Inflation Plagues Argentina Again

BUENOS AIRES — High inflation — a weakness of the Argentine economy for decades — is soaring again. Independent economists say inflation rose by 25 to 30 percent in 2010, the highest level since the calamitous 2002 devaluation that sent the economy into a tailspin.

While a return to the kind of hyperinflation that swept Argentina in the 1970s and 1980s — when retailers sometimes updated prices hourly — seems unrealistic to most, inflation shows no sign of abating.

The government’s official 10.9 percent inflation rate is less than half the estimate of private economists and firms like Ecolatina, which put inflation at 26.6 percent in a report last month. The official 12 percent number for poverty is also well below independent estimates of about 30 percent.

The economy minister, Amado Boudou, said in November that inflation was a problem of “the middle and upper classes,” and blamed companies for raising prices. Inflation “is not an issue of big proportions that the Argentine population is criticizing,” he said in a radio interview.

“It is clear that inflation weighs heaviest on Argentines on fixed incomes and especially those in the informal economy that don’t have a union to defend their interests,” said Sergio Berensztein, a political analyst with Poliarquía, a consulting firm in Buenos Aires.

Even as the government says Argentina’s economy grew by 9.5 percent in 2010, the nation’s poverty level topped 30 percent of the population, the highest since poverty exceeded 50 percent after the 2001-2 economic crisis, private economists said.

“The poverty level is higher now than the worst moments of the 1990s,” said Domingo Cavallo, a former economy minister. “Without a doubt, inflation is increasing poverty.”

In early 2007, the government of President Néstor Kirchner, Mrs. Kirchner’s husband, who died last year, began manipulating data from the statistics agency, said Martín Redrado, who was president of Argentina’s Central Bank at the time.

In the years since then, the cumulative rate of inflation has been 120 percent, private economists said, though the government has reported it to be 39 percent in the four-year period, according to a comparison in the newspaper La Nación last month.

The manipulation of the statistics has drastically increased Argentina’s risk profile, driven away foreign investors and complicated the country’s efforts to return to the credit markets, even as it moves to settle $100 billion in debt from a 2001 default.

Critics say the government is refusing to print bills in denominations larger than 100 pesos because that would be an acknowledgment of soaring prices and could revive memories of hyperinflation, when the Central Bank issued notes of up to 1 million pesos.

The Kirchner government has tried to quell concerns about mounting inflation by continuing to keep the economy growing at China-like rates, largely fueled by high soybean prices. The government also says the country is in the midst of a consumption boom, pointing to domestic car sales that reached record levels in 2010, and it has protected itself by keeping substantial foreign reserves of dollars.

“Argentina is in a formidable moment economically,” Florencio Randazzo, the interior minister, said on the radio last month.

But that may be part of the problem, economists say. Domestic consumption is surpassing the limits of production, causing inflation. The government has not inspired the kind of confidence that would help increase investment and, by extension, the supply of goods. And by tinkering with the economic data, the government has created an environment in which suppliers and producers, operating absent reliable numbers, feel the freedom to raise prices seemingly at will, economists say.

Salary increases have averaged more than 20 percent a year, yet they are still struggling to keep pace with rising food prices. In 2010, Argentines bought fewer units of beverages, fruits and vegetables, a sign that inflation was finally taking a toll, said Mr. Redrado, the former Central Bank president.

Argentines are certainly spending, but many are doing so on credit, buying cars, appliances and televisions before they become more expensive. Banks are aggressively issuing credit cards, offering discounts and interest-free payment plans stretching up to 50 months.

Carlos Bermejo, 74, said he was bargain hunting, taking advantage every Wednesday of a 15 percent discount when using a debit card at the supermarket. But he said he still had to go into debt on his credit cards every month to get by. “I’ve lived through inflation many times. The young people don’t have that experience. They are going into debt thinking they will beat inflation. But you can never beat inflation.”

adapted from The New York Times - By Alexei Barrionuevo

Former Libyan Minister and Lockerbie Attack (video)

Photo: AP - Libya's ex-justice minister Mustafa Abdel-Jalil

Before watching the video, please ask questions to get the missing information.

Pan Am Flight 103 exploded over Scotland in ......................, killing ………………………….

In 2003, Libyan leader Colonel Gadhafi finally admitted ..................

Now his former justice minister, Mustafa Abdel-Jalil says ............................

Abdelbaset al-Megrahi, the only man convicted of the attack was released from ……………………… in 20 ……… as he was suffering from ……………………………..

In 20…….., Colonel Gadhafi hosted former ………………………………. in his ………………………………...

Many Western countries have sold .................................to Libya.

British companies shipped ……………………………… to Tripoli as recently as November.

Even tiny Malta has sold about $………………………. million worth of weapons to Libya."

Scotland says it will ………………………………………………………

And now, how about watching the video so as to get the answers together with the rest of the information?

Remember you can also watch this video by clicking HERE

American billionaire supports English football club

Mike Urwin for The New York Times - The frozen foods billionaire Bob Rich has become a supporter of the Bedlington Terriers, in red.


BEDLINGTON, England — The phone first rang a year ago in January. The caller identified himself as Bob Rich, a billionaire American businessman and said he wanted to sponsor the Bedlington Terriers soccer club. This had to be a joke.

A guy named Rich wanted to help finance a team that played at a stadium called Welfare Park? Right.

Americans invest in English soccer teams, but they open their wallets for big clubs in the Premier League: Manchester United, Liverpool, Arsenal, Aston Villa. Who would possibly be interested in the Bedlington Terriers?

Bedlington is a small team from the northeast of England, near the Scottish border. Its players are semiprofessional. Matches draw 60 to 100 fans. The team’s video department consists of a guy who stands behind the goal and captures highlights on his iPhone.

Bedlington is situated in what was once a center of England’s coal-mining industry. The mines were closed long ago Trains no longer stop at the local station. It is now a bedroom community of about 15,000, with many people commuting to work in nearby Newcastle.

“I thought someone was winding me up,” said David Holmes, the team’s chairman.

But Mr. Rich was serious. He is a frozen-food millionaire from Buffalo, the chairman of Rich Products Corporation, with an estimated wealth of $2 billions who already owns three minor league baseball teams.

“There were a lot of similarities to Buffalo,” Mr. Rich, 70, said in a telephone interview. “They lost their mining and we lost our steel milling.”

That affinity led to one of the more improbable alliances in the world of international sports.

From the beginning, Mr. Rich made it clear that he did not want to buy the Bedlington team. Instead, Mr. Rich bought a jersey sponsorship for about $16,000 a season and a new scoreboard costing $50,000, but he never promised to “splash the cash.”

The new scoreboard will flash advertising and show video highlights. Mr. Rich plans to sell Bedlington jerseys at his minor league ballparks in the United States. He also hopes to persuade members of Bedlington terrier dog clubs in the United States to buy jerseys, shirts, jackets, scarves and hats featuring the woolly dog on the official team crest. Proceeds from merchandise sales will go to the soccer team.

The aims are to attract more sponsors, boost finances and sign better players. Now the club is run on an annual budget of about $128,000. Some stars in the Premier League make twice that in a week.

"We want to help them help themselves,” Mr. Rich said.

Mr. Rich saw the Terriers play twice - in March 2010 and again in late January 2011 for his 70th birthday.

Mr. Rich was researching his genealogical history last year when he found an ancestor called the Lord of Bedlington.

“I didn’t even know where it was,” he said. “So I checked a map.”

Then he jokingly told his wife, Mindy, “I should be a lord.”

She replied, “I’ll buy a title for you.” Lord of Bedlington happened to be available. These titles can be bought for as little as about $325, and his was on the low end, Mr. Rich said.

Stuart Elliott, 33, the Bedlington captain who has played on bigger clubs said, “So far Mr. Rich has done what he said he would do. And he spent his 70th birthday watching us. He could have been on an island somewhere. We appreciate that.”

This season Bedlington ranks seventh in league play, not great but encouraging enough for locals to believe that better times may be ahead.



adapted from The New York Times

Ordinary Miracle (song)