#1353 – The Expat Files: Life in Argentina – Cost of Living, Culture, and Economic Challenges

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now I wonder Hello there all you ex-pad wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Alright back again podcasting from Argentina Buenos Aires and is the air the really that bueno Yeah, it is pretty nice crisp and clean actually, you know, I got in first, you know by plane

[00:46] At night or I should say very early morning with a dawn still breaking I got into a cab around 6 in the morning from the airport going to hotel So the dawn is breaking and I've noticing now remember this is a huge city Close to 20 million. They say it's the biggest city in the Western Hemisphere Though Mexico City claims that title too But it's back and forth with those two and I'm noticing on certain corners little groups of people four five six people dressed up quite nice Almost all 20 some things all seem to be dressed to the nines nightclub style lots of leather I mean real leather and platform disco boots I'm looking at the late-night partying crowd, but this is six in the morning now now We're not talking hookers here. Not by any means the cab driver told me

[01:34] that the discos in the clubs get out around six or seven in the morning and What I was seeing is a 20 something nightlife people pouring out on the streets as the discos in the clubs are closing By the way when I mentioned real leather One thing you'll notice when you come down here is almost everyone has real leather everything real leather shoes real leather jackets real leather gloves Yeah, they wear gloves down here because it gets cold Anyway, I was seeing all kinds of real leather purses handbags backpacks real not fake suede, too Which is of course leather processed in a different way now You know in the rest of Latin America and up in the states in Europe to in Canada real leather man that costs a Real leather jacket three four five times as much as a fake leather one, right and real leather shoes

[02:22] I know people who never even tried on a pair too expensive. Oh And you're going to someone's house down here in Argentina He's bound to have some real leather furniture not the fake leather eyes stuff for a leatherette Hmm simulated leather, don't you hate the thought of it? You know these days there's lots of names for fake leather that have the word leather in them and some of them look and feel So good. They fool you till you smell them. They smell like petroleum products Real leather, you know, it's got that smell you can't duplicate it and real leather stands the test of time and the Sun I've noticed that even the best of fake leathers deteriorate start getting dried out and crackle and crumble After a while a couple of seasons doesn't last doesn't hold up after a couple years not like real leather Plus the backside of a piece of finished leather has a kind of gnarly look, you know always

[03:12] Asymmetrical but fake leather the backside, you know, the lining or the part you can't see is always completely consistent Totally uniform like it was machine-made because it was so then why am I mentioning all this? Well Everybody wants to know about the cost of living in Argentina Would it be a good expat plan B or C especially now that Malay has gotten in I've been down here a while now And here's what I found It's gonna cost you about fifty percent more To live down here in Argentina Then it costs to live in most countries in Central America, man I'll tell you it was a real shock that includes fruits and vegetables anything in the grocery store even some of the raw produce most of the raw produce produced within the country is Twice as expensive as the same thing you'd buy in Guatemala Honduras

[04:01] Panama Any of the big markets in Central America that goes for appliances hardware plumbing building products, too However, I found there were three things much cheaper in Argentina than anywhere else in Latin America. Number one as mentioned leather products Why when in the rest of the world leather goods are two or three times as expensive as plastic or synthetic stuff? Where real leather products are sort of luxury items. Well, that's an easy one Argentina's biggest export is beef Not only per capita do Argentines eat more beef than any country in the world They export more beef than any country in the world, too So what do you think has to happen when you export and eat beef? You have to do something with the carcasses, right?

[04:47] And they really do have an excess of beef carcasses down here And what do you do with those you make leather and when you have too much of anything even a good thing prices drop right supply and demand The second thing that's extremely cheap down here is public transportation, but that's subsidized by the government So when it looks cheap, it's not really cheap It's a superficial illusion Someone's paying for it somehow right in taxes or borrowing or inflation For example, they've got a really nice clean cheap subway system here It's in fact the first subway system in all the Western Hemisphere, or maybe it was just Latin America can't remember anyway I've been riding a subway practically every day Cost about 40 cents to ride anywhere within city now if you recall a couple of shows ago

[05:35] I mentioned there was a big strike here in Argentina because Malay the new president when he came into office He raised the price of a subway trip from 20 cents US to 40 cents What a dirty trick to play on the unsuspecting hoy polloy, especially when the subways have been losing money Continuously for something like 50 years Malay, what a heartless jerk. What a tyrant That's what all the government workers unionists and socialists called him and the people especially the unions took to the streets What a disgrace What an evil tight-fisted dickhead raised the price from 20 cents to 40 The problem was the people couldn't get it through their thick heads that the subway was always losing money from day one At 20 cents a ride it had to be subsidized heavily and they were painted either through taxes inflation government borrowing

[06:25] Whatever, but they were still paying for but now amazingly enough for the first time in over a half century The subway fares are actually covering the cost of paying for and maintaining the entire subway system But still people complained went to the streets, but guess what? That's all over No one's talking about it anymore people were pissed off for a few weeks But now it's back to business as usual and no one even cares anymore But still at 40 cents a ride is one of the cheapest subway systems in the world If not the cheapest subway fare in the Western world now the third thing I've discovered That's amazingly cheap in Argentina are the costs of steak dinners in practically any restaurant and believe me There's a fine steakhouse on practically every corner now I'm not a big red meat eater But I indulge sometimes when I get the urge and I thought this time man in Argentina

[07:16] You know when in Rome I'm gonna make the best of it hit a couple of restaurants a few my Argentine friends said RM us not you're on to tourist trail joints either By the way, I've been hearing all over the place from Argentines of many walks of life Telling me there aren't many foreign tourists come to Argentina much at all They say Americans used to come down a lot but not much anymore. In fact in my first month down here I only met two couples and they were at my hotel. They're not coming like they used to come Because since covid everything's gotten a lot more expensive. That's what I've been hearing. That's the word on the street So anyway for about the past month I've been hitting an Argentine steakhouse at least two or three times a week And you know, I just never seen anything like it the cuts of beef are two and three inches thick

[08:05] By the time you're halfway through you're stuffed to eat anymore, man You're out for the night and that's how it's meant for me and my girlfriend this whole time We make it about halfway through the cut of meat and we're off gotta get outside gotta walk it off No doggy bag back to the hotel room. Nope You just leave what's basically another meal on the plate and leave It's hard not to feel bad about that. But hey Now as for the Argentines eating at those same restaurants, they finish off every last morsel And you know what? They don't have much of an obesity problem down here at all Most of the real heavy and obese people I've been seeing are Peruvians But as for the Argentinos themselves Most of them are very light skinned and have dark brown hair. It is a population. That's truly like Europe

[08:52] Lots of Italian German and French blood and like Europe. Most people don't own a car They walk all over the place or use that public transportation system By the way, there are no junk cars or chicken buses down here again like Europe But I think the main reason people are not so fat or obese like and the rest of Latin America Is that they don't have deep fried food dishes at every meal They're not a culture enamored with fried fatty foods Sure, they love their big old fat cuts of meat, but they have big healthy salad dishes along with it All right, so i've been going to all these argentine steak houses Again, you just won't believe how great the steaks are Once in a while is okay for me, but man not every night

[09:37] In fact one place I wish I had a video of this the waiter brought the steaks up Things are monsters two three inches thick maybe seven eight inches wide Now what happened next if I wouldn't have seen it with my own eyes, I wouldn't have believed it The waiter took two spoons, you know regular soup spoons And cut that piece of meat in half with the edge of a spoon. Nope No serrated steak knife necessary. He cut the thing in half with a spoon I never tasted a steak so tender in my entire life Wow, how do they do it? And some of those places and i've never seen this before either have a chart on the wall when you walk in Tells how many days and months or years whatever they've aged there's certain cuts of meat

[10:23] Anyway, what i'm saying. It's a really amazing experience if you're a carnivore Now I know if I went to a very high-end steak joint in chicago, new york paris london A meal like that would cost me two three hundred bucks You know steak salad garnishings a couple glasses of wine I've been talking two or three hundred bucks for two and any other high-end steak joint in the world though I could be off probably a lot more anyway So far in the last month i've been in maybe 10 steak joints at least Never has the total bill for two been over 40 bucks for two mostly ranging from 30 to 35 bucks for two And the service angle man they got that down unlike the rest of latin america and i've been everywhere in latin america

[11:09] Where the people though, they're really friendly and nice know nothing about customer service But in argentina man, they've got that down Never have I encountered better customer service in all latin america In stores restaurants pharmacies, you name it now The other thing I learned about argentina is that people from nearby countries like brazil Paraguay chile ergoi. They're not crazy to migrate there Turns out argentina's economy has been so rotten in his shot for so many years inflation at 200 A year for so long the monetary system so destroyed so hard to make ends meet It turns out argentina is not a big magnet at all for immigration from those adjacent countries So as it turns out people are not sneaking over the borders to get there some of course

[11:58] But never in a big way because it's so damn hard to make a living to get a start That's one of the reasons malay became president politicians came and went promised the world Stole like crazy like they always do Lied their asses off and looted the treasury and malay got in because people have been so Disenchanted with the political system that they said all right. Why not give this crazy libertarian guy a chance. We tried everything else So as it turns out and I asked lots and lots of people They didn't vote for malay because they thought he could actually do anything They voted for him because he was on the fringe and they tried everything else and it didn't work The dirty little secret is they don't think he can fix it either By the way, if you think argentines are all pumped up and excited about malay being president Well, that's what I thought going in

[12:44] I mean All the people in the west and all my friends who are libertarians and the people listening to this show I get all kinds of emails Saying malay malay. He's really going to turn that place around He's going to kick ass economically like boucle in salvador kicked ass with law and order Well, guess what? I had more than a few argentines set meat straight about what they're thinking about malay No one seems enthused. No one's got high hopes They just hope things don't get worse and with every president in the last 20 or 30 years things have gotten worse They just want stability and a guy that could keep it that way And they really don't hope to get it Because you see an entire generation of argentines even two generations has had the snot kicked out of them economically Argentines have adapted to inflation rates of a hundred to two hundred percent a year. You gotta wonder

[13:37] How do they do it? How do they put up with it now if that would happen to you or me just for one year 100 to 200 percent inflation we'd freak out people would be jumping off of buildings There'd be riots in the street mass depression Think about it suppose every month Your savings account or the dough you had in your pocket or your paycheck Automatically was cut by 20 percent and the same thing happened month after month That's what a whole generation of argentines have been living with It started well before the millennium, but then in the year 2000 it got particularly bad The whole economy stalled went broke and the money was worth nothing So as corrupt broke governments will do they'll knock a few zeros off the existing paper fiat money Or issue a completely new set of bills and start from scratch

[14:25] Vastly devaluing everything in the process destroying everyone's savings unless it wasn't gold or silver So i'm down here watching seeing how young argentines have adapted to this system. They live with it day in and day out They're used to it. It's normal for them Humans can get used to almost anything Of course that kind of inflation has huge downsides for one. No one saves anything People spend their entire paycheck within the month. They get it Because they know by the 30th of the month any of the dough they have left will be worth 10 or 20 percent less Than it was the first of the month Yet when you look around there are all kinds of stores you see up in the states like mcdonald's and starbucks and diesel and All you know the first world mall stuff lots of wealth here lots of upscale communities

[15:12] So then how does a business function? Well, they've developed their own particular ways You might call them hacks like for example, I was walking through a big fancy four level mall Lots of upscale stores there. You might recognize diesel gap victoria secrets nike puma adidas And you know stores always have on their front windows the sales and the offers of the week of the month whatever However in argentina stores and malls when you look at the numbers posted They don't quite make sense. They look kind of screwy unless you live in argentina Typical example i'm walking past the nike store para nike's in the local funny money argentine pesos 200 000 pesos Don't freak out yet, but let me throw some more dirt in your eyes. Okay

[16:00] Now most stores and businesses do not take us dollars hotels do because you know tourists and all that But they'll give you the bank rate When changing dollars to local pesos, if you go to the bank you'll get about 800 pesos for a dollar 800 argentine pesos for a dollar However, if you go to a place called a cave aquaiva, you'll get 1300 pesos for a dollar 40 more aquaiva is a gray market money changer So you might be thinking well, I better change my money at a bank or my hotel because that's all on the up and I know I won't get any counterfeit bills or anything. It'll be strictly legal Well, guess what? All the people at the hotels, you know, they get tips and dollars from tourists and stuff

[16:48] They never change their dollars at the bank. They go to the quava Now there are some quavas that are considered very on the up and up Straightforward actual businesses that have been around for years and years storefronts in legit business districts now They don't have the name quava pasted on the outside of the building. No, that's just a slang term But for example when I walked into the hotel, I said, where's the nearest quava? And guess what? The lady behind the desk did not bat an eye She wrote down an address and said go around the corner two blocks. Take a right you'll see the sign It's called fast exchange. Well, I did I went around the corner So the sign and guess what there was a huge bitcoin sign in the window. I walked in I said Do you change bitcoin here? She said yeah, sure, of course She says we change all us dollar crypto coins, too

[17:34] And of course, she said we change fiat money It was like walking into a tiny branch bank totally legal or apparently legal yet They'll give you 1300 pesos to the dollar whereas the bank or the hotel right down the street will only give you 800 In other words using an official place of exchange like a bank or hotel You instantly take a 40 haircut on your dollar while switching into argentine pesos Now gringles have said aren't you taking a chance that you might get scammed in that quava? I'm telling you it's a way of life that's been going on for a generation or more They have these little quavas everywhere and everyone uses them Nobody uses their bank to change their money So you might say how do banks make their money they're making a killing because every u.s

[18:21] dollar wire transfer lands in a bank down here and then gets exchanged instantly To the 800 peso shit rate. So the bank gets a 40 cut on every wire transfer Why do you think there are a little bitcoin kiosk popping up everywhere? Oh, and here's another thing until malay got into office about six months ago The largest paper bill you could get in argentina was a thousand peso note One of those notes right now worth about a u.s. Dollar more or less. Remember I said a thousand peso note Will get you 80 us cents if you change it at a bank down here But it'll get you a dollar 30 if you go to one of those quava exchange sites the so-called cave So to make the math easy, let's just say a thousand peso note equals a dollar us dollar

[19:10] Now you heard me say that before malay got into office just six months ago The largest note you could get in argentina was a 1 000 peso note since then he's ordered a 10 000 note to be struck Which is around 10 us dollars. I haven't seen any of them though. I don't think the average american Realizes at all what that means how difficult it is to run your life with small bills I didn't until I went out shopping I decided well i'll change 300 bucks into the local funny money. See how long that lasts me I went to the quava with the bitcoin sign gave them 300 bucks. They gave me 391 000 peso notes, you know how big a stack that is about three inches tall What if you went into a shoe store a nightclub or a nice restaurant and all you had on you was a stack of one dollar bills

[20:00] Well, that's what my whole life has been for the past month. I'm carrying around with me a two or three inch stack Of one dollar bills. Well, actually you 1000 peso notes, which are worth around buck. Like I said to make it easy So the question is would you be embarrassed walking into a nike store? Paying for a pair of nike's with 200 in one dollar bills, would you feel like an ass man? I think most people would die of shame and embarrassment But that's what life is like down here people pay for everything with 1000 peso notes, which are worth about a buck Think about running your own life carrying only one dollar bills on you I'm thinking about the first time I went into one of those argentine steak houses and the bill was around 40 bucks or 40 000 argentine pesos

[20:48] I counted out 40 of those 1000 peso bills, you know, they're worth about a buck apiece, right? The waiter came by took the stack counted it out super fast like a dealer in vegas He's had lots of practice Then he went over to the next table which had I think six or seven people there And they handed him a stack of 1000 peso notes that seemed to reach to the moon And he just scooped up that wad and counted it out like a dealer in vegas Again, i'm asking if you were to go to costco and you had a 300 dollar bill at the checkout window And you paid for it in one dollar bills Would you feel like an ass like a nutty kid maybe who broke his piggy bank and ran to the store to buy candy? Or are you the kind that just says fuck it? Dollars pennies, whatever. It's all legal tender

[21:34] So as i'm going out daily mingling with the people remember, this is one huge mother of a city Four chicago's in one. I see people paying with things with stacks and stacks of notes And i'm thinking to myself how is this safe because you got to dig into your pocket or your waist belt or your Money pouch whatever and yank out this big wide man. Now. I know what a drug dealer feels like Now to me and you that would be a big problem But businesses down here in argentina have long since learned to deal with this Let's take that nike store again walking by They've got 20 or 30 pairs of nike's nicely displayed in the window with price tags on them 100,000 200,000 300,000 pesos, etc Except on the window in big red letters. It says

[22:21] 30 off for cash Or use our 6 9 or 12 month payment plan Say what now I kept seeing the same kind of signs over and over in all the stores The price listed on the shoes shirt or purse was for credit card purchases But if you pay it in cash fiat paper money, you get an instant 30 discount And that 6 month 9 month 12 month payment plan now that really stumped me because There were many stores that said it doesn't matter how small the amount will finance your purchase for up to 12 months Now that's a sign of a population that's really broke. They've got no savings at all What i'm saying is the whole economy is turned upside down because of the massive inflation that's been going on for more than a generation now

[23:08] It's a society that's simply adapted So then how do stores avoid getting caught up in that heavy inflation that could be up to 20 a month? Well at least to now anyway, it's been 20 a month Turns out the latest news down here is for the first time in 30 years argentina's had a month with single digit inflation So here's how stores stay in business you pay about 30 percent more When you purchase with a credit card That extra percentage is added on because by the time the credit card company processes the transaction And gets the actual dough transferred to the account of the merchant that could take up to a month and by then That 10 or 20 monthly inflation has taken its toll So by adding that they cover their inflationary loss for the month plus their profit margin

[23:57] I tell you the whole system's wacky and it foretells exactly what the us has to look forward to With the national personal and credit card debt growing at rates your mind can't even comprehend. Just wait Though as the argentine example shows people adapt then the system doesn't actually fall apart though It's pretty ragged around the edges, but it's certainly a tough way to live So again, the average person in argentina doesn't put much faith in malay, but they don't put much faith in any politician They've tried everything and just hope the next guy won't make it any worse It's funny though. They do pretty much accept. It's got to get worse before it gets better They know there are way too many people working for government. Just sitting on their dead asses. They'll come right out and tell you But then again, everyone's got a buddy friend or family member that happens to be one of those layered asses

[24:47] Wasn't it hl menken that said the hardest thing in the world is to convince someone to do the right thing If his job depends on him doing just the opposite Oh, and here's another little observation. You won't know about it unless you've got some boots on the ground down here yourself For those of you who've been down to central america. You'll notice that lots and lots of clothing stores In sort of ragtag middle and lower middle class malls and stuff. They're run by asians It's a might unusual, you know all these clothing stores run by asians not by guadamalans or hondurans Costa ricans salva de reños, etc, etc The vast majority of sort of middle and low-end clothing stores in central america are run by asians We're talking non-brand name clothing stores. Somehow they fell into their niche. They've got a knack for it

[25:34] Well, guess what in argentina almost all the little mini markets and fruit stores Hole-in-the-wall places that sell junk food are run by peruvians Turns out argentina peruvians have sort of found their niche mini markets and fruit stands Now, of course, that's not a hundred percent true You can't say all but the vast majority of them or at least a very disproportionate amount of peruvians own those kind of stores Oh, and you'll also see a disproportional amount of peruvians working low-level restaurant and grunt work construction jobs Now in talking to a couple of these peruvian guys They say there's no opportunity for decent jobs in peru So they come to argentina and find through family connections and such they can make it work

[26:21] That as opposed to the venezuelans who slip into argentina illegally From what I understand most of them don't stay permanently. They too find it's too expensive to live in argentina So they set their sights on moving north Ultimately, of course, they hope beyond hope to get to the united states the sueño americano That american dream and that big door biden threw open for it's true poor peruvians come to argentina They tough it out and stay make a go of it. The venezuelans who sneak in are much more educated They don't want to do the grunt work have high hopes But find it's too tough and too expensive and often have a change of plans and try to make their way up to the states They're all under the impression that if they get there biden will throw the door open for him Free food free housing a debit card with a thousand bucks on it. Imagine that

[27:10] I'm sitting here on the southern tip of south america And i'm hearing stories about biden and the american dream and all those giveaways From people who can't speak english and have never even spoke to a real gringo before until they met me and hey I don't discourage them. I say hey go get that american dream for yourself biden will take care of you He's your man, but it takes no convincing. They're convinced already So You've been listening to the expat files living in latin america If you need some help with your own plan b we can schedule a one-on-one phone or skype consult Just send me an email the expat files at gmail.com And if you want to get on the waiting list for my next week long expat insider seminar in central america Where you're guaranteed to get a two to five year head start on your plan b. Send me an email the expat files at gmail.com

[27:57] nos vamos