After our amazing (and cold) Patagonia adventure we were ready to head north to warmer weather. Mendoza was our next stop and where we would drink so much wine. So so much.
We arrived after two days of buses; Puerto Montt to Santiago which was overnight and expectedly boring, and then Santiago to Mendoza the next morning, which was an incredible drive up and over the steep Andes Mountains, passing by the famous Aconcaga Volcano National Park and through several tunnel sections of the mountain.
We arrived after two days of buses; Puerto Montt to Santiago which was overnight and expectedly boring, and then Santiago to Mendoza the next morning, which was an incredible drive up and over the steep Andes Mountains, passing by the famous Aconcaga Volcano National Park and through several tunnel sections of the mountain.
switchbacks galore! This drive was completely unexpected for us as we hadn't done the research, but it is one of the most unique and gorgeous drives in the world! We luckily got a double decker bus and sat directly in the top front so we had the best possible view of everything. We were literally expecting a boring day but, WOW were we wrong!
When we finally arrived in Mendoza we took a cab into the center part of town and went searching for a hostel. It was surprising to us that the prices for accommodation were MUCH higher than we had been told or were written our Lonely Planet book that is only one year old. I suppose we shouldn't have been that surprised considering the current politics in the country.
When we finally arrived in Mendoza we took a cab into the center part of town and went searching for a hostel. It was surprising to us that the prices for accommodation were MUCH higher than we had been told or were written our Lonely Planet book that is only one year old. I suppose we shouldn't have been that surprised considering the current politics in the country.
The thing about Argentina...
tugboat tug-of-war in Puerto Montt The thing about Argentina is inflation is completely out of control! For example, in January this year inflation was measured somewhere between 3.7 and 4.6% depending on who you ask, and annual inflation for 2014 is projected to be something between 50-60%!!! Though since 2008 it has been around 25% per year which is still insane! Now comparing to the US where ANNUAL inflation is held fairly stable (depending on who you ask, of course) at around 2%, you can see that there is a HUGE problem.
The very simplified explanation is something like this: The country has had a long history of unstable periods of high economic development followed by extreme lows. One consequence is a very large middle class where most citizens are fairly well-off and demand more expensive things. When things run out, demand increases drastically, people pay more, more supply comes in, and the peso loses value; hence inflation, and then it is too expensive to import things anymore so the cycle restarts, or something like that. During the periods of low economic development, huge amounts of debt are accumulated (as is likely to happen again this year) and so the problem just gets worse and worse.
What this means for travellers like us is something kind of disturbingly good, which is actually terrible to comprehend. We came into Argentina with knowledge of the situation so we took out a bunch of $US cash from Bolivia and Chile so that we could exchange it for Argentine pesos at a MAJOR discount; the "official" rate is between 7-8 pesos per $US, but we were able to exchange on the "Blue Market" (random people hoarding $US) for between 10-12 peso's per $US. The reason is simple; think about your RRSP's (or 401K's if you're in the US) - you have worked your whole life to save up x amount of dollars for retirement, but imagine if all of a sudden in one year inflation was 25% (something that could happen at home too) meaning that your savings account just lost a quarter of its value!!! Do that for several years in a row. Now you have nothing. Your whole life savings can now buy you a loaf of bread (if you buy now).
Wages have HAD to increase by about the same amount as inflation or everyone would have starved to death by now, but the fact remains, no savings exist in their accounts. So, what people do, and what I am sure anyone should do, is hoard $US since inflation on the dollar is more stable (perceivably) so it should hold more value over time. But the Argentine Government has made it illegal to withdraw $US from banks so the only way for people to get it is illegally, mainly from tourists.
While in-fluxing $US to the people seems like a win-win situation for tourists like us and the people we trade with (assuming that the peso continues to drop), it is completely undermining the Government and might be making things worse in the long run.
One last thing I will comment on about this situation is that one of the government strategies to control inflation, which started in January 2014, is to hold major food basket prices at a fixed rate. That means that the cost of flour, eggs, milk, sugar, bread, etc. are to remain fixed for a indeterminate amount of time. How does this help? Well, inflation is defined as the cost of a basket of goods containing those food items and some other things. So, in short, the government is trying to fake lower inflation rates (the US does this too). That is why the measure is really dependant on who you ask (the government claims that it is about half of what it really is). The good news for us as travellers is it is MUCH cheaper to buy groceries and cook our own food than to eat at a restaurant (RESTAURANTS ARE SO EXPENSIVE!). The bad news is that EVERYTHING else is very expensive (accommodation, clothing, souvenirs, travel, etc.).
The very simplified explanation is something like this: The country has had a long history of unstable periods of high economic development followed by extreme lows. One consequence is a very large middle class where most citizens are fairly well-off and demand more expensive things. When things run out, demand increases drastically, people pay more, more supply comes in, and the peso loses value; hence inflation, and then it is too expensive to import things anymore so the cycle restarts, or something like that. During the periods of low economic development, huge amounts of debt are accumulated (as is likely to happen again this year) and so the problem just gets worse and worse.
What this means for travellers like us is something kind of disturbingly good, which is actually terrible to comprehend. We came into Argentina with knowledge of the situation so we took out a bunch of $US cash from Bolivia and Chile so that we could exchange it for Argentine pesos at a MAJOR discount; the "official" rate is between 7-8 pesos per $US, but we were able to exchange on the "Blue Market" (random people hoarding $US) for between 10-12 peso's per $US. The reason is simple; think about your RRSP's (or 401K's if you're in the US) - you have worked your whole life to save up x amount of dollars for retirement, but imagine if all of a sudden in one year inflation was 25% (something that could happen at home too) meaning that your savings account just lost a quarter of its value!!! Do that for several years in a row. Now you have nothing. Your whole life savings can now buy you a loaf of bread (if you buy now).
Wages have HAD to increase by about the same amount as inflation or everyone would have starved to death by now, but the fact remains, no savings exist in their accounts. So, what people do, and what I am sure anyone should do, is hoard $US since inflation on the dollar is more stable (perceivably) so it should hold more value over time. But the Argentine Government has made it illegal to withdraw $US from banks so the only way for people to get it is illegally, mainly from tourists.
While in-fluxing $US to the people seems like a win-win situation for tourists like us and the people we trade with (assuming that the peso continues to drop), it is completely undermining the Government and might be making things worse in the long run.
One last thing I will comment on about this situation is that one of the government strategies to control inflation, which started in January 2014, is to hold major food basket prices at a fixed rate. That means that the cost of flour, eggs, milk, sugar, bread, etc. are to remain fixed for a indeterminate amount of time. How does this help? Well, inflation is defined as the cost of a basket of goods containing those food items and some other things. So, in short, the government is trying to fake lower inflation rates (the US does this too). That is why the measure is really dependant on who you ask (the government claims that it is about half of what it really is). The good news for us as travellers is it is MUCH cheaper to buy groceries and cook our own food than to eat at a restaurant (RESTAURANTS ARE SO EXPENSIVE!). The bad news is that EVERYTHING else is very expensive (accommodation, clothing, souvenirs, travel, etc.).
Back to our trip
fountain of rainbows So we found a hostel after accepting that prices have already been inflated since the Lonely Planet book was published one year ago. We went to a sketchy alleyway near our hostel that the owner recommended where we exchanged a bunch of our $US at a 12:1 rate, and were ready to relax for the rest of the day.
The next morning we wandered around the city which was nice. There are many parks scattered all over the place and the streets are very wide and spacious. The city was re-designed after a massive earthquake in 1861 in order to ensure that there are safe areas in the streets and parks to mingle if another massive earthquake happens in the future. It was nice enough but we kept on having trouble with timing - Argentina subscribes to a 1-4pm siesta every day and restaurants don't serve dinner until 8 or 9pm! Took some getting used to.
The next morning we wandered around the city which was nice. There are many parks scattered all over the place and the streets are very wide and spacious. The city was re-designed after a massive earthquake in 1861 in order to ensure that there are safe areas in the streets and parks to mingle if another massive earthquake happens in the future. It was nice enough but we kept on having trouble with timing - Argentina subscribes to a 1-4pm siesta every day and restaurants don't serve dinner until 8 or 9pm! Took some getting used to.
bikes + wine = awesome! The next day we went on a bicycle winery tour. We were going to do some tours on our own by just renting some bicycles in the nearby town of Maipu, but on the way to the bus terminal several people in the street warned us not to do it on our own as there has been a major increase in muggings and violence in the area (hmmm I wonder why...). So we bit the bullet and decided to go on a guided bike tour with a bunch of other tourists.
grape pressing machines It was actually quite fun! The Mendoza region is famous for Malbecs and Merlots. We saw three wineries but only toured two of them, which was enough. The first was a small organic winery with wines I thought tasted just fine but almost everyone else thought was terrible (I really am not the best judge of wine flavour). The second winery was a larger but still humble winery that used all modern, stainless steel equipment. The wines there were unanimously delicious and we ended up buying a bottle of their Merlot to enjoy later. After that we went to another winery just to taste some wine and, and finally to a little beer garden for a beer and some delicious empanadas. It was a great day and a fun way to learn about wine. We also met some fun people who we bumped into a few days later in Córdoba. We also made fun of a couple other guys who must have been under 20 years old but thought they were over 60 and knew everything there was to know about wine: "Do you use American oak or French oak barrels?", "I prefer a light rosemary chicken sauté with my Merlot, how about you Margaret-Ann". Oye.
sniff with your mouth open! We didn't stay long in Mendoza after the wineries. It was nice but we were looking forward to finding a more quiet and less city-like place to spend some time. We boarded another overnight bus and headed toward Córdoba, a stopping point before moving on to Capilla del Monte, a small town north of Córdoba, said to be a hot spot of UFO activity. We never thought we would actually see anything on our journey but what we found was beyond comprehension. Stay tuned for our OVNI (UFO in Spanish) experience!
Chilled beans make good ice-cream!
-Chelsea
Chilled beans make good ice-cream!
-Chelsea
Mendoza Photos
To open photos in a new window click here
RSS Feed