Topic: Argentina, on the verge of a new currency collapse - page 2. (Read 11453 times)

They're more insane than I thought.

Okay.  Bitcoin isn't going to practically help them.

What about setting up an alternate chain?  Argencoin.  That can be issued and used within Argentina fairly easily -- then, since Bitcoin-technology-Argencoins can't be prevented from being transferred, set up a BTC/AGC exchange anywhere you like outside of Argentina's control?

AGC/ARS exchange should be possible because it's internal.
AGC/BTC exchange is possible because it can't be stopped.

Exports are under tight control too. You'd need to show the money for them. They'd want tax, and the foreign currency for them to keep - giving you AR$.

Argentina is not remotely a free market economy at the moment.

I'm talking about exports though.  People in Argentina selling goods and services to foreigners is exporting.  I'd very surprised if cash-strapped Argentina banned exports.


Argentina must export more than fossil fuels?  What about the agricultural sector?  But services too would be possible.


Exchange rates sort everything out.  If only people could be persuaded to use bitcoins within Argentina, then the demand within Argentina would rise, and the few that were entering the country via service providers/farmers would be enough to run an economy (remember there are eight decimal places of divisibility).  The more valuable BTC became within Argentina, the more attractive the export business would become.

The ARS/BTC rate would sky rocket, just as the ARS/USD rate is going/has done anyway.  At some point, ARS would only be useful for paying taxes, but you'd be able to buy so many for a few BTC that it wouldn't matter in the slightest.   Importantly: BTC would allow a capital-control free existence.  The stupidity of the government wouldn't be passed on to the people, rather the stupidity of the government would be visited on the government.

Without that bootstrapping there's little you can do there. The current government restricts not just the purchase of foreign currencies and precious metals, but also imports. For mining, you need equipment that effectively is a lot more expensive than elsewhere, you cannot easily import mining equipment. If they decided to start buying and selling products and services they'd be very strictly limited to services since they cannot reliably buy outside.

Maybe web designers, programmers, etc can offer their services directly in BTC and then use it for complementary services, as a complement to their main salary typically in AR$/US$. It's limited, but it's something.

An exchange is 100% necessary.  Bootstrapping from an existing currency is only one way of getting bitcoins into an economy.  Admittedly it's the easiest -- but perhaps "easiest" becomes a less accurate term in less free countries like Argentina.

If Argentinians started earning bitcoins directly, then no exchange would be necessary.  The exchange would not be for dollars, but would be for "goods and services".  The hardest part is finding something that some foreign owner of bitcoins wants to buy.  However, it could also be that a foreign owner of dollars, who is already buying from Argentina can be persuaded to settle bills in bitcoin.

People use the argentine peso as currency; what is missing is a store of value. The problem with Bitcoin is that an exchange in Argentina would have to operate clandestinely (nobody will want to stick the head). But hey, buying dollars, gold and silver is virtually prohibited, and people are pretty comfortable with the black market. So it doesn´t seem unreasonable to think that many people may start to look at Bitcoin as a good alternative.

I was in Argentina last week hunting. Had no problems exchanging my money back to USD prior to re-entering the country. Either way if they do transition to BTC that would be incredibly exciting!

I think it's possible that Argentina could be ripe for a Bitcoin related tipping point.  There is a decent tech community in Argentina.  Around the time of their last currency collapse (early 2000's) I worked on an open source project where there was a sizable number of Argentinian's involved.  They were offering to do software development work for very cheap prices due to the currency devaluation.  Given that this currency event is such a recent memory and given there is a decent tech community, Bitcoin might have a chance there.  However, I think a few things need to be in place ahead of the event.  

First and foremost, there need to be local bitcoin exchanges.  With capital controls in place, foreign exchanges won't do them much good.  It could be readily apparent to everyone that Bitcoin has value on mtgox, but if you can't sell your Bitcoins on mtgox and transfer it back into Argentina, mtgox is of no use to them.  And capital controls will only get more restricted as the event nears.

Second, there needs to be a decent and visible amount of people willing to accept Bitcoin in exchange for goods and services domestically.  The basics (food, shelter, clothing) are essential items that need to be readily obtained with Bitcoin.  This will give people the confidence that if they hold some Bitcoins, they'll be able to spend them to obtain these necessities.  It's of little use to people in Argentina to be able to purchase mining rigs with Bitcoin when their primary concern during a currency crisis it putting food on the table.

Third, there need to be a critical mass of people in Argentina that hold Bitcoin in advance of the currency devaluation.  If very few people in Argentina have Bitcoins, then to obtain Bitcoin, it may be necessary to market and sell goods or services to international buyers that have Bitcoin.  That might be challenging.  Also, if only a very tiny portion of people have Bitcoin, those few holders of Bitcoin would command a very disproportionately large percentage of purchasing power present in the country.  This might cause others to be reluctant to use it for a currency as opposed to something like silver coins or the remaining physical USD in circulation.  The people that have Bitcoins now would actually do better with their investment if they tried to spread some of it around to other people.

They do, Argentina still keeps a middle class. They count on the currency dropping, and what they'd usually do is investing in Real Estate or buying foreign currency (US$ mainly). But Cristina Fernandez Kirchner's government is trying to lock them up to AR$ and closing in tighter controls and simply refusing exchange. This has been going on for a while... I'd say their reserves must be lower than advertised. I opened this thread earlier this year as measures starting to look markedly more worrying. Something is going on.

Do most people there have savings, and would lose money if the currency drops, or have loans, and would benefit?

From another thread:

Those who are granted a monopoly.


Those who get the money at gunpoint, basically.


Good question. I think not much can be done to remove the religion of statism (at least in the short run).

What you can do is understand the mechanism, prepare yourself for the inevitable and then try to stay calm while blood runs through the streets, like those people that made big fortunes during the collapse of 2001/2002.

Stupidity on a massive scale is like a force of nature: You learn to take advantage of it or it will destroy you.

Who's going to invest big in Argentina this time? who will they borrow from? they seem to be running out of credit in both senses of the word. Oil reserves are drying up too - shale oil will require a big investor, who's it going to be? They just blatantly stole the dividend cash reserve out of YPF. Who in his right mind would invest a dollar there?

Wow... another lost generation. How do you get out of this cycle?

That's exactly what will happen, IMHO. Although it doesn't matter the political party: everyone will do exactly the same, and the pendulum will continue. First recession, unemployment, blood in the streets... then they will change discourse. ¿And what next? privatization, of course (I mean re-privatization), crony capitalism, excessive borrowing, default...

If they convert them then it's not very useful... what about possession of gold and silver, how does that work there?

Looks pretty obvious that a devaluation is going to happen one way or the other. If they're not careful it may end up in hyperinflation. They just don't want a clearly visible GDP drop that would destroy the illusion of progress... same as they are falsifying inflation data.

I wonder what are the real reserves they are holding right now. They seem really desperate to keep ahold of every dollar, well as I said when I opened this thread, the alarm signs are increasingly more obvious.

In any case Cristina F.K. and her authoritarian model cannot possibly last. They've built such a circle of lies it's only a matter of time the whole thing collapses. I hope it's soon so Argentinian society and productive structure doesn't degenerate much more.

What's coming next? Macri? cannot see that happening. So what else is there? maybe there is a divide big enough within the peronistas so that some of them can be considered an alternative by the population.

The great Jorge Luis Borges : "I'm a modest anarchist. I believe in the individual, not in the state."
http://www.youtube.com/watch?v=5KyqsC2Zb5I
 

I don't know outside of control. You can do it on traditional ways (WU and MG) which AFAIK are working fine to receive funds (not to send). But I think they're going to convert the funds to ARS on paying...

wow, that looks like urine 

The gap in the exchange between "official" US$ dollars and "blue dollars" (black market) sky-rockets as supply is tight and the government is trying to stop the informal market by all means.



http://www.lanacion.com.ar/1473881-ante-la-fuerte-presion-el-dolar-paralelo-se-tomo-un-respiro

Is there any easy way to send dollars/euros/pounds to Argentina outside of government control?

By the way, rationing is here: http://www.lanacion.com.ar/1472986-se-hace-permanente-el-faltante-de-productos-que-controla-moreno