8/29/2022 - Politics and Society

Fire in the Titanic

By Horacio Gustavo Ammaturo

Fire in the Titanic

Perhaps many of you have seen different images, photos or drawings, in which in two scenes it is presented, usually to an animal, in a very uncomfortable situation in the first image and then, in the second, in much worse.

I remember seeing one of a cow with a stunned head in a tranquility and the next, the same, but with flock of hungry wolves approaching.

Be cows, dogs or people the message clearly is that you can always get worse.

As in the Titanic tragedy, which sank in cold waters, something worse could have happened to the survivors as the fire of lifeboats.

The economy of our country is analogous to the previous description.

Like the fateful ship, private economic activity lacks attractions for international and local investors, only stimulated by two lifeboats, subsidies of all kinds, plans, tariffs or negative rates, multiple exchange rates.

Both, of relative effectiveness and easy exhausting.

For the first, permanent injection of money increased the monetary base and inflation to hyper values increased.

In our days, the difference between inflation and hyper lies in the loss of relative prices between goods and services offered in the economy.

It is common to hear in the lectures of friends who can pay for the same product 700 or 2500 pesos without any of the values being attractive.

This is hyperinflation, it is the loss of notion of what things are worth, as a result of what money is worth and much worse than our work is worth.

While in the case of the “stimulus” through the exchange pit it served only for certain sectors of the economy to take advantage of these fiction distortions to obtain extraordinary margins.

The real business goes through obtaining authorizations to run abroad, more than by business activity itself.

In the search for this huge comparative advantage, all arguments are valid, from the salaries of employees working in the companies that request cheap dollars, to the critic who is for the health of people relying on products imported for the case of medicines and medical equipment. All make the tail at the Secretariats of Industry, Commerce and the Central Bank.

Floating in the auxiliary barges, emission and gap, our ship is sunk in the waters of a cold economy that is slowly frozen.

What could be worse?

Slowly, the page contains the first imágen, that of the stunned cow and begins to glimpse that yes it can be worse and the wolves approach.

The engines of this economy without incentives were exhausted.

The emission of weights to sustain a model based on public expenditure has destroyed confidence in weight, at least for those who have the possibility to accumulate, as a result, escape from it at any price.

Only the difficulties in accessing currencies and the high, but negative, interest rates offered to deposits in weights postpone a few days the flight to the dollar.

On the other hand, the dollars are over. In some previous note, we said that with this model Argentina could have sold out all the dollars of the Federal Reserve.

Selling 130 something that the market is willing to pay 290 and intend to pay those who must compulsively sell 120 plus being ridiculous seems to be suicidal.

Lifeboats are firing.

The weights of the plans and subsidies no longer reach because the loss of the relationship between prices left without purchasing power to all of them.

We see smoke in the central streets of the social movements screaming that no longer reaches, a sign that these auxiliary ferries are sinking.

However, farmers also smoke in their speeches and messages, delaying export settlements, as well as any other exporter of other activities.

The crossed incentives to reward unemployment to the detriment of employment and to give advantages to importers and punishments to exporters ended in hyperinflation and absolute loss of reserves.

No one is saved in a boat that sank whose lifeboats hold fire, one after another.

And as if all this was little, there was a third picture in this series of drawings, dispelling the great electoral offer from face to 2.023, lacking equipment and projects.

It is urgent for someone to show, even if it is at a distance, that they have a support boat that gives hope to the few survivors of this economic, social crisis and even more lack of expectations.

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horacio gustavo ammaturo

Horacio Gustavo Ammaturo

I am Gustavo Ammaturo. I have a degree in Economics. CEO and Director of infrastructure, energy and telecommunications companies. Founder and mentor of Fintech, DeFi and software development companies. Blockchain Product Designer.

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