Let's see. What's happening in Argentina these days? Oh, this isn't good.
High inflation in Argentina is "worrying" Toyota's local unit but the company is optimistic that concerns over energy shortages will ease in the medium term, the firm's president said on Thursday.The "official" inflation rate is quite likely lower than the "actual" inflation rate. The Argentine government of Cristina Fernandez de Kirchner changed the way Argentina calculates inflation. In fact, they adopted the US system which is, at the least, highly flawed and deceptive. Basically, the US, and now Argentina, uses hedonic pricing as a means of calculating the CPI. It's a deceptive means of reducing the effect of price increases.
Investors are concerned about inflation and energy shortages in Argentina, where the red-hot economy has grown 8 percent a year for five years straight after a 2001-02 economic crisis.
The official inflation rate was 8.5 percent last year, but private estimates put the figure at more than twice that. Economists, opposition politicians and some government statisticians accuse the government of fudging the numbers.
OK, what else in happening in the land of gauchos and pampas? Uh oh. This isn't good either.
Argentine farmers Wednesday suspended a 3-week-old strike that has led to food shortages and sparked the first political crisis for President Cristina Fernandez de Kirchner.Yes, well... the last farm strike in Argentina saw a coup by the military and seven years of mismanagement by a guy named Galtieri.
In fact, the harsh dispute centering on new export taxes was far from resolved. Bitterness remains on both sides, and the prospects for compromise remain unclear.
Producers expressed hope that negotiations could prompt what they characterized as a more flexible response from Fernandez, who has refused to roll back the expanded export levies unveiled last month. The new levies increase to as much as 45% the duties paid on soybeans, Argentina's principal export crop, from the current high of about 35%.
Taxing commodity exports has been a revenue-raising tactic of Fernandez and her husband, Nestor Kirchner, who served as president before stepping aside last year to let his wife seek office.
The center-left pair have had a tumultuous relationship with farmers and other business interests, but have overseen five years of growth in Argentina, a major exporter of beef, soybeans and other grains.
The problem is, Argentina's big food producers are making huge profits. They're capitalizing on the skyrocketing price of soya beans and grain. The smaller farmers, however, aren't doing all that much better than they ever did. Kirchner was taking aim at outfits like Cresud, one of Argentina's largest agricorps. And what are they up to? Well this.
Some of Argentina's biggest companies are raising finance to invest in the booming agriculture sector in Latin America, on the back of steep rises in soft commodity prices.Ah yes. Simply explained Argentina is a big beef producer (Argentinians eat more beef per capita than any other population on earth). However, soya beans are easy to grow and there is an increased outside demand for soya beans and grain. Andrei Fedyashin explains:
Cresud, the agricultural arm of one of Argentina's biggest investment groups, Irsa, and the country'sbiggest landowner, announced at the end of February that it planned to issue a further 180 million shares to raise $300 million.
A dollar shower started in Argentina with a skyrocketing demand for grain; the latter began rising with a rapidly growing demand for ethanol; and the latter started going up with the growing oil prices. Demand for soya beans began to increase because Argentina needed fodder instead of grain, which was exchanged for oil.... This pumping of grain from the food sphere into the fuel and energy sector may produce unexpected results. Scientists from Illinois have calculated that in 2006 the demand for ethanol grain in the United States alone was 54 million metric tons, and grew to 81 million metric tons in 2007. When 62 ethanol-producing plants are put into operation in America by the end of this year, this demand will increase to 114 million metric tons. A barrel of crude oil will cost about $100, while the producers of ethanol from fodder maize are ready to double what they offered for a bushel of maize early this year.The farmers, or more accurately, the farm corporations are complaining that the increased taxes are onerous, despite the fact that their profits from overseas sales are burgeoning and attracting the interest of some other outfits. Tyson? This Tyson?
This is all sounding very deja vue. And sure enough, the Argentine method of deflecting attention from domestic woes rears its ugly head.
ARGENTINA'S claim to the Falkland Islands, which remain in British hands after a 1982 war, is "inalienable", President Cristina Kirchner says. "The sovereign claim to the Malvinas Islands (Argentina's name for them) is inalienable," she said in a speech marking the 26th anniversary of Argentina's ill-fated invasion of the two islands 480km offshore.Oh, fer fuck sake. Don't even think about it. The only population with a claim to the Falkland Islands is a bunch of rude animals.
In any case, the place is still full of landmines, most of which Argentina laid, and they haven't finished removing yet.