Help with Food
Funding Stress, the feeling we get when your stakeholders legitimately need more funds. This time we are in Argentina!
Suspend belief - pretend it's you
Or what we do when our projects need help in a runaway economy.
I appeal for funds all the time, over and over. It’s what I do and it is how we fund the work.
The process helps you to be informed and make a decision to help or not.
Of course, some give and som do not. Some say, people needing help is a thing that has always existed and things never improve for the poor, why should I help you help them?
The single best answer I have as a human being is this, “if I can't help one person” I have made a difference. I believe we all have a voice and a place in history and believe if you help it is noted and if you do not help you are making a difference too, yet both have different outcomes.
Let me tell you, or inform you about our people in Argentina and what they are living with right now. Yet, first off allow me to say, if you just can’t get through two and a half pages of text, Bless You and consider becoming a sponsor as the kids are suffering. www.starofhope.us/give
Moving on and addressing a real problem.
Just a few weeks ago, Steve Hanke from Forbes wrote “This week, Argentina released its February inflation statistics. Inflation spiked, again. Indeed, the official annual inflation rate jumped to 51.3%/yr. ( I’ll break this down for you further down in the article)
While this spike caught most financial observers off balance, it didn’t surprise me. Each day, I accurately measure Argentina’s inflation using high-frequency data and Purchasing Power Parity theory. By my measure, Argentina’s annual inflation rate is 100%/yr (see the accompanying chart). That’s nearly double the official rate reported locally for the end of February.”
Here at Star of Hope and Tent Mission, we are familiar with poverty, inflation, devaluation, and currency loss. Poverty is why Star of Hope works to mitigate poverty and help people break the chains of need, we do this primarily with education.
Tent Mission, Star of Hopes parent organization directs this work in such a way so we can share the Gospel of Christ with people who understand (are educated) and are not starving or sick. So we know that certain human needs must be met before Tent Mission can start up a process.
Hmm, so what effect does 100% inflation in one single country we work in have on a non-profit like Star of Hope?
Let me take you down a thought process, let's look first at the cash. Think it any way you like, let’s pretend for this example that we have with a figure of monthly food budget for a family and inflation and devaluation forces are at work in a large way.
Our example is a family in Argentina not with a per capita income in the $3,000 to $5,000 dollar range in the last 5 years. The numbers we deal with of course are for people at the very bottom range, the poorest.
We say the bottom 20% in Argentina live on less than $1.90 a day or about $50 dollars a month.
Argentina’s annual inflation rate is 100%/yr as we stated above and currency devaluation is also in the mix,
The devaluation of the Argentine peso is also making the country poorer across the board compared to the outside world and since more than 80% of the government's debt is in foreign currency - and the recent devaluation of more than 20% will make it harder for authorities to repay debt. Interest rates above 60% - used to control inflation - turn the picture even gloomier.
So some thoughts:
Devaluation is the deliberate downward adjustment of a country's currency value.
The government issuing the currency decides to devalue a currency.
Devaluing a currency reduces the cost of a country's exports and can help shrink trade deficits.
Last year, in August, the peso dropped more than 25% against the US dollar and has now lost more than half its value since the start of the year.
This year it is so much worse. What does it all mean for the family?
Ok, let’s break it down, in this example, let’s try to pretend we are a poor family still with dreams and hopes - we use dollars but the figures are close to actual. No matter how you landed there in poverty, there you are poor and struggling. You are a mom and pop, you have two kids a young girl and a baby boy. Your poor but have a combined income of $1200 a year or $100 a month. In 2009 your food budget was 50 dollars a month or 600 dollars a year.
Looking just at inflation remember prices are moving up at the inflation rate climbs, let’s say your 50 dollar food budget at 32% inflation, in 2007 that cost for food is now $1005. Yet you can at this point cover food costs with your $1,200 income. So you are eating, right thats good.
Now let's add in the devaluation of the currency also.
65 pesos to the United States dollar right now and in 2009 compounding the contrast teh peso was 3.5 peso for the dollar. In other words you need 179% more cash to buy items floating at international currency rates.
Back to the food in 2009 your food budget was 50% and in 2019 without devaluation and only inflation, your food budget is 83% of your total budget.
Now, let’s add in devaluation and your food budget is 1.7 times your income. Guess what your food bill extends your income by almost a factor of 2. So you are starving and or undernourished at the least. Then, you have no income for clothing, health supplies, schoolbooks, hygiene products, soap, candy, newspapers, medicine…
Can you put yourself in this situation, yes no...?
Let’s bring it closer to home, another way to explain in a situational context is this way, lets say...
The mean income in the USA is $48,150. The mean food budget is about $8,000.
Let’s say inflation goes through the roof and food costs start to be $16,000 a year you would crimp and save on where would you and yours tighten the belt, I bet everywhere and you and yours would still make it, most likely.
Now let's say the currency, yup the good old dollar is devalued by 100% and everything costs twice what it cost the last year. Suddenly food is at $32,000 dollars a year. And! Guess what it is not just food the increase is across the board ( not your income) it is every good and service!
How would that look for you and yours, do you still have a home, car, school costs, and so on.
Please kick back and consider how this would look...scarry right?
Not good, not cool, not fun and not plausible right, well that my friends is what Argentina is experiencing right now.
In the city too...
I am asking you to consider and then decide to help our friends and the children in our projects in Argentina.
The best way is to give help to feeding so we can help feed our people who are just the best and nicest you will meet, I know I have met them.
Give to Star of Hope here https://www.starofhope.us/get-involved/quick-give-form
In other news Haiti Update https://www.starofhope.us/haiti/tony-on-the-continued-crisis-in-haiti-kids-suffering
Mark Presson 10 18 2019
