In #2 I state things as I see them... I am not saying it's good or desirable... just the way it's being going.
We've had a yearly 25-30% inflation for some years now. Prices rise steadily, so do salaries, and as long as they're in sync people get by. Business incorporate this percentage in their calculations... in contrast to hyperinflation scenarios where inflation is unpredictable and everything freezes for a while. Buying in installments (with "zero interest") is a big thing in Argentina and for the last years we've been able to buy appliances, clothes or plane tickets in 12 to 24 fixed installments, which talks a lot of the trust banks have that things will continue the same.
Middle class in Argentina DOES NOT invest (exceptions exist, of course). They've been burned by banks before (last time in the 2001 crisis when there were restrictions to take money out of the bank and when deposits in dollars where converted to pesos for a big devaluation of the peso). Middle class in Argentina has two traditional places to put the money:
- Hidden "under the mattress" in dollars
- Buying property
Because of the high price of the dollar and the restrictions to acquire currency these options are only attractive to the higher sector of the middle class... Standard bank accounts don't have an interest rate that helps with the inflation, or anywhere near it, so whatever is left after paying the bills you spend... ... trips are a big thing right now... my Facebook account has been full of people travelling for the last couple of years. This is because we can pay for the tickets in installments, the cost of food and other expenses is not too far from the prices in Argentina, and you can buy technology, clothes, etc. at lower prices.