Argentina’s Feuding Inflation Rates

article from Sept 27, 2011

By Jamie Douglas

What is going on in Argentina? That is the question of the day. Expats, please do not worry, as none of this directly affects you; but it is important to understand what is going on in this country, particularly in relation to its neighbors and fellow Mercosur members.

For starters, the International Monetary Fund (IMF) has reamed Argentina for submitting and publishing totally fictitious figures dealing with its inflation. IMF director for Latin America Nicolas Eyzaguirre is demanding that this Southern Cone nation apply major and drastic measures to comply with proper reporting of actual inflation, in lieu of submitting the disingenuous figures, which generally run about half of what the figures actually are.

Argentinean Minister of Economy Amando Boudou has attacked the messenger, as Argentina always tends to do: “The bureaucracy of the fund is watching another movie. They are playing rich kids games in a world that needs fast solutions,” Boudou stated.

Mr. Eyzaguirre, on the other hand, demands that the nation submit correct data because they have to know what is really going on in the world’s eighth-largest country’s economy: “Looking to the world and trying to decipher Argentinean statistics is like the captain of the Titanic going after the violin of the orchestra. (I think something was lost in translation here!) There are far more important things to address and not let political prejudice condition operational views.”

There is no one in Argentina who is not aware of the falsified figures being fabricated by the government. Cristina Fernández de Kirchner is running virtually unopposed in the upcoming October presidential elections, so why the steady stream of disinformation? Is it because the government expects people to be lied to all the time?

As a direct result of the disinformation that the Casa Rosada has planted, the IMF henceforth will not pay any heed to the official figures released and instead will use private consultants to harvest more truthful data in the future.

Meanwhile, in the very scary opposition to a free press in Argentina, the Domestic Commerce Secretary Guillermo Moreno had a friendly judge issue subpoenas to six newspapers for the names and phone numbers of all reporters and editors who have covered the Argentine deception on the economy. Government official are claiming a ridiculously low inflation rate of 9.8% (?) for August 2011, while the real rate is pegged at anywhere between 20% and 25%. Ask anyone shopping in the grocery store which is the correct figure.

The mere fact that the Fernández administration is going after reporters and editors, accusing them of criminally publishing false information to benefit their clients, to the supposed detriment of Argentinean consumers and the state, is a complete admission that freedom of the press is but an illusion. Judge Alejandro Catania, obviously in the pocket of the government, did comply with Moreno’s request, and he issued subpoenas to the newspapers and their employees as well as to the IMF, the tax ministry, the central bank and the stock market.

Moreno has threatened to fine the various consultants 500,000 pesos, or US$123,000, for publishing the truth. The reason for this may be found in the fact that almost all of Argentina’s sovereign debt is tied to inflation, thereby making the government’s falsification of the figures mandatory for saving the central bank billions in interest.

The stench of fascism is in the air again in the long-suffering nation, which once showed such promise on the world stage.

Jamie Douglas

San Rafael, Argentina

Where that Fine Malbec Wine still has freedom of expression!

I encourage you to write me at cruzansailor [at] gmail [dot] com with any questions or suggestions you may have. Disclaimer: I am not in any travel-related business. My advice is based on my own experiences and is free of charge (Donations welcome). It is always my pleasure to act as a beneficial counselor to those who are seekers of the next adventure.