Argentina’s president

Cristina prepares to defy gravity


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WT Economist

"The truth is, we are all dying to see what happens next, i mean seriously Argentina has had more ups and downs in the past twenty years than some countries have had in their entire existence, somehow we always pull through though."

That's optimistic, and I'd like to visit to see the an analogy of the U.S. future in the wake of Generation Greed. Perhaps it would make me hopeful.

I guess at some point the fact that prior generations were better off at your expense is less important as long as you "pull through."


Inflation, high interest, bureaucracy in Argentina, Brazil, South America are a reality, though I agree with many of the skeptical posts. There was a time when the use of Pesos outside Argentina, i.e Paraguay, were welcome, today are dollars are preferred. I am a hesitant optimist about South America, yet many times confounded.


Why The Economist is not to be trusted

If we compare total prices and salaries rise on Mercosur countries between 2005 and 2011, we can see that, although Argentine government appears to lie about inflation, -and best estimates are that real inflation is 2,3 times the official one- total price rise, measured in dollar, is the same for all Mercosur members.

So, it shows that price rise is a Mercosur feature, and not just Argentina.

The only difference between Argentina and the rest of Mercosur is the distribution between inflation, and currency appreciation, but the result is the same.

So, predictions for Argentina cannot be really different than the ones for other Mercosur countries.

It just shows what the Argentine government did: an election between real appreciation and nominal one, inside a common Mercosur policy. And since the policy is common, future evolution should also be common.


@Latinaview ... On the positive side, Canada's has rock-slid banks and is doing just fine economically and politically. :D

Same goes for Australia and New Zealand, too.

THEY'RE the countries that mid-sized countries should be compared to.


I think that TE its giving good advices when it talks about things like Inflation and "fiddled the numbers". Because the inflation its a very important indicator for a Economy. Also manipulate the data its very a very bad desicion because newspapers like the economist that usea a lot of data they can´t do charts of Argentina closer to reality.


"Having regained a congressional majority in the election, the government is now pushing through a measure to regulate newsprint, which arouses fears in newspapers that have been critical of the Kirchners."

I don´t like things like this and i think that TE need more information about the history of the newsprint and who are the owners of it.

The biggest media corporation (Clarin, that has Tv programs, Radio, Newspapers, etc) its also the owner of the newsprint and one of the 1st enemys of the "Kirchners". You can't have the biggest media corporation and also be the owner of the only factory of paper for newspaper. Thats MONOPOLY and you can decide to who sell the paper viewing your interests and a lot of nwespapers dont have enough paper because that.

This is my humble comentary, i'm 17 years old and im going to start the University and i want to be a succesfull economist. I love this magazine but they must have more information about a country before write some things.



A property of economics is that it can't predict precisely WHEN something will happen. Sure, The Economist has been castigating Argentina for a long time ... but Argentina's incessantly been wrecking the country's economy brick by brick.

Adam Smith once said that there's a lot of ruin in a country (i.e., that it takes a long time for a country's wealth to fall apart), but Argentina's been on the A-list of self-wreckers for a looooong time.


I quote inthewilderness: "The country did not follow the prescriptions for AUSTERITY and financialization that THE ECONOMIST has been recommending for years, the results of which are plain to see in Europe and the US today. Frankly, the entire worldview of this magazine has been so deeply DISCREDITED that it shocks me that anyone should take it seriously, particularly those with global investments." It seems rightists are trying to knock down the opinion on emerging countrys in Latin America. BE REAL

Omricon in reply to meisaidesi

Europe is following austerity now as it was too indulgant on debt and spending in the past. Typing Discredited in large letters wont change the fact that Argentina will crash in line with what this magasine is saying unless it decides to start following some of its simple fiscal advice.

No country has followed TE in its recommendations but if it did then I would be very surpirsed if I saw anything but a prosperous country. Its recommendations make sense and when followed by a country (usually by accident) they benefit as they think in the long term.

If you dont want to follow TE's advice then look to your neighbour. Chile is a prosperous and successful low corruption country that is going places in this world and generally follows far more sensible economic policies (and is able to manage its resources better too!)

Omricon in reply to GuillermoMarraco

Chile is something like 20th on the corruption perceptions index, right up there with the good part of Europe and Scandinavia and the USA and the least corrupt nation in SOuth America. I said 'low', not 'no' corruption and this still holds true. As far as corruption goes, Argentina is like Italy and Chile is more like the US at any rate CHile is far less corrupt than Argentina.

meisaidesi in reply to Omricon

I wonder where you are from, as you seem to know Chile's political situation. Chile does have corruption (most Chileans would agree with that); Michelle Bachelet herself payed some political cost for that reason. If by "sensible economic policies" you are referring to liberal policies that don't favor national production but promote dependence on the so called "first world", well yeah, Chile probably follows them. I happen to use big huge capital letters because I daily read TE and I am usually ashamed about how the magazine continuously try to bring down public opinion on current Latinamerican governments, always doing so with a gloomy prediction that resembles the Christian apocalypse. My only hope is that Argentina won't take TE's advices on how to run a country that recovered from its worst crisis in history by not following the IMF "recommended" austerity policies.

GuillermoMarraco in reply to Omricon

IMF says that between 2007 and 2011 Chile grew 16% measured in purchase power parity.

Argentina grew 30%, Uruguay 35%, and Peru 28.5%. Brazil 20%. Only Mexico did worse than Chile: 7%.

I do not advice Chile to take the Argentine route, but what is your point?

Omricon in reply to GuillermoMarraco

GDP per capita of Chile and Argentina are roughly the same. The growth for Argentina will soon turn into a freefall drop when they stop stealing money to pay for it though.

The big difference here is economic fundamentals are strong with Chile and are likely to continue (excepting the odd commodity price based downturn).


in my book any country which tries to limit the flow of currency(dollars, euros,sterling etc) in and out of the country is in trouble therefore argertina must be in trouble. they don't know about it but they never do. it is a shame such a lovely big country with lots of resources but can not look after 30 million people.


Wow - there are a lot of blindly loyal Argentinian supporters in this forum, or perhaps TE hit a nerve?

I am happy to recognise the faults that have led to problems in my country (and TE has suggested fixes many of which are being implemented), but a lot of posters here dont seem to recognise any faults at all in Argentina not least of which it is a house of cards waiting to fall over.

I postulate the following:
1. It is a logical fallacy to try to destroy your opponents arguments by telling them that 'their country is doing worse than yours' so please drop all this nonsense about how 'Europe and the US are doing worse so you cant talk'
2. TE had become fairly adept at noticing booms. They noticed house prices were overvalued from around 2003 and started predicting a crash. It would have been a small crash in 2003 but instead its a big one because no one listened to them. The same will be the case with Argentina, its not a valid argument to say TE are irrelevent just because Argentina didnt crash this year.
3. I would rather have 3% growth and 2% inflation than 7% growth and 25% inflation. Real salaries arent going anywhere, its non growth as far as real people are concerned.
4. Its easy to sustain fake growth when you find a new souce of cash from somewhere and spend it. Argentina usually borrows this money (and then defaults after a few years because they dont believe in paying it back). Italy like borrowing money and then devalueing (which is why lira bonds were such high interest). You dont always have to borrow though, you could instead steal everyones private pension and spend it in your budget (like Argentina - this is worse than debt because creditors choose to lend), or you could steal all the money in the central bank (short term gain, long term undermine your currency, again Argentina). Argentina will continue to steal assets to spend (looking like growth) untl they run out of other peoples assets and default again.

No wonder capital controls are being implemented, even the people of Argentina know that their money is not safe from the governments hands and try to get it out of Argentina as quickly as possible!

The conclusion is that TE is right that Argentina is on borrowed time. It will continue to defy 'crash' expectation until it runs out of things to steal and then it will go pop in a big way.

economiser1167 in reply to Omricon

We are all on borrowed time. You know the old saying -" in the long run we are all dead." The point for businessmen & economists is to be flexible, to adjust to reality, to have a range of options and prepare for a range of eventualities. For businessmen the goal is profit, for governments it is other priorities (yes, inc. staying in power to implement policies that one favours).

This magazine doesn't "notice" booms (bubbles). It actively promotes them especially the 30-yr stock market bubble in the US/UK and probably its written for those who profit from them. They are subtle about it, I'll give them credit for that. They didn't like Berlusconi,not fit to govern(not that I haveany time for him). What a self-made Billionaire(Imo just a particularly entertaining & vulgar oligarch, they exist everywhere). I think its a Latin thing.Same with Argentina, they view it through a certain prism.


I can not judge what Argentina's past is for more than four years. That is how long i have been running a subsidiary out of Argentina. Real income has hardly gone up during that time. I can judge this since i see the requested salaries pass by. If i make the adaptions for inflation these requested salaries are exactly in line with the salaries we pay (we correct for inflation). Assuming that this semi scientific approach is right inflation has been a lot higher than the official numbers. This seems to support the Economist's case for high inflation. If i judge the avery exchange rate (to both the EURO and the USD) then i must that the currency has not felt any real devaluation. In real terms the price for the services our Argentinean daughter have gone up by more than 50% over the course of the last three years. For the highly value added services that we offer this is acceptable but i can not see this to be favourable for Argentina's export position.


Argentina proves that a government run for the betterment of its people will always produce better economic results.

I am sure traders in Wall Street and the City are banging their head that they can't make an easy billion shorting this particular Latin American country.




Venerable Economist,
I'm afraid you are confusing gravity which is a natural phenomenon with status quo which, no one knows better than you, is a fabrication.


Venerable Economist,
I'm afraid you are confusing gravity which is a natural phenomenon with status quo which, as you may very well know, is a fabrication.


The Economist Vs. Argentina - Round 10

The Economist is a great magazine but it has its picks: hates Argentina, The Caribbean, UK, Israel. Loves: Brazil, balance report on the US, it is tough with European institutions. In the case of Argentina they have not been able to recognize and assimilate the country's one decade of success since its tragic default:
- 6-7% Average growth since 2002 (yes, please read that again 7%)
- Poverty was reduced from 60% to 20% since 2001
- Total Leverage was reduced from 300% of GDP to 40% (Yes they defaulted and restructured, it was painfull for bondholders like me, so what? Argentina can't and others like Greece can? Argentina is only an appetizer compared to the upcoming restructurings from OECD)
- The Bottom 20% is better off thanks to the transfer/subsidy policies of a gov't (specially that Widow that you like so much making fun off, well 60% of Argentineans or 30 mm People like her). This gov't can be questioned on its means but not on its ends, in Argentina the poor counts!
- Unemployment at 6% is a joke.
- Inflation is a problem but one where the gov't has the instruments to tackle as oppose to Europe where situation maybe out of hands.

Again, Argentina keeps growing and The Economist keeps missing its doom day target. Sorry


Well, another year on the horizon and yet another article on how "Argentina is going to be in trouble soon" variety.

Well, I guess if you keep playing red on the roulette table for long enough, you're bound to get lucky sooner or later. But I wouldn't bet on it just yet, Economist. There is still quite a lot of creative economic thinking taking place in Argentina.

By the way, how is the UK economy going, has Osborne managed to extract enough money out of the pockets of the British tax payers to keep his banking mates in the City happy?

Xiaohuang in reply to latinaview

"There is still quite a lot of creative economic thinking taking place in Argentina"

Such as lying, stealing, suppressing true economic information, and having bureaucrats tell businessmen how to do business?

What all you Latino socialists forget is that 7 years of growth since 2004 means nothing. For a human being that is a long time, for an entire economy it is the blink of an eye. Greece lived unsustainably for decades, as did the USSR.

The rules of the market are not a gringo invention they are laws of nature. Reality is coming for you.

To be fair though, short-term thinking and an inability to learn from catastrophic failures from decades ago seems to be a universal human flaw.


I have said it before but I will say it again. "20% inflation is better than 20% unemployment". That is totally wrong but that is the philosophy this current government has. I said stagflation would happen and the economy is starting to slow down as the government reaches fiscal austerity. I cannot believe she won the election.
I really hope the oppostion wins the next but what I hope the most is that they get a better plan than the one Mrs. Fernández has


The article is accurate on many aspects. As always, the predictions are gloomy. What is it about The Economist and Argentina? It is true that Argentina will have difficulties in 2012. But what part of the western world is doing well no? Argentina´s debt is 40% of their GDP. Italy is 120%, the US 100%, and so on. And Argentina is in bad shape? C´mon!!


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