Topic: Argentina's Central Bank running out of dollars as inflation hits 100% (Read 347 times)

There is something similar in Cuba. But there is generally a "country of victorious socialism", and nonsense has no boundaries. Food for the population - on cards, the slogan "we don't need a dollar", but for a tourist with a dollar - everything is there, a lot of food, any services, even completely "capitalist" and unlimited )) But they continue to "heroically and every day defeat the United States ", which ultimately manifests itself as an increasing degradation of the local population, the economy, everything! But populism and propaganda gives its result - the people, in fact, vote for the deterioration of their lives, with their own hands and from the heart .... Having visited Cuba, I had very mixed impressions

When I first heard about Argentina's numerous dollar rates for different markets (from tourism to meat etc) my jaw dropped. Its definitely absurd with them. Their inflation is probably the most sticky inflation ever in the world now. I am not surprised they are still having issues. Their national currency is literally having heart crisis. I feel like sometimes states should move on to financial systems that fixes their economy to reserve currencies like Swiss Franc. At least it could be better in long run.

Nice to hear a sound, logical approach and assessment!
For some reason, many have decided that if they change the financial instrument, then immediately, as if by waving a magic wand, everything will be fixed. But the problem is not the currency. The problem is in the heads and hands of those who run the country, the economy. If they are fools, then whatever you don’t give them instead of today’s currency, they still won’t succeed in anything sensible! They will always have someone or something to blame for their stupidity. And they will always look for populist solutions that divert attention but make things worse for lack of a real solution.

I am not a resident of the USA, 100%, so you are trying in vain to pull on my words what you personally want to hear
I have hatred only for Nazism, and racism and rashizm, and for other human-hating systems.

In relation to the USA - I like their intelligence, dexterity, sometimes cunning, and deliberate moves. And the stupid attempts of other world players to make populist moves, in anticipation of some positive results, are very funny. Regarding this situation, I have already written, and once again I will personally repeat to you - the fact that now a wave of hysteria has begun (and there is no other way to call it) is not connected with the FIGHT WITH the USA, but WITH THE SALVATION OF CHINA. You cannot catch this in any way, being blinkered by the "fight against the USA."
And all these "slogans" - "you are going to suck", "you don't know how to manage", "we don't need a dollar" and other not very smart things, only prove my case

PS What, you didn't like the example of Sri Lanka? Can you give another explanation of the situation? Only with arguments and with love for China? I'll listen to you with pleasure - I'm waiting!

Bitcoin cannot provide water for their crops to grow, so NO....it cannot help with that. It can also not force politicians to change their mind to replace their reserve currency to Bitcoin... that has to come from the voters.

The citizens of a country have their voting power to bring change and most of them do not even go to the voting stations when it is time for them to vote. They should vote for a government that will bring change.... a government that will embrace Bitcoin. 

Of course worongly abusing FIAT money help derail the economy and send to rubble an entire economy. Yet, the dollarisation of an economy, as the adoption of Yuan is not magical recipe.

I have to agree with the FT this time:

Dollarisation would not save Argentina

And yet again, you talk with American mindset at your heart and hate everything that does hurt america. You are right about the fact that yuan and following China is a terrible move, but you think dollar and america was any better? Look at the state of Argentina right now, look at the inflation, look at how terrible they are at the moment and they did not use Yuan AT ALL so far, they used dollars.

This is 100% proof that using dollar does not make you better, in fact if you use dollar and mismanage your economy that means you are going to suck, they did, so dollar is no good to anyone at all, it is all about economy. If you have a good economy, but you can use dollars euros yuans whatever you want, if you have bad economy then you could use anything and still be bad.

Some considerations about this.

First of all Argentina have in the reserves of the central bank a "swap" with China in yuan/peso since 2014.
Second this movement its more because the central bank its again run out of dollars to pay more than for the geopolitical thing.
Third, and more important, Argentina its playing really really good in this scenario like we always do historically in this geopolitical conjuncture.

In the USA China economic war, Argentina its been extorting both of them , with the last run of the usd dollar Argentina intervened in the markets with reserves, and this its prohibited by the IMF also we dont reach any of the goals put by the IMF. We keep printing money , etc.

But here comes the thing, after made this, we talk with china and make this other thing, so now the viceminister its in Washington talking with IMF board, and they have now 2 big problems, if Argentina fall again, they fall with us, because they keep sending money in 5 years when Argentina never acomplished any of the goals, in the past goverment and in this one. So or are they corrupted and the debt its totally a extortion to the country who in 5 years the politicians steal the money and they do nothing to prevent or they keep sending more money...(yes its more debt).

So here Argentina plays his other card, IMF its a puppet of white house, so Argentina its gonna say, ok no problem im gonna join China side if you dont give me the money.

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The economic/geopolitical  war its on fire in the last travel of the president to Washington , he comes back with the order of USA to stop a lot of chinese investments here in change to keep supporting us with the IMF.

We received in the last 4 months 2 visit of the southern command commander of the USA, because they see us talking a lot with chinesse and rusia counterparties to buy armament.

But the reality its Argentina its not gonna buy anything, if its not low or free, but again we are trying to extort them, in this time of weakness.

USA knows Brasil its in the BRICS and Lula its left side, so they need one ally in souther america, his historical allie was/its Chile and COlombia, but they are not so big and important than Argentina.

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Argentina was always more third position, with goverments pro USA and other no pro USA. But Argentina politics are a world appart.

The last few years have done a lot of stupid things. It seemed not enough, they decided to do a frankly idiotic act ...
It's a pity, I was hoping that the government of Argnetina would prevail over populism. Now just watch as the economy of Argentina, and so not in the best state, will be destroyed by the yuan, and "new rules of the game from China." And before that, carefully read the history of Sri Lanka over the past 5-7 years, its current situation, and most importantly, about the causes of these problems and China's place in them.
You will learn a lot of new things, and understand that this step will be fatal. Understand one thing - the so-called "de-dollarization" is nothing more than a Chinese project to save its economy by degrading the economies of the countries participating in this "project" ...

Maybe unrelated news, but apparently Argentina is joining the forces of the de-dollarisation:

Argentina to pay for Chinese imports in yuan rather than dollars



I guess this time IMF will be pissed off by this. Not that is necessarily a bad thing for Argentina.

Yes, I agree that a large influx of migrants, no offense is not the best - this is a problem.
This is a social program for "neighbors", this is drug trafficking, robbery and a decrease in social norms "on average in the country." Plus, many migrants are ready to work "for food", which dampens the job market.
But it seems to me that there are real problems a little further than this social side. I suppose - not quite skillful management as a whole, and populist decisions. Trying to "be everyone's boyfriend" very often ends badly.

SOURCE--

Previously, President Fernandez had discussed the possibility that Argentina would adopt bitcoin, but until now it was still just talk. but if Argentina really wants to get out of the current inflation, adopting Bitcoin will have a more positive impact on the country, coupled with providing social assistance to the poor, will boost people's purchasing power and surely the economy will move up again.

The economy of Argentina? It's nuts ! It has weathered economic downturns and inflation. Bitcoin? While it may seem like a panacea to some, it is not.

There are potential downsides to utilizing Bitcoin because of its infancy. No guidelines? Bang! The city of deceit. How about those unexpectedly large price increases? They can potentially make matters worse for the company.

That's why Argentines shouldn't put all their eggs in the Bitcoin basket. Instead, it should investigate thoroughly, confront the unpleasant facts, and address the issue where it originates. Restore economic prosperity through updating our legislation and government agencies. Stop spreading false alarms about the state of the economy.

It's hard to figure out why Argentina seems to struggle so much with monetary crisis after crisis. Ultimately it is a failure in there governance and like many countries it would appear their politicians are more interested in self enrichment than looking after their people. They have had debt forgiven in the past yet managed to rack it up again, which is so very strange because they used to be the highest educated and richest country within South America. It appears the drug money of their northern neighbors has probably disrupted their more honest prosperity of the past. Whatever currency they use, including bitcoin, would not help to solve the deeper rooted issues that cause this trouble to repeat.

Not really a shocking news to me as a Turkish person. We just had a %100+ year in 2022, and not like 2023 will be back to %10 or something. Even our regular period was like %20 anyway. Sometimes you just have to ask yourself if this is even intended, because it does look like it could very well be intended but I have to be honest and say that I am not certain about it. Why? Because if inflation keeps going up, people will constantly spend their money and that is a big issue obviously because if you keep spending and keep being in debt, that will result with you having nothing, and that means you will depend on seeing a good news about anything. That is a risky move but could be pulled off, or maybe its just a bad move overall. Whereas when you do not let inflation get there, and drop that, there will be recession, which does fix the economy in the long run, but makes people lack money and jobs and employment for a while, and that's a risky governments are afraid to take.

Yeah, just as what I've watched with a traveler that went there and interviewed locals and said the same thing. They don't know what's in it for the next weeks to come and that's why they are quick in spending their salaries because of the inflation is coping up so fast.

Wow, I didn't know this fact.

That's sad, most of the people have contingency plans if they see that the economy on their country is no longer viable to have some positive impact very soon. Those that can migrate and apply for other better countries residency or citizenship visas, they'll apply for it.

With the criminality that's happening there, I guess there's really something to be blamed for the government in terms of leadership and things that's impacting these matters.

Yes that lead to degradation of society, but im not gonna be the coward who blame them for our economic collapse/disaster(that its on our responsabilitie). The mayority of drugdealers are from other countries for example.


Yes they have acces to a ton of socials programs, but its not the main problem, Argentina was always and it was a pride of us to being generosity with all the so called " brothers of latinamerica" we give them all, but the problem with that its, if the country its experiencing really big economics trouble, we need to cut that helps and focus in our population.

About the last question also NO, in the past all the workers were Argentinian im talking about constructions workers, steel workers, etc, but Argentina its a country with a huge social ascent so most of the sons of them now have a degree and they work on "better jobs" so we have to replenish that workforce, and here comes all this people, right now if you pass in front of a building under construction i a lot of them the mayority of workers are Paraguayan.

So..... yes first world problem with the work force..... like europe and USA who depends for the hard/bad jobs of the migrants because nobody want to do.

Very interesting, thank you very much, I did not know much.
The question is - can we conclude that one of the problems is "poor-quality migration" and migrants from countries where the standard of living, the legislative framework is noticeably lower. What leads to the "degradation" of society? Maybe a little rude and harsh, but ... I can’t find other words?

And a related question - how does this migration affect the economy? For example - a large "influx" of migrants led to a high increase in the costs of social programs?

What is this question for? In order to collapse the economy, a rather serious problem is needed. I'm not sure that the influx of migrants who are "degrading" social norms are unlikely to have a strong negative impact on the economy.
Perhaps the economic problems are elsewhere?

Thank you @darxiaomi for this firsthand information. It is always great to hear from bitcoiner that are located in the country of discussion. We also have the same condition in my country where the young are attracted to Bitcoin while the elderly see it as something strange or sometimes a fraud. Our currency is also losing value every day and people are desperately changing their money to other currencies like Bitcoin. The wide acceptance of bitcoin by the younger generation globally is a sign that when this generation takes over both political and economic governance from the older generation, Bitcoin might be treated in a more friendly manner. All that is needed is intensive Bitcoin awareness and education.

Very soon there will be no doctors, nurses, teachers, engineers, etc, because the depreciation of the pesos will attract them to migrate to countries where the can earn h dollars.

Not really! Unless they scrap their own currency system and completely move to bitcoin, there no way bitcoin can help. Adopting bitcoin as a legal tender in Argentina, is not a solution to their hyper inflation issue. It might help a little bit largely it won't have any impact on their economy to be honest.

They will have to eradicate their entire currency supply if they want to come out of this and then the government needs to start sharing bitcoin as per the net worth of their citizens. This entire task is impossible so Bitcoin can't help here.

Yes, but i have to say a thing here, we are not similar to any other latinamerican country or sudamerican country.

Argentina was always like a paradise or like a oasis.

For example what its the most know thing about Brazil? (asides of football) yes "Favelas", and that its because Brasil always be a country with 30% rich people and 70% poor people, Argentina was always pure middle class, like a 10% of poor, 70% middle class and 20% rich , we had so little "villas" (poors people sttelments) 30 years ago, now they were big filled with ton of poor people from Bolivia, Paraguay, Peru, etc who comes for better conditions free healthcare education etc, and plus the argentinians who cant maintain his cost of living.

This happen because in our constitution say " for all the men of the world who want to live on Argentine soil: invoking the protection of God, source of all reason and justice: we order, decree and establish this Constitution, for the Argentine Nation". So everybody who comes its and can start and it will be given the Argentinian citinzeship.

For this last you can also see a rain of ukranian and russian people here in Argentina now making his citinzenship, to acces to our passport who its very strong (you can enter without visa to most of the european countries), so they make the passport and they fly to never come.

Another thing, WE NEVER had criminality like now, for us all the drug trafficking violence, like in Colombia and Mexico were things from poor countries, countries who are shit compared to us, we see the images and cant believe how something like that can happen. But now we are starting to experiencing some of this troubles, in a very little way but its starting.... and dont seems good.

So after 50 years of crumbling they finally make it we finally are falling, its really sad i hope we can like ever comeback but for the first time in my life i started to see the social fabric break down.

We are going to be another Brazil another shit third world country (i know you always see us like that but we werent).

This have multiples explanations but its really long to explain and its also really difficult to exaplain.

For the first time in my life i have a lot of friends in Europe, right now i have 4 friends making his Italian citinzeship in Italy, because we have also that benefit to migrate, we can acces "easily" to any european citinzeship, i also have Italian citinzenship, and can opt for others for my ancestors.
But this for the country its also a setback, because we are exporting the best people, all with degrees to other countries.


Right now just hit the 500 pesos, the only good thing its see the big ammount of memes we are making.

I think this is a concerning situation, especially since inflation reaches 100% and this will lead to a devaluation of the national currency and potentially make it more difficult for the country to engage in international trade. I'm also not sure yet whether In a situation like this, some individuals might consider switching to alternative forms of currency, such as Bitcoin or other cryptocurrencies as each country in tackling these issues will likely sit down together and seek economic policies and structural reforms that are wider.

So, uhm I've got a question and was hoping you could provide some answers to. Well, I don't know if you'd be in a position to know this, but let me just ask;
 The Argentine pesos is greatly dropping against the dollar and it would be foolish to have your investment in them hence the reason why investors are looking to Bitcoin trading.
- Do you think Bitcoin can be more than just a trading safe haven and instead act as a buffer to the high inflation they are experiencing?
 - Do you think it can ever be considered for adoption to reduce the strong reliance of the US dollars as El Salvador did?

I think that with the current situation buying bitcoin is not an alternative to solving financial problems that have sunk very deep, because Argentina needs money to pay off their debts which will grow day by day if they are not paid, as we know investing in btc takes a long time if you want to make a profit the big one

Apparently, the news was sourced from a financial market broker, expressing his personal view, and those were ungrounded rumours... for now.
The guy has been fired from his firm, and the ARS was little moved (close to close) vs USD.


This is true for the official exchange rate, while the unofficial exchange rate (blue dollar) continued rolling south:



Argentina’s peso, at record lows in black market, stokes market jitters

About Argentina, thanks a lot. I was in Argentina about 10 years ago, but as a tourist, I traveled and watched and rested more than I watched the economy.

You spoke interestingly about cryptocurrencies. And now, from you, as from a real resident of the country, about the causes of the problems that exist in the economy? We can imagine anything about the problems of the Argentine economy, and many media love to distort information. It is interesting to hear a real citizen of the country who deeply knows the real causes of the problems? Can you talk about economic problems?

Thank you for your super interesting report on Argentinian situation.
When someone tells me Bitcoin has no practical use, I often refers too many countries where hyperinflation is a sad reality. Glad to hear at least part of the population is taking advantage of the orange coin to protect their purchasing power.

Unfortunately, this is not the first and not the last example. It's a shame and it's not clear why, a country that has excellent conditions (geographical location, climate, natural resources, population, a good position in the world, .....) and suddenly - defaults, crises, wild inflation ... At the same time, the country is not at war, it does not suffer from terrible natural disasters, it is not terrorized by terrorist groups, it has not been attacked by marsinae ... But everything is going wrong ... Maybe you really need to change approaches, policies, "grab your head" and do the right things , and not engage in populism and fantasies?

Well, first to all thanks to Don Pedro Dinero who reach me and noticed me about this thread.

Im Argentinian and i live in Argentina. So if you wanna know something drop your question below and i will try to answer.

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Lets talk about this, i think its WIDELY spread the BTC in that mix.

Like in the whole world the old people still full USD or gold/ stock markets assets.
But the youngers are having some BTC in that, in the 2017 bullrun for example a lot of people buy BTC for save, and after that it was a option for ever.

We have here some big national companies who are dedicated to this for example, SatoshiTango, and Rippio. The only porblem with them its they are full KYC and they share all the information with the AFIP (IRS of Argentina, tax authorities).

Binance here in the P2P markets its really really strong now, they make publicity in the streets and also you can check they sponsorship the Argentina League of Football.

We also have a lot of others crypto-companies like buenbit, Lemoncash, etc who also they give debit cards.

After saying that i have to say the more common crypto save in argentina its DAI and USDT, yes some virtual USD. The cultural background still important.

All this its more common in the mid-mid high and high class. WE also have a lot of youngs who develops platforms and some ending being really big.
But in the low class, forget about it, they also still save in pesos (if they have the opportunity), its really sad to see how this people month to month lose his money for the inflation.

So in resume.

Between the young people of the mid and mid high class, YES they have some crypto it can be USDT DAI USDC BTC or ETH.



Full yes, Argentina its the country with the most ammount of USD dollars in money paper, more than USA you can check this fact.

And yes the blue dollar went up, among a internal crisis in the goverment and a big external problem in the macroeconomical side. But the USD blue still behind the inflation rate, so you can expect more up, but lets see tomorrow how the markets open here, its gonna be another amazing day in the never boring Argentina.

I cant explain so much about this because its really a new world itself the Argentina economy.

The economy and finance of Argentina had been a rollercoaster for the last 50 years.
I know that Argentina was a rich and prosperous country in the 19th century up until the first half of the 20th century. I don't know what happened afterwards. Political instability, corrupt and incompetent governments, bad fiscal and monetary policies, the global terms of trade changing to more harsh conditions for the Argentinian export. There are many factors to be blamed for the economic downfall of Argentina.
The government of Argentina will have to cut costs and lower the budget deficit, in order to fight the inflation(and stop money printing, of course). Unfortunately, Argentina is turning into "the new Venezuela".

Inflation and problems in the economy - the dollar is to blame for everything! We urgently need to join the BRICS, where everyone will be "helped" by China with the yuan, and in a couple of years the country will simply dream of such inflation and such problems!
This is a joke, no offense please

Depends on a situation. There is a claim that one of the reasons for the SYSTEMIC defaults and problems in Argentina is a law passed in the late 80s that pegged the value of the Argentinean currency, the peso, to the expensive dollar. And they say that due to the fact that Argentinean goods have become uncompetitive (expensive), this has led to the decline of the industry.
Sounds good, but far from reality.
Firstly - if you see that such a decision negatively affects the economy - cancel it! And do not use 30+ years! Moreover, everyone is well aware (or is the Argentine government stupid?!) that an expensive currency for the country's economy is bad. Then why pass such laws?
Secondly, it is always easier to "shift the blame on someone / something" than to admit your mistakes and correct them.
Thirdly - the complete absence of "work on the mistakes."

As a result, there are growing fears of a local / global recession and a rapid rise in inflation in the country, which causes investors' fears about possible defaults, and, of course, the unfulfilled tasks of the International Monetary Fund, the political unrest that follows, which leads to problems in the economy, inflation and investment unattractiveness ... This is a classic vicious circle that must be broken, harshly and abruptly, otherwise it will turn into an endless "series"

As far as I know, and I recently saw a programme about this, people spend the money as soon as they get paid because inflation is so high that it is better to spend today than to wait until tomorrow because in general things will be worth more, and people who can save, what they do with what is left over after spending they immediately convert into dollars, normally on the black market.

I have no data on the use of bitcoin but I think my local forum partner darxiaomi is Argentinian, I will tell him to stop by and let us know.

The situation in Argentina is so pathetic and undermanaged as things are getting out of hand monthly. Truly, inflation has been bitting hard since late 2021 but many countries are using measures to tame it, but not Argentina with the recent uprising figures. While the 100% that your topic captioned was not just hit, their inflation figure has been moving above that level at least since February according to Focus Economics.

Their annual average as of Match was 84.8%, but this might continue to rise if a decisive measure is not applied.

I am wondering how much Bitcoin was able to be used in this mix of “hard currencies”.
Are people relying only on dollars? (I have seen the blue dollar rate going vertical after the news).
How much bitcoin usage is widespread amongst the population as an anti inflationary tool?

The issue with Argentina might be with many other more developed countries. They had bad inflation before Covid but it seemed to be under control because they hiked fast. Then Covid happened and they cut rates slightly and then the inflation returned and got much much worse. And this time it got worse because it took them longer to hike.

With many countries suffering from inflation this might also become the norm. They hike too slow or they cut rate too early and there is a second wave of inflation worse than the first.

Aren't they the country that has a free healthcare and college? I think I've heard that about Argentina before, they're inflation is constantly rising. Hopefully they find a way to not remove that free healthcare and college despite the constanty rise in inflation in the country.

In 2018? As far as I remember, in 2001 they already had a "corralito" and there was a massive emigration of Argentines, many of them to Spain, but the problems had been there before that.


Unfortunately, Argentina's economy is a disaster.


It comes handy for ordinary people. Not just bitcoin, but gold, dollars, anything that does not devalue by leaps and bounds like their local currency, which they spend immediately because they know that they will be able to buy less tomorrow than they can today.

For a government that keeps spending and spending more and more, I don't think bitcoin will do it much good. If we were talking about a more responsible government in this sense, it would be a different matter.

 Ever since Argentina's economy nosedived in 2018, it hasn't fully recovered since then, and annual inflation rate has been above 50%, and according to the World Bank, they have spent more time in recession more than any other nation.
 At present, nearly 40% of adults live in poverty as against the 25% at the beginning of the crisis. But this fades in comparison to the first hyperinflationary crisis experienced by the nation from 1989-1991 where it surpassed 3000% annually.
 To make matters worse, Argentina is expected to experience a drought and coupled with inflation, I think the economy is going to suffer a lot as this will affect their key commodity exports: corn, soy and wheat.
 From the outlook of things, the government seem to be at their wits end, and coupled with the fact that they need to remit a lot of money back to the IMF, I think a solution for their predicament need to be thought up and fast.
 Is this the point where Bitcoin comes in handy??

https://www.washingtonpost.com/business/2023/04/06/why-70-inflation-is-just-one-of-argentina-s-problems-quicktake/0d56242a-d499-11ed-ac8b-cd7da05168e9_story.html