Posted on 05/20/2012 12:35:26 PM PDT by DeaconBenjamin
Along a busy street in the Argentine capital, the man in the brown suit doesn't need to speak above a whisper to sell his goods: "Money change. Money change." Those who want to swap pesos for dollars follow him through a run-down mall to a lingerie store. There, amid bras and pantyhose, he closes deals for greenbacks.
Argentines have increasingly turned to such black market money changers since President Cristina Fernandez sharply restricted purchases of dollars in banks and exchange houses to try to keep hard currency from pouring out of the country.
Argentina has been kept from global capital markets since defaulting on its debt during a financial crisis a decade ago, so Fernandez's government wants to keep dollars in the country to replenish central bank reserves and pay government debts. Argentines, meanwhile, are haunted by nightmares of the crisis, when banks froze deposits and the currency lost value. So they are eager for dollars to stash in vaults or under their mattress. Others send them abroad for safekeeping.
Many economists say the new black market spawned by currency controls could choke back Argentina's economic growth and create even more inflation: Controls make it harder for people to do business and undermine confidence in the peso, causing it to devalue even more quickly. That can create the threat of shortages when people are unwilling to sell goods for a currency they do not trust. The curbs could also encourage Argentines to withdraw dollars from banks.
Under the controls imposed shortly after Fernandez won re-election in October, the country's tax agency, known as the AFIP, must approve all purchases of dollars. The formal exchange rate was 4.47 pesos per dollar on Friday, a slide of about 8.6 percent from where the peso was a year ago.
(Excerpt) Read more at abcnews.go.com ...
Argentina has been touted as a socialist success story ... by socialists of course. Argentina is going down the socialist toilet just like Europe.
See our future. Bipartisan favored constituents receive money from their debt regime, have indirect regulatory control over their neighbors and continue to steal all that they can from them through regulations, false accusations and other politically correct tactics. That should heat things up nicely for the collapse.
Most politicos aren’t the producers that they claim to be. They’re socialists, from government employees, to contractors, to services, riding a debt wave while being watched closely by the currently silent, private sector masses. That’s why they fantasize so much about killing “zombies” (those who would really produce, were it not for the regulations and other thefts of the NIMBYs).
Me? I’ll keep working, building and being poor (but healthy, hopefully, and certainly happy) in the middle of nowhere, having already had enough excitement for a lifetime. Peace and quiet.
I wish that were true, but they'd be no better off if they don't fix their fiscal and regulatory mess. Argentina found that out about a decade ago.
Until gold is accepted as the universal standard, countries will have to go it on their own with their fake, fiat currencies.
Why coins instead of bills?
They are mostly copper, maybe about 10 cents worth and nobody wants them.
When currency is devalued “old peso’s” for “NEW Peso’s” (for example) the paper money is typically recalled and exchanged but the coinage , because there is actual expense to creating it (far more than paper) and because there is typically so little of it in circulation it is usually left in circulation.
Maybe more people need to watch Goldfinger and learn about his Rolls Royce.
It’s the economy - everywhere? Does it ever dawn on the reporters that it is socialism that is causing all this trauma?
Argentina is on th edge of being totally Orwellian/Ayn Randian
Excellent post and spot on. I wish I’d read it before I posted. You said it better.
Sort of like the G8 summit pledging more spending to spur their economies?
Over a century ago Argentina was competitive with the US. This is the war over what is seen and what is unseen. Sadly, the consequences of policy choices which lead to the current US domination of 25% of the world’s economy v. Argentina’s fiscal mess are “unseen” by the liberal monsters who wish to eat our society to death.
Yep. AKA cognitive dissonance.
Good post. It's going onto a gimmick t-shirt tomorrow.
It would never occur to these reporters that it is caused by socialist policies because they don’t think that could be possible. “JournOlisters” are true believers.
“Argentina has been touted as a socialist success story ... by socialists of course. Argentina is going down the socialist toilet just like Europe.”
Actually, Argentina is farther along that road than Europe. If the Europeans want to see their future, they only need to look at Argentina. Sad-the days when “as rich as an Argentinean” and the “peso de oro” are well and truly gone.
For example, May 2011, keep in mind the Unemployment Number is down because there are less available jobs;
Goolsbee isn’t the only one saying more than 2 million private sector jobs added in the last 14 months;
May. 6, 2011
http://www.indystar.com/article/20110506/NEWS/110506010/Obama-want-energy-breakthroughs-Indiana?odyssey=tab|topnews|text|IndyStar.com
“That means over the last 14 months,” Obama said, “we’ve added more than 2 million jobs in the private sector.”
http://www.monstersandcritics.com/news/business/news/article_1637565.php/Hiring-picks-up-but-US-jobless-rate-up-to-9-per-cent
White House Press Secretary Jay Carney pointed out to reporters that April was the 14th consecutive month of growth in private sector employment, for a total of 2.1 million jobs
Reminded of Democrat EconOmist...Christina Romer, Paul Krugman, Jared Bernstein, Tim Geithner, Larry Summers, Dr. Mark Zandi, Dr. Alan Blinder, Bob Kuttner, Heather Boushey, Bill Hambrecht, Allen Sinai...
bump
libs are libs
Ecuador still uses the US dollar; no mas Sucres(?).
One of those countries (it may have been Uruguay) changed their coins as well; the new ones had a dollar sign with “N” in front of it.
“I tried to buy 500 ordinary One-dollar us coins friday at my credit union.”
Just drop by your local gun store and buy a box of 50 9MM a week. They’ll be wroth more in the long run. :)
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