It looks like some alarming things may be happening to Argentina's currency (the Peso) possibly as a result of Argentine government's persistent, sustained mis-reporting the rate of inflation.

First off an article from a few days ago which states that President Cristina Fernandez is switching her savings from dollars to Pesos.
Argentina's President Fernandez stops saving in dollars

Big deal you might say but there is more to this than meets the eye. The article notes that

High inflation, officially at 9.8% but unofficially at about 25%, means many Argentines see dollars as a safe bet.

The government, which needs dollars to maintain central bank reserves, is also trying to curb capital flight.

Earlier this year, The Economist stopped publishing Argentina's inflation figures.

Official statistics: Don’t lie to me, Argentina

Here's why...

Since 2007 Argentina’s government has published inflation figures that almost nobody believes. These show prices as having risen by between 5% and 11% a year. Independent economists, provincial statistical offices and surveys of inflation expectations have all put the rate at more than double the official number. The government has often granted unions pay rises of that order

What seems to have started as a desire to avoid bad headlines in a country with a history of hyperinflation has led to the debasement of INDEC, once one of Latin America’s best statistical offices. Its premises are now plastered with posters supporting the president, Cristina Fernández de Kirchner. Independent-minded staff were replaced by self-described “Cristinistas”. In an extraordinary abuse of power by a democratic government, independent economists have been forced to stop publishing their own estimates of inflation by fines and threats of prosecution. Misreported prices have cheated holders of inflation-linked bonds out of billions of dollars.

We are tired of being an unwilling party to what appears to be a deliberate attempt to deceive voters and swindle investors.

Strong words indeed!!!

Also note the following article from The Economist...
Argentina’s inflation problem: The price of cooking the books

Argentina' high inflationary rate is apparently discouraging people from holding deposits in Pesos. The Economist claims that, in order to try to prevent Argentinians from changing their peso deposits for US Dollars, the Argentine government' has resorted to a "siege economy".

Argentina’s economy:The blue dollar. Another step towards a siege economy

FROM this week, any Argentine wanting to take a foreign holiday must not only provide his tax identification-number but also tell the tax agency (known as AFIP) where, when and why he is going. Officials say this violation of privacy is needed to fight tax evasion and money laundering. In reality, the reason is that the government of Cristina Fernández de Kirchner is starting to run out of dollars. Since the inflation rate is already over 25%, the government is terrified of letting the peso depreciate. Instead, it is resorting to a siege economy

Economists who disagree with the official government inflation figure have even faced legal action as indicated in this article from The Washington Post
Fight over Argentina’s inflation rate pits government against private economists

Graciela Bevacqua’s work, compiling inflation figures that turn out to be sharply at odds with Argentine government statistics, clearly irritates officials. First came a $125,000 fine, followed by a criminal complaint against her team of 20 university students.

Also, see this Bloomberg articcle
Argentina Files Charges Against Research Company Over Inflation Reporting

Argentina stepped up its pressure on economists who say the government has underestimated inflation in its official reports for more than four years by filing criminal charges against research company M&S Consultores SA.

Also see this BBC news article
Argentina's inflation rate: High, but just how high?

One of the biggest defenders of the official rate of inflation is Commerce Secretary Guillermo Moreno, who has fined at least three independent economic consultants for publishing figures that dispute those released by the government.

Also see this Reuters artcile
Tea price spike brews Argentina inflation fears

Inflation in Latin America's No. 3 economy is already running at up to 25 percent per year, according to independent economists, one of the highest rates in the world.

In April, inflation expectations over the next year were steady at 30 percent for a second month after holding firm at 25 percent during the previous 12 months, according to the median in a monthly poll by Torcuato Di Tella University.

That dwarfs official inflation data, which has been discredited for years and puts annual price rises at just under 10 percent.

Meanwhile, the IMF also seems to hold the view that there is a problem
IMF warn Argentina on ‘lack of progress’ in addressing inflation data

The International Monetary Fund (IMF) warned Argentina about its “lack of progress” in addressing inflation data and called on the country to implement “specific measures” within the next six months to improve it.

"The Executive Board regrets the absence of progress in the adaptation to international statistics standards..."

If these news articles are correct we seem to have the following
- high inflation
- a government deliberately misreporting the inflationary rate
- legal action taken against dissentign economists
- widespread dumping of Pesos for US Dollars
- introduction of restrictive measures by the government in order to make it more difficult to dump Pesos for US Dollars
- a publicity stunt by the President supporting the Peso (a possible sign of desperation)

It all sounds very worrying to me.

stockula

Anchorage, AK

May 2003

JUN 17, 2012 10:46 PM

Very tragic what happened to Argentina. Maybe if they had someone like Pinochet as Chile did they too could be an OECD nation.

MisterSatan

Portland, OR

August 2002

JUN 17, 2012 11:36 PM

stockula said:
Very tragic what happened to Argentina. Maybe if they had someone like Pinochet as Chile did they too could be an OECD nation.

Sure, Pinochet was a hell of a great guy.

Edited to add one of these, in case the internet isn't conveying my sarcasm strongly enough:

stockula

Anchorage, AK

May 2003

JUN 17, 2012 11:40 PM

Would you rather live in Argentina or Chile today?

motorfirebox

Pittsburgh, PA

March 2004

JUN 18, 2012 02:00 AM

Um, Argentina actually had plenty of guys like Pinochet. They just had the misfortune of having the UK as an opponent, and the shortsightedness to think that the US wouldn't let the UK punch Argentina right in the battleships when Argentina decided to throw down. I'm a little saddened you don't know about this--the fight between the UK and Argentina was possibly the coolest war ever, the kind of thing that ought to be right up your little Republican alley. For that reason, if no other, you ought to be familiar enough with the recent history of the country to avoid making such an abysmally stupid statement.