Argentina is very interesting for all those places for whom are expecting a crash.
What I can't understand is that if one goes to Banco Piano and buys gold and then sells it in just 3 weeks you've likely made a small profit,
I would have though that would be popular but I don't see ques of people there after pay day. Perhaps there's a tax on it.
Land is popular but when you come to sell it the inflation makes it look like it's gone up in value when in fact it hasn't.
I wonder if people not exactly refuse to take part in the money machine but try to ignore it as best as possible and enjoy life as best as possible.
I think that most people here is just not accustomed to measure value in anything else than local currencies, us dollars, and maybe land and housing.
People just get on with life with some tenacity, I just don't fully know how. There's a lot people can learn from here. In Europe people complain at 7% inflation but here it's been 25% for years and somehow life goes on. I don't know many economies that could go on and yet this one does.
How can an economy survive at 25% for so long?
What I find frightening though is that even after being shafted for so long and so many times there are still people here who have resumed life similar to before the crash, without taking precautions;
using banks, accepting a fixed wage rather than establishing a business etc
Inflation, as any other economic variable, is something you get accustomed to live with after a while. People just design their strategies for survival and goes on with their lives. Even most of them do it intuitively, without having a real clue that their are doing it... For most of them everything It's just the way it is...
Protectionism vs free market is such a cyclic political thing we just can't seem to escape for hundreds of years.
Basically the idea here is that you can protect against outside market forces with protectionism. By putting a tax on outside imports you can also build a local industry to protect against the outside world. If the UK was dependant on Argentina for food like Tibets allies for China it wouldn't be able to have the Malvinas.
On protectionism. What its proponents never seem to get is that a trade deficit is balanced by a current account surplus. In other words, the more you import, the more foreign investment you get. That's before even considering that other countries will introduce retaliatory measures.
Adam Smith covered this about 200 years ago; and yet most countries still don't get it. (The USA is particularly prone to listening to protectionist rhetoric).
One of the problems with free market evangelists is that they want everybody else to wide open their economies, but they always keep protecting themselves.
And concerning the foreign investment that should balance the current account when you open your economy, the problem with it is that most of those investments are only after big and fast profits, and they usually give a damn about the long term welfare of the target economy. If they can take a quick and big profit by destroying the economy, they will do so, and they has historically done it. All colonialism has being (and still is) nothing but examples of this point... And we, colonized countries, live with it everyday.
