I'm Argentinian. This is cultural. Not from today, nor yesterday. It has always been like that.
Every single other country I've travelled so far thinks in its own currency while in Argentina
we have pesos which are really a facade to US dollars.
What we see today already happened. Many times. Is the same old story repeating over and over again.
It will repeat in the future, for sure. Argentina has 4 or 8 years governments but we have no state.
There's absolutely no coherent and/or constant consensus where to head the country from let say today to 20 or 30 years.
It's always the patch for today and for tomorrow. Zero serious politics. Every politician wants to fill
its own pockets. They laugh in our face despite the fact we're at the verge of an hyper-inflacionary process.
They don't care. Never did. Never will.
I clearly remember: in 2000-2001 one dollar was around 1,45 pesos. Today?
One US dollar 500 pesos and going up. Without limit. Even a child in elementary school knows that our
currency doesn't exist. It is literally money that you need to burn today, right now.
We can't save money unless you find shelter in another currency, is fucking obvious!
How do argentinian politicians suppose to convince people to trust in a currency that day after day loses
its value? I know! Raising to 97% interest rate, right?
What do we have? Governments stepping in and out which if they don't like what has been done so far, will undo things,
regardless whatsoever. They will satisfy their agenda, their pockets. Every single government does the same.
One step forward two steps back. No economical plan at all. We have been with this inflation process forever.
On the other side it is a really sad story because we have beautiful country and we have everything to become
a developed country. We just have these eternal scumbags that keep doing nothing more than harm to our country.
"There's absolutely no coherent and/or constant consensus where to head the country from let say today to 20 or 30 years."
mmm, quite the opossite, there's is an obvious cabal of private and state actors pushing relentlessly for more inflation, more fiscal deficit, actually creating the cycles you mention.
This not cultural, this a plan, a method, for a clear benefit: cheap dollars financed by the BCRA, this entity - playing along with the Minister of Economy - pushed by the mentioned cabal of political and economic actors to continuously create and sustent the required measures to keep the inflation increasing till the cycles ends (hyperinflation),
and they cash out all the pesos and dollars they amazed during the cycle by buying very very cheap dollars first - this is ongoing, you can see it playing it right now in the argentine markets - but mostly by massive adquistion of cheap assets valued in pesos (giant holdings, thousands of otherwise valuable stock market stuff, sold by penies by investor trying to cut their loses having missed the chance to get out before the cycle's end), acquired in dollars cheaply gotten previously.
Then cycle restarts.
Most of the assets are kept for a while, till the economy jumps back from nothing to something, and those assets got revalued to a lot more of their adquistion prices because of the expected exponential grow of consumerism - and earnings - financed with a new wave of money printing by the BCRA and new dollars now available - through refinanced debts- in the same BCRA (this is the mentioned cycle restarting).
How is inflation or fiscal deficit helping private sectors?
The only governments that has cheap (read official) and expensive (read real) are the peronist governments.
The problem is (besides corruption and not fit for the roles) that we keep giving money for "free" to anyone.
Just an example, we have to hire people to keep company of my dad. He is fine, but just forgets things, so he might just forget to turn off the oven.
One of the girls who has been with him the most time told me, "my sister has 3 kids, between the plans (money from the gov) that she has, the one that her husband has, they don't need to work. If they want to buy something more expensive, they work some days, and make the difference. The rest of the time they scratch their balls".
Given that knowledge, why does any business use Pesos? Why not use USD only? If someone buys in Pesos because the state forces acceptance of it, charge price for it and immediately convert to USD. Touch pesos only momentarily.
This is bad because Argentina loses monetary control to a foreign state, but that's a much better solution than using toilet paper.
The thing I find odd, is that even greedy capitalists know that, and powerful greedy self serving capitalists (I'm being overly cynical here to make a point) will want a 'stable currency' because these shenanigans do not benefit anyone.
The only people that can survive money printing are a very, very small number of politicians, how is there not a revolution backed by all sorts of groups? I find this odd.
Because most people get paid in pesos and access to USD is controlled by the government. And probably because US banks would not give loans in dollars to argentine businesses.
The Argentine government has severely restricted the rate at which people can convert ARS to USD. I'm not sure the current limit, but a while back it was something like $200/month for most individuals. Not sure about the restrictions on businesses. Greatly messed up my mother-in-laws plans to visit us in the US.
Businesses do use USD whenever they can. There's some mechanisms available to get USD, but that involves shady suppliers or very expensive market rates. But the issue is that everyday expenses are in pesos, so, it's usually not practical.
"how is there not a revolution backed by all sorts of groups?"
This already happened across the decades by different groups inside and outside the law, but the cabal of private and state actors that thrives on inflation cycles controls the outcome of those movements and takes back the ownership of the government eventually (even few months after some groups got "decisive success" influencing the change of pro-inflation policies).
Social control make the rest of the work. Most of the citizens are just used to live in poverty - likewise some Africa countries in the 70s,80s - and have no will to organize themselves, nor to embrace any kind of overthrowing of the cabal.
Some even got to the government, like Macri, but didn't get much farther, eventually becoming just another puppet of the cabal, effectively sustaining - albeit conceived from the general population by extensive use of propaganda and disinformation campaigns- the policies and measures required to continue and/or make the cycle of inflation continue towards the hyperinflation goal (the "cash out moment" for many of the cabal's long term "investors" and/or members).
I see article after article saying the government is doing it wrong, too little too late, etc. I have yet to read about a proposed solution to Argentina's economy. Any good resources about it? I only have first hand experience with Brazil's URV solution (that worked pretty well but many people on HN have told me it wouldn't work with Argentina).
I have yet to read about a proposed solution to Argentina's economy.
It's not that complicated. The government needs to balance its budget. Continually borrowing money -- from the central bank when nobody else wants to lend any -- is inevitably going to inflate the currency.
Unfortunately, while this is the only economically feasible solution, it's not a politically feasible solution.
A state needs money in circulation to operate (which comes from debt usually), and, it needs money to pay for stuff while it's in distress.
'Balanced Books' is like asking a cancer patient to leave the hospital and 'get a job!'.
Something needs to be done for 'full restoration of confidence' - and while 'balanced books' will do that, it will kill the economy in the meantime.
Probably getting rid of corruption, then getting rid of obvious waste, then having maybe a period of 'dollar pegging' and outside observance of the Central Bank and maybe some economic oversight as well from Europe and USA ... might help.
Sort of like a giant 'drug rehab program' with observers and transparency etc.
I suggest a lot of the system is broken and a lot of pieces within it need to be fixed. It's very hard to pull a drug addict off of a drug, the entire body is addicted down to the cellular level.
Argentinian here. The solution is to absolutely destroy peronism and whatever comes close to (proteccionism, false socialism, control on every fucking thing imaginable, blatant populism), it corrupts everything it touches, it rots all foundations, every solution to a problem, even if it's been proven to work 100% everywhere, if you add peronism it will make it not work, how? You wouldn't understand, you have to be an argentinian to get it. Somehow these pieces of shit (sorry I don't know another way to call them) break all they touch, they think they're the true solution but the have been in the government for the past 70+ years...
You want a solution? Free market (even a simple notebook, nothing fancy, costs a fortune), control nothing, destroy all the stupid fucking taxes we have that once were "temporary" and here we are still having to pay them, let people improve their businesses (as of today, if you want to import machinery you have to pay an absurd amount, which leads to small businesses stuck).
Desgraciadamente Argentina, un país hermoso, con gente maravillosa, ha estado en manos de poderosas fuerzas políticas que han destrozado el país a través de décadas de afanar, subyugar y controlar. Lo único que les importa a esos reverendos HDP's es mantener el poder. Y ahora le están vendiendo el país a China. Genial la idea. No?
Interesting that there's a thread about problems in Argentina. I posted something about this on another conversation earlier today. It was violently and mercilessly downvoted and flagged, which is normal for HN. Why? Because leftists in the US don't want to hear the truth about the garbage they have come to believe through indoctrination.
People in the US are so ignorant about history of other countries, and, in particular, Latin America, that they are solidly marching in a direction to make all the mistakes history has proven to destructive to societies.
Schools, universities, in the US are teaching hatred of free market concepts. They are indoctrinating kids into actually believing things that have been proven, time and time again, to be destructive to society. These are the kinds of things have have been happening in places like Argentina, Chile, Mexico, Ecuador, Colombia and nearly every country in Latin America for decades.
In fact, I tell my friends that places like Argentina are like a time machine for the US. If you study what happened there at various times it is impossible not to draw parallels to what has been happening here for a decade or two.
As I mentioned in my the post linked above (flagged, so I don't know if anyone can read it), my parents had business in Argentina and so I lived there a number of years when I was a teenager. I saw the transition into the military regime and everything that went with it.
I also say in that post that if you actually ask people who have lived in such countries how they feel, the last thing they are going to say is that big government control of everything, high taxes and all the crap being pushed here in the US are things they enjoyed. What you will typically hear is exactly what you said: Free market is the best thing for any society.
If people stop lending to the government and stop using the currency so that gov. can't print anymore, then that problem goes away.
Also, worth noting that all succesfully countries spend more than they take in. US, Canada, UK, France, especially Japan. They just structure it differently.
Put another way, in Japan, they don't print money to debauch the currency, they just borrow from retirees under weird terms that don't make sense.
Ultimately, the net quality of life will wash out the accounting, but the difference is if investments are made rationally be actors - and - the system 'believes' that it works and upholds it. Especially outside parties who continue to value the currency on some level.
Simply by 'losing the faith' of outside parties, everything can go downhill and break in ways that even our own economies would break if that happened - so sometimes it's hard to tell what's really happening.
For this reason, countries like Russia have to hoard gold, run surpluses, keep a fat current account, so that when the 'system loses trust' in a huge way aka 'sanctions' - they can stay alive without the need for international credit.
So this simplistic 'balance the books' approach isn't really it.
It's more like: 'everyone has to act responsibly and rationally and especially not be corrupt' - in the state, private sector, everywhere - including voters. This is a nuanced argument though. Not very populist.
It's hard to do that over the long term. One of the advantages of having your own currency is that you can use it to manage the economy. During recessions a central bank can buy bonds from the government for pesos that they can use to prop up the economy in a downturn. When the currency is not your own then that's not possible so recessions are deeper and more painful. I suspect that's why argentina decided to depeg it to the dollar. They probably had a nasty recession that they hoped that by issuing more currency they could fix. But they could not do that while the peso was peg to the dollar.
At least one presidential candidate going into the next election has proposed dollarization as (part of) a way out. I don't know how likely he is to win or his other policy positions though.
He's (Javier Milei) been in the rise for the past few years, I really don't know if he's going to win, but I do hope so, even if he's not my preferred Libertarianism candidate.
The interest rate is not high enough to beat inflation. Generally speaking the interest rate has to be at or slightly above the inflation rate minus the desired inflation rate for the amount of time it takes for it to start coming down. Right now they are just chasing inflation rather that combating it. Chasing inflation will eventually lead to a currency collapse and a reissuing of the national currency. This has happened before. Too bad, Argentina has a fundamental problem that they have never addressed. That problem is what they need to fix. If they don't there will always be a never ending cycle of inflation and currency collapse.
I don't know enough to know the problem but I suspect the problem is related to lack of independence of the central bank to protect the Argentinian peso. It's easier, at the moment, to issue more currency rather than to deal with whatever economic problem pops up. A central bank that's not independent will always do what's politically desired which always leads to currency issuing, therefore inflation.
It's sad. The country has so much potential that they can not take advantage of due to the never ending economic problems.
Six months ago an ex National Minister of Economy and current governor of Buenos Aires province posted on Twitter that current levels of money printing does not contribute to inflation.
Crypto has been playing a decisive role as it provides new opportunities for anyone to have access not only to harder assets, but to more economic freedom.
Companies like belo.app and others are among the tools anyone, not experts, can use to hedge against terrible economic decisions from the government.
Readit News
What we see today already happened. Many times. Is the same old story repeating over and over again. It will repeat in the future, for sure. Argentina has 4 or 8 years governments but we have no state.
There's absolutely no coherent and/or constant consensus where to head the country from let say today to 20 or 30 years. It's always the patch for today and for tomorrow. Zero serious politics. Every politician wants to fill its own pockets. They laugh in our face despite the fact we're at the verge of an hyper-inflacionary process. They don't care. Never did. Never will.
I clearly remember: in 2000-2001 one dollar was around 1,45 pesos. Today? One US dollar 500 pesos and going up. Without limit. Even a child in elementary school knows that our currency doesn't exist. It is literally money that you need to burn today, right now.
We can't save money unless you find shelter in another currency, is fucking obvious! How do argentinian politicians suppose to convince people to trust in a currency that day after day loses its value? I know! Raising to 97% interest rate, right?
What do we have? Governments stepping in and out which if they don't like what has been done so far, will undo things, regardless whatsoever. They will satisfy their agenda, their pockets. Every single government does the same. One step forward two steps back. No economical plan at all. We have been with this inflation process forever.
On the other side it is a really sad story because we have beautiful country and we have everything to become a developed country. We just have these eternal scumbags that keep doing nothing more than harm to our country.
mmm, quite the opossite, there's is an obvious cabal of private and state actors pushing relentlessly for more inflation, more fiscal deficit, actually creating the cycles you mention.
This not cultural, this a plan, a method, for a clear benefit: cheap dollars financed by the BCRA, this entity - playing along with the Minister of Economy - pushed by the mentioned cabal of political and economic actors to continuously create and sustent the required measures to keep the inflation increasing till the cycles ends (hyperinflation),
and they cash out all the pesos and dollars they amazed during the cycle by buying very very cheap dollars first - this is ongoing, you can see it playing it right now in the argentine markets - but mostly by massive adquistion of cheap assets valued in pesos (giant holdings, thousands of otherwise valuable stock market stuff, sold by penies by investor trying to cut their loses having missed the chance to get out before the cycle's end), acquired in dollars cheaply gotten previously.
Then cycle restarts.
Most of the assets are kept for a while, till the economy jumps back from nothing to something, and those assets got revalued to a lot more of their adquistion prices because of the expected exponential grow of consumerism - and earnings - financed with a new wave of money printing by the BCRA and new dollars now available - through refinanced debts- in the same BCRA (this is the mentioned cycle restarting).
The only governments that has cheap (read official) and expensive (read real) are the peronist governments.
The problem is (besides corruption and not fit for the roles) that we keep giving money for "free" to anyone.
Just an example, we have to hire people to keep company of my dad. He is fine, but just forgets things, so he might just forget to turn off the oven.
One of the girls who has been with him the most time told me, "my sister has 3 kids, between the plans (money from the gov) that she has, the one that her husband has, they don't need to work. If they want to buy something more expensive, they work some days, and make the difference. The rest of the time they scratch their balls".
That is what populism gets you.
I'm Argentinian. And I agree with you, and that's why I left to live somewhere else ten years ago.
But. When I've said this in the past the answer is, why would we want to be that? People don't care.
It is the classic joke of Luis Landriscina: Para qué?
https://youtu.be/5qJLElHpfDk
This is bad because Argentina loses monetary control to a foreign state, but that's a much better solution than using toilet paper.
The thing I find odd, is that even greedy capitalists know that, and powerful greedy self serving capitalists (I'm being overly cynical here to make a point) will want a 'stable currency' because these shenanigans do not benefit anyone.
The only people that can survive money printing are a very, very small number of politicians, how is there not a revolution backed by all sorts of groups? I find this odd.
This already happened across the decades by different groups inside and outside the law, but the cabal of private and state actors that thrives on inflation cycles controls the outcome of those movements and takes back the ownership of the government eventually (even few months after some groups got "decisive success" influencing the change of pro-inflation policies).
Social control make the rest of the work. Most of the citizens are just used to live in poverty - likewise some Africa countries in the 70s,80s - and have no will to organize themselves, nor to embrace any kind of overthrowing of the cabal.
Some even got to the government, like Macri, but didn't get much farther, eventually becoming just another puppet of the cabal, effectively sustaining - albeit conceived from the general population by extensive use of propaganda and disinformation campaigns- the policies and measures required to continue and/or make the cycle of inflation continue towards the hyperinflation goal (the "cash out moment" for many of the cabal's long term "investors" and/or members).
It's not that complicated. The government needs to balance its budget. Continually borrowing money -- from the central bank when nobody else wants to lend any -- is inevitably going to inflate the currency.
Unfortunately, while this is the only economically feasible solution, it's not a politically feasible solution.
A state needs money in circulation to operate (which comes from debt usually), and, it needs money to pay for stuff while it's in distress.
'Balanced Books' is like asking a cancer patient to leave the hospital and 'get a job!'.
Something needs to be done for 'full restoration of confidence' - and while 'balanced books' will do that, it will kill the economy in the meantime.
Probably getting rid of corruption, then getting rid of obvious waste, then having maybe a period of 'dollar pegging' and outside observance of the Central Bank and maybe some economic oversight as well from Europe and USA ... might help.
Sort of like a giant 'drug rehab program' with observers and transparency etc.
I suggest a lot of the system is broken and a lot of pieces within it need to be fixed. It's very hard to pull a drug addict off of a drug, the entire body is addicted down to the cellular level.
You mean in terms of winning the next re-election? Or because other politicians will not approve new laws to control that?
If the people have to starve for X years, I doubt it's a good solution but I don't know if that's what you mean by politically.
You want a solution? Free market (even a simple notebook, nothing fancy, costs a fortune), control nothing, destroy all the stupid fucking taxes we have that once were "temporary" and here we are still having to pay them, let people improve their businesses (as of today, if you want to import machinery you have to pay an absurd amount, which leads to small businesses stuck).
Desgraciadamente Argentina, un país hermoso, con gente maravillosa, ha estado en manos de poderosas fuerzas políticas que han destrozado el país a través de décadas de afanar, subyugar y controlar. Lo único que les importa a esos reverendos HDP's es mantener el poder. Y ahora le están vendiendo el país a China. Genial la idea. No?
Interesting that there's a thread about problems in Argentina. I posted something about this on another conversation earlier today. It was violently and mercilessly downvoted and flagged, which is normal for HN. Why? Because leftists in the US don't want to hear the truth about the garbage they have come to believe through indoctrination.
Not sure you can still read it, here's the link:
https://news.ycombinator.com/item?id=35951446
People in the US are so ignorant about history of other countries, and, in particular, Latin America, that they are solidly marching in a direction to make all the mistakes history has proven to destructive to societies.
Schools, universities, in the US are teaching hatred of free market concepts. They are indoctrinating kids into actually believing things that have been proven, time and time again, to be destructive to society. These are the kinds of things have have been happening in places like Argentina, Chile, Mexico, Ecuador, Colombia and nearly every country in Latin America for decades.
In fact, I tell my friends that places like Argentina are like a time machine for the US. If you study what happened there at various times it is impossible not to draw parallels to what has been happening here for a decade or two.
As I mentioned in my the post linked above (flagged, so I don't know if anyone can read it), my parents had business in Argentina and so I lived there a number of years when I was a teenager. I saw the transition into the military regime and everything that went with it.
I also say in that post that if you actually ask people who have lived in such countries how they feel, the last thing they are going to say is that big government control of everything, high taxes and all the crap being pushed here in the US are things they enjoyed. What you will typically hear is exactly what you said: Free market is the best thing for any society.
Dead Comment
Dead Comment
Also, worth noting that all succesfully countries spend more than they take in. US, Canada, UK, France, especially Japan. They just structure it differently.
Put another way, in Japan, they don't print money to debauch the currency, they just borrow from retirees under weird terms that don't make sense.
Ultimately, the net quality of life will wash out the accounting, but the difference is if investments are made rationally be actors - and - the system 'believes' that it works and upholds it. Especially outside parties who continue to value the currency on some level.
Simply by 'losing the faith' of outside parties, everything can go downhill and break in ways that even our own economies would break if that happened - so sometimes it's hard to tell what's really happening.
For this reason, countries like Russia have to hoard gold, run surpluses, keep a fat current account, so that when the 'system loses trust' in a huge way aka 'sanctions' - they can stay alive without the need for international credit.
So this simplistic 'balance the books' approach isn't really it.
It's more like: 'everyone has to act responsibly and rationally and especially not be corrupt' - in the state, private sector, everywhere - including voters. This is a nuanced argument though. Not very populist.
I don't know enough to know the problem but I suspect the problem is related to lack of independence of the central bank to protect the Argentinian peso. It's easier, at the moment, to issue more currency rather than to deal with whatever economic problem pops up. A central bank that's not independent will always do what's politically desired which always leads to currency issuing, therefore inflation.
It's sad. The country has so much potential that they can not take advantage of due to the never ending economic problems.
Continuously inflating the money supply kills an economy and slowly destroys its society.
Isn't it exactly what FED and ECB have been doing post 2008 till 2022? The infamous QE? The reason you can't afford a home anymore?
https://twitter.com/kicillofok/status/1523728930251091968