Amado Boudou

I'm being asked to come back and write something. So instead of apologizing (again) for doing something else instead of writing, I thought I'd share short snippets of my thoughts that might interest my readership. Here comes one: did you know (or notice) that phonetically, the name of our latest Minister of Economy, Amado Boudou, means Beloved Voodoo?

Voodoo seems an appropriate subject to relate to the minister. Our economy, with its ups and downs, is faring surprisingly well given the crisis, but since Néstor Kirchner decided to get rid of Roberto Lavagna, the office of the Minister of Economy is like a periodically revived zombie. When someone alive steps into the post, or she or he's promptly bludgeoned into an undead state by the Kirchners' requirements of absolute loyalty. Felisa Miceli was an undead from the start, as was Miguel Peirano; his successor, Martín Lousteau, like him a promising, independent young minister, made the grave mistake of proposing Resolution 125 and the fatal one of disturbing the government's inflation denialism, and lasted very little after that; Carlos Fernández was barely seen or heard, an undead without even the redeeming features of romanticism or tragedy, and passed without a sigh.

Argentine governments tend to burn economy ministers fairly quickly. Boudou has just started and he's half wasted already, having had several members of his work team vetoed or hand-picked by Néstor Kirchner on the basis of personal loyalty. Want to bet how long he'll last?

Seven point two

7.2%

According to the official datum of inflation ("it is no longer correct to call it a measurement, since it is not measured", as La Nación reads today), during 2008 the Consumer Price Index rose by 7.2%, the smallest rate in four years. The Basic Food Basket, which enters the calculation of the poverty line, rose by less than a half of a percentage point (less than 2 pesos). So last year was a bargain. How come we didn't notice?

One strongly feels that this is about it — it's just not possible to lie any more than this and still pretend to be in contact with reality. The government first denied there was inflation, then accused a vaguely defined ensemble of foes of fueling price increases, all the while letting the thuggish Secretary of Trade, Guillermo Moreno, mangle the figures produced by INDEC. Last year the mangling became unnecessary: you don't have to tweak the figures when you've intimidated all the figure-checking personnel into silence or replaced them by your own employees.

Although the real inflation rate, as measured by several independent sources, is about three times the one reported by INDEC, it doesn't really matter to anyone (except the holders of inflation-pegged bonds, for whom this represents a fraud for $5.5 billion). People in the streets have turned from anger to indifference. As in many other respects, this once promising-looking government has abandoned us. We know they're lying, they know we know, and we know they know we know. How they plan to stay on top for three more years like this is a mystery to me. We can only hope they will die with a whimper and not with a bang.

Musketeers of redistribution: Guillermo Moreno

This is the third and last installment of my translation of the Crítica Digital article titled Los mosqueteros de la redistribución ("The Musketeers of Redistribution"), which shows how the Kirchner administration has failed to redistribute income, which they claim as their main economic goal. This time it's about the worst offender in many respects, Secretary of Commerce Guillermo Moreno. This is what the article says about him:

In theory, his mission was to keep inflation from diluting the purchasing power of fixed-wage workers and retired citizens. The price agreements that he signed with companies at the beginning ceased being complied with long ago, except for [the statistics bureau] INDEC, where Moreno draws the lines of his private world.

Of course I've already written about INDEC and its ridiculous, obscenely faked figures of inflation, which the government continues to defend as true. Moreno is de facto leader of INDEC, which used to be a purely technical organization, fairly independent from the national government and thus trustable, until Néstor Kirchner decided he didn't like reality and let Moreno appoint his minions in places of power there. And that's not all.

[The manipulation of INDEC's figures] is a well-known story. Less known are [Moreno's] practices to favour concentrated companies, consolidating monopolic or oligopolic markets. For Moreno, competition is [a subject] for textbooks. He has always chosen commanding phone calls and verbal agreements with the major actors in each economic sector (cereal producers, mills, supermarkets, dairy companies, food companies, etc.) over transparent regulations that might discourage [the formation of] concentrated structures and encourage competition.

The removal of José Sbatella from the leadership of the National Commission for the Defense of Competition, key to the enforcement of anti-monopoly laws, is the culmination of that process. Sbatella, a professional with a long career, ruled against the Cablevisión-Multicanal merge, which two of Moreno's deputies in the Commission approved on the last day of Néstor Kirchner's term; Sbatella also set conditions for other multi-million [company] purchases in the food sector, which were not taken into account.

Guillermo Moreno is the kind of official that any sane administration would get rid of as quickly as possible, preferrably offering him (as compensation) a trip to some faraway land. Cristina Kirchner's unspoken excuse for keeping him is that everybody in the opposition and the major media is asking for Moreno's head, so firing the guy would be interpreted as a sign of weakness. I can understand that, but it also shows quite plainly that Cristina cares more for an appearance of overwhelming power and firm determination than for doing her job well despite her personal pride.

Moreno is a wrench in the most sensitive part of the economic machinery; the more he stays, the more difficult it will be to restore the credibility of the government regarding inflation and their goal of reducing poverty. Right now we don't know how many poor people there are in Argentina, but we know for sure they're many, many more than Cristina Kirchner and Guillermo Moreno would admit.

1 in 200

One in two hundred. That's my (admittedly rough) estimate of how many people believe INDEC is reporting the true inflation rate for February — which turns out to be, according to them, exactly 1 in 200, or as those math snobs say, 0.5%.

The good news is that, according to one economist consulted by La Nación, last month's Consumer Price Index "doesn't seem as fudged as in other cases". Let's rejoice.

Food and drink did rise a bit more — 1.1%. That's just 11 more pesos. It's not much, and now that tomatoes are cheap (in real life, not in Kirchnerland) you might actually be eating and drinking a lot more for that modest extra amount.

Not only that, but with the soon-to-be-implemented seasonal substitution sampling method, inflation will be magically reduced further! The method works by ignoring large price variations — replacing the varying items with others of the same category, whatever that means. Take, for example, potatoes. Suppose they're suddenly up by 15%. That's a lot. That has to be anomalous. It must be because it rained a lot — or not enough — or maybe the Chinese suddenly developed a taste for fries. So you take potatoes out of your statistical sample for this month's inflation rate. You can do without potatoes for a month, can't you?

The true experts note that, once you begin tampering with the inflation rate, the whole statistical edifice has to crumble. Those GDP growth figures, for example, say nothing if you don't factor in inflation to get the real growth. Gloating over the nominal GDP figures, like the Kirchners love to do on every conceivable occasion, is like coming from the gym and congratulating oneself on gaining weight when most of it is fat rather than muscle.

And then the fudging of the inflation rate is not only obvious if you go to the supermarket, but can be easily inferred by looking at the (presumably untouched) figures of tax revenue. If the VAT brings in 38% more than last year, and people are buying more or less the same amount of things and there aren't a lot more people buying and you haven't caught a massive amount of tax evaders and forced them to pay the tax, then it's obvious that most of that increase is due to rising prices.

Since INDEC is irrelevant, most people who care are now working with private estimates, which produce rates on the order or two to three times the official figures. By now it's clear that INDEC is not doing statistics but propaganda, so I think we should rename it to something more meaningful. The acronym is so math-geekily cool I wouldn't want to change it, but I have an idea to preserve the initials... Let's call it Instituto Nacional de Distorsión de Estadísticas a medida de Cristina.

Let them eat tomatoes

I can resign myself to be ruled by Queen Kristina of the Clenched Fist from December on, but I sincerely hope she has learned something from the embarrassing mess his husband's made and fires Alberto Fernández. For his ilk we have the word impresentable in Spanish — I don't know if there's such a term in English. Alberto Fernández is simply not somebody you want to speak for your administration. They say pets resemble their owners; if so, Fernández can be seen as Kirchner's oversensitive, rabid bulldog.

The issue is, as usual, inflation. Listen to this: according to the Chief of Cabinet, "the opposition candidates are dealing irresponsibly with the issue of inflation" because "they're trying to create inflationary expectations in order to ruin Argentinians' lives." I'd reply to that by saying that tomatoes at 15 or 16 pesos per kilo are ruining our salads (an important part of my life, at least!), but then the Master Number-Cruncher Guillermo Moreno (Secretary of Internal Commerce) would come, figures in hand, to tell me that IndeK's fair and flawless measurements show tomatoes at AR$3.99/kg, and my belief that tomato is outrageously overpriced is the fruit of a conspiracy.

Since this blog is intended for an international audience, I thought I'd make it clear. The figures released by Indec, our census/stats bureau, are not trustable. Inflation is the main one, but inflation also correlates with poverty. We now know that energy use, GDP growth, and others have been subtly tweaked as well — not by making them up, but by using different criteria for the measurement. For example, Indec decided to show electric power demand and quietly dropped power generation from publicly accessible reports. Demand is growing steadily and often surpasses the offer; generation is stagnant.

So if you hear rumours in the international media about the controversy with Argentina's census bureau, be sure that they're understated. We're in the dark regarding our figures — some are obviously false, others probably, but we don't know which and how false.

Back to inflation, it just happens that the house of cards crumbles at the slightest touch, because Argentina is still nominally a federal country and each province has its own stats bureau. Indec releases a metropolitan consumer price index (IPC) showing inflation for Buenos Aires City plus Greater Buenos Aires, where Moreno and his thugs can pressure producers and supermarket chains and manipulate the prices at will, and where the inflation rate is consistently less than what common sense dictates. It also releases a national consumer price index, which is not really national but includes weighted data from several provinces (presumably based on sampling criteria). The national IPC has been showing higher inflation than the metropolitan one.

And finally —surprise, surprise— when one reviews the IPCs calculated by the stats bureaus of the provinces that are not included in Indec's national sample, the inflation rate is much, much higher.

Granted, the Entre Ríos bureau uses different criteria, leaving out some services and tourism and giving more weight to (for example) fruits and vegetables. The other provinces surely do similar stuff. Therefore the IPCs are not directly comparable. But this shows that maybe, just maybe, Indec is not doing its thing right — that's what you think when your figures are considered meaningless and irrelevant for the public.

Public perception is that Indec is simply making up the figures. More educated observers note that Indec might simply be selecting a biased sample and/or giving sample items a weight that doesn't correspond to its relevance in real economy. You can stop doing tourism every long weekend; your dog can do without a weekly grooming by professionals; your children don't need to have a brand-new cellphone every six months; but you cannot (or should not be forced to) stop eating tomatoes and lettuce or drinking milk and yoghurt.

On top of that, it's been announced that Indec will begin using the "American method" to eliminate seasonal variations from the price index. That's right — so when the price of tomatoes increases fourfold during the winter, they'll just ignore it and take the previous price as an estimate, because everybody knows that tomatoes are like that, always going up and down like crazy. If this is the same for other items, I guess they won't record anything unusual if medical laboratories decide to start selling $20 aspirins next winter.

Regardless of the method and its results, yelling at people from a stand, hinting that they're all fools if they believe the opposition, and denouncing invisible conspiracies to make tomatoes look expensive, is the kind of thing that would cost an elected official his or her job, or in the case of a minister, cause the president to ask for his or her resignation ipso facto. Only here can Fernández be such an ignorant foul-mouthed thug and survive intact.

Macondo's inflation INDEKS

If you haven't heard of magic realism, you might be tempted to (and should probably) read some of the works of Gabriel García Márquez, or query Wikipedia, or ask an acquaintance with a PhD. Or you could read Argentine news!! Case in point: INDEC.

INDEC (sometimes spelled Indec, or lately, IndeK), is the official organization that performs all manners of statistical surveys, from the national census every ten years to the monthly inflation measurements.

Earlier this year I spoke about government intervention in the workings of INDEC. The Kirchner administration is extremely concerned with inflation, and has tackled it with aggressively heterodox policies, including price controls (they call them price-keeping agreements), negotiated/forced by Secretary of Interior Commerce Guillermo Moreno.

After an initial success, the price controls started to show problems. Many people don't know this, but the controls were only valid in the Greater Buenos Aires area — that's where most major producers, distributors and sellers are, that's where one third of the population of Argentina lives, and most importantly, that's where INDEC has always measured inflation. The inflation rate in "the interior" has been measured for some time now, though only in the largest metropolitan areas (like Córdoba, Rosario and Mendoza); it's published later, without fanfare, and doesn't interest anyone. The national government, sadly, lives for the headlines — the price controls were, since the very beginning, focused exclusively on the goal of showing smaller inflation figures in the headlines of the lead Buenos Aires newspapers.

When prices escape controls, inflation rises. At first the controls were widened and hardened. Kirchner accused big business of restricting offer to raise prices and collect extraordinary profits. Moreno sent teams of inspectors ("hounds") to check that those that had agreed with keeping prices stable were indeed doing so, and pressure those who weren't. It didn't work. For whatever reason (I'm not going to discuss that here) prices continued rising. Enraged, the government removed top officials of INDEC. New employees were appointed in key areas. Administrative workers and professionals in INDEC protested, told the press the government was manipulating the surveys and faking the numbers.

All this time it was obvious for all of us that this was all a farce. Circumstancially wrong statistical samples were not enough to explain the inflation rate. When tourism in February this year turned out to be cheaper (according to INDEC) than tourism in the same month of 2006, I commented on it humorously.

Now this was beginning to look like a bizarre confusion of make-believe and reality, or a reality where natural laws, logic and common sense are suspended — magic realism. But this month was the last stroke. First, INDEC announced the March inflation rate (0.7%) before the usual day, to avoid doing it on the same day as a protest organized by its employees. Then, INDEC's employees leaked the figure of inflation for the "basic food basket", i.e. the sample of food items used by INDEC: it was 3.6%, the largest since 2002. They warned that this was the "real" figure. Days later (yesterday), INDEC officially announced... hold your breath... deflation!

Deflation! INDEC wants us to believe that prices of the basic food basket have decreased by 0.2%!

I think I'll metaphorically slam the door on the way out of my mind.

If you can't beat 'em... just close your eyes

The problem with a planned economy is that you can't keep holding all the threads in your hand. Some you will forget, some will tangle, some will stretch and stretch and finally snap and lash against you.

As inflation started creeping into public opinion as a growing concern, the Argentine government started talks with a few economic agents (producers, distributors and sellers). The talks soon turned into "agreements", then negotiations under pressure, and finally de facto price controls. Even then, the loopholes were so many and so big that the price of most products continued rising.

The government restricted exports of beef and other sensitive products. Many cattle farmers, unsatisfied by their profits, turned their pasture land into soybean and corn crops. The slaughter and export fell. The government started monitoring the Liniers Cattle Market, which has long been the largest in Argentina. The livestock producers turned to private one-on-one transactions and to the black market, as the prices in Liniers were much lower.

The controls finally started leaking massively because of those little things that lie outside our abilities (and even President K's abilities). The price of corn rose internationally after Wargame Boy decided that the U.S. should move from dependency on foreign oil to dependency on foreign ethanol, which is produced (among other methods) by fermenting corn. Feedlot cattle in Argentina therefore became more expensive (the government is subsidizing feedlot corn). The weather in the north-center of Argentina turned rainy at the worst possible time, so the Paraná River started to rise, flooding a lot of low-lying islands in its delta, mostly in Entre Ríos, which were used as pasture for hundreds of thousands of cows; those cows are being moved at great cost to higher regions, and many are drowning or getting sick. Up goes the price again — no less than 10%, according to worried butcher shop owners, and this while the meat arrives with a noticeably lower quality.

At some point during the last year, also, the Argentine government concluded that, if you can't control the economy, you can invent it and get away with it. 2006 finished with an inflation rate suspiciously just beneath the highly symbolic mark of 10%. Fine enough. We went on vacation and everything was much more expensive than that, but hey, vacations are a luxury item, like a car. Surely beef, chicken, fruit and vegetables were more-or-less the same? Wrong. The result of meddling with the census bureau are evident. INDEC (I've already seen the spelling IndeK in the papers!) has hastily changed the methods used to calculate inflation, and nobody would be surprised to see similar changes for unemployment, GDP growth, and other figures. The scandal has given way to practical, typically Argentine skepticism — INDEC has become political and thus irrelevant. Nobody believes politicians will keep their promises; we know their job is trying to deceive us.

When the scandal first broke out, I guessed it was largely an invention of the media, because I thought things would be made clear soon; it was in the best interest of the citizenry and the government. I must correct myself now. Another high-ranking official of INDEC has just resigned, the third since December. IndeK is fast turning into a new Ministry of Plenty. Everybody, get a firm hold on your beef rations and pretend to be happy!

Página/12 does sarcasm

Página/12 had two very good articles last Wednesday (I was going to blog this on Thursday but I thought dengue was more important). One was a delicious sarcastic commentary about the rate of inflation, which according to the government-influenced census bureau (INDEC) was only 0.3% in February. The other was a light philo-psycho-sociological piece about the use of a certain word by a candidate for mayor of Buenos Aires City.

In the article titled "INDEC and the happy man", Maximiliano Montenegro speaks of "the "official tourist" who, according to the Argentine census bureau, had cheaper vacations this year than the previous season; the "official health insurance people", whose health is so robust that they never need to pay the heavy extra fees that became associated with many treatments last month; and the consumers that only need to stop being lazy and should simply walk down to the "official neighbourhood", where 1 kg of lettuce costs AR$2.88 as reported by INDEC, and not the 5, 6, or 7 pesos that it costs in other stores and supermarkets.

In the second article, Sandra Russo analyzes the use of the imperative verb form Retirate by BA chief-of-government candidate Mauricio Macri, the millionnaire president of the Boca Juniors football club. Macri, in the crudest display of demagogy, launched his campaign from a garbage lot in a poor neighbourhood, with a 10-year-old girl under his arm, who had (he claims) simply asked to be with him as he spoke. Macri wanted to show he wasn't the spoiled brat turned dark businessman that he really is, and obviously also took advantage of the location to mark how the center-left Telerman administration doesn't care for the poor peripheric barrios.

After the wave of criticism he aroused, Macri said he might've made a mistake: "[If I'd known this would happen], I'd've told her: Retirate que estoy por empezar" — which is supposed to mean "Kindly leave, because I'm about to start [and I don't want to use your presence as a propaganda device]", but sounds exactly like "You are dismissed". Russo points out that nobody except people like Macri (rich guys who grew up surrounded by armies of uniformed maids) would use that verb; middle-class housewives who have somebody come over to help with everyday chores will use simpler, less formal expressions like Andate "Go", Listo "That's fine", etc. Macri's choice of words thus betrays his instinctive view of those under him in the social scale.

You won't find anything like this in any major paper outside Página/12. There are meaty editorials in La Nación, to be sure, but they tend to be boring rants against President Kirchner by Joaquín Morales Solá, or rambling, purposefully vague criticisms of Argentine realpolitik by Mariano Grondona, a well-known collaborationist of the last dictatorship that likes to quote Plato and Aristotle to speak against democracy. Clarín simply doesn't understand satire, parody, or any kind of humour except simple puns; when you have to keep the distinction of being the most read newspaper in Argentina, you have to sacrifice that kind of subtleties... Página/12 has several columnists that are experts in satire, and I swear they must have a team of editors specialized in funny and shocking titles. It's more of my kind of paper, ideologically speaking, so I never, ever, read it in isolation — self-complacency is a permanent temptation.

The incredible shrinking inflation

Remember the scandal about the inflation rate of January 2007? Well, the February rate has just come out: 0.3%. Needless to say, nobody believes it. Either the statistical sample is not representative, or the figure has simply been tweaked. Página/12's article, which I'm linking to, explains that both have happened in a way — to outrageous extremes. In some cases it's almost the case of one department of government telling shops to display certain prices so that another department records those prices, and not the real ones; in the case of tourism, it's literally one office asking another one what the prices are in their area of control, without actually checking reality at all. Less than a third of one percent is less monthly inflation than any other since 2004, and it's difficult to trust INDEC when so many things you buy almost every day seem to be so much more expensive. Is the government truly and so evidently manipulating the figures? That would be, as we say, peeing outside the can — a big stupid mistake.*

First of all, you can't enrage people more than they are already by presenting them with numbers that mean nothing. Less than 1% is simply not "true" for Doña Rosa.† Second, if you start rewriting reality like that, when will you stop? Third, and most importantly, regardless of whether this ridiculously low figure is real (no matter how twisted the method used to calculate it), trust has already been lost, and the Argentine State has already issued bonds indexed by inflation to refinance its debt. For every 1% of increase in the inflation rate, the government's debt increases by 1,500,000,000 pesos (about 500 million dollars); and the symbolic value of an index is one of those things that shortsighted politicians like Néstor Kirchner delight in.

Today I'm hearing in the radio (I'm having trouble finding the info online) that Merrill Lynch is offering "low inflation insurance": if you have an Argentine inflation-indexed bond and our annual inflation is less than 9.5% on average over the next five years, M-L will cover your losses. They may or may not believe that the rate reported by INDEC is fake, but that's not important for them or for financial speculators.

Speaking of speculators' fear, you probably heard that the Chinese government decided to cool their economy and stop short-term speculation, and screwed up the whole world's stock markets. Like Argentina, China is experiencing problems due to its fast growth. However, while Argentina may happily sink into the Atlantic Ocean with nobody else noticing, China is the engine of the world's economic growth, since its huge population is waking up to the joy of consumerism. If China stopped buying soybean completely (unlikely, but let's take an extreme case), Argentina would see its foreign trade surplus go down to zero, and its fiscal surplus would get a noticeable dent as well (because soybean exports pay taxes). Maybe we should ask the Chinese to send some of that growth our way, since we, unlike them, can handle it so well we're having less and less inflation every month.

Yeah, right.


* Mear fuera del tarro ("peeing outside the can"): doing something in a context where it's not appropriate at all to do it, such as offering an uninformed opinion in a delicate matter without being invited. You don't want to use the verb mear in a formal situation, but other than that, it's pretty harmless.

† Doña Rosa: the lowest common denominator of public opinion; the lady next door who comments on every piece of news as she were an expert.

Inflation inflated

Inflation, sir? No, thanks. The media are gloating over the scandal caused by the government's alleged interference in the measurement of January's inflation rate by INDEC (the National Institute of Statistics and Censuses). But first, some history.

Inflation is the historical archenemy of the Argentine economy. Back in 1989, president Raúl Alfonsín was forced to resign after food riots caused by hyperinflation. In 1991, Carlos Menem brought Domingo Cavallo to the Economy Ministry to fight inflation; Cavallo froze all bank accounts for 180 days, and thus halted the multiplication of money in circulation and stopped financial speculation and inflation, causing some prices to drop by 50% overnight. Then Cavallo came up with Convertibility, which effectively turned over the control of monetary policy to the U.S. Federal Reserve... and brought 12 years of almost zero inflation, and a few instances of deflation. Inflation exploded again when Convertibility was abolished in 2002, but it was just that — not a hyperinflationary catastrophe.

From 2003 on, the government decided that it wouldn't "cool off" the economy, which was expanding at an accelerated rate, so Argentina's inflation rate has been greater than that of most other Latin American countries and "normal" stable economies, around an annual 10–12%. Workers' salaries and companies' profits have recovered; the downside is that there's so much money flowing in the system and so little incentive to save (interest rates are ridiculously low) that everybody except the poorest of the poor is spending like crazy: cell phones, air conditioners, cars, clothing, plasma TVs, tennis shoes, home theaters, MP3 players, tourism packages...

So what's the problem now? Ten-percent inflation is rather high in international terms, but it's not that much when GDP is growing at an annual 9%. The labour unions are strong and the government is prodigal, so private and public sector wages are keeping up, more or less (in fact they recovered 8% over inflation last year). Price controls leave holes everywhere but they're effective overall.

The problem is, Doña Rosa feels that the inflation rate as measured by INDEC is not real. INDEC goes around each month, looking at the prices of a basket of 8,000 products that (ideally) make up a representative sample of citizens' consumption patterns. If a product's price doesn't increase during a given month, it'll bring down the rate in proportion to its statistical weight — and the basket includes items like tourism and canine grooming, which are not exclusive of the filthy rich but are certainly not within reach of many lower-middle class families. Naturally, the weight of such items is very small, but the media and the opposition made so much out of it that Doña Rosa is now convinced that the IPC (Price Consumer Index) is fabricated. Luxuries like canine grooming and imported LCD screens are expensive, but they've been expensive for a while, so their prices won't move, while basic needs like tomatoes, jam, chicken and T-shirts go up and down all the time (always more up than down) following seasonal effects, unjustified maneuvers of the producers, and a myriad other causes.

The last stroke was the sudden replacement of the head of INDEC by another person, just before the announcement of the January inflation index. The opposition, the media (even abroad), and the consumer organizations pounced on that — why was a long-time, respected official of one of the few government organizations with a reputation of flawless political independence replaced overnight without a clear cause by someone chosen by the national government? Could it be because private analysts were foretelling that the January rate would be over 1.5%? In 2006 it was 9.8% — was that because the government pressured INDEC to produce a number below the (psychologically important) 10% that the Economy Ministry had publicly set as a target? For how long exactly had the government tried to fool the public? And so on.

INDEC has, as I said, a reputation of independence and of methodological quality that has been acknowledged here and by international organizations. That reputation has been now tainted. After the dismissal of its top official, a number of employees denounced the government's interference and announced they'd monitor the figures closely, warning that they wouldn't let them be tampered with. The vociferous de facto speaker for the president, Minister Aníbal Fernández, spoke of "mafias" and accused the employees of having an agenda. Security personnel surrounded the seat of INDEC and the figures of inflation (the PCI and the inflation on a basket of basic products) were released later than usual.

The Kirchner administration reacts to accusations with paranoia and verbal excess; the inarticulate and generally sleazy opposition, and our lowest-common-denominator mass media, arguably deserve such a treatment... but I believe that someone should strive to stay in the high moral ground, so I can't justify that, no matter how much in agreement I may be with K in other issues. If you're right, you don't need to scream about it — reality will prove you right in the end.

The net result of this is that now nobody believes INDEC's inflation rate. This is serious not only in itself. We've emitted inflation-indexed debt bonds; those bonds fell abruptly after the scandal, as consultants recommended holders to sell. The country risk index assigned to Argentina by JP Morgan jumped more than 6% — that means Argentina will pay more interest for loans, as it's a riskier investment to lend to us.

Prices will continue to rise, as ever, independently from the fate of INDEC and the meddling of the national government. The possibility of runaway inflation seems remote now. Ultimately it's us consumers who can exercise control, by not buying obviously overpriced goods. Why don't we see that is a mystery.