If you ever seen pictures of Germany in the early 1930’s you may have see German citizens using wheelbarrows to pay for their goods. Inflation was very high, the money almost worthless and no one really had a solution. The problem arising politically because something seems better than nothing, and a person with a charismatic personality will tend to rise in the polls. The status quo has to be changed, to what is often ill defined.

In an article by Paul Wiseman of the Associated Press, the latest country with overwhelming inflation and money almost worthless is Argentina. Unfortunately for the country, it has seen this chapter before, the last time was under the Peron’s regime and Broadway had a musical including the song by Madonna singing Don’t Cry for Me Argentina about some of the times of the country.

A new President, Javier Milei has been elected, and he has started with cutting government spending and trying to pay off debts. The proposals including slashing the currency’s value in half, reducing aid to provincial governments, suspending public works, cutting subsidies for gas and electricity and raising some taxes.

In Argentina, inflation is 161% and for a country that depends on agriculture including raising beef cattle, the drought has lasted 5 years. The result is Argentina has debts of $45 billion owing to the IMF or International Monetary Fund and 1 out or every 4 live in poverty.

One of the problems according to Monica de Bolle, a senior fellow for the Peterson Institute for International Economics is the solution being proposed will make the life of all Argentinas harder in the short run for a long term solution. By any measures, a recession is forecasted for Argentina with a growth rate of – 1.3%.

President Milei believes by slashing government spending and debt, the fiscal house of Argentina will for the first time in many years be in order. The theory includes by slashing the value of Peso, exports will rise because they will be less expensive for other countries’ consumers.

Linking to dividend paying stocks, the easy place to become wealthy is invest in a company or country that has been beaten down to low asset values. The hardest place to become wealthy is the invest in a company or country that has been beaten down to low asset values. The reason is time, how much time will it take and what will be your reward? In Argentina the time will be years, often times for a company it can take a couple of years, but one has to monitor the situation closely. It is easier to watch from a distance, invest in profitable companies which can pay dividends and if you wish to invest in beaten down country do it through ETFs or companies which have operations in the country.

There are more questions than answers, till the next time – to raising questions.