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We all know that Turkey's inflation is high this year, but a country far away in South America is also "no inferior" compared to it.
The country is Argentina.
In July, Argentina's inflation rate reached a staggering 71%, the highest in history; In terms of global comparison, "忝" is one of the TOP 5.
And that's not all, the worst thing is that prices in Argentina are still rising at 7-8% per month, and inflation is expected to rise to a peak of 94% by the end of this year (December).
It can be said that prices in Argentina have completely spiralled out of control and climbed freely, while the government has done nothing and ignored it.
It is true that the soaring international energy prices and global shipping tensions in the past two years have brought great import inflation to Argentina, which is an "important reason" for the inflation of Argentina.
But hyperinflation in Argentina is essentially self-inflicted and self-inflicted, thanks to its own foolish policies.
The streets of Buenos Aires, the capital of Argentina
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In fact: since entering the 21st century, Argentina has suffered from high inflation, and the CPI increase has remained around 10% for a long time; However, the 10% inflation rate is not too outrageous, and the Argentine people have endured the "economic crisis" for a long time, and they have experienced hundreds of battles and barely survived.
However, in 2015, Macri, who was deeply influenced by neoliberalism, became the supreme leader of Argentina; One of his riots completely buried Argentina today and tomorrow.
Ignoring the facts in Argentina, Macri brazenly declared that the Argentine currency (peso) and the US dollar were freely convertible; Abandonment of "exchange control" and "exchange rate floating management" policies.
This is a catastrophe: the original Argentine weak industrial technology, its peso exchange rate is high; In a short period of time, all foreign exchange controls and exchange rate floating management will be relaxed, and the peso will not depreciate, and it will be a ghost.
Thus, the plummeting of the peso against the dollar was staged.
In 2015 alone, the Argentine peso depreciated by 34% against the dollar; Since 2015, the peso has cumulatively lost 94% of its value against the dollar.
At the same time, with the abandonment of exchange controls and the great devaluation of the peso, a large number of Argentine rich and middle-class immigrants to the United States and Canada and packed up huge amounts of wealth.
These disregards of national justice not only caused the rapid depletion of Argentine dollar foreign exchange, but also further promoted the wild depreciation of the peso; There are also two more serious consequences.
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First, the Argentine peso fell sharply against the US dollar, resulting in a surge in the price of imported commodities, and the urgent needs of Argentina's industrial equipment, chemical raw materials, oil chips, as well as the prices of cars, smart phones, drugs and other commodities have to rise 1-2 times every year, making the people miserable.
Second, argentina's rich, entrepreneurs and middle class have fled in large numbers with their wealth; Caused by the collapse of the Argentine tax base, Argentina's fiscal revenues; It is Wang Xiao'er's New Year, and one year is not as good as a year.
However, Argentina is also an electoral country, and politicians must continue to fulfill the high welfare promised to the voters; And this level of welfare is beyond the actual level of economic development in Argentina.
To give an example: an average Argentine family pays less than $20 a month in energy bills; German families with the same high welfare need to pay as much as $270 a month for energy. Even if the reasons for Germany's high prices are excluded, the energy benefits of Argentine households are "much higher" than those in Germany.
What if Argentina has no money to elect a government and wants to fulfill its "promise of high welfare"? It can only be an over-issued currency, paying for high welfare.
According to the data released by the Argentine Central Bank: from 2015 to 2021, the average annual growth rate of Argentina's M2 currency is as high as 40%; Good guys, this is not super hair, it is simply indiscriminate.
And the Argentine election politicians also thought about it: Anyway, I have fulfilled my promise, and the welfare of education, energy, and medical care has paid for you; As for the indiscriminate issuance of currency, which has pushed up the prices of other "non-government-paid goods", then I can't control it.
USD and Peso
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Therefore, under the double blow of the import inflation caused by the peso's devaluation and the Indiscriminate issuance of currency by the Argentine government, Argentine prices are completely out of control.
In 2015, Argentina's inflation rate broke through 20%;
In 2016, inflation peaked at 40%;
From 2017 to 2018, the inflation rate fell slightly, but it did not fall below 20%, but it was lying on the ground and waiting for it;
In 2019-2021, Argentina's inflation rate once again soared, directly breaking 50%, approaching 60%;
This year (2022), inflation finally rose to 71% in July, driven by a hike in the us dollar and soaring energy prices.
The Argentine people thought that the "10% inflation rate before 2015" was high enough, but they did not expect that during that time, it was a rare "peaceful time" in Argentine history.
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After the prices in Argentina are completely out of control, the lives of ordinary people are even more hell.
Because prices rose so fast, money became almost a waste of paper, and people were forced to find alternatives.
In argentina today, almost all commodity transactions, such as land, houses, cars, gold, precious works of art, are traded using only dollars; Real estate developers in Argentina do not accept the national currency, which is the biggest fool in the world.
At the same time, ordinary people in Argentina, after receiving their wages, immediately run to the mall, all of which are replaced by commodities, and all are consumed; Because prices are rising every day, they can't be sure tomorrow and they can buy so many things today.
There are many more ordinary people, simply do not use pesos, barter: a pair of jeans for two packs of milk, a T-shirt for 2 pounds of noodles...
Barter, though cumbersome, is better than worrying about currency depreciation every day.
The rich and middle class, who are more accessible than the average person, will find official banking relations after receiving wages and asset gains, or go directly to the black market and quickly convert the peso into dollars.
The rich and middle class would then lock dollar cash in an explosion-proof safe and put it in a basement with nine-story door locks to prevent theft.
Argentine supermarket
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It can be said that although it is the 21st century, the current Argentina is still as absurd, cruel, magical and realistic as Márquez's old Latin America.
In 500 years, from the conquest of the Inca Empire by Spain to the declaration by the United States of the need to bring liberal democracy to the Latin Back Garden, Westerners and Western capital have completely occupied Latin America, but they have never brought stability and peace to this rich land.
When also? Fate also?