Paul R. Gregory's writings on Russia, the world economy, and other matters that he finds of interest.
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Monday, February 4, 2013
No One Ever Learns: The Argentine Price Freeze
has ordered a price freeze on food products to last until April 1. The
price freeze applies to the largest food retailers, which account for
seventy percent of the market. It follows a day after the IMF censured
Argentina for its manipulated statistics, most importantly its gross
underreporting of the inflation rate. Customers have been urged to keep
cash register receipts as proof if the largest retailers violate the
The results are predictable. Market demand will spill over to small
retailers who cannot satisfy the demand for food products. Their prices
will rise, and there will be two quite different prices of the same food
products. Customers of large retailers will stand in line hoping to buy
at the frozen price. There is no assurance that there will be anything
to buy when they get to the front of the line. Outside Wal-Mart, Carrefour, Coto, Jumbo, and Disco stores, black market sellers will offer customers goods at much higher prices.