Live data from Hacker News

Argentina’s black-market USD rate climbs 24% in two weeks

argentinareports.com

111–120 of 196 posts

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#111
post #19

For those on the "it's-fine-to-print-money-at-will" bandwagon, please meditate on at least this part: > “everything starts with a large fiscal imbalance, which becomes a monetary imbalance due to printing [money] to finance the deficit.” Says the chief economist of the Agricultural Foundation for the Development of Argentina. A.k.a. someone in one of the best places in the world today to really know this stuff.

I was given to understand that the owners of the Argentinian agriculture industry are the most corrupt part of Argentinian politics

No way. If it were so, they would not have to pay such high taxes when they export grains ("retenciones a las exportaciones").

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#112
post #105
post #57

Earlier quoted context omitted.

The illegal dollar market is not where major operations are done, and so, it doesn't affect anything to a great degree. It's small in the sense a few big whales can manipulate it. > It's not that the dollar goes higher: the peso goes down. Well, yes . If you are from Argentina, you know what I meant. If the agricultural sector only "thinks in dollars", then why do they regularly push for a peso devaluation, talk abou…

Why "must" the agricultural sector be forced to "liquidate" their dollars "in a reasonable time"? By "liquidate" you presumably mean "sell for pesos", and the answer is that pesos are an irresponsible speculative investment that nobody would invest in voluntarily. It only goes down, and it does so with enormous volatility. The only reasonable time to do this is less than one day before spending the pesos. So the answ…

Yes. The grains that somebody produces are their private property. Why does the government have to force the owners to sell their own property?

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#113
post #19

For those on the "it's-fine-to-print-money-at-will" bandwagon, please meditate on at least this part: > “everything starts with a large fiscal imbalance, which becomes a monetary imbalance due to printing [money] to finance the deficit.” Says the chief economist of the Agricultural Foundation for the Development of Argentina. A.k.a. someone in one of the best places in the world today to really know this stuff.

"It is fine to print money at will", maybe some words from the ex vice president that bought the printing company that print the cash.

Literally, he bought that.

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#114
post #37

Earlier quoted context omitted.

But it is , just the government. They refuse to cut down on deficit spending, keep a hopelessly intractable tax system, and they keep the money printer running non-stop to keep up. It doesn't help that they keep one of the most unenviable levels of corruption, either. And it's not limited to the current government, their previous one was woefully incompetent at fixing deficit spending. But it can't also be denied tha…

> But it is, just the government. I really don't think it is just the government, nor is it the lack of cutting down deficit spending, nor the tax system. I try to take a more historically grounded view. I don't think there are easy answers though. I believe the view that "there's the government, and there's this bunch of innocent businessmen at the mercy of big bad government" is not very compelling, for various rea…

The answers are suprisingly easy. And the people to blame are obvious. There's little nuance to be had and no "historical context" is needed beyond "it's been fucked for a while because spending has been fucked for a while".

If you want to choose to believe that this is an "us vs greedy capitalists/the opposition/whatever" problem, that Argentina's problem is highly complex, multi-layered, too hard to deal with, and that the devil is in the details like the government tells people to believe on the TV, don't be surprised or angry by the results.

I've also never implied the solution is to let "some businessmen" run the country, and in fact implied that clearly not to be the case with my statement on Macri's government. Argentina is in such a dire state of emergency that it matters none if it's a right-wing, left-wing or whatever kind of government that's running the show because given basic competent human beings willing to fix the country that kind of "detail" only matters once you have surplus money to expend and you have to decide what to do with it. There's only one way out of this and it's to fix the budget by cutting spending to reasonable levels in one go, do away with inflationary practices, and make it possible for productive people to produce without having to worry about arcane tax rules. And again, tax-wise it's not so much the tax rate that matters (although in the short term it does, because Argentina has fucked over investors time and again and needs to do a lot to seduce money back in) as it is the amount and complexity of the tax system that leads people to evade them.

There are many political situations where information is scarce and there's room for honest discussion. In this one, there is none. I just hope that the only person stating basic truths over there looking and acting like a clown doesn't ruin your chances of not becoming another Venezuela.

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#115
post #95
post #81

Earlier quoted context omitted.

Incentives don’t need to be perfect to work out. US has had a much more stable economy post fiat money than before fiat money. https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...

(X) doubt Any evidence for that?

The US was on the gold standard from 1882 to 1933. Recessions from that time:

* 1882-1885 recession (not totally fair; gold standard policies hadn’t had time to cause this)

* 1887-1888 recession

* 1890-1891 recession

* Panic of 1893

* Panic of 1896

* 1899-1900 recession

* 1902-1904 recession

* Panic of 1907

* Panic of 1910-1911

* 1913-1914 recession

* Post-WW1 recession (1918-1919)

* Depression of 1920-1921

* 1923-1924 recession

* 1926-1927 recession

* The Great Depression

We were on a mixed system from 1933 until the end of Bretton Woods. We’ve had seven recessions since then (vs 15 over a similar time span), and one of the big ones (1973-1975) was clearly driven by decisions made while operating on a gold standard.

(It’s a different story if inflation is the only metric you about at all - while it was more volatile it was also lower on average)

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#116
post #53

Earlier quoted context omitted.

More: * Huge asset bubble in the 1980's. * The Nikkei 225 stock market indicator reached a high of about 40k in 1989, but dropped to a quarter with the collapse of that asset bubble, and has not recovered that yet (it just recently hit 30k). This period was known as the "lost decade" [1] * Japan has had very low (near zero) rates for nearly three decades, more than twice as long as the rest of the world. * Demographi…

I believe Nikkei total return, i.e. with dividends reinvested, is higher than in 1989. So even money invested in 1989, if not touched, eventually outperformed cash. But it took a while.

I had a quick look at the TOPIX total return index and it looks plausible (not sure there is a total return version of the Nikkei 225).

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#117
post #37

Earlier quoted context omitted.

> But it is, just the government. I really don't think it is just the government, nor is it the lack of cutting down deficit spending, nor the tax system. I try to take a more historically grounded view. I don't think there are easy answers though. I believe the view that "there's the government, and there's this bunch of innocent businessmen at the mercy of big bad government" is not very compelling, for various rea…

The answers are suprisingly easy. And the people to blame are obvious. There's little nuance to be had and no "historical context" is needed beyond "it's been fucked for a while because spending has been fucked for a while". If you want to choose to believe that this is an "us vs greedy capitalists/the opposition/whatever" problem, that Argentina's problem is highly complex, multi-layered, too hard to deal with, and…

> The answers are suprisingly easy. And the people to blame are obvious. There's little nuance to be had and no "historical context" is needed beyond "it's been fucked for a while because spending has been fucked for a while".

I obviously disagree with this. Whatever else our differences are, I don't think anyone thinks "the answers are surprisingly easy".

> There are many political situations where information is scarce and there's room for honest discussion. In this one, there is none.

I... well, I'm glad you have this level of certainty that you think there's no room for honest discussion.

> I just hope that the only person stating basic truths over there looking and acting like a clown doesn't ruin your chances of not becoming another Venezuela.

I'm afraid I know who you are talking about. "Basic truths" :facepalm:

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#118
post #81

Earlier quoted context omitted.

It's not that it's impossible to manage fiat money sensibly. It's that the incentives are perverse such that politicians have every incentive to keep the gravy train going and little to no incentive to be disciplined about spending. The end result is a system that necessarily has a greater likelihood to evolve into an inability to manage fiat money sensibly. So it's not about impossibilities, so much as it is about i…

Incentives don’t need to be perfect to work out. US has had a much more stable economy post fiat money than before fiat money. https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...

It's hard to assess economic stability because big crises are low-probability events, but it doesn't seem obvious to me that Bretton Woods US (01944–01971) was systematically less stable than the US after the switch to fiat money in 01971.

Certainly it was far more economically prosperous; the change to a fiat currency coincides with a widely-remarked drop in the GDP growth rate and an even more dramatic growth of inequality, to the point that the lowest quintile in the US has famously seen no real income growth since the switch to fiat money.

But that could easily be a coincidence, because many other things also changed. For example, the Bretton Woods period was a historically anomalous period during which the US was by far the world's dominant economic power; all the other advanced economies had been bombed to smithereens, the PRC and Russia were additionally crippled by communism, and the former colonies in India, Africa, and Latin America were only beginning to recover from colonialism. The dollar itself enjoyed the exorbitant privilege of being the backing for all other currencies. Plausibly the US's dominance during this period allowed it to strip resources from weaker powers in a way that dramatically enhanced its own economic growth, a way that is no longer possible.

Also, you could reasonably quibble that, rather than being a natural division between systems, comparing to Bretton Woods amounts to historical cherry-picking: it's been 51 years since the US transitioned to a fiat currency, and the preceding 51 years include the crash of 01929 and the Great Depression! Any period of world history is economically stable compared to a period embracing the Great Depression.

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#119
post #118
post #81

Earlier quoted context omitted.

Incentives don’t need to be perfect to work out. US has had a much more stable economy post fiat money than before fiat money. https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...

It's hard to assess economic stability because big crises are low-probability events, but it doesn't seem obvious to me that Bretton Woods US (01944–01971) was systematically less stable than the US after the switch to fiat money in 01971. Certainly it was far more economically prosperous; the change to a fiat currency coincides with a widely-remarked drop in the GDP growth rate and an even more dramatic growth of in…

I am suggesting you compare 1776-1971 vs 1971+ which is the opposite of cherry-picking. Ignoring all US history prior to 1944 is going to give you a very distorted view of what’s normal. Especially as Brenton Woods was a mixed system.

The degree to which these differences are a function of various monetary systems is debatable, but it’s very hard to argue that fiat is worse on those timescales.

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#120
post #39
post #19

For those on the "it's-fine-to-print-money-at-will" bandwagon, please meditate on at least this part: > “everything starts with a large fiscal imbalance, which becomes a monetary imbalance due to printing [money] to finance the deficit.” Says the chief economist of the Agricultural Foundation for the Development of Argentina. A.k.a. someone in one of the best places in the world today to really know this stuff.

Sure, this random guy who works at a foundation who’s mission is “to explain to Argentinians that deficits are bad” [0] is the most qualified person to talk about global monetary policy. [0] https://www.google.com/amp/s/www.infocampo.com.ar/gustavo-vi... Carlos Schilling, el ex presidente de FADA, señaló que “es común que hoy en día nos preguntemos ¿qué estamos haciendo para mejorar nuestropaís? Desde FADA hacemos, y…

You sound like you're being sarcastic, but certainly it sounds like the things he was trying to divulge are some of the most important and fundamental aspects of global economics, and they are aspects that are poorly understood by the Argentine public: producing more is good for everyone, it is bad if the country is in a [trade] deficit, and if we export more it helps us all. (That's my translation of the Spanish.)

I don't know anything about his qualifications.

Post reply on HN