Down in Argentina, the US dollar was a way the citizens could protect their savings from the volatile Argentine peso. Now, the government imposed a new ruling that unofficially bans the American currency.
Posted by FerFAL
Nov 7, 2011
The Modern Survivalist
As Greece and Italy go to hell in a hand basket, down here in the Banana Republic of Argentina we’re seeing a déjà vu of the 2001 collapse. The government imposed a “green” corralito by which through one excuse or another the American currency is being unofficially but effectively banned. The US Dollar was the way in which Argentines protected their savings from the even more volatile funny money that is the Argentine peso. With the new restrictions, before buying dollars you have to be authorized by the AFIP, the Argentine version of the IRS. Through a complex system that not even themselves understand, they check how much money you earn, what are your expenses, how much you may have saved based on that, and only then do they somewhat estimate what you should be allowed to buy. There’s people that own big companies that aren’t even allowed 50 USD.
To close the corralito even further the banks themselves came up with their own set of rules for the purchase of dollars, simply making it impossible to buy the American currency. The only way to buy dollars then is the black market where the dollar reaches 5.50 or 6 pesos per dollar, against the official rate of 4.26 pesos per dollar. In the black market caves and “arbolitos” (arbolito=tree, named based on them selling/buying the green USD) there’s been several reports of SIDE agents (our CIA) closing them down, and arresting both customers and owners of the joints. Why the arrests aren’t done by the police, I have no idea. This would be the time to stay put and wait until things settle before trying to buy USD.
So yes, these are interesting times to say the least. Lots of rumors, lots of desperate people out there. People that were just about to travel and needed dollars but cant buy them, people about to close business deals in dollars but cant get the money either. USD accounts being closed, Pesos accounts being closed as well out of fear and the too vivid ghost of 2001. Interest rates have doubled in banks in the last few days and everyone is just waiting, and I guess that the key word in today’s article. Waiting, staying put to see what happens. What happens when the economy is about to collapse, or just collapsed? Everyone waits. I saw the exact same thing 10 years ago. No one buys anything or sells anything unless they really have to.
What’s on high demand during times like these?? Nothing. Nothing at all. All the survival BS about this and that “being worth its weight in gold!!” its proven yet again to be false. At least during the peak, the initial days, everyone stays put.
The food you buy at the supermarket, you go to work and school, pay your bills, but other than that you don’t spend a buck unless you have to. The only thing I do notice is that regarding imports, if someone needs something that was imported in USD and they can buy it in pesos, they do so quickly speculating the USD will keep going up in price. Keep that in mind and close deals quickly if you think a devaluation would work against you. A tell tale of what happened was seen a few months ago when imports stopped rolling in.
Other than that what people really want is dollars, the only way in which you can escape the peso. Gold and silver being marketed in USD are also being restricted. I posted about this being a good way to save what you had in an Argentine forum, I hope at least some people took advantage of that loophole during the couple days that it lasted.
The lesson here is simple: For Argentina its USD, that’s what we’ve always gone to during complicated times and that’s what the government always restricted right before everything goes to hell. For US its going to be gold and silver, that your version of what the dollar means for us. When the government starts looking for ways to directly or most likely, indirectly restrict the purchase and sale of precious metals, that’s when you know the S is just about to hit the fan.
The Argentine government just created a new department, specifically to hunt down “financial criminals”, you know, old ladies that try to buy a Benjamin or two.
Little lessons from Argentina boys and girls, please don’t EVER allow this sort of thing to happen in your country.
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