Another currency crisis: 12,000 people in Argentina who make over $2.4 million will pay a one-off tax of at least 2% to pay for bloated Argentine Government Spending – December 8, 2020,
Argentina is a warning sign to countries who believe that there is no penalty for growing the size of government without productivity growth. Argentina like many parts of Europe prior to the creation of the European Union deemed it a good idea to grow the size of their government to the point in which they couldn’t service their country’s debts without borrowing money from their central bank to do it.
This behavior led to hyper-inflation and the Argentine peso has never recovered. To give you an idea of the value of the Argentine Peso 200 million pesos equals $2.4 million US dollars. Despite what some might think, life still goes on when a currency is debased, furthermore attitudes towards socialism don’t change even when it’s proven that socialism doesn’t work.
I write this primarily because the Argentine government has voted DEMOCRATICALLY to expropriate currency from it’s 12,000 richest citizens in the form of a Wealth Tax! Now, they’ve labeled this wealth tax “a one-off tax of at least 2%” but it’s stealing. Once it’s shown to most people that a government via democracy or via a dictator is willing to steal from its citizens, investors will limit their exposure to Argentina.
It’s important to remember that the Government and people closely aligned with the government who probably don’t have their assets/wealth within the reach of the Argentine government need not worry, because they would have been notified long in advance of this wealth tax, but those deemed rich not close to the government will have their property seized.
In Argentina, $2 million USD is considered super-rich, which gives you an idea of the ridiculous cost of living we have in countries like Canada and the United States. The one thing that is very interesting to observe about Latin America is how expensive the cost of living is in Western developed nations in comparison to Latin America.
Argentina is a prime example of how bad the economic crash will be in developed nations because as bad as things have gotten in Argentina their cost of living is still a lot lower than most developed nations, meaning that a U.S greenback goes a lot further in purchasing power in Argentina than it can go in the United States.
So for those of you not understanding how the U.S will fall, you’re not paying attention to the cost of living charts and even labels being given to countries by the mainstream U.S media. The U.S dollar is more valuable outside of American than it is inside of America and with the newly elected President Biden I suspect the cost of living in the United States will go up even further,
Interesting times ahead!