Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench

Argentina Announces Price Freeze to Control Inflation; Expect a Robust Black Market and

IMG Auteur
Published : February 05th, 2013
333 words - Reading time : 0 - 1 minutes
( 3 votes, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
FOLLOW : Argentina
Category : Crisis Watch

Argentina just announced price controls. Yet, common sense alone is all it takes to know that price controls cannot work.

For example, if government sets prices too low, suppliers will not sell merchandise at a loss, and shortages will appear. It will not matter one bit what the official prices is, because it will be impossible to get merchandise at deep discounts to true market prices.

It's as simple as that, yet politicians think they can halt the incoming tide by decree.

Please consider Argentina Freezes Prices to Break Inflation Spiral.

Argentina announced a two-month price freeze on supermarket products Monday in an effort to stop spiraling inflation.

The price freeze applies to every product in all of the nation's largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies' trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government's news agency Telam reported.

The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1.

Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it's trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.
Expect a Robust Black Market

The government's official CPI measurement is 10.8%, but no one believes that, especially with the government attempting to hold wage hikes to a mere 20%.

Setting up a hotline is a waste of time and money. Actually, it's worse than that.

If the hotline and other enforcement mechanisms succeed at anything, it will be to drive transactions to the black market. And then the government will lose tax revenue in the process.

The more "success" the government has in suppressing illegal price hikes, the bigger the black market will become.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Companies Mentionned : Robust |
Data and Statistics for these countries : Argentina | All
Gold and Silver Prices for these countries : Argentina | All
<< Previous article
Rate : Average :5 (3 votes)
>> Next article
IMG Auteur
Mish 13 abonnés
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
WebsiteSubscribe to his services
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
IMX Resources NL(Cu-Ni-Pa)IXR.AX
Shortfall from Share Purchase Plan to be underwritten
AU$ 0.01+8.33%Trend Power :
Corporate news
IMX Resources NL(Cu-Ni-Pa)IXR.AX
Results of Meeting
AU$ 0.01+8.33%Trend Power :
Corporate news
SpitfireSPI.AX
Notice under Section 708A(5)(e)
AU$ 0.01+11.11%Trend Power :
Corporate news
Entek EnergyETE.AX
Operations Update
AU$ 0.02+22.22%Trend Power :
Corporate news
Agrium Inc.AGU.TO
Agrium Obtains Issuer Bid Exemption Order to Permit Purchases by Way of Private Agreement
CA$ 136.14+0.26%Trend Power :
Corporate news
ConocoPhillips(Oil)COP
Governor plans to call for company buy-out in gas project
US$ 46.82+2.07%Trend Power :
Corporate news
Transcanada PipelinesTRP.TO
Governor plans to call for company buy-out in gas project
CA$ 45.50+0.75%Trend Power :
Corporate news
Encore Acquisition(Oil)EAC
6:13 pm Erickson Air-Crane announces it has been selected by Pan Aviation to provide emergency fire suppression support for the Municipality of Istanbul and the surrounding areas of Turkey
US$ 3.37+1.81%Trend Power :
Corporate news
Rare Element Res.(Au)RES.TO
Rare Element Files Canadian Preliminary Shelf Prospectus to Replace Expiring Shelf Prospectus from 2013
CA$ 0.48+5.43%Trend Power :
Corporate news
Gold Bullion Dev.(Au-Cu-Mo)GBB.V
GOLD BULLION ANNOUNCES FILING OF 43-101 TECHNICAL REPORT ON THE CASTLE SILVER PROPERTY, GOWGANDA ONTARIO
CA$ 0.02+33.33%Trend Power :
Corporate news
Comments closed