F Dominicus Blog

A politically incorrect blog about matters of money, government, bureaucracy, freedom and sometimes something else.

The spiral of interventions

Well now we see another template example of interventions.

Argentina, has obviously left the area of markets due to the "politics" of Mrs Kirchner and her spouse. In a side-note of the newspaper of my wife I found: Inflation 25% and official course between Peso and $. And what has happened before.

It started with good running exports and higher as usual prices for the exported goods. So far so normal, then comes the Kirchners and what did they do? They spend this money on welfare (and if there is but one way to get money burned faster, really burn it). This has bought here enough votes (yes the merits of democracy) to get re-elected. and it has come as it always comes.

The prices for the export goods are falling and she does not have enough money for their "welfare" operations. Well one might think well one must cut them back. That's normal thinking, but not the Deledefs way, and so they make more debts (one just can say as usual) and started to make restrictions on free trade. Well if you mess with the markets the only answer there is appears, the prices start raising. And indeed even the stupid newspaper of my wife at least has to "admit" that inflation is beyond 25%. 25% means in a little over 3 years your property halfs in money value. You can bet the only things raising as fast as inflation are always the all-day-needed goods. And so the poor start paying the bill immediately.

Now the people act logically and try to get rid of the Peso and that means they buy other currencies, and this get the next reaction. Controls on the money export/exchange and indeed this is what Frau Kirchner and the Poligangsters did, they "forbid" exchanging into $ and now $ are scarce and a scarce thing does what? Exactly it raised in Price, now the official exchange rate and the "paid" exchange rate differ around 40%. Very "appealing", the members of the parliament (probably of Mrs Kirchners party), do what? They buy more Dollars and they can, so much to "equality" before the law

So the end is coming, and the interventions gets more and more by the hour. People which have gained at least some wealth are not expropriated by the inflation initiated by interventions of the state. The sucker spiral turns faster. I guess within the next 5 years Argentina will fall back below 3rd world level. So dear Argentines, say "thank you" to your deledefs. And bite yourself because of your stupidity.