PJ Media

First, I would like to state for the record, that Argentina is a great country. I have chosen to immigrate to Argentina, and this election not withstanding, I do not regret this decision, for there is much to recommend here. Argentina can have an incredible future, if only the politicians would stop playing their silly games and if these wonderful people would use their heads instead of their emotions. They have a land blessed with immense natural resources and a fairly well educated populace. My purpose here, however is not to extol this great country.

Unfortunately, the Argentineans tend to think with their hearts more than their heads. However, this may not be so much an Argentine trait, but rather a Hispanic characteristic. As a rule, they usually act primarily on emotion and relegate logic and reason to merely secondary considerations. This may well never change as this seems to be a part of the Latin psyche. As I am closely connected to a Hispanic family, and have also lived, studied, and worked in Germany for many years, I feel that I have experienced the western gamut.

For the past few months, the government has been providing a few staples, such as potatoes, at prices about 1/3 of the free market price. This sells well with voters who don’t seem to remember that only a few months ago, these potato prices were nowhere to be found. One day after the election, there are still potatoes available at this price, but, not for long. President Kirchner bought this election by bribing the people with a few inexpensive commodities. Do not scoff however. When you are as poor as many of the people here, you will vote according to your hunger pains, even if they are only temporarily satiated.

The economy here seems to operate more on dollars than on pesos. Most properties are bought and sold in American dollars. You can also rent an apartment with dollars. It is even possible to buy your groceries using dollars. At banks, you can buy certificates of deposit in U.S. dollars or in Argentine pesos. However, the top interest rate you can get if you purchase a CD in dollars is less than 5%. If you but a CD in pesos, you can get slightly over 10%. While the dollar has been falling against the Euro and other currencies, it is rising against the Argentine peso. This certainly makes one pause before converting currency to the peso. For those of you reading this who have studied the most basic economics courses, you will understand the significance of such circumstances.

Inflation is the boogeyman that haunts this economy. The Argentineans are at present incapable of executing a policy that will slay this demon. The disastrous convertibility policy of Domingo Cavallo, which did manage to tame inflation, killed the economy for over a decade until it was finally abandoned about 5 years ago. Be careful what you wish for because you might well get it. Now, the government feels that they can stave off the grim reaper by lying about the inflation numbers. They cannot, at least not for long. A reckoning is coming and it is coming very soon.

As is usual for this wonderful land, I see stormy waters ahead. El Presidente has left his wife a train wreck in the making. A person, who has not said anything about how she will govern, or what her economic policies will be beyond government mandated price controls, leads this observer to be somewhat negative about the future.