Fed Chairman Bernanke and his ilk refuse to see the connection. They’re too busy ogling inflation in the US that is suspiciously low. But China has its eyes riveted on the revolt in Brazil. Like all revolts, it’s about deep-seated issues and inequalities, but the spark that lit it – after inflation had made life too expensive – was an increase in bus fares.
Entries in Latin America (21)
The issue of inflation is complex everywhere. Official rates are disputed. People can’t reconcile them with what they see at the store. There are different formulas, resulting in different rates, and everyone picks and chooses what suits their needs. But nowhere is the issue as “complex,” infested with lies, and shrouded in obscurity as in Argentina. But 34.9%?
Contributed by Don Quijones: “We make or break human life every day of every year as probably no other force on earth has ever done in the past or will ever do again” — Davison Budhoo, former IMF economist who in 1988 broke ranks and published a scathing 150-page resignation letter. In it he accused the IMF of corruption, self-interest, and deceit.
Contributed by Don Quijones: In 1994, decades of economic mismanagement, political ineptitude, corruption, and financial fraud in Latin America – overseen by the IMF, now a protagonist in Europe’s Troika – reached their nadir in the Mexican Tequila Crisis. It should have served – but patently didn’t – as a portent of the financial storms now buffeting Europe.
Contributed by Don Quijones: A cardinal rule that visitors should observe at all times in Mexico City is to avoid catching random taxis on the streets. Pick the wrong one and, at best, you will be abusively overcharged. Or you may be whisked away to some neighbourhood where the taxi driver’s partner(s)-in-crime will be waiting. But this taxi ride was different.
Contributed by Marin Katusa, Casey Research: Hugo Chávez was a highly controversial figure, calling George W. Bush a drunkard and a "psychologically sick man" and Tony Blair an "imperialist pawn,” and worse. But with Chávez no longer in the picture, things will change, and cheap Venezuelan oil will be able to flow into the markets, right? Wrong!
The California Division of Occupational Safety & Health just slammed Chevron with massive, record-breaking penalties related to the refinery in Richmond—the one that ended up in a fireball last August and caused 15,000 people to seek medical treatment. Purpose: to teach the mega-company an excruciatingly painful lesson. Alas....
Contributed by Bianca Fernet. Last night, I passed a sign that called for the nationalization of the Argentine Railway System, which was privatized 20 years ago. It remains highly subsidized and fraught with dangerous problems. I couldn’t help but be drawn in, as I'm currently re-reading Ayn Rand’s sexy ode to free markets and railroads, Atlas Shrugged.
Contributed by Daniel J. Graeber of Oilprice.com. Unlikely that Venezuelan President Hugo Chavez will return to power after missing his inauguration. That leaves Vice President Nicolas Maduro in de facto power of a country that is dependent on a poorly-managed oil sector and has moved closer to rogue regimes like Syria and Iran.
Contributed by Jen Alic of Oilprice.com. Bolivian President Evo Morales ordered the nationalization of four business units owned by Spain’s largest utility, Iberdrola. Hours later, the army and police seized the company’s offices. Part of the plan to make electricity more affordable and accessible to the population. So far, 15 companies have been nationalized.
Contributed by Bianca Fernet. The dust has settled—for the time being—from the November/December drama surrounding the US Court rulings regarding Argentina’s payment on defaulted bonds. But it remains a confounding snaggle. And an appeal is coming. It will certainly be a titillating February.
Contributed by Chriss Street. When President Obama met with the new President of Mexico, Enrique Pena Nieto, the press focused on the Administration's talking points on issues ranging from energy to climate change. But the Mexican economy is outperforming the U.S., and the real immigration concern is Americans illegally moving to Mexico.
Contributed by Bianca Fernet. A version of this post has been in permanent edit mode since September, and has been extremely difficult to write for two reasons: It will evoke more emotion and generate more controversy than my typical subject matter; and quite honestly as an American white girl from the suburbs, I lack the “street cred” that’s preferred when tackling touchy subjects like racial or class divides.
Argentina: Not An Effective Capital Control, Import Control, Or Tax Measure – But An Effective People Control
Contributed by Bianca Fernet. Sometimes I have to hand it to the Argentine government – their systematic clampdown on the movement of goods and capital across their borders is creeping along just enough to make international headlines about once a week without incurring any real domestic outcry to speak of. But now they have a new thing.
Contributed by Bianca Fernet. The US, Japan, and Mexico followed the EU’s lead and filed complaints at the WTO against Argentina’s import restrictions. Argentina promptly responded with its own complaint—against the US for blocking imports of beef and lemons. Yet, its beef market is one of the top 10 most protected in the world—and not in favor of its own beef producers! Just to keep the country glued together for a little while longer.
Contributed by Bianca Fernet. Argentina is the perfect example of trade barriers, exhibiting a tantalizing web of import and export tariffs, quota systems, subsidies, licensing schemes, and local content requirements, all along with a healthy dose of corruption. One of the reasons I love living in Buenos Aires is that it is like living in an economics textbook. Argentina’s most ‘popular’ textbook economic blunder is capital restrictions.
Contributed by Bianca Fernet. It’s the longest subway strike in Argentina’s history. The shutdown began Friday a week ago, and as I write, the end is still not in sight. The Metropolitan Area of Buenos Aires is home to over 12 million people, and over 1.1 million trips are taken on the Subte every day. These people now cram themselves onto the congested streets. Transportation has ground to a crawl, the bus system is overburdened, traffic chokes the streets. Due to politics and money.
Contributed by Bianca Fernet. The winter weather is not the only thing chilling the bones of Argentina’s residents. Since late July, a new set of words has been showing up in the articles about the economy. Shrinks. Slows. Stagflation. These chilling terms are being used to describe the consequences of what some nasty looking economic indicators might have in store. Argentina, an alternative path for indebted Eurozone countries? Not so fast!
Contributed by Chriss Street. President-elect Enrique Pena and his Institutional Revolutionary Party moved to dissolve the Agencia Federal de Investigación (AFI). Modeled after the FBI, the AFI was founded in 2001 to crack down on Mexico’s government corruption and drug trafficking. With drug cartels murdering between 47,500 to 67,000 Mexicans over the last six years, the move represents the surrender of Mexico’s sovereignty back to the money and violence of the drug cartels.
Contributed by Bianca Fernet. Argentina is known for its myriad of protests against price increases, lack of wage increases, benefits for veterans, laws regulating the sale of goods on the street, lack of funding for schools, increases in subway prices…. These protests are accompanied by much more disruptive behavior than clanging pots and pans. Yet are treated as commonplace occurrences, like a minor traffic collision