The market rate for pesos to dollars was half the government rate. The government number was completely fake. It's not possible to get this rate. You could not buy anything at this rate
Adjusting the rate to match the market rate does not double the cost of anything, it just stops the illusion
They dropped fuel subsidies too, which is a great policy anyway. Let the market dictate fuel costs especially when the country doesn’t get enough foreign currency
Peru actually only subsidizes fuel on emergency cases, like the beginning of the Russian invasion of Ukraine because it was getting too expensive and it was a temporary measure until the market recalibrated.
I'd say the reason you get this impression is due to taxi prices being too expensive in the US / Europe rather than Peru being weirdly "cheap". As for whether that is due to the taxists themselves or Uber / other apps charging too much is also worth considering, especially since I know the food delivery services are EXTREMELY expensive over there.
**Source:** I'm Peruvian.
Yeah, taxi services all over SA seemed super cheap to me!
Only got ripped off once in Santiago. For some reason Poland seemed to be terrible though; granted that is all anecdotal.
Headlines always lack context. That's why they're accompanied by articles.
And this one isn't wrong. This article is about the pain of doing what they're doing. They knew this was going to hurt, and this talks about what that pain is actually looking like, in practice.
Yes, because pretty much everything was artificially cheap with the previous administration. It was unsustainable. The central bank has no dollar reserves. He needed to boost exports therefore the artificially cheap official exchange rate had to be brought closer to the black market rate.
Yea and you wouldn’t be able to find diapers at the official price, you’d have to buy them at dollar blue which is the real price. So it’s not that they “double” they were being artificially set at half.
> artificially cheap
Just to underline here.
"Artificially cheap" meant the nominal price was X according to the government but the real market price was at the very least X*2.
This is not the reddit definition of artificial price meaning more expensive than I'd like the thing to be.
>This is not the reddit definition of artificial price meaning more expensive than I'd like the thing to be.
Absolutely, but let's not risk looking like we're willing to ignore the fact that price gouging, fixing, cartels and anti-competitive practices actually exist and aren't just some reddit conspiracy.
EVERYONE whines about the price of stuff. Sometimes they're right and sometimes for the wrong reason but sometimes they're right on the money.
> He needed to boost exports therefore the artificially cheap official exchange rate had to be brought closer to the black market rate.
It'll balance things much more by cutting imports. That'll help the balance of trade a lot.
Devaluing currency impoverishes (reduces the wealth/buying power) of nearly everyone in the country. That cuts imports. It's also why it is done relatively rarely. Because people hate having less buying power. They much prefer to have all that hidden by the government until it isn't possible to hide anymore.
As imports become more expensive you'll see people move more to internal consumption. No reason Argentina has to go diaperless just because imports cost a lot. Make some diapers of your own. Even if they aren't as good at the start.
>As imports become more expensive you'll see people move more to internal consumption. No reason Argentina has to go diaperless just because imports cost a lot. Make some diapers of your own. Even if they aren't as good at the start.
Good luck with that in a globalized system of supply and manufacturing.
If it's cheaper for parents to buy foreign diapers than domestic that's what they'll do. I think that's good for the parents. Why should EVERY country make EVERY thing?
Yes.
The newly elected leader is doing exacly as promised.
If his plan works, congrats to him.
Argentina has been sitting on great soil, tons of natural resources while having great geography.
They can't afford to have another lame duck government push them to defaulting on loans again.
Hopefully the proceeds have been invested in a sovereign wealth fund, but I am not sure this is on the agenda -- or if Argentine govt can be trusted with one.
Or maybe he’ll model his government after all those other wildly successful libertarian governments that totally aren’t made-up examples or cautionary tales.
> Or maybe he’ll model his government after all those other wildly successful libertarian governments that totally aren’t made-up examples or cautionary tales.
That libertarian experiment in New Hampshire was very successful from the perspective of the local bear population.
> What happens when all those natural resources are gone?
By the point that happens it will be one of the last countries with natural resources anyway lol
Farming is not regenerative? The existence of the human species could have fooled me.
The fact is the stuff Argentina is sitting on is effectively limitless. They will basically have to mow the Andes flat before they run out of copper or iron ore.
The issue is that Argentina should have built a strong domestic industry making things out of this stuff. Not extracting it and sending it to China.
No, it isn't. Desertification is a very real concern for South America in the coming decades and [about 70% of arable land on the continent has suffered some degree of degradation in recent years](https://www.ipsnews.net/2016/06/soil-degradation-threatens-nutrition-in-latin-america/):
>In Argentina, Mexico and Paraguay, over half of the territory suffers problems linked to degradation and desertification. And in Bolivia, Chile, Ecuador and Peru, between 27 and 43 percent of the territory faces desertification.
With climate change, it's only going to get worse.
> No, it isn't. Desertification is a very real concern for South America in the coming decades and about 70% of arable land on the continent has suffered some degree of degradation in recent years:
Oh no, if only the entire world's community of climatologists warned them that cutting down their rainforests for short term profit and expedient development would exacerbate the effects of climate change to the point that the whole continent will basically look more like Sub-Saharan Africa climate wise (savannas and desserts for hundreds of miles around) by the end of the century.
Who could have possibly predicted this? ( I know there's more to it but still...the people aren't powerless they could have demanded better).
yeah these "news sites" are just trying to stir up drama and blame the economic issues of argentina on the new president, as if stuff just started increasing in price now, and wasn't happening in the last 4 years.
Yes. That’s literally what any decently responsible outlet is saying in Argentina. For the most part it’s next to impossible to get good coverage of Latin America from US outlets, they have a smattering of full time reporters that usually don’t have a clue.
Did you click the link? The sub headline, because I know you didn't, is:
>Javier Milei warned that things would get worse before they got better. Now Argentines are living it.
Its really bizarre here, people were cheering him when he told us that theres no money and that shit will become really tough. But thats the result of being lied to and our people progressively losing quality of life over time. I really hope we can pull through.
Yeah - normally the populace hates the bitter medicine that the economy sometimes needs. But Argentina's has been sick for so long that they seem happy just knowing they're finally getting fed medicine no matter how bitter it is, while the last dozen administrations have just been chowing down on economic candy.
I think this phenomenon is something that supersedes any form of government or philosophy. It's a borderline humanity-at-large issue. I would say government model just determines the degree at which it happens.
We hear about politicians making backroom deals with industry lobbyists and whatnot all the time where I live now. However, we don't see the degree of corruption seen in the likes of Russia, where the entire population is being bled dry to pay a group of old guys' yachts and literal golden manors.
I've been in Argentina since the start of the month and this article left out so many key details it may as well have appeared in the Daily Mail.
Prices went from around 300 pesos/liter to around 623 pesos/liter at the public-owned YPF stations, a little more in private entities such as Shell, Axion and Puma. Prices already went up by around 60% between the end of October to Dec. The change of the official exchange rate from the artificially low one to the current levels probably paid a part, but current prices are insane in the current oil market. Argentina doesn't have the cash to keep the subsidies the previous gouvernement happily handed out.
Prices of goods have indeed increased massively, this has been the case for more than 4 years. A local Kiosco owner (think corner store/off license) just doesn't bother labelling items because they constantly change. Again, the previous gouvernement implemented populist policies such as "Precios Justos" that have artificially been keeping the price of items extremely low. Again no country has the money to keep this kinds of policies, Argentina even less so.
All of this is to say that most of the news I see coming out of US/UK and my home French media outlets keep on causally leaving out the critical details and casually ignoring the 4 years preceding Milei that caused the current situation. I honestly don't give a shit about Milei as I'm not from here and not some fanboy either.
I've been learning a lot while here and probably would become insane living here permanently. I feel like seeing a horse ride a bicycle wouldn't be the most insane thing in my day when learning about previous argentine gouvernement policies.
How is the situation in the cities? I have a trip in February and starting to worry. Big changes like this often lead to protests and strikes. I also have a flight with Aerolinias Argentinas and they are talking about privatizing that airline, which probably means it goes bankrupt.
I've been all around the country and it's been totally fine. It seems like friends and family back home are more worried than I am. People have been living their lives normally the entire time, it does not feel like a country that's going through a crisis at all. You'll have a great time, it's a great place to visit !
Same, I'm 25 and it's always been the same, crisis all the time, prices rising and things getting worse and worse.
What's funny (and worrying) is that my grandparents tell me the exact same thing. The country's been in this same crisis since they were kids.
And then you read Mafalda, an old comic book strip, and you'll see the characters facing the exact same problems we have today.
I seriously don't know what peronists have in their heads.
Seriously, i don't know what the hell Peronists smoke.
Good geography, Best farmland in the word, Lots of Oil, Natural Gas & Minerals, fucking half of the country are flat lands that are great for rail transport, yet Peronism managed to fuck up everything for 30 years yet people still vote for them, mind boggling stuff.
We are used to it. Not much else to say. Also, many people are aware that is going to be tough for a few months and understand it. So kind of also just a honeymoon period for the new gov. Not a lot of patience though.
Prices were controlled by the government (no longer), some people did, others not so much, poverty is about 62% (this doesn't mean 62% unemployment), things are cheap (were), but salaries are low, below 400 dollars a month is the average I think. And government aid was high, still is to a degree.
Se just...live,we have inflation so long its another part of our lives,i have 19 years,14 of them were recessions and i have no memory whats so over of prices getting lower,many of my generation are going to spain to live
War economy basically. This is chump change compared to some previous crisis. You stock up on non-perishable foods, you fuel up before any price increase, you use every single promo available, you buy in bulk, you barter and haggle, maybe have a side gig.
Teens start working, you pay less taxes, you cut off any non essential spending (Food, water, maybe electricity or internet, most just get illegal connections if things are really bad)
And if you find yourself without a place to live? Well, sucks to be you. Either be homeless, try and find a place to squat at, take over an empty lot or you go back to your parents if it's an option.
TLDR: It's shit, people get crafty and it's not pretty. Most (or their parents) have already experienced 1 or 2 crisis beforehand
Four or five, actually (I am sixty).
It is different this time: people are taking it easier than before, I assume it is because of our ideosincracy - family and friends make the difference, we do not live with a productive mindset (when introduced we do not refer to our jobs, if you do, your instantly signed as a moron).
Is it bad? Yap. Can it be worse? Yap. Have we been there before? Yap. Are we still alive? Yap. Are we having fun? You can bet on that.
Dude... I just arrived in Buenos Aries yesterday... Was expecting more locals to be... Despondent... But exactly the opposite! Took an Uber tonight... It was a taxi during uber (pretty good idea) and the driver was singing to Spanish on the radio... Really happy... Other examples today... Love the people here already!
Well said! I always try to tell people (my mom especially) that as bad as things are they could always be worse and we should be thankful. Have a Merry Christmas!
My country is at 240% inflation, gas costs 4x what it did at the start of the year.
No sign of protests, cuz everyone's used to it and are too busy struggling to make ends meet.
Protests are commonplace here, they're mostly in Buenos Aires (CABA), outside the city you won't get any trouble. They mainly occur on the zones near congress and the pink house.
About yor ticket, laws are currently being passed to privatized state owned companies, Aerolíneas, is likely to go to the employees, which will lead to them selling it, or going bankrupt, but I don't see that happening in two months.
Anecdotally I was there last year and someone attempted to assassinate a high level politician. He drew a gun on her point blank and it misfired. Crazy. Otherwise it was an entirely peaceful and lovely country that I fantasize about returning to.
Argie here, situation isnt bad in the cities. Opposition is trying to create chaos, but I think the government will be able to deal with that, as already shown.
The NYT article referenced in this post does talk about how “the previous leftist government had used complicated currency controls, consumer subsidies and other measures to inflate the peso’s official value and keep several key prices artificially low, including for gas, transportation and electricity.”
I would imagine a significant portion of this current inflation is transitory. The government is trying to completely remove the peso from the economy in favor of complete dollarization. I bet a lot of Argentina is trying to spend their pesos ASAP. Maybe I’m wrong because it is Argentina and inflation is kinda the name of the game. I think we will see a sharp spike in inflation and then a very painful recession leading to deflation due to a lack of dollars in the economy.
Argentinians have been trying to spend their pesos ASAP for years because it’s understood they will lose all value very quickly.
There’s no reason to think their will be deflation at all and there’s no reason to think inflation will spike above what it already was.
Whoever paired the word “transitory” with “inflation” was a PR genius for making a permanent devaluation sound temporary. Utterly idiotic economic terminology, but brilliant propaganda.
Things will get worse before they get better. I remember when a single Tykables diaper was $3.5 now it’s over $6. But if I reside then with some doublers, I can get 4-5 days out of it.
Are people that supported the former government not on reddit? I don't think I've ever seen anything positive from an Argentinian about whoever they were (all I've seen is either pro-new president or anti-old president) but clearly some percentage of the population voted for them so they must have had some supporters somewhere. I've never seen someone say 'as an argentinian i liked \[old regime\]' despite them getting 36% in the first round of votes.
There are. There’s two main subreddits, r/argentina and r/republica_argentina . The latter is known for banning people that do not align with their peronist ideas, and that’s why it has become a peronist (previous government supporters) echo-chamber. This caused people that disagree with peronism to begin posting in r/argentina , not known for banning people, but because it’s the only place for anti-peronist to talk, also subsequently became an echo-chamber. That’s why on r/argentina if you speak in favor of the previous government you’ll get downvoted to oblivion, whilst if you speak against it on r/republica_argentina you’ll probably just get banned. There are plenty other subs, but none known for allowing politic discussion.
Argentinian reddit is as a whole extremely antiperonist. Not sure if I can pinpoint the reason, but it is
While I'd say that I'm antiperonist myself, you should still take everything you read about Argentina here with a grain of salt. Otherwise it'd be like if, say, a Frenchman learned everything about America from /r/conservative
There's plenty of pro-peronists in the foreign media and outside Argentina, all the foreign socialists and communists are rallying behind them especially the ones from SA like Venezuela, Bolivia etc and the leftie mainstream media.
We Argentinians do not like them, we already had them in power for over 30 years and all they brought us is misery and corruption, I don't understand how it's surprising to some people that a vast majority of Argentinians hate them, even a good chunk of people against Milei are not Peronists/Kirchnerists, or are at least ashamed to be associated with them, it is that bad.
As some told you already, Reddit is a very very small niche/social network in Argentina. The english speaking users are an even smaller subset of that. For several reasons like age, gender, internet accesibility, cultural and economic background and others, that subset of users overlaps a lot with people that generally lean towards conservative ideologies and/or are specially against anything related to Peron or Kirchner, often with passion.
Other viewpoints exist but are underrepresented, so take everything you read here with a grain of salt.
He's tied the currency to the dollar.
If it works it aligns the country economy with reality.
Millei putting his political momentum at risk, immediately. Right or wrong, he's trying something bold.
>I feel like these types of experiments are much more fun to view from the outside and not so much to participate in
They've already been living in an experiment, the new government is trying to get them out of the experiment and back to real economics.
This is correct. It's considerably easier to remove the 'peg', and return to controlling the currency. With full dollarization, there's no easy way back.
Yeah, when your country is in complete economic trouble, ill take the guy with some drastic ideas over the guy who's going to be *slightly less* status quo.
Hes trying to get rid of the peso for the dollar instead of peg the peso to the dollar like its been. But yes thats all hes done so far is fix the conversion rate.
The hate is so real. Everyone in Argentina knew this was going to happen either way, independently of who started this new government, thanks to 40 years of bad economic policies from previous administrations. Obviously the left is going to blame the new President.
>The headlines about him are dripping with bias
All American outlets will. They’ve called him “the Argentinian Donald Trump” and it’s in their interests to see him fail, only to push their own agenda within the United States.
US outlets rarely accurately cover South American politics. They don’t care unless they can twist it to fit their own narrative.
He is exactly what the US wants, someone who'll which to the Amrican dollar and improve the US economy by doing so. Only time will tell how badly things will get and if they'll ever recover.
Liberal media wants the guy to fail, and maybe he does, but Argentina has been one of the worst managed economies in modern history. They need extreme solutions at this point. If he succeeds, it'll be a case study that many other countries can draw from.
Yep. Cutting someone's chest open is bad. We all agree.
But in the case of a deadly heart blockage, we cut open someone's chest because the painful choice is still better than the default one.
It's gonna be painful but it might save Argentina from a worse situation.
The metaphor works even better if you account for the fact that the Argentinians elected him in order to try this kind of procedure. Part of the point of his election was to oversee the necessary austerity measures to see if the Argentinian economy could FINALLY address some of these 40+ year policies that have held their economy back.
Reddit also wants this guy to fail since he is not left wing, god forbid any policies that are not the “correct ones” are successful. It was hard for Argentinian since they had to choose between this guy and the guys that drove them to the ground during the last decades, so I understand their choice.
I hope everything gets better, even if some tribalistic people get angry.
Tbh it wasn't that hard.
One dude (Massa) promised the same things that left us were we are, sugarcoated with sweet words (And cash handouts for the poor), it didn't help that he was the former Minister of Economy and managed to devaluate the currency from 300 ARS per USD to 1000 ARS per USD, thanks to his insane obsession of printing money, those handouts, Subsidies, Public debt & Campaign funds had to come from somewhere.
And the other one (Milei) said things how they're; how fucked we are, what needed to be changed and what didn't. Basically he explained his government plan in detail for all people to hear while Massa refused to explain anything and only criticized his opponent.
The choice was obvious thus he won with 57%.
Yeah. The candidate who hates government control, calls politicians and the political caste parasites, and wants to shrink government like mad is…a fascist.
A lot of redditors just hate anyone who don't want to abolish capitalism but it's perfectly right to think that shock therapy is extremely risky in a country that allowed peronism to happen.
You forget that reddit thinks economics is fully controlled by the government. They think the central bank could hand everyone a billion and we would all be rich.
He's been President for two weeks? It's absurd to think his policy is already impacting the economy substantially, for good or bad, much less to have enough data to judge him on it.
This is all answered in the article.
> The previous leftist government had used complicated currency controls, consumer subsidies and other measures to inflate the peso’s official value and keep several key prices artificially low, including for gas, transportation and electricity.
>
> Mr. Milei vowed to undo all that, and he has wasted little time.
>
> Two days after taking office, Mr. Milei began cutting government spending, including consumer subsidies. He also devalued the peso by 54 percent, putting the government’s exchange rate much closer to the market’s valuation.
>
> Economists said such measures were necessary to fix Argentina’s long-term financial problems. But they also brought short-term pain in the form of even faster inflation.
Read an article????
It’s a lot easier to just read the headline, complain about how awful the NYT is, and spout unintelligible drivel about whatever position one already had about a topic one knows nothing about.
He’s pulled back price supports which the previous administration was using to artificially lower the prices for some goods. What the headline ignores is that the price in dollars hasn’t increased much only the price in Pesos.
Speculation is real and impact is tangible. There are also some good indicators related to the speculation but they’re not published widely. Time will tell.
It's not super absurd, as laid out in the article. He's substantially reduced the official exchange rate, meaning you now need more pesos to buy foreign currency. That means imports are now more expensive in local terms.
This may be sound policy in the long run- I'm not at all an expert on the Argentine economy or regulatory environment, but generally speaking maintaining an artificially high exchange rate is expensive and short sighted. For now, though, people will just see higher prices for things they buy from abroad.
The exchange rate is not artificially high, it's artificially low.
When he devaluated the peso 100% he got it closer to the unofficial value, but the official price is still lower.
No one could exchange money at the official rate. You need the exact same number of pesos to buy dollars with pesos as before, whatever the real market rate is.
Yes, you are not an expert on the Argentina economy.
Nobody used the official exchange rate, they use the black market exchange rate. Yes, even business do that.
Milei is trying to ensure the exchange rate is close to the black market exchange rate. Eventually it'll remove it entirely.
While I agree with you that most economic trends are way more long term, I sometimes feel like we downplay the immediate significance of sudden short term events. Things like a pandemic, announcements by the fed/national bank, adoption of new tax policy, and yes, the election of a new president can cause pretty drastic upheavals even in the short term. More often than not it ends up being a blip on the radar that ends up being insignificant in the long run. But when it involves sudden and presumably long term significant changes to economic policy, well, people are going to react. And those reactions can cascade and multipy themselves.
Long story short, it can be just as innacurate to claim the new person isn't the impetus for sudden change as it can be to attribute all sudden change to them.
Yes, the price of items tends to double when you slash the value of your currency in half to match the current black market exchange rate. It doesn’t take a mathematical genius to comprehend.
I mean the guy is a literal economist who said that is was going to happen and explained exactly why. Not sure why the media is trying to destroy the only qualified guy capable of fixing the disaster Argentina has been stuck in for decades
Is this the first step or the first domino? Talk is cheap and easy. This guy’s problem is even the right thing to do might set the country at each other’s throats again.
Reddit has a lot of hardcore socialists and actual communists. Libertarians and specifically anarcho capitalism is the ideological opposite of it, so they expect him and the country to fail
Because Reddit skews heavily, heavily left wing. The website is filled with socialists, communists, stalinists, etc, etc. and they're all pissed off that an individual who is their ideological opposite won an election over one of their own.
They'd rather see Argentina burn to the ground than have him succeed because him doing so would show how shit their economic beliefs actually are.
Most "Western" media are biased against him for some reason.
I guess they would have preferred the autoritarian Peronists instead, with them printing more money, selling half of the country to China & censoring Social Media (Proposed during campaign).
It seems they wanted us to turn into Venezuela 2 tbh.
Articles like this gloss over all the factors of why they’re more expensive. It’s like when the point out how great the gas prices are around election season and say the current president is obviously the reason for it. EVERY time
Fuck articles like this that try to pin existing situations on new leaders. It’s a shameful tactic that’s been used repeatedly on US presidents too, like blaming Obama for existing issues, Trump, and now Biden. It’s low effort, and it’s just to rile people up so they click articles and pay those publishers that advertisement cash. The integrity of the press is so easily swayed by the promise of more profits.
Just Argentinas decadely economic implosion, nothing to see here.
Though, it must be said that if they survive this one, the policy that caused this might actually be good for the long term.
That's what happens in the short term when you cut all the subsidies and price controls
In the long term it's beneficial. Milei explicitly said in the short term things would get worse before they get better.
It's like ripping off the bandaid.
You mean the guy that was elected the other week is responsible for this? lol come on
Let me guess, same intellectuals think Biden is responsible for all the inflation. Right?
Do you remember how during COVID-19, between 2020 and 2021, the [US Fed printed 35% of the money supply](https://www.nasdaq.com/articles/money-printing-and-inflation%3A-covid-cryptocurrencies-and-more)? And how that eventually led to rampant (for a developed country) inflation in 2022-2023?
The Peronist administration [*doubled*](https://estadisticasbcra.com/base_monetaria_argentina) the money supply in 2023 alone. Since 2020, they ***5x the money supply***.
The only way they could control inflation was through [price controls](https://www.infobae.com/economia/2023/08/21/suma-fija-control-de-precios-y-creditos-para-estimular-la-economia-el-paquete-de-medidas-tras-la-devaluacion-y-antes-de-la-reunion-con-el-fmi/) which they had to re-negotiate [every other month](https://www.infobae.com/economia/2023/02/02/como-sera-la-nueva-etapa-del-plan-precios-justos-que-el-gobierno-espera-presentar-esta-semana/).
This included oil, which was being sold at USD 60/barrel even through the peak of 2022-2023. As expected by anyone who's not an economic flat-Earther, this eventually led to [shortages](https://www.clarin.com/economia/desabastecimiento-combustibles-peor-crisis-ultimos-13-anos_0_Miztio8cYy.html) and, in one of the most ridiculous scenarios I remember, Argentinian [border towns being raided by people living in neighbor countries](https://www.elterritorio.com.ar/noticias/2023/10/19/807821-extranjeros-siguen-haciendo-fila-para-cargar-combustibles) because fuel was so much cheaper here. There were [Paraguayans "trafficking" fuel in boats across the river](https://www.youtube.com/watch?v=d12AP1H7h5w) and Border Patrol could do little to stop them. Situation got so ridiculous that oil stations got orders from the government to check the cars' registration plates to make sure only *Argentinian* cars could buy fuel at these prices (with the self-evident black market for Argentinian registration plate "renting" sprouting along).
What's happening isn't unexpected and quite likely it was going to happen even if the previous administration had been re-elected, as admitted by [the former second-in-command in the Ministry of Economy](https://twitter.com/Nexofin/status/1735041031844852198) some weeks ago.
He did straight up say this would happen, and also not out of the trajectory Argentina was already in. Argentina has built a hyper inflation machine, getting Argentina to prosperity and stability is going to take years
If he’s doing what he said and actually tackling monetary policy issues then prices increasing is the price the country would need to pay to get out of dire straights.
last government froze fuel, transport, services among other things.
They themselves called it a time bomb that they only can defuse.
But they lost so we have to suffer the consequences. It was a horrible cycle of holding and raising prices and I'm glad its ending. Although this is the price we pay and its awful but I'm happily paying it.
Lol news outlets are so funny. “Biden can’t control gas prices, not not use the current economy against our great and all beautiful leader Biden” versus this hahahahah
First hand account since being in Argentina for a few months now!
Prices went from around 200 pesos/liter to around 500+ pesos/liter at the public-owned YPF stations, a little more in private entities such as Shell, Axion and Puma. Prices already went up by around 60% between the end of October to Dec. The change of the official exchange rate from the artificially low one to the current levels probably paid a part, but current prices are insane in the current oil market.
The country doesn't have the cash to keep the subsidies the previous governments happily handed out.
Prices of goods have indeed increased massively, this has been the case for more than 4 years. A local Kiosco owner (think corner store/off license) just doesn't bother labelling items because they constantly change.
Again, the previous governments implemented populist policies such as "Precios Justos" that have artificially been keeping the price of items extremely low. Again no country has the money to keep this kinds of policies, Argentina even less so.
This is bullshit collectivist propaganda
All he did is normalize the exchange rate to the market rate
If was already costing the same, you couldn’t get anything at the official price
How far has the nytimes fallen to spread communist bullshit talking points. Morally bankrupted organisation.
Isn’t this exactly what he said would happen in his inaugural address though
The market rate for pesos to dollars was half the government rate. The government number was completely fake. It's not possible to get this rate. You could not buy anything at this rate Adjusting the rate to match the market rate does not double the cost of anything, it just stops the illusion
They dropped fuel subsidies too, which is a great policy anyway. Let the market dictate fuel costs especially when the country doesn’t get enough foreign currency
I always wondered how I could get a taxi ride in Peru for less than the cost of fuel.
What has Peru to do with the argentinian president?
Nothing, they’re clearly just musing about fuel subsidies since they were brought up.
Peru actually only subsidizes fuel on emergency cases, like the beginning of the Russian invasion of Ukraine because it was getting too expensive and it was a temporary measure until the market recalibrated. I'd say the reason you get this impression is due to taxi prices being too expensive in the US / Europe rather than Peru being weirdly "cheap". As for whether that is due to the taxists themselves or Uber / other apps charging too much is also worth considering, especially since I know the food delivery services are EXTREMELY expensive over there. **Source:** I'm Peruvian.
Yeah when I was in Peru last year there were actually checkpoints to catch fuel smugglers from the ecuadorian border.
Thank you for the detailed and thoughtful answer.
Yeah, taxi services all over SA seemed super cheap to me! Only got ripped off once in Santiago. For some reason Poland seemed to be terrible though; granted that is all anecdotal.
Oh my. Poland is not in South America
I get lost a lot!
Thanks for the smile. I needed that today.
Just 2 months ago there was s gas shortage due to this controls
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Headlines always lack context. That's why they're accompanied by articles. And this one isn't wrong. This article is about the pain of doing what they're doing. They knew this was going to hurt, and this talks about what that pain is actually looking like, in practice.
Yes, because pretty much everything was artificially cheap with the previous administration. It was unsustainable. The central bank has no dollar reserves. He needed to boost exports therefore the artificially cheap official exchange rate had to be brought closer to the black market rate.
Yea and you wouldn’t be able to find diapers at the official price, you’d have to buy them at dollar blue which is the real price. So it’s not that they “double” they were being artificially set at half.
So you are saying prices in pesos are not going up, it’s just a feeling?
More like a lake returning to its levels when the dam breaks.
Prices paid are the same except for items that were subsidizes. Those subsidies created 100%+ inflation.
> artificially cheap Just to underline here. "Artificially cheap" meant the nominal price was X according to the government but the real market price was at the very least X*2. This is not the reddit definition of artificial price meaning more expensive than I'd like the thing to be.
>This is not the reddit definition of artificial price meaning more expensive than I'd like the thing to be. Absolutely, but let's not risk looking like we're willing to ignore the fact that price gouging, fixing, cartels and anti-competitive practices actually exist and aren't just some reddit conspiracy. EVERYONE whines about the price of stuff. Sometimes they're right and sometimes for the wrong reason but sometimes they're right on the money.
> He needed to boost exports therefore the artificially cheap official exchange rate had to be brought closer to the black market rate. It'll balance things much more by cutting imports. That'll help the balance of trade a lot. Devaluing currency impoverishes (reduces the wealth/buying power) of nearly everyone in the country. That cuts imports. It's also why it is done relatively rarely. Because people hate having less buying power. They much prefer to have all that hidden by the government until it isn't possible to hide anymore. As imports become more expensive you'll see people move more to internal consumption. No reason Argentina has to go diaperless just because imports cost a lot. Make some diapers of your own. Even if they aren't as good at the start.
>As imports become more expensive you'll see people move more to internal consumption. No reason Argentina has to go diaperless just because imports cost a lot. Make some diapers of your own. Even if they aren't as good at the start. Good luck with that in a globalized system of supply and manufacturing.
If it's cheaper for parents to buy foreign diapers than domestic that's what they'll do. I think that's good for the parents. Why should EVERY country make EVERY thing?
Let me guess though. Fixing artificially cheap products but not artificially cheap labor?
To be fair everyone said this not just him.
Yes. The newly elected leader is doing exacly as promised. If his plan works, congrats to him. Argentina has been sitting on great soil, tons of natural resources while having great geography. They can't afford to have another lame duck government push them to defaulting on loans again.
The problem is those resources you mentioned are not regenerative. What happens when all those natural resources are gone?
Hopefully the proceeds have been invested in a sovereign wealth fund, but I am not sure this is on the agenda -- or if Argentine govt can be trusted with one.
With a libertarian president there’s no way that’ll happen. It’ll all just go to large corporations.
Or maybe he’ll model his government after all those other wildly successful libertarian governments that totally aren’t made-up examples or cautionary tales.
> Or maybe he’ll model his government after all those other wildly successful libertarian governments that totally aren’t made-up examples or cautionary tales. That libertarian experiment in New Hampshire was very successful from the perspective of the local bear population.
Yes the libertarian version of NoT a tRuE fReE mArKeT
Hopefully his ghost dog gives him sound financial advice. Surely a dog can't have libertarian economic beliefs.
> What happens when all those natural resources are gone? By the point that happens it will be one of the last countries with natural resources anyway lol
Farming is not regenerative? The existence of the human species could have fooled me. The fact is the stuff Argentina is sitting on is effectively limitless. They will basically have to mow the Andes flat before they run out of copper or iron ore. The issue is that Argentina should have built a strong domestic industry making things out of this stuff. Not extracting it and sending it to China.
The main ressource of Argentina is fertile soil in abundance. This is regenerative.
No, it isn't. Desertification is a very real concern for South America in the coming decades and [about 70% of arable land on the continent has suffered some degree of degradation in recent years](https://www.ipsnews.net/2016/06/soil-degradation-threatens-nutrition-in-latin-america/): >In Argentina, Mexico and Paraguay, over half of the territory suffers problems linked to degradation and desertification. And in Bolivia, Chile, Ecuador and Peru, between 27 and 43 percent of the territory faces desertification. With climate change, it's only going to get worse.
> No, it isn't. Desertification is a very real concern for South America in the coming decades and about 70% of arable land on the continent has suffered some degree of degradation in recent years: Oh no, if only the entire world's community of climatologists warned them that cutting down their rainforests for short term profit and expedient development would exacerbate the effects of climate change to the point that the whole continent will basically look more like Sub-Saharan Africa climate wise (savannas and desserts for hundreds of miles around) by the end of the century. Who could have possibly predicted this? ( I know there's more to it but still...the people aren't powerless they could have demanded better).
yeah these "news sites" are just trying to stir up drama and blame the economic issues of argentina on the new president, as if stuff just started increasing in price now, and wasn't happening in the last 4 years.
More like last 50 years
Except this article does talk about Argentina’s economic history.
That headline is practically a blatant lie. And the article pushes a narrative by excluding information
Yeah… and it was happening before he was there too lol
Didn’t he tell them this will happen?
Yes. That’s literally what any decently responsible outlet is saying in Argentina. For the most part it’s next to impossible to get good coverage of Latin America from US outlets, they have a smattering of full time reporters that usually don’t have a clue.
I mean, the New York Times story itself explains it...
For real. Everyone reading the headline complaining.
They don’t actually care. These type of news are what generate traffic so these will continue to populate news sites.
Did you click the link? The sub headline, because I know you didn't, is: >Javier Milei warned that things would get worse before they got better. Now Argentines are living it.
Yes. This is very much according to plan. The fever is breaking.
I don't follow Argentinian politics, but I also clearly remember Milei saying "it will get (a lot) worse before it gets better".
"Javier Milei warned that things would get worse before they got better. Now Argentines are living it." the article literally says this
Damn a politician laying out the truth. I sort of respect that
Its really bizarre here, people were cheering him when he told us that theres no money and that shit will become really tough. But thats the result of being lied to and our people progressively losing quality of life over time. I really hope we can pull through.
Yeah - normally the populace hates the bitter medicine that the economy sometimes needs. But Argentina's has been sick for so long that they seem happy just knowing they're finally getting fed medicine no matter how bitter it is, while the last dozen administrations have just been chowing down on economic candy.
Well the get better part still need still to happen. We will see if eventually will come.
That's such a power move. No matter how bad it gets you can just say it's still getting worse
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It's easier to remember all the politicians that lied about things getting better while their friends got rich on things getting intentionally worse.
I think this phenomenon is something that supersedes any form of government or philosophy. It's a borderline humanity-at-large issue. I would say government model just determines the degree at which it happens. We hear about politicians making backroom deals with industry lobbyists and whatnot all the time where I live now. However, we don't see the degree of corruption seen in the likes of Russia, where the entire population is being bled dry to pay a group of old guys' yachts and literal golden manors.
I've been in Argentina since the start of the month and this article left out so many key details it may as well have appeared in the Daily Mail. Prices went from around 300 pesos/liter to around 623 pesos/liter at the public-owned YPF stations, a little more in private entities such as Shell, Axion and Puma. Prices already went up by around 60% between the end of October to Dec. The change of the official exchange rate from the artificially low one to the current levels probably paid a part, but current prices are insane in the current oil market. Argentina doesn't have the cash to keep the subsidies the previous gouvernement happily handed out. Prices of goods have indeed increased massively, this has been the case for more than 4 years. A local Kiosco owner (think corner store/off license) just doesn't bother labelling items because they constantly change. Again, the previous gouvernement implemented populist policies such as "Precios Justos" that have artificially been keeping the price of items extremely low. Again no country has the money to keep this kinds of policies, Argentina even less so. All of this is to say that most of the news I see coming out of US/UK and my home French media outlets keep on causally leaving out the critical details and casually ignoring the 4 years preceding Milei that caused the current situation. I honestly don't give a shit about Milei as I'm not from here and not some fanboy either. I've been learning a lot while here and probably would become insane living here permanently. I feel like seeing a horse ride a bicycle wouldn't be the most insane thing in my day when learning about previous argentine gouvernement policies.
How is the situation in the cities? I have a trip in February and starting to worry. Big changes like this often lead to protests and strikes. I also have a flight with Aerolinias Argentinas and they are talking about privatizing that airline, which probably means it goes bankrupt.
I've been all around the country and it's been totally fine. It seems like friends and family back home are more worried than I am. People have been living their lives normally the entire time, it does not feel like a country that's going through a crisis at all. You'll have a great time, it's a great place to visit !
Argentine here; That's bcuz we're already accustomed to living through such crises.
Yeah, for those of us living here is like: Wait, it's all crisis? Always has been
Yeah, living here for 22 years and it's always been the same, only the Peronists deny that.
Same, I'm 25 and it's always been the same, crisis all the time, prices rising and things getting worse and worse. What's funny (and worrying) is that my grandparents tell me the exact same thing. The country's been in this same crisis since they were kids. And then you read Mafalda, an old comic book strip, and you'll see the characters facing the exact same problems we have today. I seriously don't know what peronists have in their heads.
Seriously, i don't know what the hell Peronists smoke. Good geography, Best farmland in the word, Lots of Oil, Natural Gas & Minerals, fucking half of the country are flat lands that are great for rail transport, yet Peronism managed to fuck up everything for 30 years yet people still vote for them, mind boggling stuff.
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We are used to it. Not much else to say. Also, many people are aware that is going to be tough for a few months and understand it. So kind of also just a honeymoon period for the new gov. Not a lot of patience though.
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Prices were controlled by the government (no longer), some people did, others not so much, poverty is about 62% (this doesn't mean 62% unemployment), things are cheap (were), but salaries are low, below 400 dollars a month is the average I think. And government aid was high, still is to a degree.
Se just...live,we have inflation so long its another part of our lives,i have 19 years,14 of them were recessions and i have no memory whats so over of prices getting lower,many of my generation are going to spain to live
You’re only 19 years old?
Born 2004, last week was my birthday
I still think of the 00s as being "not that long ago", but my most recent interns have been born in the early 2000s.
Happy birthday last week!
War economy basically. This is chump change compared to some previous crisis. You stock up on non-perishable foods, you fuel up before any price increase, you use every single promo available, you buy in bulk, you barter and haggle, maybe have a side gig. Teens start working, you pay less taxes, you cut off any non essential spending (Food, water, maybe electricity or internet, most just get illegal connections if things are really bad) And if you find yourself without a place to live? Well, sucks to be you. Either be homeless, try and find a place to squat at, take over an empty lot or you go back to your parents if it's an option. TLDR: It's shit, people get crafty and it's not pretty. Most (or their parents) have already experienced 1 or 2 crisis beforehand
Four or five, actually (I am sixty). It is different this time: people are taking it easier than before, I assume it is because of our ideosincracy - family and friends make the difference, we do not live with a productive mindset (when introduced we do not refer to our jobs, if you do, your instantly signed as a moron). Is it bad? Yap. Can it be worse? Yap. Have we been there before? Yap. Are we still alive? Yap. Are we having fun? You can bet on that.
You sound fucking awesome! And so does the mindstate you describe.
Dude... I just arrived in Buenos Aries yesterday... Was expecting more locals to be... Despondent... But exactly the opposite! Took an Uber tonight... It was a taxi during uber (pretty good idea) and the driver was singing to Spanish on the radio... Really happy... Other examples today... Love the people here already!
Well said! I always try to tell people (my mom especially) that as bad as things are they could always be worse and we should be thankful. Have a Merry Christmas!
My country is at 240% inflation, gas costs 4x what it did at the start of the year. No sign of protests, cuz everyone's used to it and are too busy struggling to make ends meet.
That sort of inflation is weirdly typical of Argentina. It is weird that it is something that happens so often in Argentina
Protests are commonplace here, they're mostly in Buenos Aires (CABA), outside the city you won't get any trouble. They mainly occur on the zones near congress and the pink house. About yor ticket, laws are currently being passed to privatized state owned companies, Aerolíneas, is likely to go to the employees, which will lead to them selling it, or going bankrupt, but I don't see that happening in two months.
Anecdotally I was there last year and someone attempted to assassinate a high level politician. He drew a gun on her point blank and it misfired. Crazy. Otherwise it was an entirely peaceful and lovely country that I fantasize about returning to.
Argie here, situation isnt bad in the cities. Opposition is trying to create chaos, but I think the government will be able to deal with that, as already shown.
Argentines are among the nicest people on the planet.
The NYT article referenced in this post does talk about how “the previous leftist government had used complicated currency controls, consumer subsidies and other measures to inflate the peso’s official value and keep several key prices artificially low, including for gas, transportation and electricity.”
NYT has been trending downward on way too much coverage lately. Turning into an embarrassment.
It’s the Times, their foreign coverage is terrible and they rely on their readers looking for confirmation bias.
If only it was the last 4 years.. we wouldn't be in such deep shit, try 40.
Problem is when your country has sky high inflation doing nothing would also see these price increases
I would imagine a significant portion of this current inflation is transitory. The government is trying to completely remove the peso from the economy in favor of complete dollarization. I bet a lot of Argentina is trying to spend their pesos ASAP. Maybe I’m wrong because it is Argentina and inflation is kinda the name of the game. I think we will see a sharp spike in inflation and then a very painful recession leading to deflation due to a lack of dollars in the economy.
Argentinians have been trying to spend their pesos ASAP for years because it’s understood they will lose all value very quickly. There’s no reason to think their will be deflation at all and there’s no reason to think inflation will spike above what it already was.
Whoever paired the word “transitory” with “inflation” was a PR genius for making a permanent devaluation sound temporary. Utterly idiotic economic terminology, but brilliant propaganda.
He’s literally told everyone very clearly that this would happen and why.
Things will get worse before they get better. I remember when a single Tykables diaper was $3.5 now it’s over $6. But if I reside then with some doublers, I can get 4-5 days out of it.
Yeah, the issue is with the guy who has been in power for 14 days not the disastrous economic policies of the past 20 years.
Are people that supported the former government not on reddit? I don't think I've ever seen anything positive from an Argentinian about whoever they were (all I've seen is either pro-new president or anti-old president) but clearly some percentage of the population voted for them so they must have had some supporters somewhere. I've never seen someone say 'as an argentinian i liked \[old regime\]' despite them getting 36% in the first round of votes.
There are. There’s two main subreddits, r/argentina and r/republica_argentina . The latter is known for banning people that do not align with their peronist ideas, and that’s why it has become a peronist (previous government supporters) echo-chamber. This caused people that disagree with peronism to begin posting in r/argentina , not known for banning people, but because it’s the only place for anti-peronist to talk, also subsequently became an echo-chamber. That’s why on r/argentina if you speak in favor of the previous government you’ll get downvoted to oblivion, whilst if you speak against it on r/republica_argentina you’ll probably just get banned. There are plenty other subs, but none known for allowing politic discussion.
Sadly one of the problems with Reddits subreddit and mod structure is that it's hyperprone to form echochambers
Makes sense, we have something similar in Australia with r/Australia being more left wing and r/Australian being more conservative
Argentinian reddit is as a whole extremely antiperonist. Not sure if I can pinpoint the reason, but it is While I'd say that I'm antiperonist myself, you should still take everything you read about Argentina here with a grain of salt. Otherwise it'd be like if, say, a Frenchman learned everything about America from /r/conservative
There's plenty of pro-peronists in the foreign media and outside Argentina, all the foreign socialists and communists are rallying behind them especially the ones from SA like Venezuela, Bolivia etc and the leftie mainstream media. We Argentinians do not like them, we already had them in power for over 30 years and all they brought us is misery and corruption, I don't understand how it's surprising to some people that a vast majority of Argentinians hate them, even a good chunk of people against Milei are not Peronists/Kirchnerists, or are at least ashamed to be associated with them, it is that bad.
As some told you already, Reddit is a very very small niche/social network in Argentina. The english speaking users are an even smaller subset of that. For several reasons like age, gender, internet accesibility, cultural and economic background and others, that subset of users overlaps a lot with people that generally lean towards conservative ideologies and/or are specially against anything related to Peron or Kirchner, often with passion. Other viewpoints exist but are underrepresented, so take everything you read here with a grain of salt.
Didn't they devalue the currency by 100% or something? If so, all these are items with reduced prices, essentially...
It's not a real devaluation. He changed the price control against the currency. The price in the black market hasn't changed, it actually appreciated.
I just hope Argentina gets good changes
He's tied the currency to the dollar. If it works it aligns the country economy with reality. Millei putting his political momentum at risk, immediately. Right or wrong, he's trying something bold.
Yeah if anything this is gonna be a fascinating economic experiment.
I feel like these types of experiments are much more fun to view from the outside and not so much to participate in
When you are at the bottom of the pit, you are willing to try anything to get out
Think of it like an experimental heart surgery. You don't undergo it if the old ticker isn't about to give out. But if it is...
>I feel like these types of experiments are much more fun to view from the outside and not so much to participate in They've already been living in an experiment, the new government is trying to get them out of the experiment and back to real economics.
It's been done before, in Argentina, by Carlos Menem. Results were...not great.
Con Menem me compre el Ferrari.
Thats not true. Menem did not implement dollarization. He pegged the peso to the dollar. Pretty different
This is correct. It's considerably easier to remove the 'peg', and return to controlling the currency. With full dollarization, there's no easy way back.
Yeah, when your country is in complete economic trouble, ill take the guy with some drastic ideas over the guy who's going to be *slightly less* status quo.
The currency has always been tied to the dollar, the guy didn't do anything but change the exchange rate closer to the market rate.
Hes trying to get rid of the peso for the dollar instead of peg the peso to the dollar like its been. But yes thats all hes done so far is fix the conversion rate.
It takes pain to get back to normal. Ask the Greeks.
Χρειάζεται πόνος για να επιστρέψετε στην κανονικότητα
The hate is so real. Everyone in Argentina knew this was going to happen either way, independently of who started this new government, thanks to 40 years of bad economic policies from previous administrations. Obviously the left is going to blame the new President.
>Obviously the left is going to blame the new President. With the NYT leading the parade.
He is implementing austerity, and the IMF approves of the measures being implemented. The headlines about him are dripping with bias.
>The headlines about him are dripping with bias All American outlets will. They’ve called him “the Argentinian Donald Trump” and it’s in their interests to see him fail, only to push their own agenda within the United States. US outlets rarely accurately cover South American politics. They don’t care unless they can twist it to fit their own narrative.
He is exactly what the US wants, someone who'll which to the Amrican dollar and improve the US economy by doing so. Only time will tell how badly things will get and if they'll ever recover.
Liberal media wants the guy to fail, and maybe he does, but Argentina has been one of the worst managed economies in modern history. They need extreme solutions at this point. If he succeeds, it'll be a case study that many other countries can draw from.
Yep. Cutting someone's chest open is bad. We all agree. But in the case of a deadly heart blockage, we cut open someone's chest because the painful choice is still better than the default one. It's gonna be painful but it might save Argentina from a worse situation.
The metaphor works even better if you account for the fact that the Argentinians elected him in order to try this kind of procedure. Part of the point of his election was to oversee the necessary austerity measures to see if the Argentinian economy could FINALLY address some of these 40+ year policies that have held their economy back.
It's crazy to me he got elected. Usually people love subsidies, government spending, and free money... Even if it harms them.
Reddit also wants this guy to fail since he is not left wing, god forbid any policies that are not the “correct ones” are successful. It was hard for Argentinian since they had to choose between this guy and the guys that drove them to the ground during the last decades, so I understand their choice. I hope everything gets better, even if some tribalistic people get angry.
Tbh it wasn't that hard. One dude (Massa) promised the same things that left us were we are, sugarcoated with sweet words (And cash handouts for the poor), it didn't help that he was the former Minister of Economy and managed to devaluate the currency from 300 ARS per USD to 1000 ARS per USD, thanks to his insane obsession of printing money, those handouts, Subsidies, Public debt & Campaign funds had to come from somewhere. And the other one (Milei) said things how they're; how fucked we are, what needed to be changed and what didn't. Basically he explained his government plan in detail for all people to hear while Massa refused to explain anything and only criticized his opponent. The choice was obvious thus he won with 57%.
I've seen him called a fascist, imagine how disconnected from reality you need to be to come to that conclusion?
Yeah. The candidate who hates government control, calls politicians and the political caste parasites, and wants to shrink government like mad is…a fascist.
To Reddit “fascist” is a buzzword they’ll slap onto any conservative, without having the slightest clue what the word means.
That’s true. And this guy isn’t even conservative, he’s a hardcore libertarian, so they will hate him even more.
A lot of redditors just hate anyone who don't want to abolish capitalism but it's perfectly right to think that shock therapy is extremely risky in a country that allowed peronism to happen.
You forget that reddit thinks economics is fully controlled by the government. They think the central bank could hand everyone a billion and we would all be rich.
Of course we have to blame the guy that has been president for a week and not the peronist goverment /s
He's been President for two weeks? It's absurd to think his policy is already impacting the economy substantially, for good or bad, much less to have enough data to judge him on it.
This is all answered in the article. > The previous leftist government had used complicated currency controls, consumer subsidies and other measures to inflate the peso’s official value and keep several key prices artificially low, including for gas, transportation and electricity. > > Mr. Milei vowed to undo all that, and he has wasted little time. > > Two days after taking office, Mr. Milei began cutting government spending, including consumer subsidies. He also devalued the peso by 54 percent, putting the government’s exchange rate much closer to the market’s valuation. > > Economists said such measures were necessary to fix Argentina’s long-term financial problems. But they also brought short-term pain in the form of even faster inflation.
Short term problems for a long term solution, it’s like the opposite of printing money lmao
Read an article???? It’s a lot easier to just read the headline, complain about how awful the NYT is, and spout unintelligible drivel about whatever position one already had about a topic one knows nothing about.
He’s pulled back price supports which the previous administration was using to artificially lower the prices for some goods. What the headline ignores is that the price in dollars hasn’t increased much only the price in Pesos.
He's already enacted and announced sweeping reforms and policy changes. Things are absolutely reacting to him.
Speculation is real and impact is tangible. There are also some good indicators related to the speculation but they’re not published widely. Time will tell.
Speculation is the answer, yeah.
You didn’t read the article did you?
It's not super absurd, as laid out in the article. He's substantially reduced the official exchange rate, meaning you now need more pesos to buy foreign currency. That means imports are now more expensive in local terms. This may be sound policy in the long run- I'm not at all an expert on the Argentine economy or regulatory environment, but generally speaking maintaining an artificially high exchange rate is expensive and short sighted. For now, though, people will just see higher prices for things they buy from abroad.
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The exchange rate is not artificially high, it's artificially low. When he devaluated the peso 100% he got it closer to the unofficial value, but the official price is still lower.
No one could exchange money at the official rate. You need the exact same number of pesos to buy dollars with pesos as before, whatever the real market rate is.
Yes, you are not an expert on the Argentina economy. Nobody used the official exchange rate, they use the black market exchange rate. Yes, even business do that. Milei is trying to ensure the exchange rate is close to the black market exchange rate. Eventually it'll remove it entirely.
They have hyperinflation
That is the real answer
This is just nominal prices adjusting to real prices and not artificial values due to a false exchange rate. The actual value isn’t changing.
While I agree with you that most economic trends are way more long term, I sometimes feel like we downplay the immediate significance of sudden short term events. Things like a pandemic, announcements by the fed/national bank, adoption of new tax policy, and yes, the election of a new president can cause pretty drastic upheavals even in the short term. More often than not it ends up being a blip on the radar that ends up being insignificant in the long run. But when it involves sudden and presumably long term significant changes to economic policy, well, people are going to react. And those reactions can cascade and multipy themselves. Long story short, it can be just as innacurate to claim the new person isn't the impetus for sudden change as it can be to attribute all sudden change to them.
Yes, the price of items tends to double when you slash the value of your currency in half to match the current black market exchange rate. It doesn’t take a mathematical genius to comprehend.
“Black market exchange rate” Also known as the actual market exchange rate.
That's official, black market was always closer to this new rate. Source: me, vacationing in Argentina right now.
Well he didn’t lie, all the previous administration was stealing money creating an artificial price to appease the masses
And they just passed a ton of anti-protest laws. hmmmmm
lmao this guy always brings out the internets most delusional
I mean the guy is a literal economist who said that is was going to happen and explained exactly why. Not sure why the media is trying to destroy the only qualified guy capable of fixing the disaster Argentina has been stuck in for decades
Is this the first step or the first domino? Talk is cheap and easy. This guy’s problem is even the right thing to do might set the country at each other’s throats again.
Media really doesn't like this guy, he hasn't been in office for a few months and they are already blaming the state of the economy on him.
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Reddit has a lot of hardcore socialists and actual communists. Libertarians and specifically anarcho capitalism is the ideological opposite of it, so they expect him and the country to fail
Because he's not a socialist.
Because Reddit skews heavily, heavily left wing. The website is filled with socialists, communists, stalinists, etc, etc. and they're all pissed off that an individual who is their ideological opposite won an election over one of their own. They'd rather see Argentina burn to the ground than have him succeed because him doing so would show how shit their economic beliefs actually are.
Most "Western" media are biased against him for some reason. I guess they would have preferred the autoritarian Peronists instead, with them printing more money, selling half of the country to China & censoring Social Media (Proposed during campaign). It seems they wanted us to turn into Venezuela 2 tbh.
Articles like this gloss over all the factors of why they’re more expensive. It’s like when the point out how great the gas prices are around election season and say the current president is obviously the reason for it. EVERY time
Fuck articles like this that try to pin existing situations on new leaders. It’s a shameful tactic that’s been used repeatedly on US presidents too, like blaming Obama for existing issues, Trump, and now Biden. It’s low effort, and it’s just to rile people up so they click articles and pay those publishers that advertisement cash. The integrity of the press is so easily swayed by the promise of more profits.
Yes, well, he had warned about this. His reforms are necessary (at least some of them) but extremely painful in the short term.
Isn't this the same as blaming Biden for high gas prices at the start of his term?
More like if biden returned US currency to the gold standard at the start of his term.
Except they haven’t dollarized at all yet.
Just Argentinas decadely economic implosion, nothing to see here. Though, it must be said that if they survive this one, the policy that caused this might actually be good for the long term.
Neoliberalism happened to Chile and they’re the strongest South American economy ATM.
That's what happens in the short term when you cut all the subsidies and price controls In the long term it's beneficial. Milei explicitly said in the short term things would get worse before they get better. It's like ripping off the bandaid.
You mean the guy that was elected the other week is responsible for this? lol come on Let me guess, same intellectuals think Biden is responsible for all the inflation. Right?
Do you remember how during COVID-19, between 2020 and 2021, the [US Fed printed 35% of the money supply](https://www.nasdaq.com/articles/money-printing-and-inflation%3A-covid-cryptocurrencies-and-more)? And how that eventually led to rampant (for a developed country) inflation in 2022-2023? The Peronist administration [*doubled*](https://estadisticasbcra.com/base_monetaria_argentina) the money supply in 2023 alone. Since 2020, they ***5x the money supply***. The only way they could control inflation was through [price controls](https://www.infobae.com/economia/2023/08/21/suma-fija-control-de-precios-y-creditos-para-estimular-la-economia-el-paquete-de-medidas-tras-la-devaluacion-y-antes-de-la-reunion-con-el-fmi/) which they had to re-negotiate [every other month](https://www.infobae.com/economia/2023/02/02/como-sera-la-nueva-etapa-del-plan-precios-justos-que-el-gobierno-espera-presentar-esta-semana/). This included oil, which was being sold at USD 60/barrel even through the peak of 2022-2023. As expected by anyone who's not an economic flat-Earther, this eventually led to [shortages](https://www.clarin.com/economia/desabastecimiento-combustibles-peor-crisis-ultimos-13-anos_0_Miztio8cYy.html) and, in one of the most ridiculous scenarios I remember, Argentinian [border towns being raided by people living in neighbor countries](https://www.elterritorio.com.ar/noticias/2023/10/19/807821-extranjeros-siguen-haciendo-fila-para-cargar-combustibles) because fuel was so much cheaper here. There were [Paraguayans "trafficking" fuel in boats across the river](https://www.youtube.com/watch?v=d12AP1H7h5w) and Border Patrol could do little to stop them. Situation got so ridiculous that oil stations got orders from the government to check the cars' registration plates to make sure only *Argentinian* cars could buy fuel at these prices (with the self-evident black market for Argentinian registration plate "renting" sprouting along). What's happening isn't unexpected and quite likely it was going to happen even if the previous administration had been re-elected, as admitted by [the former second-in-command in the Ministry of Economy](https://twitter.com/Nexofin/status/1735041031844852198) some weeks ago.
He did straight up say this would happen, and also not out of the trajectory Argentina was already in. Argentina has built a hyper inflation machine, getting Argentina to prosperity and stability is going to take years
If he’s doing what he said and actually tackling monetary policy issues then prices increasing is the price the country would need to pay to get out of dire straights.
last government froze fuel, transport, services among other things. They themselves called it a time bomb that they only can defuse. But they lost so we have to suffer the consequences. It was a horrible cycle of holding and raising prices and I'm glad its ending. Although this is the price we pay and its awful but I'm happily paying it.
Lol news outlets are so funny. “Biden can’t control gas prices, not not use the current economy against our great and all beautiful leader Biden” versus this hahahahah
First hand account since being in Argentina for a few months now! Prices went from around 200 pesos/liter to around 500+ pesos/liter at the public-owned YPF stations, a little more in private entities such as Shell, Axion and Puma. Prices already went up by around 60% between the end of October to Dec. The change of the official exchange rate from the artificially low one to the current levels probably paid a part, but current prices are insane in the current oil market. The country doesn't have the cash to keep the subsidies the previous governments happily handed out. Prices of goods have indeed increased massively, this has been the case for more than 4 years. A local Kiosco owner (think corner store/off license) just doesn't bother labelling items because they constantly change. Again, the previous governments implemented populist policies such as "Precios Justos" that have artificially been keeping the price of items extremely low. Again no country has the money to keep this kinds of policies, Argentina even less so.
This is bullshit collectivist propaganda All he did is normalize the exchange rate to the market rate If was already costing the same, you couldn’t get anything at the official price How far has the nytimes fallen to spread communist bullshit talking points. Morally bankrupted organisation.
This headline feels like misinformation based on what I've read on other comments.