Argentine Govt Tries to Disguise 20% Inflation as Election Approaches

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“Argentina is being modified artificially, like middle-aged women in magazines…vastly improved, thanks to ‘Photoshop,’” says our new Argentine Daily Reckoning correspondent, Paola Pecora. “Then, when you actually see these women on the streets, the whole world falls apart… ‘Must be her sister… No! Her mother!’ you say to yourself.”

“That is the kind of disparity that is taking place today in Argentina…

“Since 2003, we Argentines have lived in a fantasy world… President Kirchner’s administration performs daily plays of the so-called ‘Theatre of the Absurd,’ a theatrical trend created between 1940-1960 in which actual on-stage events contradict the play script recited by the performers (the government). Crises are systematically denied (inflation, energy, tax collection, corruption…) but always right in front of us.

“One of the most classic plays ‘Waiting for Godot’ is about an eternal wait for someone who never arrives and we don’t know if he exists or ever existed. Our government is a mess, but the whole country waits…and waits for a political opposition that never shows up. Does it even exist? We don’t know…

“In the meantime, the Photoshop Policy works overtime. One government agency tells us what problems we face. Another one tells us how the government is solving the problems. And then, there are national statistics from INDEC – all doctored up by Photoshop to look better than they actually are. Argentines all have dormant inflationary genes (bred into them by many years of sad evolution). According to INDEC the inflation rate in the country is less than 10%. According to unofficial INDEC figures, inflation is already over 20%.”

Why the disparity? Because an election is coming in just a few weeks. Nobody tells the truth before an election…at least not in Argentina…

Yesterday, we went out to lunch to one of the nicest restaurants in the area – a steak house right across the road from the Four Seasons hotel. Curiously, the place – though huge – was empty. We were the only diners.

The steaks were very thick and delicious; the two of us had salads…we had coffee…and two glasses of wine. The bill came to 150 pesos, delivered with a plate of tiny desserts. Or, about US$45. Or, about 23 pounds sterling. Or about 32 euros. In London or Paris, we would have thought we had come across an extraordinary deal, though here in Buenos Aires, it was probably one of the most expensive lunches available.

“But you don’t have to pay that amount,” volunteered the waiter, for no particular reason that we could see.

“We will give you a discount.”

And with that, he took off 54 pesos. We paid only 96 pesos…

“You can barely get a Happy Meal for that kind of money…” our son concluded.

Argentine politics are a mystery to us.

“Are you kidding? They’re a mystery to us too,” said a local.

Along the Avenida 9 de Julio, campaign posters urge the voters to the polls. Near our apartment, a wall of plywood surrounds a construction site. There, hundreds of billboards have been plastered. At first, we thought it was a “WANTED” poster put up by the police. The large face is surrounded by long, uncombed hair…and the face itself is unshaven, with a two-day stubble sprouting out. The fellow may be a criminal – but he is also a candidate in the up-coming elections!

Bill Bonner
The Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Bill Bonner

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