Tuesday, November 9, 2010

Argentina is not a serious country, episode 12,849

So today Argentina's FinMin Amado Boudou comes out and admits inflationary price rises in "some products" but tries to lay the blame on local businessmen for inflation, saying that

"There are some increments (due to) the push that an expanding economy gives, that has an enormous demand, the result of having incorporated millions of Argentines into the jobs market and millions of Argentines into the pensions system.

"However there is an attitude, and I want to say it with much respect, on the part of businesspeople who quickly move to increase prices instead of expanding supply and services."

Well, let's see now. I'm ok about normal rank and file people not getting the fact that inflation is caused by expansion of money supply, but the FREAKIN' MINISTER OF THE ECONOMY OF A NATION OF 40 MILLION PEOPLE? Gimme a break here, fercryinoutloud. Bizpeeps to blame for Argentina's inflation? As Dr. Johnson would say, I refute it thus:

Economics 101 lesson over. Data source: BCRA. DYODD, dude.

UPDATE: At the behest of ace Argy econ dude and site friend Miguel Olivera, here's the chart that shows YoY percentage change in that above M2 figure. Note how the recent 20%-or-so average increase YoY closely correlates with the unofficial inflation figures out of the country (as opposed to the official INDEC numbers which are the biggest statistical crock in South America right now).