Argentina economy set to go BOOM!

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Argentina economy set to go BOOM!

Postby admin » Fri Mar 23, 2012 7:13 pm

Don't cry for me Argentina. You just gave me a raise.

They are giving control of the central bank reserves to our favorite botox loving president, Cristina Kirchner. Can we start placing bets now on how long until the full implosion?

http://www.businessweek.com/news/2012-0 ... nk-charter
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Re: Argentina economy set to go BOOM!

Postby eeuunikkeiexpat » Fri Mar 23, 2012 7:19 pm

I believe those reserves include a nice chunk of gold.

Should be interesting to watch.
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Re: Argentina economy set to go BOOM!

Postby nwdiver » Fri Mar 23, 2012 7:49 pm

admin wrote:Don't cry for me Argentina. You just gave me a raise.

They are giving control of the central bank reserves to our favorite botox loving president, Cristina Kirchner. Can we start placing bets now on how long until the full implosion?

http://www.businessweek.com/news/2012-0 ... nk-charter




With this ability she will bankrupt the country within 2 years, and they are still delinquent on payments from the last crash. I have said it before the IMF and Worldbank have real countries with real upside to support not this basket case. I know several in the wine industry setting up their cash flight paths for when the cash restrictions start. They will be selling wine at production cost to new distributors (themselves) in several other countries, a skill one learned well in South Africa 30 years ago.
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Re: Argentina economy set to go BOOM!

Postby Andres » Fri Mar 23, 2012 9:16 pm

nwdiver wrote:They will be selling wine at production cost to new distributors (themselves) in several other countries, a skill one learned well in South Africa 30 years ago.

"Transfer pricing" is an old practice, not done solely when there are capital or foreign exchange restrictions. It is a common practice to shift profits out of high-tax jursidictions to lower-tax jurisdictions.
Wikipedia has an article on it.
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Re: Argentina economy set to go BOOM!

Postby nwdiver » Fri Mar 23, 2012 10:25 pm

Andres wrote:
nwdiver wrote:They will be selling wine at production cost to new distributors (themselves) in several other countries, a skill one learned well in South Africa 30 years ago.

"Transfer pricing" is an old practice, not done solely when there are capital or foreign exchange restrictions. It is a common practice to shift profits out of high-tax jursidictions to lower-tax jurisdictions.
Wikipedia has an article on it.




Yes but get caught doing it in a civilized county and go directly to jail.
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Re: Argentina economy set to go BOOM!

Postby Andres » Fri Mar 23, 2012 11:15 pm

nwdiver wrote:Yes but get caught doing it in a civilized county and go directly to jail.

That depends upon who your friends and enemies are . . . assuming you can find a "civilized" country on this planet.
Sometimes the penalty is just a fine. Sometimes the "penalty" is a new "partner" and a large contract to do it even more.
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Re: Argentina economy set to go BOOM!

Postby JHyre » Sat Mar 24, 2012 10:43 am

Transfer pricing is very hard to police. It requires significant government resources, including high-powered economists. As such, the odds of getting caught strike me as quite low, at least in a law-driven society, where things such as "evidence" are not mere niceties. Those types of audits tend to be highly concentrated where the use of recourses will pay off - with large companies. In societies where "law" has less meaning, "bribery" tends to have more. As such, I would see Argentines "playing the game", at least until our Latin Hillary cuts the Gordian Knot by directly seizing things sans the fig leaf of tax laws.

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Re: Argentina economy set to go BOOM!

Postby Andres » Sat Mar 24, 2012 11:23 am

And let's not forget the "US model", which some say encourages large US corporations to not pay tax to the US govt so the US tax burden falls disproportionately on US citizens and small businesses. If the US, allegedly a "civilized country" does it, it is no surprise other governments might facilitate similar policies.
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Re: Argentina economy set to go BOOM!

Postby nwdiver » Sat Mar 24, 2012 1:34 pm

JHyre wrote:Transfer pricing is very hard to police. It requires significant government resources, including high-powered economists. As such, the odds of getting caught strike me as quite low, at least in a law-driven society, where things such as "evidence" are not mere niceties. Those types of audits tend to be highly concentrated where the use of recourses will pay off - with large companies. In societies where "law" has less meaning, "bribery" tends to have more. As such, I would see Argentines "playing the game", at least until our Latin Hillary cuts the Gordian Knot by directly seizing things sans the fig leaf of tax laws.

John Hyre




Any Canadian company that “appears” to be playing the game (never any profit on exports) gets red flagged and audited, especially those playing with Hong Kong, from my experience. If you are selling consistently below the market, they give you a break a couple of time as being a bad businessman, and then if the pattern continues they can get nasty.
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Re: Argentina economy set to go BOOM!

Postby JHyre » Sat Mar 24, 2012 2:55 pm

NWD,

Interesting. I am rather surprised that Revenue Canada has the resources to do that. Perhaps they paint with a broader brush than the US, allowing auditors to accomplish more.

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Re: Argentina economy set to go BOOM!

Postby Andres » Sat Mar 24, 2012 7:35 pm

JHyre wrote:I am rather surprised that Revenue Canada has the resources to do that.

Or perhaps the government of Canada still realises that its constituents are Canadian citizens and therefore attempts to satisfy their wishes rather than catering primarily to the wishes of large business. (Unlike some other governments.)
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Re: Argentina economy set to go BOOM!

Postby fahrvergnugen » Sun Mar 25, 2012 1:46 pm

Great pertinent article you guys may enjoy:

http://soberlook.com/2012/03/cracks-for ... nomic.html


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