Horacio Pozzo

This underreporting of the true inflation also generates further growth of GDP ... What is this?, The question is simple, and broad lines can be said that due to the fact that these indices are used to deflate the items of GDP everything that is not declared as price increase is declared as an increase in the product. Of course, the list of negative consequences generated by this prank price indices is much larger. Some of the damage it generates for the economy are: an intention and realization of investments, investors fled from the national government securities, lack of access to international financial markets, greater distortions in relative prices, and worst of all is not to attack the inflation problem. This hurts all investors with interests in Argentina's economy, those investors in the real economy, and those who invest in financial markets. Those interested in investing in the real economy, as a result of the unpredictability in the dynamics of prices (real prices), clearly can not infer profitability of their investments.

All key elements to determine whether an investment is profitable or not, they move with such force that even the investment projects are short-term difficult to assess. For example, if someone wanted two months ago to invest in the export sector in Argentina, and would have thought that, knowing the evolution of prices, could control the dynamics of real exchange rate, now feel frustrated to see that the nominal exchange rate in Argentina has been forced into an assessment by the Central Bank of Argentina, which took him from the $ 3.21 two months ago to the current $ 3.04. Neither is an easy scenario you want to invest in the Argentine capital market, which in addition to the problems of underdevelopment (it is small and shallow), finds that the papers have excessive volatility due to instability of the rules game. What is the trap of price indexes in Argentina? The catch is that while from the government maintains the illusion that everything is going the right way with a stable inflation, when worldwide is accelerating (strange is not it?) with growth is maintained at Chinese rates (when the rational indicates that this is impossible under current conditions), with levels of poverty and low poverty, and other illusions, inflation is hurting the economy becoming more and more irreversible its consequences and getting closer to a point of no return, which will be too late to change course. We will meet again tomorrow, Horacio Pozzo m