
Argentina restricts online shopping as foreign reserves drop - ytNumbers
http://www.bbc.co.uk/news/world-latin-america-25836208
======
JVIDEL
What happens with the Argentine economy is that everybody who actually kept it
afloat (not the corrupt politicians, crony CKD assemblers passing as
"industry" or the masses of unskilled and unemployable public employees who
can make or break an election) just plain _gave up_

This is very difficult to explain to people in developed countries, but what
you have to understand first and foremost is that in Argentina there is no
"plan" at all, is a country in a permanent state of improvisation, and because
of that you have things like this which are literally implemented overnight
with no warning let alone debating about it, you know like democracies are
supposed to do...

Because of crap like this many Argentines give up and either live off savings
or just leave. And really, with an effective tax-rate of over 60% with
virtually no rebates and a VAT/sales tax in the mid 20s you reach a point
where your income no matter what you do is lower than your expenses, so why
keep going? you are actually acquiring DEBT in order to WORK.

The current dolar reserve crisis is being handled in such a stupid sloppy
manner that is difficult to explain, because it makes no sense whatsoever. For
example the government wont let you buy or sell _any foreign currency_ , but
it subsidizes every operation in foreign currency at between 40% and 50% lower
than real value. The excuse is to avoid an inflationary spiral but it actually
created one, and destroyed the reserves of the central bank.

~~~
nickff
I could not agree with you more, but I do have a simple explanation for the
currency exchange regulations.

The government is taxing exports by underpaying exporters for their goods,
while collecting market prices from the foreign customers. The government
achieves this by overstating the value of the Argentinian peso, which the
exporters are forced to accept as payment (at government dictated exchange
rates). This would be a problem if the government allowed citizens to purchase
USD at the artificial (low cost per USD in pesos) price, so the government
restricts USD purchases in Argentina.

The Chinese government implemented this policy before Argentina, which is why
they are always accused of manipulating their exchange rates.

~~~
rahimnathwani
The alleged manipulation by China is the reverse: China has been accused, by
western politicians, of keeping the value of its currency _lower_ than it
would be if freely floated. This, if true, would effectively be a subsidy for
exporters: they receive dollars for exports, whilst paying (cheap) local
currency for labour and rent.

~~~
nickff
I apologize if I am not being clear, but this is precisely what Argentina
does. Argentina keeps the value of its dollar much _lower_ than its official
exchange rate by giving exporters less pesos than the real exchange rate would
dictate. The government pockets the extra USD.

You could also look at this is as if the exporters got fair market exchange
rates for the USD they earn, and the government took some of the pesos the
exporters were given, and immediately converted them back into USD. The effect
is the same, as the exporters end up with less money than they earned, and the
government pockets USD.

Overall, this reduces the resources available to people holding (the same
number of an increasing pool of) pesos, thus devaluing the currency.

The fixed official exchange rate also allows for less obvious increases in the
money supply (inflation).

~~~
rahimnathwani
From Forbes: _Argentina 's black market offers some 10 pesos per dollar,
instead of nearly seven at the fixed exchange rate._

So, the open market value of a peso is about 0.10 USD. The official value is
0.15USD.

The official value of 1 peso (0.15USD) is higher than the open market price
(0.10USD). Thus the government is overvaluing the peso.

In contrast, 1 CNY is currently worth (0.17USD), i.e. similar to the official
value of 1 peso. However, some people argue that it should be worth much more
(e.g. 0.25USD).

In your example, exporters are getting screwed through an implicit tax. In my
example, exporters are getting an implicit subsidy.

~~~
nickff
If the exporters are being subsidized, China would have to be depleting its
foreign currency reserves for as long as the policy is in place.

~~~
rahimnathwani
China's trade surplus was more than 4 _trillion_ USD in 2013.

Exporters use USD (which they receive from overseas buyers) to buy CNY. Those
USD add to China's foreign currency reserves.

------
bevacqua
I live in Argentina and _I bought pesos at 11.665_ on the dollar yesterday.
Today it's closing in on the 12 mark, at 11.85.

Lately, the Argentinean peso has been plummeting in value. Yesterday the
official peso dropped with a rate that hadn't been seen in 5 years.

The government converts USD, if I were to place them in my bank, to the
official peso. They don't sell USD, though. So I would never get real USD if I
were to use my bank account in Argentina. That currency currently sits at
6.89, over 70% below the real value.

Now they're attempting to limit online shopping to, get this, TWICE _per
year_.

This makes me want to flee the country.

~~~
estebank
I've left the country exactly a year ago.

There's no legal way of leaving the country with your savings. You're unable
to exchange your savings legally as the only concept that the AFIP (local IRS)
accepts for exchanging is exports. I know, I checked every possible avenue.
The people you talk to's attitude ranges from apologetic, passing through not-
give-a-shit reaching abuse.

Luckily for me, I didn't have any big savings, not really, but if you have a
house/car/anything (IE, have roots) and you sell it you're royally fucked.
Even if you exchange in the black market you cannot leave the country with
more than USD 10K per person, and if you do and get caught in either Argentina
or destination country, it'll get confiscated in its entirety. And once you've
arrived to a country with USD 10K, you have to exchange it to the local
currency (let's say EUR). But now you have EUR 7380 in cash that no bank will
touch with a 10 foot pole because almost no other country in the world
disallows it's citizens from doing bank transfers, so that money is suspected
of being laundered.

On top of all this, you can use your credit card outside of the country, with
a 35% tax to every purchase, with a monthly top, so if you're left with pesos,
as I was, you can start chipping away at the meager pesos savings bit by bit.
But then you have to keep in mind the incredible inflation rate that the peso
has[1][2] of over 28% for 2014[3](3.38% in a _month_!).

[1]: [http://imgur.com/va1o1C1](http://imgur.com/va1o1C1)

[2]:
[https://docs.google.com/spreadsheet/pub?key=0AuNh4LTzbqXMdFJ...](https://docs.google.com/spreadsheet/pub?key=0AuNh4LTzbqXMdFJobGlLMWl2bzR3SHM3Nmc1dExLZmc&output=csv)

[3]: [http://www.infobae.com/2014/01/14/1537019-la-inflacion-
congr...](http://www.infobae.com/2014/01/14/1537019-la-inflacion-congreso-
fue-283-2013-y-la-mas-alta-un-mes-mas-22-anos)

~~~
lazyant
"you cannot leave the country with more than USD 10K per person, and if you do
and get caught in either Argentina or destination country, it'll get
confiscated in its entirety"

I don't know if it's different because I was coming from a different country
but I arrived once in the US with more than $10k, I just declared it and
filled out a form.

~~~
estebank
You're right, and it seems like in both the US[1] and Europe[2] you can enter
with more than that, all you have to do is declare it.

In Argentina you cannot enter or leave with more than USD 10K[3], declared or
undeclared except _through a financial or banking institution_ , which _in
effect_ cannot move money abroad.

[1]: [http://getawaytips.azcentral.com/amount-currency-can-
bring-p...](http://getawaytips.azcentral.com/amount-currency-can-bring-
plane-3952.html)

[2]:
[http://ec.europa.eu/taxation_customs/common/travellers/enter...](http://ec.europa.eu/taxation_customs/common/travellers/enter_eu/index_en.htm#section_3_5)

[3]:
[http://www.afip.gov.ar/turismo/equipaje.asp](http://www.afip.gov.ar/turismo/equipaje.asp)

 _" Los pasajeros y tripulantes mayores de 21 años podrán retirar del país,
metales preciosos, billetes y monedas extranjeras por montos superiores a u$s
10.000 o su equivalente en otras monedas, sólo a través de ENTIDADES
FINANCIERAS Y CAMBIARIAS, con las respectivas autorizaciones."_

------
itchitawa
After a century of failing to manage its economy, Argentina continues to fail
to manage its economy.

In other news, water is wet.

------
gadders
I expect the Falklands will get a mention by their president soon. Normally
any time they have an internal problem they try a bit of sabre rattling to
distract the population.

~~~
blueskin_
With a bit of luck, they can prove the downfall of two Argentine dictatorships
instead of just one.

------
blueskin_
Argentina keeps resembling a dictatorship / failed state more and more with
every passing month.

------
martinvol
It's incredibly what the government had done to the economy just in a couple
of years. In 2008 we were virtually safe from the world crisis.

Then they didn't stop the public spending, so the emitted more and more pesos,
which lead to inflation, that they didn't want to admit, so they started
fixing the exchange rate with the dollar.

Until it was unbelievable cheap, so they started to control it.

More and more restrictions went on. So many that they basically destroyed the
economy trust, that is pretty much everything in economy.

It's incredible that this distortions led to a country with few dollars,
expensive for forgings, with no foreign investment. And it's also cheap for
Argentines to travel abroad!

I have no idea how the hell they did that mess so quickly.

------
Daishiman
Yeap, holy shit did I pick a good time to leave.

------
kfk
It’s good to point out that a G8 country like Italy is going about the same
way as Argentina. Those 2 countries are extremely connected, Argentina’s
Italian descends today might be as much as 60% of the whole population. As
Italian, I am not trying to stick yet another stereotype to us, but this is an
interesting fact after all and it says a lot about the future of Italy too if
you ask me.

edit O yeah, and Europe too, it says a lot about the future of Europe too

------
acd
There is no gold in the vaults only useless paper notes backed up by the
fraudulent system of fractional reserve banks. Paper notes goes back to their
intrinsic value that of paper.

Argentina and India will most likely by their history of high inflation be
keen to use cryptographic currencies like Bitcoin.

------
hrnnnnnn
This is pretty much how it's been in Iceland for several years now.

~~~
blueskin_
The main difference is that Iceland has so far not made territorial claims on
Greenland to try and distract its population from their miserable situation.

------
ye
Argentina is now the primary candidate for Bitcoin adoption.

High GDP.

Crazy inflation.

Corrupt stupid government.

Totalitarian-style financial laws.

Easy widespread internet and mobile access.

Not enough dollars.

~~~
maxerickson
Can you explain how a large amount of bitcoin end up getting sold into
Argentina?

I don't see why anybody (in country) with dollars would bother selling them
for bitcoin, and I don't see why anybody with bitcoin is going to be excited
about pesos.

So you get a little trickle.

~~~
GigabyteCoin
It's nearly impossible if you think about it in depth.

Argentina does not allow money (in significant amounts) to leave their
borders.

Bitcoin is a world-currency.

In order for an argentinian to acquire a Bitcoin, he must pay taxes in excess
of 50%, be limited to a few hundred USD in purchases per month, and find
somebody who owns bitcoin to take argentine pesos which are in an inflationary
spiral at the moment:
[http://www.xe.com/currencycharts/?from=USD&to=ARS&view=10Y](http://www.xe.com/currencycharts/?from=USD&to=ARS&view=10Y)

The value of Bitcoin is doing the exact opposite of argentine pesos.

Anybody holding Bitcoin would have to be insane to exchange them for argentine
pesos.

~~~
politician
Well, it would be possible if the Argentinians adopted a "South American"
Bitcoin variant with their own Genesis block: restarting the BTC valuation
process based on their local economy would capture the actual local value.

You'd be in a competition at some point with the larger "Western" Bitcoin
variant, but that's not an issue in the short term.

~~~
GigabyteCoin
If a "South American Bitcoin variant" was created, purely for south americans,
why would anyone holding a world currency (Bitcoin) trade it for currency only
recognized in south america?

~~~
ihsw
Because they wish to do business in South America, or with South American
companies.

Economic unity is very attractive, especially considering the financial/legal
hurdles that come with reaching customers in a dozen different currencies in a
dozen different national jurisdictions.

~~~
GigabyteCoin
Ok we're really going on a tangent now...

So the proposed solution is to:

a) create a crypto currency for south americans only

b) ask other countries who want to buy your resources to pay in south american
coin

c) convert south america coin to bitcoin (how?) once you have transacted with
the rest of the world to re-enter the world-currency market

Good luck with that idea. It's never going to work.

