I came across your blog and found a lot of great information about how to prepare for the coming crisis.
Really appreciate your effort. If you don’t mind, please share your knowledge about these topics. After the collapse, did the government hike the tax like crazy?
How is the banking industry like in Argentina now? Do they make loans? During the crisis, did power get cut off?
The government did indeed raise taxes considerably.
Ten years later its still an ongoing process that is milking money out of the already crippled middle class. We currently have 21% tax on everything (food, clothes, services), then there’s income tax, home taxes, etc. For business owners its such a nightmare. Off the record, business owners will admit that if they pay everything they are supposed to, they couldn’t stay on business.
Rising taxes is something already happening in USA, another parallelism, expect it to get worse as time goes by.
Prices of services in general went up considerably, sometimes 400% or more. On the other hand you have the people in villas and shantytowns that are illegally connected, so basically what happens is that the middle class is milked by the rich and corrupt through taxes (bailouts, concessions) , and also forced to pay for the expenses of the poor stealing such services that are the ones that vote these people into power. The more poor, the better for these politicians.
The banking system never got back on its feet. They operate as usual, but no one really trusts them. If you have the money, you put it into real estate, if you don’t have the money for that, you buy a car. The crisis showed people that at least you had the car valued in dollars even if the peso collapsed, so it has become a way of keeping your money as well. The peso may default 50% next month, but the vehicle remains and somewhat keeps its value.
Of course people that have ways of doing so keep their money in off-shore accounts. Loans are expensive, interest rates are high, and the requirements are pretty high for any significant amount of money. Yes you can get a house loan for 100.000 pesos, but you don’t buy a place in a ½ ok neighborhood with that amount. It would be hard finding a place anywhere for that little money actually. As the local joke goes, “to get a good loan in Argentina you have to be rich enough that you don’t need it”.
Power problems started a few months after the economic collapse and we suffered them the following summer. The infrastructure was already in poor condition because companies haven’t been making the needed maintenance. Once the peso devaluated supplies and spare parts, most of which were imported, became very expensive and in some cases unaffordable. Especially during summers, we had rolling black outs. There was problems with water supply as well and people went without water for days, even weeks in some of the poorest suburbs. Currently during summer time there’s also blackouts but far less than before.
What we see a lot of is “dirty” power, power that has a V below the one it should have. It should be 220V, but sometimes it goes down to 190V, even 170V. I found a solution to this problem with a voltage elevator. Now my appliances run well during summer when the power problems start.