Sam, I agree with you 100%... this K regime we have as government is not doing anything to deal with inflation, as a matter of fact... they are in denial. We need to see how things develop over the next 15 or so days, but the possibility of another crisis has been increasing over the past few months.

Gaucho100K:
You don't sound very optimistic .. to say the least. Actually, it sounds scary to me. Regarding the inflation, you might be correct. I checked, and the ARS lost about 19% in one year against the Euro. That number may mirror the inflation rate. BTW, Argentina has to keep the inflation numbers low in order to save money; the bonds Argentina has sold are coupled to the inflation index!
Is there a way to keep the inflation down? To change the index wouldn't help a lot ... you, everybody knows, the inflation is about double the published numbers. Bashing the K regime doesn't help either. Actually, I believe Argentina inherited most of the problems from the Menem regime. 1 ARS = 1 $, that was a joke. Who would produce in Argentina, when you buy and/or produce the stuff much cheaper elsewhere?
Is there a light on the end of the tunnel ....? I hope so....and I will be back to Argentina in Nov/Dec.
Some good news:
-I see much more Argentina wines on US supermarket shells, just purchased a couple of Malbec from Trapiche.
-Mendoza is booming, lot's of foreign companies are investing in hotels and wineries ... like Austrian Svarovski.

More bad news today, as reported in the New York Times,
In Argentina’s Grain Belt, Farmers Revolt Over Taxes
WENCESLAO ESCALANTE, Argentina — When the government decided in March to raise taxes on farmers’ profits, it set off a rural revolt in Argentina. For three weeks enraged farmers blocked roads nationwide, paralyzing grain and meat sales and causing food shortages......They are preparing to resume crippling strikes of grain exports once the deadline for the talks expires on Friday. Some farmers have already spontaneously put up roadblocks in recent days. Full story at this link
http://www.nytimes.com/2008/04/27/wo...l?ref=americas

Might be a rocky winter in the Argentine :(

SAM

Im not too optimistic... Im afraid I am rather worried. Allow me to, however, clarify a few points you make in your above post.

The Peso has lost the approx. 20% you mention but that is basically mirroring the devaluation of the USD against the Euro... remember that Argentina is a USD block country... and while the USD has been losing ground against every currency in the world in Argentina is has actually remained quite stable (or even with a slight gain), because for most Argentines it is still considered a "reserve" currency and together with real estate, the only safe-haven to put savings in when things get rough on the economic front.

The inflation numbers are of course cooked.... apart from the indexing of interest cupons on some of the bonds that are outstanding, its also a very important political and economic indicator for the domestic market... trade unions ask for collective agreement salary increases using the CPI as a benchmark... hence the government has chosen to play with the statistics instead of facing and addressing the real problem head-on.

I dont use bashing the K regime as a sport... its unfortunate that I have to bash the government as I live here... who else wants more than I to have things go well down here...? Alas, I also try to report things as I see them... and for now, there is little room for optimism.

However... to end on a positive note... for visitors and part-time residents that have incomes in G7 nation currencies, the outlook is still positive and actually, a meltdown of the local economy could mean a chance to enjoy some amazing bargains. If the peso is heavily devaluated, then short term Peso denominated prices will become hugely attractive in USDs/Euros/GBPs.... and while prices will eventually adjust, in the turmoil many bargains are there for the taking. If this does play out... it may not be pretty.... alas, Argentina and the Argentines are known to weather stroms well. If a crisis does hit... it wont be the first and we will again bounce back.

Sam... the news report, while recent, is in fact old news.... the roadblocks were established as part of the original farmers dispute... and during this truce were actually put on hold... but the different farmers groups & associations were at all times ready to step back into the strike if the government didnt offer them a fair compromise/deal.

With the current truce (which runs until May 1st) food supplies of all types of products has returned to normal... but, unless the truce is extended or a deal is struck betweem all parties involved, then we may again see disruptions in the normal distribution of basic foodstuffs.

Gaucho100K:
Thanks - I understand and agree!
I truly wish Argentina will weather the storms well ... and I am pretty sure they will. Argentina has had enough problems in the past. Now it's time for a "better world" for ALL .... actually, I have seen only "happy people" in the nice parts of Buenos Aires ... Recoleta, Palermo .. I have never been in one of the distressed barrios.

From CIA - World Factbook:
"Economy - overview:
Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight. A severe depression, growing public and external indebtedness, and a bank run culminated in 2001 in the most serious economic, social, and political crisis in the country's turbulent history. Interim President Adolfo RODRIGUEZ SAA declared a default - the largest in history - on the government's foreign debt in December of that year, and abruptly resigned only a few days after taking office. His successor, Eduardo DUHALDE, announced an end to the peso's decade-long 1-to-1 peg to the US dollar in early 2002. The economy bottomed out that year, with real GDP 18% smaller than in 1998 and almost 60% of Argentines under the poverty line. Real GDP rebounded to grow by an average 9% annually over the subsequent five years, taking advantage of previously idled industrial capacity and labor, an audacious debt restructuring and reduced debt burden, excellent international financial conditions, and expansionary monetary and fiscal policies. Inflation, however, reached double-digit levels in 2006 and the government of President Nestor KIRCHNER responded with "voluntary" price agreements with businesses, as well as export taxes and restraints. Multi-year price freezes on electricity and natural gas rates for residential users stoked consumption and kept private investment away, leading to restrictions on industrial use and blackouts in 2007"

https://www.cia.gov/library/publicat...k/geos/ar.html

Well.... there is really no need to visit the distressed barrios (or villas miserias as they are called here). I know that some tour companies organize visits to these places not only here but also in Brazil and other countries... and in all honesty I never understood the point... poor people are not animals that merit visits like if they were in a zoo.

Whatever happens to the economy... I hope that more small & medium businesses that cater to tourists continue to learn and understand what customer service is... stop seeing tourists as walking ATMs and realize that is it for the wellbeing of all Argentines that Buenos Aires needs to become the gateway for tourists to all Argentina.... a visitor that comes here and returns home happy is the best ambassador and will provide priceless word-of-mouth that will mean more visitors and more business for all involved. If only the government would do their part... :rolleyes:

But some of us spend time in barrios other than recoleta, palermo etc as that is where are interests lead us.. In our case many of the traditional milongas are in those areas off the tourist list. (not to view animals) What is left there of the middle class is hurting and things are getting worse.

NYTango.... its one thing to go outside of Recoleta and Palermo... but another entirely to go to the Villa 31 or La Cava.... Im not talking about San Telmo, Boedo, Balvanera or Flores.... where most of the Milongas are.

Argentina featured on the Today Show
 

I didn't look at the videos, but the articles were interesting and surprisingly accurate (by that I mean, only a few errors): http://today.msnbc.msn.com/id/24282949/.

I thought the errors were horrendous, not to mention that a previously published article on BsAs by Daniel Shumski was plagiarized - as noted on his blog: http://worldsfirstexpatblog.blogspot.com/

John

Thanks for the post John.... I need to contact the author of that blog.

Alex, pretty damning article in the Economist from May 1..
http://www.economist.com/world/la/di...ry_id=11293743

Sam

Sam... I had read the article as Im a subscriber to the Economist. While I dont always share the point of view of the "newspaper" (as it likes to call itself), in this case they are 200% correct.... unless someone can drill some senses into Kristina things are going to get choppy. Right now, it seems like Argentina's government is suffering from a case of the Emperors New Clothes... :eek:

Has anyone ever heard of or stayed at Bernie's B&B near EZE? Here is a link http://www.bedandbreakfast.com/argen...breakfast.html

I could not even find the address, but someone is recommending it on another travel site and first time I have ever heard of this place.

Sam