Argentines are now allowed to know the real rate of inflation | Hacker News Reader

Argentines are now allowed to know the real rate of inflation

qz.com

63 pointswslh28 comments

This is a chart comparing the "official inflation" vs. an unofficial one: http://www.pricestats.com/argentina-series

Also, the government forces McDonald's to keep the price of the Big Mac low for statistical reasons. You will not find the typical Big Mac advertised. It appears in a small McDonald's menu because the advertised one is a "Triple Big Mac" with an adjusted price. Bizarre?

More specifically, this has to do with the Big Mac Index by The Economist.

http://en.wikipedia.org/wiki/Big_Mac_Index

http://www.economist.com/content/big-mac-index

Further to this, the Economist stopped publishing Argentina's consumer price index numbers in from INDEC in Feb 2012 numbers due to government involvement::

http://www.economist.com/node/21548242

I thought the Big Mac agreement expired and wasn't renewed.

In US from late 90s to mid 2000s the price of housing kept increasing, dollar vs. euro plunged and dollar vs. many commodities dropped as well. But some how there was very low inflation???

Interest rates, although falling, were relatively high.

Inflation rates, also in the western countries, are messed up statistics. Many 'corrections' are taking place that seem pretty much unjustifiable, lowering the reported inflation rate. Governments are selling inflation indexed securities, and thus have an incentive to report lower than actual inflation rates. They can do so because the reporting institutions are often government subsidiaries. I can imagine inflation "manipulation" is going on at a scale that has far greater consequences than LIBOR gate.

In Uruguay, and I imagine Argentine as well, several social security payments are directly tied to inflation.

Salary increases are also inflation-adjusted, which leads to unions calling governments liars, governments calling the unions greedy and liars, etc...

Inflation is a serious thing, especially in these countries.

If the government is fighting to maintain a legally mandated purchasing power, that just guarantees even higher inflation. Either they are willing to suspend the guarantee, or let the currency dissolve in (yet another) hyperinflation.

Asset bubbles are great for inflation to hide in so it won't show up on your grocery bill. If you're not in the market for whatever is the hot bubble right now, works great ;)

The truth is; many countries (known examples; US, China, India, Turkey, Argentina) , significantly manipulate inflation and jobless stats, by playing with the contents and weight of the baskets used or definitions of job seekers/willingness to work.

The economist's spotlight on Argentina is due to the British establishment's dislike of the currently elected Argentinian government and England/Argentina tensions of the past decades.

> The economist's spotlight on Argentina is due to the British establishment's dislike of the currently elected Argentinian government and England/Argentina tensions of the past decades.

Indeed the current situation in Argentina is very extreme in terms of democracy: people being prosecuted for thinking differently, the government building an explicit criminal association. The conflict with the Falklands is finished and the Argentinisn government uses it as smokescreen.

The argentinian official CPI is totally messed up, and it's been years with all argentinians knowing that.

In the US, the inflation is so close to 0 that the index can be manipulated without rising as much suspicion.

Just wondering when Indians will get to know the same!

Spot on.. I changed the country name from Argentina to India in the price stats URL.

Alas! It's 404.

http://www.thehindu.com/business/Economy/coming-in-june-infl...

This isnt actually true. Unfortunatenly, private inflation offices dont have neither the manpower or the expertise to produce statistics as the official Indec organisation, so their numbers are also hard to trust.

More important than this, currently in argentina you dont have the ability to buy foreign currency, and not knowing what the inflation is (but perceiving it very high) is one of the factors that contributes to the raise of black market dollars, and buying dollars with credit cards and selling them in the black market pays off half a paycheck in a day for many people.

ADDITION: there is no doubt in anyones mind that the Indec is grossly manipulated. They claimed today that with 6 pesos (about 1.2 dollars) you can feed a family of four. A Regular combo in Burguer King or Mc'Donalds is between 50-60 pesos. A 1 litre coca-cola costs 10 pesos in a cheap supermarket.

>This isnt actually true. Unfortunatenly, private inflation offices dont have neither the manpower or the expertise to produce statistics as the official Indec organisation, so their numbers are also hard to trust.

They are not hard to trust because every Argentinian that goes to the supermarket knows about it. And you have the data scraped to analyze it yourself. I can quickly compare tickets from years ago.

It is truth that is very difficult to do statistics at a country scale but if the Government says that 1 + 1 = 4 and you say it is 2.15, who is closer?

Thats anecdotical evidence. 10% inflation can also be felt on a supermarket.

Private inflation offices also gain money by providing high numbers, as they tell what other people want to hear.

The reality is that the Central bank prints money at an accelerated pace and that there is inflation between 10% to 30%. "closer" is not enough for me.

Indeed there is not such thing as an inflation precise calculation that makes everyone happy. There are many different approaches to the inflation problem: do you take into account real state? even if few people can buy a house?

I dont know how to make an index, and I dont trust Indec or private offices. Thats why I refute the claim that "now we have an inflation index" by the economist.

We dont.

Also, the economist had published an article called Gaucho "Blues" about the blue market in argentina, and it has been taken down. Thats a red flag.

At the end it doesn't matter how to calculate the index, what matters is if you can live with your salary.

I think the index says that with 6 pesos a person can be fed, not a family. Still ridiculous, but less.

meh. Nice to see some rationality but the real rate of inflation measured by private entities never stopped being published by senators in congress taking advantage of their immunity.

Bitcoin exchange rate going up in 3...2...1...

Bitcoin is of course renound for stability.

Compared to latin american currencies, it's a safe haven :)

I've seen the Old Peso, the New Peso, and the (Newest) Peso (which was an exchange rate of 1000 to one, to remove zeroes from the bills), and I'm only 32 years old.

Same for Brazil, they had the Cruzeiro, Cruzado and Real.

Argentina had several different Pesos (Peso Ley, Peso Fuerte, Peso Convertible) and the Austral.

I also believe Bitcoin is a good opportunity for Argentinians.

BEcause of the difference between credit card dollars (about 6.20 pesos) and black market dollars ( 9 pesos today, 10 pesos last week) you could buy bitcoins, sell it for dollars and then sell dollars back in the market at 9 pesos.

It is part of the circumstance that argentinians just really love dollars.

Reply on news.ycombinator.com