Reference News Network, December 10** According to the Spanish "Vanguard" **December 10** If it is said that in Buenos Aires, people can have a good time, it is obviously a little rash. Here, inflation is approaching 200 percent, and families with three or four children are left to sleep on the streets.
Many of the Argentine middle class who voted for Milley hope that the liberal economist will end the plague of inflation by making massive adjustments that cut subsidies for the poor, transportation, health care, education and fuel. But few people understand what Milley never hidden. The first phase of the adjustment will lead to an acceleration of inflation, as the Argentine peso will depreciate further in the full liberalization of the exchange rate.
The report quoted a veteran Buenos Aires journalist as saying that for fear of triggering unrest, "I don't think Milley will dare to cut subsidies to the poorest at this time, so the pressure of adjustment will fall more on the lower middle class due to prices." "And these are the people who voted for Milley.
Everyone in Buenos Aires thinks the official peso will depreciate by 40% next Monday, the report said. This will lead to a skyrocket. In fact, this has already happened. Supermarkets are ready for an imminent 30% or 35% price increase. Gasoline is just 15% up. And that's just the beginning. In an interview with the local market, the president of the Buenos Aires Grocers Federation said: "Yerba mate has risen by 35 per cent, and flour has increased by 35 per cent to 40 per cent. ”
The report also said that the outgoing Alberto Fernández has lifted the regulations and is trying to protect the purchasing power of ordinary Argentines through a complex multiple exchange rate system and gradual devaluation. And Milley will accelerate all this, but the paradoxical result will be that the first phase of the disinflationary adjustment will see a **spike.
On the other hand, there is the liberal adjustment, in which Milley intends to cut public spending, which will lead to a slowdown in the economy and the destruction of employment.
The report also said that while inflation is rising, there may be a social crisis that is more serious than the existing one. The adjustment and stagflation period may last for six months and up to one year. Some people in Buenos Aires quoted Perón as saying, "The most sensitive internal organs of man are the pockets." (Compiled by Han Chao).