When central planning fails

September 22, 2012


According to the official exchange rate, which is subject to capital controls, 4.4 pesos buys you a dollar. But on the street people are happy to pay up to 6.7. Inflation runs at 25%. The purchasing power of an Argentine’s peso savings is going down by one-quarter each year.

The government claims inflation is 9.9% and has outlawed calculating or quoting any other inflation rate. Forty percent of dollar deposits have been withdrawn from Argentina since last October. Now there are capital controls. You need special permission to move your dollars overseas.

To take a foreign vacation, Argentines have to apply to a bureaucrat for permission and explain where they got the money for the trip. And there are rumors that it will be made illegal to talk about the existence of the shadow market exchange rate for dollars.

Don’t think it can happen here? How exactly do you think government borrowing 40 cents of every dollar it spends plays out when we get beyond the ability of the current Fed/Treasury jiggery-pokery to conceal it?

And remember, Senator Chuck Schumer has already proposed, and Speaker Boehner has indicated approval, of a Reich Flight Tax to confiscate assets of Americans fleeing the Obama regime.

16 Responses to When central planning fails

  1. artist on September 22, 2012 at 7:30 am

    What a train wreck.

  2. dtrumpet on September 22, 2012 at 8:17 am

    I expect this train wreck to occur after one or two nuclear weapons go off in an American city if Obama is re-elected. If it takes almost two weeks to call a planned attack an attack one might be able to suspect that it is in the realm of possibility that we will, for political reasons, fail to use the available intel to stop it from happening. Everything in the decision making process of this administration denotes appeasement instead of strength. All of the counterstrikes will be meaningless when we have been transformed and if the past is any indicator we will be to busy blaming other Americans.
    When one tries to make deals with the devil the devil always wins.
    I am sorry to be pessimistic, but I can just see it coming by extrapolating the actions of this administration. Sadly we will be so busy hating each other that we won’t have time to see it.

  3. R U in the tank for the RINO Keynesians?? on September 22, 2012 at 9:00 am

    we’ve been walking slowly towards the same road for awhile … and now picking up speed. And yet the mostly staunch Romney supporters on here revel in the fact that Team Romney and the RNC chiefs screwed Ron Paul, who was the only one that called attention to this and had real plans to address this. Seems that most Romney supporters, like Obama supporters, don’t have a clue about what’s unfolding or don’t mind living under the heavy hand of ‘big government’ — as long as its the RINO version of it.

    • Lance on September 23, 2012 at 3:28 am

      I’d guess that over half the people that are supporting Romney now are mostly on board just to defeat obama so your theory doesn’t really hold water. Also, ron paul could never get above about 9% in the primaries so most normal people understand that obama would have easily beat paul, without even trying. At least with R&R, there is a good chance to defeat the left, in which case Paul Ryan will be the vehicle through whom the base can focus their desire to reform the fed.

      It sure would be cool if you ron paul guys could let go of your anger, and actually try to focus on accomplishing some of ron paul’s goals for the fed, instead of looking backwards and bellyaching about what could’ve happened or should’ve happened.

    • Jorge on September 23, 2012 at 6:56 am

      Ron Paul’s forgien poicy is worse than Obama’s

      • R U in the tank for the RINO Keynesians?? on September 24, 2012 at 2:32 pm

        and Romney’s is the same as Obama’s — more treasury draining wars. Are you trying to stir the pot, Jorge, or are you just clueless? Or worse — you think you know what’s going on because you watch the MSM and can re-gurgitate their talking points.

        Yeah, despite Obama admin mishandlings, Romney will fare no better. We think we can force Muslim countries to accept democracy while they are in lock step with the teachings of the Koran. We support dictators one day and then support Al Queda rebels the next or defer to China and Russia regarding Syria or concede our superior position to an ineffective UN. Yeah, what a great, effective foreign policy … I bet, like Charlie Sheen, you would classify this as “winning”!

  4. satted on September 22, 2012 at 9:31 am

    I fear I wont have time… 9 years left to pay off the house. Then debt free… I thought I could avoid the rape of the people; but now don’t know. Sad days indeed.

    • W.C. Varones on September 22, 2012 at 9:50 am


      You could probably rent out your house to cover the mortgage and have some cash flow left over to start a new life somewhere else… Canada and Australia are much freer, and Chile is affordable and already ranks higher than the plummeting US on the Economic Freedom Index (pdf).

  5. artist on September 22, 2012 at 11:09 am

    WC, That’s what I’m planning but Canada is too cold and Australia too expensive. Looking at Thailand or the Philippines. Maybe Panama. Any other suggestions?

    • tom bombadil on September 22, 2012 at 11:59 am

      Non-citizens are not legally permitted to own property in the Philippines.

      It’s one of the main reasons that the country, despite its young demographics and loads of cheap labor, is desperately poor and the Mexico of Asia. That and the extensive government corruption.

      Unless you are married to a Filipina that you really trust (since property would have to be in her name), I wouldn’t advise it, unless you are simply retiring there and taking your money with you–in which case it can be a great place, remarkably cheap to live like a king.

      But watch out–it’s a third-world country and if you get yourself in trouble it can be bad unless you have the money for bribes. In generaly, everyone will be looking to scam you. Enjoy, but trust no one and watch your back.

      I think if the U.S. goes, the rest of the world is going with it so it’s really not going to matter much where you try to run.

      • artist on September 22, 2012 at 5:09 pm

        I think if the U.S. goes, the rest of the world is going with it so it’s really not going to matter much where you try to run.

        I agree with that.

        As an aside, you can buy a condo in the PI.

        • Jorge on September 23, 2012 at 6:57 am

          How about weapons?

  6. setnaffa on September 22, 2012 at 11:58 am

    Argentina’s train-wreck economy prompted the ruling junta to try to take over the Falklands…

    Read about the movies Wag the Dog (1997), The Final Option (1982), Rules of Engagement (1999), On Wings of Eagles (TV mini-series 1986) and think about how well Mr. Mom-jeans and Uncle Joey would handle a real-life attack on a US Embassy…

    Oh, wait, we already know… And it ain’t as pretty as the movies… Sending our UN Ambassador to lie to the American People on TV is the least of their crimes…

  7. rightwingyahoo on September 22, 2012 at 3:27 pm

    You’d think this was a replay of 2001 in Argentina, but sadly it’s not. They elected their own version of Ogabe, and they are already suffering for it.

  8. setnaffa on September 23, 2012 at 6:51 am

    Argentina might look at Mr. Mom-jeans and Number 10 Downing and think they can win this time…