Argentina Freezes Supermarket Prices To Halt Soaring Inflation; Chaos To Follow

Tyler Durden's picture


Up until now, Argentina's descent into a hyperinflationary basket case, with a crashing currency and loss of outside funding was relatively moderate and controlled. All this is about to change. Today, in a futile attempt to halt inflation, the government of Cristina Kirchner announced a two-month price freeze on supermarket products. The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported. As AP reports, "The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1."

Perhaps they will. What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today's prices, before the country's inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting's good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse, are taken by Argentina's female ruler.

As such expect photos of empty shelves from Buenos Aires to start popping up in a few days, comparable to how threats of a gun and weapon ban by the US government did more for the top and bottom line of US arms dealers than any military conflict ever could.

Sure enough:

Economist Soledad Perez Duhalde of the consulting firm predicted on Monday that the price freeze will have only a very short term effect, and noted that similar moves in Argentina had failed to control inflation. Consumers shouldn’t be surprised if the supermarkets are slow to restock their shelves and offer fewer products for sale, she added.

In other news Argentina, just like the rest of the "developed" world, appears to have a slight inflation tracking problem:

Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it’s trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.

The BLS has the solution: just exclude any product whose price is rising from your CPI calculation, and voila. For everything else there is a hedonic adjustment.

The ironic comparison to the US does not end there however:

A more effective way to contain inflation would be to “reduce government spending, which is financing an expansion of the money supply, and to have a credible price index.”

Wait, are they still talking about Argentina or the US?

The government announced the price freeze on the first business day after the International Monetary Fund formally censured Argentina for putting out inaccurate economic data. The IMF has given Argentina until September to bring its inflation and economic growth statistics up to international standards. If Argentina doesn’t comply, it could face expulsion from the world body in November.

Well good thing the US complies with the IMF's stringent "seasonally adjusted" data reporting quality control. Or else, the US may have been expelled from the IMF too. And then who would fund the creeping bailout of Europe (aside from Germany of course)?

The IMF censure “is not just a new error ... it’s also a clear example of the organization’s unequal treatment and double standards in regard to certain member countries,” Lorenzino said. “Argentina, just as it agreed with the IMF to do, will keep working to improve its statistical procedures in accordance with good international standards.”

So to summarize: first capital controls, then a currency crisis, then expectations of sovereign default, then a rise in military tensions, and finally - price controls, after which all out chaos usually follows.

Study this sequence well: it is coming to every "developed" country near you in the months and years ahead.

But, as with every other hyperinflationary implosion, there is a silver lining: the stock market is soaring...

... at least in Peso terms. When priced in USD, the 360% stock market "rise" is more like -9% in the past 21 years. But luckily, the general public has a gene that prevents it from grasping the difference between nominal and real - something Ben Bernanke is very well aware of.

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Mon, 02/04/2013 - 23:03 | 3215311 Calmyourself
Calmyourself's picture

So this makes Obama and his cronies what?  Lefty=economic failures /  Right= foreign policy disasters, I got it they are a group of Refties..  Actually fascists, but Refties works for me.

Tue, 02/05/2013 - 03:39 | 3215710 TWSceptic
TWSceptic's picture

So Obama is both left and right wing?


Sorry didn't read Calmyourself's comment.

Mon, 02/04/2013 - 20:48 | 3214990 moonstears
moonstears's picture

Though not LDS, I know those guys get food storage. Great informative link!

Mon, 02/04/2013 - 21:28 | 3215116 Bad Attitude
Bad Attitude's picture

I posted this on another thread earlier today, but it is very relevant to this article. Here is an Argentinian's account of what he experienced and lessons learned from the 2001 economic collapse in Argentina:

It is time to start preparing for chaos here in the good ol' US of A. Buy shelf-stable food while it is still cheap and available.

Mon, 02/04/2013 - 21:41 | 3215152 klockwerks
klockwerks's picture

Silver tree , thanks for the link, great additional info

Tue, 02/05/2013 - 01:24 | 3215577 OldTrooper
OldTrooper's picture

One of the great things about getting moved to Vernal (besides still being gainfully employed) is the chance to stock up on some serious food supplies. #10 cans of dried or freeze dried food are available in all the grocery stores and at least one big online Utah-based vendor will ship to a Utah address for next to nothing. Overall, it's a good place to be when TSHTF. There may not be a better prepared population on Earth. They probably have the natural resources and industrial base to make it on their own, too.  There are worse place to be these days.

Mon, 02/04/2013 - 20:32 | 3214956 xtop23
xtop23's picture

Welcome to bare shelves bitches

Mon, 02/04/2013 - 20:43 | 3214980 kliguy38
kliguy38's picture

most cities have two days on their shelves of less than 7 days they'll be jammed up on every freeway out of the 10 days they'll be on foot on every highway in search of food. If you live within a 20 mile radius near a state're tits

Mon, 02/04/2013 - 21:18 | 3215086 Zap Powerz
Zap Powerz's picture

You forgot the best part: cannibalism.

Mon, 02/04/2013 - 21:29 | 3215120 TBT or not TBT
TBT or not TBT's picture

I'd guess the zombie apocalypse scenario in Argentina isn't trading well.    They've done stupid shit before and there were no big cannabilism outbreaks that I read about anyway.    Hunger, and serious hunger, but cannabalism?       An EMP is more effective than a printing press or price controls.

Mon, 02/04/2013 - 22:01 | 3215200 francis_sawyer
francis_sawyer's picture

the lesson to be learned is... "Don't waste your ammo on would be cannibals"...

Mon, 02/04/2013 - 22:59 | 3215302 StychoKiller
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"Yon Casius has a lean and hungry look."  -- Julius Caesar, W. Shakespeare

Tue, 02/05/2013 - 03:18 | 3215696 TBT or not TBT
TBT or not TBT's picture

Gunshots indicate the location of your meat supplies, which are you and your family.    Edged weapons, blunt force, strangling, crossbows...and plenty of spices and salt.   Real world zombies would be pretty game-y.

Tue, 02/05/2013 - 03:50 | 3215720 Shell Game
Shell Game's picture

Just like an short bond ETF to bring a knife to a gun fight..

Tue, 02/05/2013 - 01:56 | 3215615 Freddie
Freddie's picture

Do Zombies tango?

On British TV they do

Maybe they are dancing about the Malvinas.

Kirchscner is an old botxed socialst like her alter ego Pelosi.

Mon, 02/04/2013 - 21:57 | 3215192 midtowng
midtowng's picture

Sounds like a new reality TV show!

Mon, 02/04/2013 - 23:04 | 3215316 Go Tribe
Go Tribe's picture

The whores will be cheap. Blow jobs for a Snickers bar.

Mon, 02/04/2013 - 23:55 | 3215448 harleyjohn45
harleyjohn45's picture

In a couple of days the shelves will be empty.

Mon, 02/04/2013 - 20:48 | 3214999 smlbizman
smlbizman's picture

this will work...price freezes

tricky dick

Tue, 02/05/2013 - 00:34 | 3215502 Zigs
Zigs's picture

And, that was on 4% inflation.  We're over that, now.

Tue, 02/05/2013 - 00:34 | 3215503 Zigs
Zigs's picture

And, that was on 4% inflation.  We're over that, now.

Tue, 02/05/2013 - 02:02 | 3215619 Freddie
Freddie's picture

In Nixon's semi-defense - this inflation was due to LBJ Guns and butter or LBJ's Vietnam War and his War on Poverty aka the state enslavement of blacks.

Mon, 02/04/2013 - 20:34 | 3214964 sunaJ
sunaJ's picture

Argentina to Zimbabwe... We will all be here soon...

Mon, 02/04/2013 - 20:58 | 3215025 Freddie
Freddie's picture

I always said our skeet shootin muslim was Mugabe 2.

Mon, 02/04/2013 - 21:23 | 3215098 vato poco
vato poco's picture

"PULL, Muthafucka!"

Mon, 02/04/2013 - 21:25 | 3215106 Bad Attitude
Bad Attitude's picture

Don't speak disrepectively of Dear Leader (peace be unto him).   </sarc>

Mon, 02/04/2013 - 21:31 | 3215127 TBT or not TBT
TBT or not TBT's picture

Did Mugabe actively dislike his own country and want to punish it?     Dinesh D'Sousa theory of Obama makes the best sense so far.   He wants to take it down.

Tue, 02/05/2013 - 01:06 | 3215549 Terminus C
Terminus C's picture

Puppets don't "want"....  The puppet masters on the other hand... they probably do want the destruction of the U.S.A.

Mon, 02/04/2013 - 22:58 | 3215300 bigkahuna
bigkahuna's picture

skeet skeet skeet

Tue, 02/05/2013 - 00:57 | 3215535 Teamtc321
Teamtc321's picture

Skeet shooting Freddie? Give me a fucking break. Anyone and I mean anyone who has shot skeet at all, knows the preppy, poised picture shoot, look's more like a Monkey trying to fuck a football.

I'm surprised his fucking eyes where not slammed shut from the fear of touching a gun for the first time for the photo opp. 


FORWARD!!!! Bitcheezez.

Tue, 02/05/2013 - 01:02 | 3215542 Jam Akin
Jam Akin's picture

I wasn't even assuming he had actually touched a firearm.  The birth certificate production team (BCPT) has gotten some more practice in recent weeks.

Tue, 02/05/2013 - 12:48 | 3216575 IrritableBowels
IrritableBowels's picture

Probably why he wasn't wearing the yellow shooting glasses-his eyes were shut.

Mon, 02/04/2013 - 20:38 | 3214972 Oldballplayer
Oldballplayer's picture

Take notes, students. This shit will be on the test.

Mon, 02/04/2013 - 21:27 | 3215112 Bunga Bunga
Bunga Bunga's picture

Hyperinflation will save you. Better get another student loan now.

Mon, 02/04/2013 - 20:39 | 3214974 Banksters
Banksters's picture

Riot cam app?


There  could be a theraputic aspect to it.  See, you ain't so fucked up, but they sure are!

Mon, 02/04/2013 - 20:47 | 3214993 Handful of Dust
Handful of Dust's picture
President resigns after riots leave 22 dead in Argentina

Mon, 02/04/2013 - 20:58 | 3215023 Bunga Bunga
Bunga Bunga's picture

That was many years ago. But after that there was a much bigger event: government default.

Mon, 02/04/2013 - 21:16 | 3215076 PLira
PLira's picture

Stupid Fuckhead, you could have referenced that article is from Friday, 21 December, 2001.


Mon, 02/04/2013 - 21:20 | 3215093 Shell Game
Shell Game's picture

What do you expect from a handful of dust.........dusty links.

Mon, 02/04/2013 - 20:40 | 3214976 Everybodys All ...
Everybodys All American's picture

a world economically on the brink.

Mon, 02/04/2013 - 21:45 | 3215164 Buck Johnson
Buck Johnson's picture

They most definitely are.  You see the article is totally correct in regard to Argentina.  Yea Walmart and the others agreed, because there arms where twisted.  But they know that they will be leaving in a month or two because they aren't going to eat the costs on their end just to get Argentina out of a hyperinflationary problem. 

It looks like we are going to see a Argentina economic problem this year just like in 2000.

Tue, 02/05/2013 - 02:05 | 3215623 goldenbuddha454
goldenbuddha454's picture

Like the good communists they are they'll nationalize Walmart and others before they can leave.

Mon, 02/04/2013 - 21:55 | 3215191 world_debt_slave
world_debt_slave's picture

yeah, I work in a grocery store as a cashier and amazed at how prices keep going up. But the masses keep on buying.

Mon, 02/04/2013 - 22:11 | 3215219 Dr. No
Dr. No's picture

A guy has gotta eat

Mon, 02/04/2013 - 23:15 | 3215338 Calmyourself
Calmyourself's picture

Yes, but is the bitching about prices louder and are people stocking up??  What buying behaviours do you notice?

Mon, 02/04/2013 - 22:59 | 3215303 masterinchancery
masterinchancery's picture

Argentine store shelves probably already empty in many places--who's next?

Mon, 02/04/2013 - 23:45 | 3215421 bobthehorse
bobthehorse's picture

I just don't see hyperinflation as an American problem.

For us, deflation will rule the day.

Japan is our model.

Tue, 02/05/2013 - 00:35 | 3215504 xtop23
xtop23's picture

I'd take deflation all day long if the option is hyperinflation.

Tue, 02/05/2013 - 01:07 | 3215550 Teamtc321
Teamtc321's picture

I'm going to be a Angry Sinner if you post up that spam link again Nutsack.

Do NOT follow this link or you will be banned from the site!