This page has been archived and commenting is disabled.

Three 'Central-Planning' Lessons From Argentina

Tyler Durden's picture




 

Submitted by Simon Black via Sovereign Man blog,

Well... this has turned out to be one of those epic fail travel stories.

 

I was supposed to be in Cape Town this morning, where the entire city has been shut down due to the presence of Barack Obama.

 

But apparently when you fly to South Africa from Argentina, you’re required to have a certificate of Yellow Fever vaccination. I didn’t have a certificate on me. So I was denied boarding, despite having traveled to Africa numerous times without one.

 

Funny thing is that I’ve actually had a Yellow Fever shot. And I even have the original certificate sitting in my safe in Santiago. So I’ll probably now have to head back to Chile, get this silly piece of paper, and then start all over again.

 

What a complete waste of time.

 

To be fair, Buenos Aires is a great city to be stuck in. There’s never a shortage of things to do– from the cultured and divine to the city’s seedy underbelly.

 

There’s a reason that so many Wall Street refugees came down here to huddle at the onset of the financial crisis in 2008 - it’s cheap, and it seems to remind everyone of New York.

The more interesting part about Buenos Aires, though, is that this place is the headquarters for the central planning bad idea bus.

Argentina’s President, Cristina Fernandez, continues to tighten her stranglehold over the nation’s economy and society.

This country is so abundant with natural resources, it should be immensely wealthy. And it was. At the turn of the 20th century, Argentina was one of the richest countries in the world.

Yet rather than adopting the market-oriented approaches taken by, say, Colombia and Chile, Argentina is following the model of Venezuela.

Cristina rules by decree here; there is very little legislative power. She may as well start wearing a crown.

Just in the last few years, she’s imposed capital controls. Media controls. Price controls. Export controls.

She’s seized pension funds. She fired a central banker who didn’t bend to her ‘print more money’ directives. She even filed criminal charges against economists who publish credible inflation figures, as opposed to the lies that her government releases.

Inflation here is completely out of control. The government figures say 10%, but the street level is several times that.

Curiously, even Cristina acknowledges that prices are way too high. But rather than rein in spending and stop the money printing, she’s digging her high heels in even further by launching a new clothing line.

This new brand – NYP (Nacional Y Popular) will be owned and run by the government, selling everything from jeans to shirts to shoes at prices below 100 pesos (less than $20 officially).

In every instance, they just keep going further down the rabbit hole of more government control, more central planning. It’s like living inside the pages of Atlas Shrugged.

It’s a shame. This is a beautiful country with very enterprising people. Many of the top entrepreneurs in Latin America come from Argentina. Plus, they make the most hilarious jokes about their own government.

They say, for example, that they live in a ‘dedocracy’ (dedo means finger, so they’re saying that nothing happens without Cristina’s touch).

Being here in this laboratory of central planning makes a few things abundantly clear:

1) Printing money does not create wealth. If it did, Argentina would be one of the richest places in the world again.

 

2) All of these policies that are ‘for the benefit of the people’ almost universally and up screwing the people they claim to help.

 

Printing money creates nasty inflation. If you’re wealthy, it leads to asset bubbles, which can make you even wealthier. If you’re poor, you just get crushed by rising prices. Or worse– shortages (remember the recent Venezuelan toilet paper crisis?)

 

3) Desperation leads to even more desperation. The worse things get, the tighter government controls become... which makes things even worse. It’s a classic negative feedback loop.

Both the United States and pan-European governments are varying degrees of this model, with only a flimsy layer of international credibility separating them from the regime of Cristina.

So Argentina is really a perfect case study in things to come.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 07/01/2013 - 21:51 | 3712270 0b1knob
0b1knob's picture

If Italy and Spain had an illegitimate bastard deformed child it would look like Argentina.

Mon, 07/01/2013 - 23:30 | 3712599 akak
akak's picture

If the USSR and imperial Britain had an illegitimate bastard deformed child with narcissistic sociopathic tendencies, it would look like the contemporary USA.

Mon, 07/01/2013 - 23:30 | 3712601 smlbizman
Mon, 07/01/2013 - 21:52 | 3712271 CH1
CH1's picture

What this means is that the rulers have figured out how to bullshit the populace for long periods of time.

If the people didn't follow the script, the rulers' game would collapse.

Tue, 07/02/2013 - 02:37 | 3712963 Harbanger
Harbanger's picture

The rulers game there has been socialism.

Mon, 07/01/2013 - 21:55 | 3712288 W74
W74's picture

Out of this there will arise a real-life Fransisco D'Anconia.

Mon, 07/01/2013 - 22:23 | 3712360 fiftybagger
fiftybagger's picture

Clearly has mastered the graces of natural beauty as well.

http://www.egyptindependent.com/sites/default/files/imagecache/highslide...

Mon, 07/01/2013 - 22:36 | 3712402 BandGap
BandGap's picture

Ten miles of bad road.

Mon, 07/01/2013 - 22:35 | 3712397 tony bonn
tony bonn's picture

the bitch is a nazi.

Mon, 07/01/2013 - 23:08 | 3712504 HardAssets
HardAssets's picture

But I thought women are supposed to be kinder & gentler rulers ?

Tue, 07/02/2013 - 02:56 | 3712984 darteaus
darteaus's picture

Ask Bill Clinton...

Mon, 07/01/2013 - 23:02 | 3712458 Kiss My Iceland...
Kiss My Icelandic Ass's picture

 

 

I don't think you need to go as far as Argentina to witness central banking insanity. Though I hear Buenos Aires is beautiful in the Spring. Or Autumn. Or however that works ...

Mon, 07/01/2013 - 23:17 | 3712541 Richard Whiskey
Richard Whiskey's picture

She still makes obummer look like a monkey.

Mon, 07/01/2013 - 23:31 | 3712604 akak
akak's picture

That's because he IS a monkey.

Mon, 07/01/2013 - 23:32 | 3712612 Promethus
Promethus's picture

Argentina – Never go full retard. Cristina is a pampas ass. 

Argentina - Nunca vayas retraso completo. Cristina es un culo pampas.

Mon, 07/01/2013 - 23:34 | 3712619 TNTARG
TNTARG's picture

This article is absolutely full of lies.

Amazing. If this is the way we are supposed to be informed...

Mon, 07/01/2013 - 23:38 | 3712625 akak
akak's picture

LOL, I just KNEW you were going to appear any second in this thread to defend your indefensible statist tyrant! 

"None are so hopelessly enslaved as those who believe that they are free."

(Or who believe in Peronist central planning nonsense and plain old naked fascism.)

Tue, 07/02/2013 - 01:23 | 3712874 Harbanger
Harbanger's picture

TNT is a politically savvy business woman in that country.  So what if it's naked facism, I bet she keeps a suitcase of full US Benjamins under her bed and away from the peronist govt just in case she has to escape.

Tue, 07/02/2013 - 09:19 | 3713500 hootowl
hootowl's picture

She better spend those bennybucks quickly, they may go the way of the Zimbabwen dollar soon.

Tue, 07/02/2013 - 02:52 | 3712982 TNTARG
TNTARG's picture

Your lack of knowledge put a smile on my face.

I don't know where are you from, but I can tell you: These days, the naziest country in the whole world is the US.  Colsely followed by some European Union countries.

Mon, 07/01/2013 - 23:46 | 3712664 phlipski
phlipski's picture

"It’s a classic negative feedback loop."

 

No - what Simon really means to say is, "It's a classic positive feedback loop - with negative consequences."

http://en.wikipedia.org/wiki/Negative_feedback

 

Tue, 07/02/2013 - 00:20 | 3712744 TNTARG
TNTARG's picture

Among other "things",

1) Many laws passed by Congress are not being fully applied because of legal gimmicks used by judicial members on corporate payrolls.

2) Corporate media are working hard against the government. They're being exposed on their ties with the last barbarian dictatorship and some of their "untouchable" members are under trial; overthrowning the present gvt and setting up another one more "friendly" may be their last chance of salvation from jail.

3) This gvt sends law proposals to the Congress to make constitutional articles full operatives (as art. 114) setting things in place that were "delegated" (in this case, the budget of the judicial system to be managed by the Consejo de la Magistratura (as the Constitution states) instead of the Supreme Court (as it works right now, by "delegation"). Think about it: it's huge.

4) The Congress has passed the most democratic media bill on the fu..ng world (33% of the audiovisual media to private hands, 33% to NGOs and Social Organizations, 33% to public entities - local, regional,national -), the law was approved by a vast majority of votes, different parties, in both the Senate and the House of Representatives, and by the same kinf of gimmicks the biggest media corporation of our country, Clarin, doesn't allow it to be fully applied.

5) Pension funds were nazionalized to be taken away from the financial casino - do I need to explain? -. It was done by law passed by the Congress. If they haven't done it, were do you think pension funds would be by now? Do you actually believe the people would get their pensions at the end of the month?

I could keep going for pages.

You can like this gvt or not, but there are things nobody can deny:

a) It's an absolutely legal government, got 54% (to vote in Argenetina is mandatory so everybody votes), and it counts with vast consensus, otherwise, with the kind of powers against it and practically all the corporate media trying to overthrown it, it wouldn't have lasted.

b) It's the most democratic gvt we had in many decades. And that's not much appreciated by corporations.

c) It's a gvt with initiative and always on the move. It brings a lot of shit to the surface, in the open, and many "sacred monsters" find themselves with their asses on the wind.

Even when I don't like some of their policies, I have to give them that. Not the USA nor Europe have that much.


 


Tue, 07/02/2013 - 09:14 | 3713478 hootowl
hootowl's picture

You are a socialist, fascist, economic mess, on the verge of economic collapse.  Just like nearly all centrally controlled economies all over the world, including the demonically led U.S.

Prepare yourself.  You will soon be burdened with more than just a shortage of toilet paper.

Tue, 07/02/2013 - 09:14 | 3713479 zohan
zohan's picture

¿Ya te ganaste el chori de hoy con los comentarios defiendo a K o todavía tenés que postear 4 o 5 más para ganarte el sueldo?

Tue, 07/02/2013 - 00:28 | 3712758 TNTARG
TNTARG's picture

And... It NEVER uses cohercitive, repressive force against protesters. I mean, YOU CAN PROTEST as much as you like in Argentina, nobody from the Federal gvt is gonna bit your ass out.

The police force used against protesters was by the governor of Buenos Aires City (one of those that "belong"), i.e. to bit people who was defending the Borda Hospital, where Mr. governor Macri wants to develop his own real state project.

 

Get some real information, please. As the "handicapped childs" of spaniards and italians, we have A LOT of freedom around here, that you can't find in Italy nor Spain.

It ain't good for financial business, perhaps.

Tue, 07/02/2013 - 08:10 | 3713290 123dobryden
123dobryden's picture

since Evita, your coutry never recovered, love is a bitch

Tue, 07/02/2013 - 01:32 | 3712891 Bear
Bear's picture

"Don't cry for me Argentina" ... cry for yourself 

Tue, 07/02/2013 - 01:44 | 3712909 sethstorm
sethstorm's picture

So Argentina is really a perfect case study in things to come.

I'm not sure that you can compare a hyperpower with reserve currency status and a military-industrial complex to back it up(the United States) to a bit player in South America. 

 

Tue, 07/02/2013 - 02:11 | 3712933 Harbanger
Harbanger's picture

Status and power when you're in debt? LoL!  The only difference between large and small facism is size.

Tue, 07/02/2013 - 10:37 | 3713854 kchrisc
kchrisc's picture

Two big differences between US and Argentina: Argentina does not have trillions of it's currency overseas ready to to flood home, and Argentina is not run by a rapacious group of thugs occupying and killing the people of several other countries of the world.

Tue, 07/02/2013 - 02:19 | 3712940 Dull Care
Dull Care's picture

If there was ever a poster-child of how populations never stop and think about history and the consequences of big government the Argentines would be near the top. Enslaved to the disastrous personality cult of the Perons. Never do they stop and think that maybe we were far better off before the government became socialized.

The same could be said for US Americans and their love for FDR, Wilson etc.

Tue, 07/02/2013 - 02:44 | 3712969 TNTARG
TNTARG's picture

I've been in Europe for many years. I've been in the US. Even in Africa.

I've chosen to live and work here.

No falsfe flag operations.

No militaries destroying our front doors or shooting inside our houses since the last US/UE supported dictatorship. No "Sandy Hook" nor "Boston Bombings".

No pepper gas on our faces if we want to protest, since 2001/2002.

No illegal detentions with no charges, defense attorneys, etc.

Plenty of freedom. Compared to the EU or the USA, low taxation.

As for the banks, well... Would you trust them your money? Me neither.

But as a university student told me 10 days ago, the "eye of Sauron" is targeting us again. That's way a lot of "information" about our "tyrant" gvt flows from the corporate media all around the World.

We're well aware of it. They took over the US, over the EU. Would we be so naïve to believe they will let us be?

Hope some awakening, up there in the North. Otherwise we may be fucked up again. So we're enjoying this freedom while it lasts.

And... there's plenty of nice places to find  peaceful settlements to stay away from the fuckers, if the time comes.

Tue, 07/02/2013 - 02:52 | 3712980 darteaus
darteaus's picture

Where is "here"?  Fortress of Solitude?

Tue, 07/02/2013 - 09:05 | 3713460 hootowl
hootowl's picture

Errrrrrhh, What?

Tue, 07/02/2013 - 03:10 | 3712996 TNTARG
TNTARG's picture

Finally, the whole thing is mispresented.

Your Federal Reserve is owned by people you don't even clarly know, some of them aren't even americans, and they belong to the same cartel that owns the ECB and Central Banks of practically any country in the West.

Our Central Bank is owned by the Argentina's State. (As the Vermont State Bank, perhaps? And isn't Vermont that wants to secede from the US?)

So when you talk about Central Planning, for the US it's a gvt which finances, economy and monetary  policy is ruled by a corporate system.

When you talk about Central Planning in Argentina you must intend a legal, legitim gvt established by the people, which finances, economcs and monetary policies are decided by the government - ovbiusly within the international context.

It's like comparing apples with oranges.

Tue, 07/02/2013 - 09:02 | 3713452 hootowl
hootowl's picture

.....and the demoniacal Fernandez has been so hugely successful.....But then, you don't speak to that issue.

Tue, 07/02/2013 - 05:53 | 3713087 BritBob
BritBob's picture

Argentina is the poorest rich country in the World. All down to poor political governance and propaganda - whenever there's a problem at home, they're always quick to push the blame on someone else and never take the hit themselves. Their cult heroine, Eva Peron was responsible for facilitating the the arrival of 5,000 Nazi war criminals in Argentina after WW2.

Their current leadership have Masters Degrees at telling lies.

Tue, 07/02/2013 - 05:53 | 3713088 BritBob
BritBob's picture

Argentina is the poorest rich country in the World. All down to poor political governance and propaganda - whenever there's a problem at home, they're always quick to push the blame on someone else and never take the hit themselves. Their cult heroine, Eva Peron was responsible for facilitating the the arrival of 5,000 Nazi war criminals in Argentina after WW2.

Their current leadership have Masters Degrees at telling lies.

Tue, 07/02/2013 - 08:59 | 3713440 hootowl
hootowl's picture

The Argentine leadership must all be graduates of the American Ivy League.  The same satanic cultists that lead the American government.

Tue, 07/02/2013 - 17:05 | 3715250 AurorusBorealus
AurorusBorealus's picture

I grow weary of disputing Simon´s uninformed assertions about Argentina.  Is there central planning here?  Yes.  Is it too much?  Yes.  Is there inflation? Yes, but it is 15% not the 25 and 30% that Simon has claimed in the past.  Are the taxes on businesses too high? Yes.  But if Argentina is such a basket case, why is the peso climbing rapidly against the USD?  Why has the peso gained 10% against the Euro and USD this month?  Why Simon?  Why?

You do not want to explain this because it does not fit your preconceived notion of how the world should work.  And this is the problem with everyone who thinks they know something about economics... they are all dogmatists with their pet theories, Austria School included.  Before we spout off how the world should work, let us be empirical, respect the facts, and then we will see how the world really works and maybe learn something of value.

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