I have finished watching Follow The Money part 4. It is a documentary by Peter McCormack on youtube and follows his trip to Buenos Aires in Agrentina to look first hand at the inflation crisis there. Argentina is a place I would love to visit, particularly Buenos Aires, therefore I was intrigued by this documentary and to see if I would learn anything from it. The director is a Bitcoiner and here are my thoughts and observations from it.
I have never been to Argentina but I have met many people from there and people who have visited. When I think of Argentina, apart from Maradona, it is quite well known for its high inflation and it seem this year to have grabbed the headlines with a mainstream media labeled radical presidential candidate who is promising to fix things (when do politicians not?).
The election starts this week on the 22nd October where people can decide to continue with the status quo or go for the new guy promising some radical changes. It seems this could be a more pivotal election than has happened previously, but can a politician fix this inflation crisis?
The documentary is around 45 minutes long and first sees Peter meeting some locals at a ranch on the outskirts of the city and he gets some first hand opinions on the monetary problems there as well as riding a horse. He is very impressed that they drink wine at 10am and is impressed of this early drinking thing.
Peter interviews some people first hand in the style of Luis Theroux about how they are surviving with this inflation and asks how their day to day lives look like. He speaks with a range of people. Some feedback from a couple of business owners confirmed that it is hard to run a business there because the owners need to call the suppliers each day to check for price changes and get authorisation for price updates. One of the main complaints Peter recorded from business owners were that they were complaining of needing to spend a lot of time doing maths running their business.
When asked what prices are rising, he got answers like, the main necessities that people need go up in price most. Later on he interviews some people in the city and then people from a more rural poorer area and comes to conclusions that people in the city are managing quite well despite the inflation because they sell their pesos straight away for crypto stable coins it is implied, but the poorer people are unable to do this.
On the league table of fiat coins, Argentina is near the bottom of best performing. It seems that fiat money is the anti-thesis of a stable coin, yet when Peter tried to buy some pesos using the grey (black) market, he could pay using Tether on his phone. The dealer said this is the most popular stable coin to buy pesos with, which considering ETH gas fees, I am surprised.
However it makes sense to buy pesos using the grey market as the quoted exchange rate was double the official one, so you could lose out pretty badly. The country seems to be approaching the absurdity of the Weimar Republic with wheelbarrows of cash as I saw that the guy selling pesos brought huge wads of freshly minted notes for the few hundred dollars transactions.
The new radical presidental candidate Javier Milei was quoted by Peter as promising to dollarise the economy if he wins. Looking at the use of Tether by people to store value, it seems that it has already mostly dollarised. People are just going through the motions with pesos.
Peter speaks with quite a few more people and the discussions range from the government providing services and benefits and then the people are unhappy when the value of them goes down each month because they cannot control the inflation.
The reality seems in Argentina that the government cannot give something it doesn't have and those with some wealth are using the tools available to them to try and preserve their wealth such as using stable coins and Bitcoin. Although, most people said they are living day to day and cannot save anything due to the inflation.
Something that Peter didn't really touch on and was important to me was how do people earn their wages? Are they paid in pesos or in dollars? I would assume as prices go up for goods, if people earn pesos, their wages would also need to go up so they could afford to live and the spiral would continue.
An over-riding message from the video is that also that the government services are not working and they dont have enough funding, so people need to pay for most things privately. Peter then mentions if the government would just stop making so many rules and interferring in peoples lives, people could get on with things. Considering Peter is living in the UK, I am wondering if he has looked around himself there lately with the huge amount of useless rules, regulations and other things going on in the UK and the damage it causes.
It was mentioned in the documentary, that it seems most people ignore most of the government rules and it was mentioned they dont pay the taxes either as they see it as unjust and imoral.
This probably then caused further problems when the government promised more free benefits to people that they do not have the money to give. So instead of honesty that there isn't enough money for benefits, ever more debased currency is given out.
It makes you wonder where we go from here with government taxing half of our wages and then debasing the currency to crazy extremes, how do you get this leviathan under control? The rich are happy oppressing the poor and many people want and often need to continue to get benefits, even though the situation ends up as it does. Is their a more fair and equitable system?
Somehow, I think the Argentine situation will spread and those dependent on the government and trapped in fiat will suffer the most. Which is the poor and most vulnerable in our society.
What are your thoughts about inflation?
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