Argentina Economy, Election, and possible default?

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Re: Argentina Economy, Election, and possible default?

Post by admin » Thu Sep 12, 2019 1:44 pm

well, i get they are trying to stop the arbitrage, but that is exactly the point. Introduction of currency controls, price controls, etc, is exactly how they got in to this mess; and, I am sure everyone with a bit of inside info is exploiting all kinds of arbitrage opportunities.

It is more like they are intent on clamping down on the little people exploiting the arbitrage; but, keeping it available for the big boys and their friends.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Fri Sep 13, 2019 10:10 pm

seems Argentina may not get the next IMF payment until after the election.

https://www.bloomberg.com/news/articles ... -fog-lifts


meanwhile, seems to be some issues with argentinean companies being able to pay foreign investors bond payments, even when they have the money due to the currency controls.

https://www.bloomberg.com/amp/news/arti ... l-controls

I don't think they are going to make it to the election without a full default.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Sat Sep 14, 2019 9:44 am

interesting article on the position of the dollar in Argentina society.

https://www.aljazeera.com/amp/ajimpact/ ... 01142.html

what seems to always be missing from those articles is a good excuse for why Argentina does not officially go to dollars. I get the classic arguments about paying debts and sovereign, bla,bla; but, Argentina is not able pay the debt now. the country is functionally already a dollar economy. ripping the bandaid off, would be a lot less painful right now than trying to keep that peso alive. right now it is just being used as a means to rip off the poor people. a massive wealth transfer from the poor to the rich.
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Re: Argentina Economy, Election, and possible default?

Post by at46 » Sat Sep 14, 2019 10:41 am

admin wrote:
Sat Sep 14, 2019 9:44 am
interesting article on the position of the dollar in Argentina society.

https://www.aljazeera.com/amp/ajimpact/ ... 01142.html

what seems to always be missing from those articles is a good excuse for why Argentina does not officially go to dollars. I get the classic arguments about paying debts and sovereign, bla,bla; but, Argentina is not able pay the debt now. the country is functionally already a dollar economy. ripping the bandaid off, would be a lot less painful right now than trying to keep that peso alive. right now it is just being used as a means to rip off the poor people. a massive wealth transfer from the poor to the rich.
Right now it's a transfer from the Argentian poor to the Argentinian rich. Switching to the dollar would ultimately transfer wealth from the Argentinian poor to the American rich.

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Re: Argentina Economy, Election, and possible default?

Post by FrankPintor » Sat Sep 14, 2019 4:13 pm

admin wrote:
Sat Sep 14, 2019 9:44 am
interesting article on the position of the dollar in Argentina society.

https://www.aljazeera.com/amp/ajimpact/ ... 01142.html

what seems to always be missing from those articles is a good excuse for why Argentina does not officially go to dollars. I get the classic arguments about paying debts and sovereign, bla,bla; but, Argentina is not able pay the debt now. the country is functionally already a dollar economy. ripping the bandaid off, would be a lot less painful right now than trying to keep that peso alive. right now it is just being used as a means to rip off the poor people. a massive wealth transfer from the poor to the rich.
Yes, it's already functionally a Dollar economy. Not only are rents and property prices quoted in Dollars, but after the latest devaluation, Peso-denominated prices went up too (except for some basic goods whose prices were frozen by the government). The bottled water we get went from 185 to 205 Pesos for a 12l bottle, even the Peruvian restaurant we order takeaway from increased its prices by 20%. However... actually using Dollars for day to day living is a whole other thing, I lived in Ecuador for a few years, and I could see that nobody has change, the banknotes degrade in quality as the year goes on (the central bank has to collect the bad ones and send them all to the US at the end of the year to get new ones), and of course the Peruvians take advantage of the low-quality US banknotes to send forgeries all over Latin America. Ripping off the bandaid is going to cause even more problems.

Argh! my ExpressVPN IP address has been blacklisted :-(
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Re: Argentina Economy, Election, and possible default?

Post by admin » Tue Sep 17, 2019 7:40 am

well, perhaps it is not a so much a "functional" as a "disfunctional" dollar economy.

get this. so, YPF sent a letter to its foriegn suppliers that it was fixing the peso dollar at 45 to 46 pesos to the dollar for the oil well projects in baca morta.

https://mobile.reuters.com/article/amp/idUSKBN1W111P

yea, that a good name.

I follow lithium stocks very closely. a couple years ago all the gringo investors and companies were all excited about the "miracle" of Argentina lithium and drinking the koolaid both the junior lithium companies and Argentinans were pushing. They were all bashing chile at the time because of the bachelet stupidity going on with the lithium contracts. I kept telling them, "you are all going to get your rears handed to you".

Most of those Argentina lithium projects are not going to come online, ever. It is not an accident, that the biggest lithium miners in the world, abermal and SQM, with the most experience operating in south america, are staying way away from all that "easy" lithium just over the boarder. SQM did one small joint project to get a plant up and running, and then promptly sold their stake to the Chinese. They were in and out in like 6 months. Other than that, nothing.

the big boys know all that junior lithium is going to "evaporate", and the lithium from Chile and Australia will pretty much be the only game in town.
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Re: Argentina Economy, Election, and possible default?

Post by 41southchile » Tue Sep 17, 2019 10:43 am

admin wrote:
Tue Sep 17, 2019 7:40 am
well, perhaps it is not a so much a "functional" as a "disfunctional" dollar economy.

get this. so, YPF sent a letter to its foriegn suppliers that it was fixing the peso dollar at 45 to 46 pesos to the dollar for the oil well projects in baca morta.

https://mobile.reuters.com/article/amp/idUSKBN1W111P

yea, that a good name.

I follow lithium stocks very closely. a couple years ago all the gringo investors and companies were all excited about the "miracle" of Argentina lithium and drinking the koolaid both the junior lithium companies and Argentinans were pushing. They were all bashing chile at the time because of the bachelet stupidity going on with the lithium contracts. I kept telling them, "you are all going to get your rears handed to you".

Most of those Argentina lithium projects are not going to come online, ever. It is not an accident, that the biggest lithium miners in the world, abermal and SQM, with the most experience operating in south america, are staying way away from all that "easy" lithium just over the boarder. SQM did one small joint project to get a plant up and running, and then promptly sold their stake to the Chinese. They were in and out in like 6 months. Other than that, nothing.

the big boys know all that junior lithium is going to "evaporate", and the lithium from Chile and Australia will pretty much be the only game in town.
Yup , unless you read bullshit fake news like an article I read the other day from a guy trying to discredit electric cars (he was from oil industry I guess). He was saying one of the many downsides of lithium is the biggest producer Bolivia, uses child labor to extract it. In other words he doesn't have a clue what he is talking about or knows it's fake but spouts it anyway to create doubt in the mind of consumers.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Tue Sep 17, 2019 10:59 am

there was another one today about boliva, with the numbers published listing chile as only producing 16,000 tons of lithium. try more like 80,000 tons and change. more, they have Australia listed at like 56,000 tons, but Australia exports most of its lithium as raw ore, unprocessed to be sent to china vs. the chilean production which is ready to go in to batteries. but, bolivia is producing almost zero lithium, of any sort, and the problem is its ore is contaminated; it requires extremely expensive processing to be usable; and most experts believe it will never be viable because the technology simply does not exist. never mind that the logistics of operating in bolivia will always guarantee their lithium is double or triple the cost of chilean lithium to produce.

https://www.batimes.com.ar/news/latin-a ... mand.phtml

here is the mess under the table foriegners are hearing about Argentina's currency controls:

https://www.clarin.com/economia/control ... n.amp.html
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Re: Argentina Economy, Election, and possible default?

Post by admin » Tue Sep 17, 2019 11:42 am

you know i have actually seen that 'error' about child labour and lithium promulgated repeatedly on the internet in almost the exact same way.

In fact the wording is so similar that i have to conclude it is either bots or paid spammers doing it. It has all the finger prints of the right wing republican oil lobby from the u.s. targeting trump supporters.

they typically confuse the issues with cobalt production from africa, with lithium production in south america, in some strange attempt to make the bible belt in the u.s. feel justified about supporting Trump and the oil industry.

Which is all very typical of the shallow thinking from the bible belt Trumppets. no one puts billions of dollars in to lithium mine, just to let a bunch of children play with it. lithium does not work that way.
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Re: Argentina Economy, Election, and possible default?

Post by FrankPintor » Tue Sep 17, 2019 12:12 pm

Vaca Muerta is a big project, very high quality (shale) oil apparently. I was chatting to a friend who works at the subsidiary here of a big German company, importing precision industrial equipment... they're still reporting 10% profit margin to head office (who don't believe them), simply because they've padded the sales price here with a big enough margin even after the devaluation. And they'll raise prices again to recover the margin. You can be sure the suppliers to YPF for Vaca Muerta are doing exactly the same thing, the squealing is just for show :wink:

Lithium is more problematic, look where the lithium is in Argentina, 1500km from the nearest Argentinian port? And no functioning train lines... that's going to be a bit difficult. Bolivia is in a worse state, they don't even have a port. Chile's ahead in the game because of an accident of nature.
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Re: Argentina Economy, Election, and possible default?

Post by 41southchile » Tue Sep 17, 2019 12:22 pm

FrankPintor wrote:
Tue Sep 17, 2019 12:12 pm

Lithium is more problematic, look where the lithium is in Argentina, 1500km from the nearest Argentinian port? And no functioning train lines... that's going to be a bit difficult. Bolivia is in a worse state, they don't even have a port. Chile's ahead in the game because of an accident of nature.
Yeah an accident of nature is right. I was listening to a fascinating article on the radio the other day from a scientist about how the lithium brine got there and Chile is in a brilliant position and has a competitive advantage with Lithium. Fingers crossed the politicos dont screw it up too much.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Tue Sep 17, 2019 3:50 pm

FrankPintor wrote:
Tue Sep 17, 2019 12:12 pm
Vaca Muerta is a big project, very high quality (shale) oil apparently. I was chatting to a friend who works at the subsidiary here of a big German company, importing precision industrial equipment... they're still reporting 10% profit margin to head office (who don't believe them), simply because they've padded the sales price here with a big enough margin even after the devaluation. And they'll raise prices again to recover the margin. You can be sure the suppliers to YPF for Vaca Muerta are doing exactly the same thing, the squealing is just for show :wink:

Lithium is more problematic, look where the lithium is in Argentina, 1500km from the nearest Argentinian port? And no functioning train lines... that's going to be a bit difficult. Bolivia is in a worse state, they don't even have a port. Chile's ahead in the game because of an accident of nature.
well sounds like the gas stations in Argentina are joining the complaint department.

https://www.clarin.com/economia/estacio ... jSM8Y.html
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