Private economics consulting firms figure the rate of price inflation in Argentina is running more than double the official 9.7% and are publishing their data, making President Cristina Kirchner’s administration upset. The Wall Street Journal‘s Taos Turner explains,
The government is charging MyS Consultores with “publishing false information about inflation data” to benefit themselves and their clients. The criminal complaint alleges that MyS’s data also lead to speculative behavior in Argentina’s bond market.
The government says inflation is no problemo, and anyone that says otherwise must be an enemy of the state. Nine economics firms have been fined half a million pesos apiece for reporting the truth.
“They fine us for saying how much prices have risen,” Mr. Ferreres, director of his eponymous firm, tells the WSJ. “They could seek criminal charges against all of us. We don’t know how far they’re willing to go.”
Government officials in Argentina say they hope the fines will stop economists from “deceiving” the public into making poor financial decisions by publishing inflation estimates that substantially differ from the government’s consumer price index.
Of course legal scholars say these charges are unconstitutional and have no legal basis. However, Turner writes,
the fines had the desired effect of silencing some economists and leading others to refrain from talking openly to the media. Citing government pressure, consulting firm Economia y Regiones said in March it would stop making public its inflation estimates.
Never mind that former employees of Indec, which produces the official inflation numbers, and some Economy Ministry officials, admit Indec’s numbers are manipulated. Also, government officials routinely rubber stamp collective-bargaining agreements that include 20-30 percent annual wage increases.
Surely, economists are safe here in the good old U.S. of A, where the Bureau of Labor Statistics just reported that annual price inflation was running at 3.6% in May, at the same time Shadowstats.com‘s John Williams estimates that consumer prices are really rising at an 11.2% clip?
Nothing to worry about. After all, America is just a republic, not a banana republic. Right?
{ 14 comments }
In the old Soviet Union, this would have been referred to as “Subversive Activity”.
At least their economists are doing their job on trying to tell the truth — or were.
Argentines are buying cars on credit as investments because the cars depreciate at a slower rate than the loans.
http://www.pri.org/business/argentines-invest-in-cars-to-avoid-inflation.html
That should tell you everything about the fiat money system in Argentina.
———-
The government says inflation is no problemo, and anyone that says otherwise must be an enemy of the state.
———-
They say it as if it was something bad. They equate country with the state, and then portray patriots as traitors. That’s sneaky. That’s fascism.
The solution to all of the government’s problems is to simply outlaw inflation. No more COLA. No more debt debates. No more problems with ever higher entitlement costs. They make money out of thin air and claim it makes us all prosperous. They legislate markets and productivity into existence (e.g., ethanol and minimum wage). Why should making inflation “disappear” be any more outrageous? It will be like prostitution, drugs, alcohol, smoking, carbon emissions and obesity. Just make it illegal.
They’re scared from these pathetic fines? Half a million pesos will barely buy you a lollipop.
actually, half a million pesos would be around a hundred and ten thousand dollars. Quite an expensive lollipop
Argentina ?
Isn’t that the country which seized their people’s private pension funds ?
Beware that the USA might do the same thing in the future and seize your private pension plan, it is already in the process of seizing your health care.
There is even a short song deriding the political class of Argentina, calling them the “Hand Raisers”, Los Levantamanos.
http://www.youtube.com/watch?v=gx4nAuPgFDI
This story resembles the episode where Latvia has brutally arrested and jailed an economist for telling people to dump Latvia’s currency and buy Gold.
http://news.bbc.co.uk/2/hi/business/7768696.stm
Just pay off the fine next year after the Peso devalues.
They’ll do what Venezuela did: create a separate currency for dealing with the governement.
My Dad always has the best stories when he comes back from Venezuela on business. Like how Chaves was on TV bragging how cheaply he set the price of beef (half of the US market price) while he was eating a $100 hamburger because the only place to get beef was on the secondary market for hugely inflated prices. And this was in a state-run hotel specifically for foreigners on business, showing that even the state doesn’t buy into that nonsense and readily buys off the black market.
I think I got the country wrong, but you get my point
I’m Argentinean living in Argentina. I’m economist and had the chance to work at the central bank until a year ago as an adviser to the former governor, who was ousted for not allowing the use of reserves to pay for the government debt. Although his tenure wasn’t one to be proud for fighting inflation, it was nothing like what’s happening at this moment.
I also had the chance to work with a couple of colleges that were not only fined with AR$500.000 (something like US$125.000), but also made liable with penal charges that could end in two years of jail. Not funny at all!
We are going through tough times in Argentina, and even more for those of us that believe in liberty and freedom of speech.
Comments on this entry are closed.