Right next to the the article I was reading was an ad for the Alfa Romeo Giulietta, a 2-door subcompact that is not for sale in the U.S., but that has received good reviews in Europe. Because of tight controls and high tariffs on imported goods, Argentines need a down payment of $20,400 (dollars) plus 36 fixed monthly payments of 3,360 pesos (equivalent to $660 at today's rate). That's the kind of financing you get in Argentina, where in effect you are making a down payment equivalent to half the car's price.
A 15-minute taxi ride in Buenos Aires can cost less than $8. Giving a taxi driver a $1 tip in Tucumán will earn you a big thank-you, and a $4 tip will prompt looks of incredulity, since most taxi rides around the city don't cost much more than that. A giant steak—a bife de chorizo—can be had for $10, and a bottle of good wine averages $10 at most restaurants. Good hotels in Buenos Aires can be found for $100-200 per night; we spent a little over $200/night at the charming Miravida Soho boutique hotel in Palermo. At Don Abel, the hotel we stayed at in Tucumán, we had a comfortable suite for only $100 or so a night, including breakfast. The toll road from Ezeiza airport to downtown Buenos Aires costs only $1.25. The toll road from Tucumán to Salta costs a ridiculous $0.60, which, given the relatively light traffic, might possibly be enough to pay the wages of the toll collectors. In short, anything with pure local content is very cheap.
Don't plan to buy much at the Duty Free in Ezeiza airport. Most prices are off-the-charts expensive. I got the impression that a good portion of the sales they do make are the result of tourists like me spending their leftover pesos in the knowledge that they are worthless once you leave the country. (Reminds me of an old Argentine joke: "Why is the peso like a pair of pajamas? Because you can only use them indoors.") And though you will be tempted by the displays in the boutiques of trendy Palermo Soho, the prices will cool your ardor real fast. Electronics and appliances, most of which are imported, cost upwards of twice what they cost in the U.S. I was told that a person holding a non-Argentine passport could make a living shuttling back and forth between Miami and Buenos Aires, buying iPhones and MacBook Airs and selling them for a 50% profit in Buenos Aires. It's a lot tougher for Argentines to pull this off, because they are thoroughly searched for such items when they return to the country and must pay a steep tax. It's a safe bet that most returning Argentines have purchased new suitcases in the U.S. to hold mountains of new clothes and multiple small electronic items, all purchased for a fraction of what they cost in Argentina. Most sought-after item in Argentina: a new, unblocked iPhone 4S.
Since the government is restricting people's ability to change pesos for dollars, there is a black market in dollars. Despite signs outside showing the official exchange rate, tourists can walk into just about any Casa de Cambio and sell their dollars (clean $100 bills are preferred) for about $5 pesos each, or 10-15% more than you can get at the "official" rate of 4.45, which is what you'll get at a bank. That's a lot better, by the way, than using your ATM card to get peso cash, or using your credit card for routine purchases, since the bank will translate the pesos at the official exchange rate and often add a extra charge for the trouble. So if you're going to Argentina, you'll want to carry lots of $100 bills with you, and I hasten to add that they are accepted as payment at many restaurants and hotels, but not always at the "black market" rate. Argentines wanting to get large amounts of money out of the country without having to carry wads of $100 bills in their briefcase can do so only via a financial transaction called something like the "blue-chip rate," but they must pay upwards of 5.85 pesos per dollar to do so, which represents a 30% premium. (Bloomberg subscribers can find this by typing .IMPARS G Index
Kirchner's economic policies are doomed to fail, it's just a question of when. The government is fudging the inflation statistics and restricting access to dollars, and that just feeds the fires of capital flight and an eventual currency devaluation. Import restrictions are going to choke off economic growth. Price caps and controls on energy are going to result in energy shortages. The nationalization of YPF and probably other industries is going to result in sharply lower foreign direct investment, which in turn will aggravate the shortage of dollars. Corruption at all levels of government is undermining popular support for the regime. It will end in tears and a big devaluation.
When I went there I expected to see more signs of stress, but I was wrong. Things aren't too bad, but they are slowly getting worse. There might be another year or so to go before things start to really collapse. In the meantime, there's plenty to enjoy in Argentina, since living standards are rising and the economy is growing (but nowhere near as fast as the government claims). The mood of the people is generally good, things are peaceful, the planes fly on time, and we didn't see a single protest/strike/shutdown such as we have seen on previous trips.