There is a huge flight of money out of the country and out of the Argentine peso and into the U.S. dollar. Price inflation in the country is around 25%.
I warned this would occur back in April:
Two women have taken control of Argentina's central bank and are about to use it as if they are on a weekend shopping spree.Paul Krugman, on the other hand, has been encouraging this mad money printing for some time. He wrote last October:
Argentina was facing deflation; the trouble was that by pegging to the United States, which did not by any means dominate its trade, Argentina exposed itself to the fluctuations of the dollar (any perceived similarities to the problem of a gold standard are completely right)...Oh yes, according to Krugman, everyone is suffering from deflation---although prices aren't going down at the consumer level anywhere, certainly not in Argentina.
In May, seemingly ignorant of the developing price inflation storm, he wrote about the current Argentine economy:
[I]t’s a remarkable success story, one that arguably holds lessons for the euro zone.Got that? A country experiencing nationalizations, massive capital flight and near hyper-inflation is to Krugman a "remarkable success story" that should be copied in the eurozone. Krugman's latest book, which encourages the type of mad government spending going on in Argentina for the eurozone, is apparently a big seller in the F PIIGS countries. Heaven help the F PIIGS.