Economy Why Argentina Faces an Economic Crisis. Again (Wall Street Journal)

[earlyretirement]

Article in today's WSJ. Nothing we don't already know.

https://www.wsj.com/articles/why-argentina-faces-an-economic-crisis-again-11569422388?mod=hp_lead_pos5

 

[Frisel]

So... Fernández will save us all right and lead Argentina to an economic and cultural resurgence?

 

[earlyretirement]

So... Fernández will save us all right and lead Argentina to an economic and cultural resurgence?

Ha. Yeah, the next few years is going to be one HUGE cluster?#!*.

 

[GerardX]

It always amazes me when I read these articles they have some understanding of the situation but no understanding of life in Argentina.

Why would any Argentinian put any money in the bank here? Imagine if you had a lot of money in the bank here 24 months ago. With the peso issues and inflation, you would have 60% of your money just like that. So how is the government going to fix that? Argentinians have no confidence in their banks or the economy and really that is wisdom.

A large percentage work in black and pay no taxes. Why? Salaries are so low, to begin with.

Argentina suffers a huge citizen no confidence in the government issue and you cannot fix that over night it is set in their thinking.

These are the things the international firms have no clue about they have never lived here they have no idea what life is like for an Argentinian.

 

[PoulCess]

Good old Paywall. Can't beat it for denying
people your news. Sigh.

 

[SerchMinm]

Good old Paywall. Can't beat it for denying
people your news. Sigh.

Print is disappearing. Newspapers need to make a profit. Is that unreasonable?

 

[earlyretirement]

It always amazes me when I read these articles they have some understanding of the situation but no understanding of life in Argentina.

Why would any Argentinian put any money in the bank here? Imagine if you had a lot of money in the bank here 24 months ago. With the peso issues and inflation, you would have 60% of your money just like that. So how is the government going to fix that? Argentinians have no confidence in their banks or the economy and really that is wisdom.

A large percentage work in black and pay no taxes. Why? Salaries are so low, to begin with.

Argentina suffers a huge citizen no confidence in the government issue and you cannot fix that over night it is set in their thinking.

These are the things the international firms have no clue about they have never lived here they have no idea what life is like for an Argentinian.

I agree many of these international publications have NO understanding of what life is really like in Argentina. Many have in theory or in principle how things SHOULD be but they don't have a true appreciation for how complex (i.e. screwed up) life is in Argentina. Fundamentally the country is broken and the reality is that it doesn't really matter who is in office. Things can't be solved for the long term here without really blowing up the entire system and starting all over. (legal system, banking system, judicial system, labor laws, taxes, etc). Short of this, I don't see things over the long term EVER working in Argentina.

Argentina will always be a beautiful country that in-between relatively short periods of some stability having major crises. It's been this way for a long time and will most likely always be like this because the locals refuse to take the pain needed to permanently fix the long term issues. They will never allow it and therefore the system will always be broken.

I'd only disagree about the people having cash in the bank. Honestly under Macri I had faith in the banking system and it was the first time that I didn't really worry about having cash (US dollars) in my US dollar account. A few months ago I sold one of my apartments and I couldn't close personally and I had a friend close for me. He deposited $300,000 US in my account down in Argentina. I was in no rush to go down to Argentina to transfer it out as I was busy traveling. I would have NEVER done this under CFK era. But really under Macri I had the confidence that my money would be ok in the local banking system. In living and working in Argentina since 2001 the first time I can say that.

Fortunately a few weeks ago just before this big blow up with the primary election, I went down and transferred ALL of the cash out of Argentina to the USA. Just in time as they enacted limits/currency controls a few weeks after I sent the funds out. And again, it was very simple and easy to wire the funds out and relatively cheap (0.5%). I had a bad feeling a few weeks before the primary election and booked a flight down there to transfer the funds out and glad that I did.

Now I wouldn't dream of keeping any significant funds in my US dollar account there. But lots of people (like the guy in the WSJ article) had faith in the banking system to keep US dollars in their US dollar account at the local banks before this latest blow up. You will NOT see this happen under the new regime.

Print is disappearing. Newspapers need to make a profit. Is that unreasonable?

I agree. Print is dead. I don't have any problem with all of these media companies charging. WSJ constantly has deals. You can sign up for $1 for 12 WEEKS of WSJ. You can cancel before it ends if you want and sign up with another email. They make it really easy.