Inflation has the power of destruction

According to MarketWatch report, Argentina's annual rate of inflation was about 20% now, sharply lower than last year's 40%.

The Argentine Central Bank is struggling to bring down inflation target in three years ' time, down to 5%. In the past, Argentina's inflation will be much higher. In the 15 years from 1975 to 1990, average annual inflation of 300%, that is, every few months, prices will rise 1 time.

In 1989, price annual rate surged over 1000%, and takes control. I can remember in the mid-1990, Argentina virtually no inflation. At that time, Argentina Peso pegged to the dollar, in the streets of Buenos Aires, the two currencies can be used for everyday transactions, price is the same.

But Peso depreciated against the dollar, leading to sharp rise in inflation.

Recent high inflation, severe trauma Argentina economy. Due to the rise in market interest rates, response to high inflation, the Government is now paying short-term rates on peso loans of about 25%.

Banks have been reluctant to offer fixed-rate long-term loans, because inflation will diminish the value of their bonds and loans.

Homes and businesses have been reluctant to change interest rate loans, invest for the long term, due to rising inflation, will make their interest payments soar. Argentina's hyperinflation, has ruined the domestic mortgage market, let the family cannot be used with mortgages to buy homes.

Enterprises do not want to apply for a loan, because of rising inflation, interest rates should rise enough for healthy corporate bankruptcy. Insurance industry collapse because of high inflation in the past.

Because no one knows when the next pay, the peso is worth, who will today pesos to buy insurance? Former Argentina inflation forecast levels significantly lower than the actual data published by the Government in order to deceive the public. Even expelled from the inflation data correctly from the Government statisticians, to replace them with political allies to offer artificially low data. Someone once said, they will be the Government's statistics, from technical issues to art.