Argentine Economy

If I understand the proposal right the owner can only enforce a 2% yearly rent of the declared value of the property. He can off course try to increase the declared value of the property but that would mean that he would have to pay more taxes. As a guarantee only a bank-guarantee will be accepted and someone can stay for 5 years (I would assume with a yearly price increase)

The temporary rentals will also be limited to 3 months.

I don't know how the final plans will be but I would think that if the rental-return is too low many people prefer not to rent out or try to rent out to foreigners, but there is a big oversuply already.

WTF: they have nationalized pensions, airlines, utilities, futball and now apartment rentals. What is next, privados?

Hello Damman,

You are right, numbers are worthless without cited sources. I checked those numbers that I had in mind and found out I underestimated them by far.

The total debt per us household was actually more than 700,000 USD by the end first quarter 2009, for a total of 52,592 billion dollars. (Z1 federak stat: [url]http://www.federalreserve.gov/releases/z1/Current/z1.pdf[/url])

In 1983, 1.63 dollar of debt was needed to make one dollar of growth.
In 1997, 3.06 dollars were needed for that growth dollar
In 2008, 6.86 dolllars
In 2009, the massive injection of cash failed to bring growth, except on stock market.

Here is a link that will tell you more about the exponential growth of US debt : [url]http://mwhodges.home.att.net/nat-debt/debt-nat.htm[/url]

The point is to demonstrate that there is absolutely no difference between Argentina and the US regarding debt. The problem is simply unsolvable since it s gone out of control. What saves the US from a massive devaluation is the international status of their currency dating back from 1945 (the USA are allowed to print money for international trading needs) A status that the pace of debt will undoubtedly fragilize.

Joe, I know some countries that regulate the growth of rent based on a construction cost index, more or less linked to inflation. This seems to be a fair basis.

Damman,

I may be naîve but the main reasons why I think Argentina has been such an economic disaster for the last 60 years or so were; lack of democracy, and corruption. From the 30's until 1983 the country never had any kind of democratic government. A succession of military dictatorships, or their friends, forming governments, and the biggest party being excluded from elections, was never going to bring sound economic growth. The fact that the country would win gold if corruption was an Olympic sport doesn't help either. Menen would have won more gold than Michael Phelps.

I have got to get a life. Anyway, the $300K debt number, thought you were referring to personal debt. As for the national debt number per household, off the charts and incomprehensible. Very scary. However, people and countries get in line every month to buy treasuries. What can I say. And you are correct, US has the luxury of having the bench mark currency for the world and can print paper to pay their debts. Quite sure the Chinese are going to make a run at the dollar, but their record is not all that great yet. Who would you loan money to? Like it or not, the only reason the dollar is the benchmark currency of the world, never missed a payment. Again, love or hate the US, they always pay.

[QUOTE=MataHari]The point is to demonstrate that there is absolutely no difference between Argentina and the US regarding debt. The problem is simply unsolvable since it s gone out of control. What saves the US from a massive devaluation is the international status of their currency dating back from 1945 (the USA are allowed to print money for international trading needs) A status that the pace of debt will undoubtedly fragilize. [/QUOTE]Forgive me Mata, but I cannot see how Argentina's debt can possibly be compared with the debt of Gringo land. It all comes down to credit worthiness. What is Argentina's FICO score? Everyone experiences hard times. For Argentina, it has been an ongoing soap opera for fifty years. That is where I have a problem with understanding the mind set of the Argentine people. Very proud industrious population, plenty of natural resouces to go around, should be self sufficient in every respect, but..... nothing to show for it. They have had enough revolutions to fill two encyclopedias and nothing changes.

[QUOTE=SteveC]Damman,

I may be naîve but the main reasons why I think Argentina has been such an economic disaster for the last 60 years or so were; lack of democracy, and corruption. From the 30's until 1983 the country never had any kind of democratic government. A succession of military dictatorships, or their friends, forming governments, and the biggest party being excluded from elections, was never going to bring sound economic growth. The fact that the country would win gold if corruption was an Olympic sport doesn't help either. Menen would have won more gold than Michael Phelps.[/QUOTE]If there were easy answers, the solutions would have followed. It is a complex, self-perpetuating and ultimately up to now, an insolvable conundrum. Democracy per se has never existed in the sense of what that means in the USA. Corruption is a result of and not a cause of bad government. The answers lie elsewhere and I suspect part of the current problems have their roots in the policies that are the basis of Peronism. Peronism is a form of Mussolini's Fascist model. It didn't work in Italy before the Second World War and after being adopted by Juan Peron for Argentina, now 65 years later, surprise, surprise, it still doesn't work. Make of that what you will. I don't have the answers but it surely is not corruption and a lack of western democracy.

Argento

I talked a lot about that issue with Argentine people from all over the country (not just Portenos) Even if the answer is rarely clear, since people express first and foremost their frustrations for their own cases, it seems that there is a cultural reason for this situation; nepotism. To get a job, a situation, a privilege, you need to know somebody who has the power to grant you this privilege. Getting a responsability depends less on your technical skills than on your human skills to influence people. The other cultural reason is to be found in religion. Catholicism favors fatalism, which discharges you from any responsability in case of failure, mystifies poverty while leaving suspicion on quick, oportunistic financial success.

This is a big cultural gap with the USA, where what counts most is visible success and each individual is responsible for his fate (dominant protestant values)

Different philosophies for a similar effect: abyssal debt.

[QUOTE=MataHari]I talked a lot about that issue with argentine people from all over the country (not just portenos) Even if the answer is rarely clear, since people express first and foremost their frustrations for their own cases, it seems that there is a cultural reason for this situation; nepotism. To get a job, a situation, a privilege, you need to know somebody who has the power to grant you this privilege. Getting a responsability depends less on your technical skills than on your human skills to influence people. The other cultural reason is to be found in religion. Catholicism favors fatalism, which discharges you from any responsability in case of failure, mystifies poverty while leaving suspicion on quick, oportunistic financial success.

This is a big cultural gap with the USA, where what counts most is visible success and each individual is responsible for his fate (dominant protestant values)

Different philosophies for a similar effect: abyssal debt.[/QUOTE]Mata, very insightful observation: Catholicism. It is that common thread throughout South America. Some things never change, woes of religion throughout everyone's history.

Thanks

Argentine state just bought the broadcasting rights for the local soccer games for 600 milion peso a season. Seems to me it's a rather expensive way to fight back against Clarin.

The explanation of the president was also hillarious, she said that the broadcasting of soccer games makes democracy stronger because everybody can watch soccer now, not just the ones that can pay for it. She also made a daily reference to the 30.000 desparecidos when the offical death-toll of the Argentine state is little over 8900.

[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.