Thursday, August 28, 2008

Some Q&A

Ferfal - thanks again for this great blog. As inflation is a major problem in Argentina, I was wondering how do people buy big-ticket things these days? Like a car or a house? Or even a new refrigerator? Is there still credit now (as you knew it) before you currency blew-up?

It’s very hard. Credit is back now but we spent several years without credit of any kind after 2001, and still in some places ( like gas stations) no kind of plastic is accepted, cash only.

It’s not uncommon to see commercials on TV about loans and credit for buying a camera or a TV.

The TV add shows a really old couple watching TV, and then the same couple in a much younger version “Don’t wait until you are too old! Buy your tv/camera/Jacuzzi now!”
Things that aren’t really that expensive in most places, are a big deal here, and something you think carefully about because you’ll be paying it for years.

Something as simple as an average car repair is something that sets you back considerably. The parts alone are very expensive.

Something like a fridge or TV?
There’s still credit yes, but the price/salary ratio will be hard on most medium class people, maybe spending an entire year to pay for the credit on the fridge. Poor people can’t even afford it.

A car? IF you get credit, (big if) most people here spend years paying for an old car that costs just one average 1st world monthly salary.
The same car that costs maybe 2 or 3 months worth of average salary in USA or Europe, costs anyway from 2 to 5 years worth of average salary here.

A home? Forget it, average people can’t afford to buy one these days.
No credit for normal people for that kind of expenses.
You slowly save money for years before you dream of walking into a bank and asking for a loan.

Most people I know of either rent or live in places owned by friends or family.

Almost no one has what it takes to buy a house here these days.

The market is slow, its normal for a house to spend several years on the market, unless it’s really cheap, a real steal.

Ferfal, I also have a question for you: Do you think a safe deposit box is a safe place to store valuables like most of your "gold fund" jewellry or golden coins? What happened to the contents of safe deposit boxes during the conomic collapse and the time the banks were closed? Were the contents still safe? I figure in normal times a safe deposit box is one of the safest places to put valuables because bank robbers seldom try to open them and almost never succeed in opening them, but I'm pretty sure the bank manager could open them if he wanted to.

Not as safe as you’d think.

In some cases, orders have been given by judges or officials to open private safety boxes to see if there’s cash or gold (screw our Constitution and the right to intimacy and private property)
It’s also a common target for bank robbers, knowing that there’s where the money really is.

Some years ago a spectacular robbery took place, involved a tunnel, and inflatable raft going through the sewers below the bank and the city for miles, and finally escaping through the river in jet sky.

Many times bank employees are involved in the robbery of the safes.

It’s safer than a bank account in my experience, safer than a vault in your home probably, but don’t think that your stuff is 100% safe or out of the hands of the gov. crooks.
It isn’t.


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