Argentine Economy

[Gandolf50]

Large normal coffee 70$.

Yuppie coffees as high a 335$.

Regular coffee with a ham and cheese on toast 145$.

Prices as of today, hope this helps.

[Slipknot]

Thanks. Yes, I am trying to get a grip on real prices. So, if I go to La Biela and am having my doble cortado and demi lunas, whilst contemplating getting some honey on my stinger, what are the prices? I have plenty of references from past time in Bs As. I am more curious to know if a cup of coffee is $0.50 or $2.00. How much is a pack of smokes? What is 30 mins at a privado?

Cheers.

FYI -.

Of the three Independent girls I have seen recently, two have kept their price the same as 8 months ago and one increased her rates by about 15%, three months ago (she is high end). I did not question it, but would suspect it is due to the peso drop. And this was before the additional drop last week. I have also seen a few changes in restaurant prices, but to be honest, I don't pay that much attention to what each item costs.

Not sure if that helps you or not. Cheers!

[Wild Walleye]

Hey, W Squared .

I see that youre trying to get a handle on BsAs real-world inflation too.

What I do is get on the Coto Grocers website and look at the price of food staples (frequently updated). I then compare those prices to what I was paying during Dec of 17 (peso/us$ @ 19). For me, the price of domestic cheese, orange juice, milk, Coke/Pepsi is a good indication. I buy a lot of this during extended stays. Notwithstanding sales prices, I find that these items are pretty much the same as they were in Dec.

If you dont already have a price reference point, you can always start one. E.g. On day one note the Coto grocery item price, and compare it that price on, say, day 45.

Hope it helps!

Thanks. Yes, I am trying to get a grip on real prices. So, if I go to La Biela and am having my doble cortado and demi lunas, whilst contemplating getting some honey on my stinger, what are the prices? I have plenty of references from past time in Bs As. I am more curious to know if a cup of coffee is $0.50 or $2.00. How much is a pack of smokes? What is 30 mins at a privado?

Cheers.

[Macgoo]

Hey, W Squared .

I see that youre trying to get a handle on BsAs real-world inflation too.

What I do is get on the Coto Grocers website and look at the price of food staples (frequently updated). I then compare those prices to what I was paying during Dec of 17 (peso/us$ @ 19). For me, the price of domestic cheese, orange juice, milk, Coke/Pepsi is a good indication. I buy a lot of this during extended stays. Notwithstanding sales prices, I find that these items are pretty much the same as they were in Dec.

If you dont already have a price reference point, you can always start one. E.g. On day one note the Coto grocery item price, and compare it that price on, say, day 45.

Hope it helps!

I believe that we are starting to see this take place. The currency has been crushed, recently.

What is happening to prices? What are you guys paying for a cup of coffee, empenadsas and poontang?

[Wild Walleye]

...and in order for things to "normalize" the devaluation of the peso needs to exceed inflation...

I believe that we are starting to see this take place. The currency has been crushed, recently.

What is happening to prices? What are you guys paying for a cup of coffee, empenadsas and poontang?

[Wild Walleye]

Plus bureaucratic and legal issues. I looked at taking a stake in a business down there about a year after Macri came in. Small deal, nothing like a forex play, but oh boy the fuckery. Lets just say the accounting was ... Artistic, and not because they were bad guys, but hiding money and greasing skids are accepted parts of competition.

I still dig around while I'm there, if only to make the trip a write off and get plugged into the city. But anything that matters involves significant inside baseball and most official interactions are an adaptation of "Esprando a Godot." Sorry Argentina, I'm not sophisticated enough to price that sort of risk.

That said, there are still strong underlying strengths, and by underlying, I mean deep in the bucket. Highest regional broadband penetration, a relatively educated population, a ton of unexploited minerals, oil, and gas. 50% of the country doesn't have a bank account, Still the most culturally significant country in South America. How they unlock all that I have no idea.

Broadband is nice, but not the great equalizer it was promised to be.

As for natural resources, Brazil owns most of Argentina's.

[Moore]

That said, there are still strong underlying strengths, and by underlying, I mean deep in the bucket. Highest regional broadband penetration, a relatively educated population, a ton of unexploited minerals, oil, and gas. 50% of the country doesn't have a bank account, Still the most culturally significant country in South America. How they unlock all that I have no idea.

Except broadband, I think that’s been the issue with Argentina for the last 100 years.

[Wild Walleye]

Plus bureaucratic and legal issues. I looked at taking a stake in a business down there about a year after Macri came in. Small deal, nothing like a forex play, but oh boy the fuckery. Lets just say the accounting was ... Artistic, and not because they were bad guys, but hiding money and greasing skids are accepted parts of competition.

I still dig around while I'm there, if only to make the trip a write off and get plugged into the city. But anything that matters involves significant inside baseball and most official interactions are an adaptation of "Esprando a Godot." Sorry Argentina, I'm not sophisticated enough to price that sort of risk.

That said, there are still strong underlying strengths, and by underlying, I mean deep in the bucket. Highest regional broadband penetration, a relatively educated population, a ton of unexploited minerals, oil, and gas. 50% of the country doesn't have a bank account, Still the most culturally significant country in South America. How they unlock all that I have no idea.

Let me know when you are going back to Bs As. Maybe we should meet up.

I bought and sold a company in Argentina in the late '00s. My local lawyers and accountants were excellent. We made a ton of money. I have looked at acquiring several businesses in Argentina, since Macri was elected, but I have a very strict discipline when evaluating ops. I think that this currency blow up is part of what I have been waiting for.

[Jhskiier]

...and in order for things to "normalize" the devaluation of the peso needs to exceed inflation...

Personally, I prefer Argentinian women to Brazilian women. I really like the old world feel of Bs As, the wine, the food and the culture. I'd be willing to pay a premium for those things.

Despite the IMF life-line, things (from a currency perspective) are going to get worse in Argentina, before they get better. Additionally, as previously discussed, despite currency devaluation, the inflation of prices has offset much of the devaluations, therefore, things haven't actually become much cheaper. That means that the scales haven't been tipped in favor of the foreign investor (something that needs to happen in order to entice foreign investment).

Plus bureaucratic and legal issues. I looked at taking a stake in a business down there about a year after Macri came in. Small deal, nothing like a forex play, but oh boy the fuckery. Lets just say the accounting was ... Artistic, and not because they were bad guys, but hiding money and greasing skids are accepted parts of competition.

I still dig around while I'm there, if only to make the trip a write off and get plugged into the city. But anything that matters involves significant inside baseball and most official interactions are an adaptation of "Esprando a Godot." Sorry Argentina, I'm not sophisticated enough to price that sort of risk.

That said, there are still strong underlying strengths, and by underlying, I mean deep in the bucket. Highest regional broadband penetration, a relatively educated population, a ton of unexploited minerals, oil, and gas. 50% of the country doesn't have a bank account, Still the most culturally significant country in South America. How they unlock all that I have no idea.

[Wild Walleye]

If inflation is outpacing the peso...that is one xxxxload of inflation. Ouch.

...and in order for things to "normalize" the devaluation of the peso needs to exceed inflation...

[Wild Walleye]

Thanks for your detailed input. It was an informative read.

Yes, I was aware that there is an enormous amount of speculation in currency markets. But, I am grateful that my econ professor told me long ago, that I couldn't speculate on those things. Otherwise, I would have tried to do it at some point. As a result, I would have most certainly lost money like I have with any purely speculative investment I have attempted.

So, from the sound of things it, the situation will need to get much worse before young women are selling their bodies at discount prices, due to the lack of income or employment opportunities. But, Brazil is appearing to have a bit of a currency crisis, too. Maybe the pickings will be better there?

Personally, I prefer Argentinian women to Brazilian women. I really like the old world feel of Bs As, the wine, the food and the culture. I'd be willing to pay a premium for those things.

However, I suspect that most of the developing economies, that are not currently rocking and rolling (from an economic perspective), are going to face an uphill battle, over the next six months and for the foreseeable future. The US Fed will raise rates at least another two times, this year. That probably means another .50% on the Fed Funds Rate. That will continue the "capital flight" mentioned in my previous post.

Despite the IMF life-line, things (from a currency perspective) are going to get worse in Argentina, before they get better. Additionally, as previously discussed, despite currency devaluation, the inflation of prices has offset much of the devaluations, therefore, things haven't actually become much cheaper. That means that the scales haven't been tipped in favor of the foreign investor (something that needs to happen in order to entice foreign investment).

Argentina is going to have to take some bitter medicine in order to break the cycle and turn the corner...a corner it had sort of turned with the election of Macri, but truncated by the moods of the markets (and Fed Rate hikes). However, these things take time and patience, two things voters tend to lack. If things go poorly, the Argies will fall back on electing Peronistas and the whole cycle will begin again. The biggest problem with that repugnant form of governance is the economic isolation that it comes with it. The IMF loan will be the last foreign money Argentina sees for the foreseeable future, if it starts to move back towards the Peronistas.

If the country falls back on old populist handout politics, the country will be plunged into an economic decline that will make 2001 look like a cakewalk. Conversely, if the country takes its medicine (eliminate many entitlements and what is effectively an economy-wide write-down of many assets and service in the country via further erosion to the peso) it will be able to begin anew climbing up the slope of economic recovery.

From AP and the local foros, I believe that thing are starting to get less expensive in Argentina, including chicas. However, prices still have a long way to go. IN 2007, I started spending a lot of time in Bs As. An hour romp at 1707 Ste Fe was $39. A similar romp, today is about $52. So, we'll need to see about a 24% drop in prices (AR$33:1USD) to get to back to what I consider the good ole days. The old timers here knew it when it was much better than that.

[Eszpresszo]

With all due respect, it's a good thing that your econ professor wasn't a currency trader.

I hope you don't mind, if I chime in with a few personal observations.

There is a huge global currency spot and futures market based, in large part, upon speculation.

Thanks for your detailed input. It was an informative read.

Yes, I was aware that there is an enormous amount of speculation in currency markets. But, I am grateful that my econ professor told me long ago, that I couldn't speculate on those things. Otherwise, I would have tried to do it at some point. As a result, I would have most certainly lost money like I have with any purely speculative investment I have attempted.

So, from the sound of things it, the situation will need to get much worse before young women are selling their bodies at discount prices, due to the lack of income or employment opportunities. But, Brazil is appearing to have a bit of a currency crisis, too. Maybe the pickings will be better there?

[PirateMorgan]

If inflation is outpacing the peso...that is one xxxxload of inflation. Ouch.

[Gandolf50]

I have a question. Have prices in Argentina shot up as the currency has crumbled? Have you guys on the ground really benefited by this drop? It seems as if you have received a windfall. I am happy for you!!!

Inflation seems to be out pacing the decline of the peso. Most things are cheaper in the states where you are at least earning dollars and not pesos.

[PirateMorgan]

I have a question. Have prices in Argentina shot up as the currency has crumbled? Have you guys on the ground really benefited by this drop? It seems as if you have received a windfall. I am happy for you!!!