing everything wrong to inflame inflation, the Macri government will have its hands full confronting reality. While empirical evidence pointed to huge MONTHLY increases in inflation rates and after the IMF censured Argentina for its faked inflation statistics, the brown nose asshole Finance Minister Axel Kicillof launched a new metrics system, which he labeled the consumer price index NU (CPINu). Two years ago, the new index put one month's (Jan 2014) inflation at 3.7%--the highest monthly rate recorded by the government since 2002. If extrapolated, such a rate would mean annual inflation of 55%. But the newer and more current numbers are still lower than many private estimates. Think of what Macri is facing. His first job is to stem inflation. Here's some things Macri's Finance Minister must do IMMEDIATELY, (1) Get rid of the export tax, (2) Devalue the peso again, (3) settle old debts with Singer's group, (4) reestablish good relations with the USA, (5) and most of all - increase the number of tourists coming into the country by passing new cheap pussy laws. Thanks, Bobby Doerr.

[QUOTE=Gandolf50;446473]In the past week, asphalt roofing shingles here in Buenos Aires have jumped 100 pesos a bundle. Currently selling at $750 pesos a bundle, up from $650 the week before. Prices in the states ( Using Home Depot pricing as a reference ) continue at $21.70 or there abouts. Using the current Blue price of around 15 to 1 they should cost around $320 pesos. What a privelage to live here and pay double for everything and at the same time you get to earn less!!!! :-).[/QUOTE]Much of the difference between the Argentine and the USA asphalt shingle prices can be attributed to Argentina's 100% tariff on imported goods and it's 21% "National Sales Tax" on retail sales.

Thanks,

Jax.

It looks as if AA got a bellyful of Argentine government game playing. CFK had a number of retaliatory actions. It will be interesting to see if she uses her last days in power to try and impose them. If Aerolineas were worth a shit and flew on time, AA would not sell so many tickets in Pesos, and maybe would keep accepting Pesos. First Venezuela, and now Argentina. I wonder which airline will be next, and I also wonder what Macri will do when he takes over.

[URL]http://finance.yahoo.com/news/american-airlines-stops-taking-payment-argentine-currency-192148757.html[/URL]

Tres3.

[QUOTE=Jackson;446476]Much of the difference between the Argentine and the USA asphalt shingle prices can be attributed to Argentina's 100% tariff on imported goods and it's 21% "National Sales Tax" on retail sales.

Thanks,

Jax.[/QUOTE]Does the "National Sales Tax" include the VAT? If not, that tax amount must also be included in the sales price.

Tres3.

[QUOTE=Jackson;446476]Much of the difference between the Argentine and the USA asphalt shingle prices can be attributed to Argentina's 100% tariff on imported goods and it's 21% "National Sales Tax" on retail sales.

Thanks,

Jax.[/QUOTE]LOL!! You would think with 121% tax they would encourage imports!

[QUOTE=Tres3;446478]It looks as if AA got a bellyful of Argentine government game playing. CFK had a number of retaliatory actions. It will be interesting to see if she uses her last days in power to try and impose them. If Aerolineas were worth a shit and flew on time, AA would not sell so many tickets in Pesos, and maybe would keep accepting Pesos. First Venezuela, and now Argentina. I wonder which airline will be next, and I also wonder what Macri will do when he takes over.

[URL]http://finance.yahoo.com/news/american-airlines-stops-taking-payment-argentine-currency-192148757.html[/URL]

Tres3.[/QUOTE]Macri announced a replacement to run Aereolineas, maybe he can cut the 350 employees per plane to something closer to the norm of around 50. And while hes at it cut the 3.5 million dollars a day subsidy Aereolineas is costing the country.

[QUOTE=Gandolf50;446487]LOL!! You would think with 121% tax they would encourage imports![/QUOTE]Most intelligent heads of state long ago discarded the discredited "Import Substitution", but not CFK. In fact, she increased it for the average person who pays taxes. The well connected long ago learned that a well placed bribe could avoid paying the tax.

Tres3.

So the Nazis had a coincidental fire at the Reichstag but it was for a good reason .

Blame the Red Pigs and gain support.

The new fire in The Ministry of Finance here in BA was obviously intended to cover up KFC's corruption.

[URL]http://www.zerohedge.com/news/2015-11-27/mysterious-fire-hits-argentine-ministry-finance-destroys-years-prior-regimes-files[/URL]

Unbelievable.

TL.

[QUOTE=Tres3;446479]Does the "National Sales Tax" include the VAT? If not, that tax amount must also be included in the sales price.

Tres3.[/QUOTE]The "National Sales Tax" I referred to is known by it's acronym "IVA".

It's not a Value Added Tax as it's not added on to the cost of a product at each step in the importing / manufacturing / distribution process.

The 21% IVA is added to and included in the final retail sales price, but it is not itemized on the sales receipt like sales taxes in the USA.

Nevertheless, the next time you are motivated to complain about the price of a retail product or service, first recognize that the retailer is only receiving 79% of the price you paid.

Thanks,

Jax.

I am looking at exchange rates today just out of curiosity and it seems like it is reasonable to bring and use the ATM card again. [URL]Dolarblue.net[/URL] site is down. I looked at a hotel site which I used before and they still have not converted. They are still quoting about 10 to 1. There appears to be some confusion. Look for deals now.

[QUOTE=BigBossMan;446626]I am looking at exchange rates today just out of curiosity and it seems like it is reasonable to bring and use the ATM card again. [URL]Dolarblue.net[/URL] site is down. I looked at a hotel site which I used before and they still have not converted. They are still quoting about 10 to 1. There appears to be some confusion. Look for deals now.[/QUOTE]I tried to talk somebody into making a test today for a couple hundred pesos and was unable to.

If it works, actually works, I would say probably. It remains Argentina, until somebody has proven that you're not getting raped on the backside (fees, funky exchange when clearing through the banks) I would maintain hope with healthy skepticism.

[QUOTE=DaddyRulz;446629]I tried to talk somebody into making a test today for a couple hundred pesos and was unable to.

If it works, actually works, I would say probably. It remains Argentina, until somebody has proven that you're not getting raped on the backside (fees, funky exchange when clearing through the banks) I would maintain hope with healthy skepticism.[/QUOTE]I'm on an expat FB group and a couple guys there ran a test today (small amounts) with ATM cards and got 9.5. One guy reported that his statement showed "transaction pending." I'm sure it will take a couple days to smooth out, and the residual 9.5 wasn't theft, pretty sure anyway, but lets see what happens. Though it wouldn't even be a stretch for me to see somebody report they questioned the bank about this and the bank said, "Yes, the exchange rate is indeed 14-1 except when you use your debit card to get money from a foreign bank, then it's 9.5-1."

Declarations of Peso value STILL don't mean anything unless there is a sufficient supply of dollars to feed the needs of individuals and business in Argentina. The jury is completely out on this. If there isn't enough, oh my, the blue will go to unparalleled levels. It will not take long to shake out one way or the other.

[QUOTE=Jackson;446532]

Nevertheless, the next time you are motivated to complain about the price of a retail product or service, first recognize that the retailer is only receiving 79% of the price you paid.

Thanks,

Jax.[/QUOTE]Wouldn't it be 82.6% ?

[QUOTE=Moore;446635]Wouldn't it be 82.6% ?[/QUOTE]Yes, but I didn't want to get into the entire "Margin vs Markup" discussion, thanks.

Inflation-stricken Argentina to issue higher denomination banknotes.

[URL]http://www.cnbc.com/2016/01/15/[/URL]

I knew this was coming !

Beware of fakes.

TL.

[QUOTE=TejanoLibre;446844]Inflation-stricken Argentina to issue higher denomination banknotes.

[URL]http://www.cnbc.com/2016/01/15/[/URL]

I knew this was coming !

Beware of fakes.

TL.[/QUOTE]Here is the working link:

[URL]http://www.cnbc.com/2016/01/15/reuters-america-inflation-stricken-argentina-to-issue-higher-denomination-banknotes.html[/URL]

Good News.

[URL]http://www.businessinsider.com/r-coca-cola-to-invest-1-billion-in-argentina-over-next-four-years-2016-1[/URL]

TL.

They think only governments create economic growth and jobs are blown out of Christina's a$$.

They will surely view this as Yankee Imperialism.

[URL]http://www.clarin.com/politica/Davos-Mauricio_Macri-ingles_0_1508849387.html[/URL]

Not KK, pretty sharp guy.

[QUOTE=Thomaso276;446881][URL]http://www.clarin.com/politica/Davos-Mauricio_Macri-ingles_0_1508849387.html[/URL]

Not KK, pretty sharp guy.[/QUOTE]Build on what you have, being able to feed yourself is pretty huge.

Following is a link to this article.

[URL]http://finance.yahoo.com/news/mediator-argentinas-debt-battle-says-issue-significant-statement-213952527--sector.html[/URL]

Tres3.

The below link is to a recent Bloomberg article about the defaulted Argentine bonds. It is the first time that I was aware that Argentina was foolish (or desperate) enough to issue floating rate bonds.

[URL]http://www.bloombergview.com/articles/2016-02-08/argentina-s-bond-fight-comes-down-to-its-worst-bonds?cmpid=yhoo.headline[/URL]

Tres3.

The below link is to an article that appeared on the front page of Wednesday's Miami Herald.

[URL]http://www.miamiherald.com/news/nation-world/world/article62021447.html[/URL]

Tres3.

The below link seems to indicate that the Argentina debt debacle is almost over -- if the Argentine Congress does not fuck it up.

[URL]http://finance.yahoo.com/news/argentina-us-creditors-reach-deal-160120062.html[/URL]

Tres3.

I guess all of the sleepless nights endured by Singer's minions are going to finally pay off--if the Argentina Congress does not fuck it up.

[URL]http://finance.yahoo.com/news/hedge-funds-poised-massive-gains-144957191.html[/URL]

Tres3.