With countries around the world grappling with rising prices, perhaps no major economy knows how to deal with inflation better than Argentina.
The country has suffered from sharp rises in prices for the past 50 years. During the turbulent late 1980s, with inflation reaching an incredible 3,000%, residents rushed to buy groceries before clerks with price guns patrolled. Since 2018, high inflation of over 30% has returned each year.
To understand how Argentines are coping, we spent two weeks in and around Buenos Aires, working with economists, politicians, farmers, restaurateurs, realtors, barbers, taxi drivers, I spoke with money changers, street performers, street vendors and the unemployed.
The economy isn’t always the best conversation starter, but nearly everyone in Argentina pumped up the economy, eliciting curses, deep sighs, and informed opinions about monetary policy. One lady happily showed off her hiding place and got $1 (an old ski jacket). Another woman explained how she stuffed cash into her bra to buy a condo, and a Venezuelan waitress questioned if she had emigrated to the right country.
One thing has become surprisingly clear. That is, Argentines have developed a very unusual relationship with their money.
They spend pesos as soon as they get them. They buy installments for everything from TVs to potato peelers. They don’t trust banks. They rarely use credit. And after years of constant price increases, they have little idea of how much it should cost.
Argentina shows that people find ways to live and adapt to years of high inflation in an economy found almost nowhere else in the world. Life is especially manageable for those who have the means to make the upside down system work. But all of these surprising workarounds mean that few who held political power during years of economic depression realized they were paying a real price. increase.