Topic: Crisis in Argentine (Read 4397 times)

I get what your saying, and you're right on the spot on that last paragraph.

This has been a long dragged process in Argentina, which begun in 2001 and hasn't really finished yet. We are being bled out, slowly and painfully.

I think he's suggesting you do it in the "blue" market at least until you earn a nontrivial amount of BTC.

I think we are seeing why debt-based currencies can become popular quickly.  It is very easy to kick-start a currency by loaning it to lots of people... especially if you can just print more if some don't pay back.

But for asset based currencies, exporting services/stuff (for BTC in this case) is really the key because nobody wants your pesos.

Normally an economic crash would produce a lot of people who are willing to work and export stuff inexpensively -- for less then outsourcing companies in stable economic zones.  This one of the reasons countries are inflating their currencies right now -- to offer an export advantage and deter imports.  Clearly, this would kick-start internal productivity...  So you'd think as a leader in this Argentina would have an advantage. 

But it is perhaps a very unfortunate effect of certain political/economic systems (generally those with heavy regulations/taxes and tariffs) that they can fall apart slowly and in such a way as to not be able to undersell these other zones until the economic destruction is completed ("completed" can be loosely defined as when the majority of economic activity is unreported).

Well somewhat... I'm not so sure tho.

Setting up capital and doing an investement is not quite the same as running a services company (which I do actually, I'm a dev like many other people in the btc world). There is a LOT more work, there are lots of legal issues (if I want my company to stay within the legal bounds, pay taxes, etc) and last but not least, if I want your btc for it, I'm competing with the hordes of Indian and asian outsourcing companies. The have huge working forces, can also arbitrage the usd / local currency, and overall drive all prices down.

Actually it would be much easier to just offer some services on the web, accepting bitcoins as a payment.

Sounds great !  Let us know if you launch something !

Matonis is a hype master.  Take everything he writes with a healthy dose of salt.

OMG Wines for BTC, you just made my day (month? year???).

I've worked with dozens of distributors.. I'll have the website up in a week !

This is the opportunity, not the problem. To all Argentinians here: Stop thinking "problem". think opportunity.

Can anyone sell me 10000 bottles of fine Mendoza wine for Bitcoin?

Actually quite a lot of people seem to be interested in it: http://www.forbes.com/sites/jonmatonis/2013/04/27/bitcoins-promise-in-argentina/

Sure the blue rate is pretty high, reflecting the risk of buying it, but that is part of the price. It's not just an exchange rate, it's the exchange rate + the risk of exchanging in the jurisdiction of a state that does not want you to exchange.

If I sold washing machines for $500 each and the government sold washing machines for $100 each, well, what's the "real" price? If the government only sells an extremely limited number of washing machines and uses the police force to attempt to stifle any other washing machine sales, and I sell an unlimited number but with inherent risk, well, I'm selling them at the "real price" plus the risk of law enforcement seizure. Somebody who needs more than one washing machine might have to come to me.

So yes it's not the ' real price ' but so long as the exchange is legally flakey, there will be no real price, no matter how 'kind hearted and altruistic' the BTC trader is.

Ideally we'd get people selling BTC for argentinian pesos, at a lower exchange rate than the dollar "blue rate" in bitcoins. Lower risk reflected in price. But who has bitcoins to sell and wants argentinian pesos? Lol. And who in argentina has even heard of bitcoin? It'll be a while.

The official rate is obviously way low, but the "blue" rate in turn is also likely artificially high, because of the risks involved in criminal markets. If Bitcoin offers a way to transfer value with fewer risks, that should eventually be reflected in the exchange rates.

...
What are you talking about? The rest of the world knows that your 'official' peso/dollar exchange rate is flat-out wrong, the government is lying to you. Something is worth what people are willing to pay for it - so while you might be able to get a very limited amount for the "official rate" through "official channels," the rate you can get an unlimited amount for on the black market is as close as you can get to the 'real' discovered price. Just because the word "official" is in front of the "official exchange rate" doesn't make it legitimate.

Inflation is 25% not 10% so why do you hope/expect to find someone willing to exchange USD as if inflation were 10%... You'd have to find some pretty stupid people.

Anyways.

Argentinians are used to buying USD on the black market so I have no doubt that they can easily become accustomed to buying BTC on the black market - and trust me, no one's going to do that wacky Virwox linden dollars thing - OTC is the way to go, whether it's IRC or IRL. Like I said, if you're already used to buying USD from a "friend" and stuffing it under your mattress, buying BTC the same way is not going to be a stretch as it would be in many other countries.

That said, it'll be a while before we see any real demand from Argentina. While the dollar is relatively stable, they'll be buying dollars just because it's familiar and easy. As wopwop pointed out, you can not only buy BTC a couple days ago at $93 and wake up today and have it be $102... you can also buy them at $102 and wake up a few days later and have them be $93. The volatility is not appeasing, even though the long-term trend beats any fiat currency in existence.

Same thing happening in Venezuela - annualized monthly inflation is 40%, current YoY is ~35%, also there is a toilet paper shortage
inb4 "lol their just not doin' socializm rite - if they did tru socializm it wud totally werk"

thanks for the ideas and brahah
my buds and I were deciding to open an exchage
semm Argentina would be the best choice but also a worst choice

I know. Called it soccer so the US people would know what we're talking about. Some of them have trouble with mBTC, football etc  

There is a mailing list for trade of BTC in Argentina: http://wiki.eudemocracia.org/en/bitcoin
Found it in this blog post: http://thebluemarket.wordpress.com/2012/10/18/bitcoin-dollars-and-pot-banging-protests-in-argentina/

It's called football. Americans.....

This is where bitcoin can come in. Smuggling bitcoins is really low risk compared to USD. Of course, the hassles, fees and travel costs are still an issue. But if someone is traveling from the US to Argentine anyway for whatever reason, buying some BTC beforehand could be a really good deal. If you ever visit the states you could look at BTC as an alternative to USD without the big risks of getting caught.

You should start to sell soccer players in BTC instead of Euro/USD

You won't be.....


... if you solve that problem.

PM me if I can be of any help (sitting in the EU)

 

It's about 50% (25%/year). See http://inflacionverdadera.com.  It's very high though, no need to exaggerate.

Anyway: Why is this in the "Speculation" subforum? This has nothing to do with the Bitcoin price. Should be in "Politics & Society", "Economy" or "Off Topic".

Argentinians are USD addicted right now, in a forced way.

Inflation is over 100% in the last two years but salaries in pesos have not adjusted accordingly (maybe 30/40% increase).

All our economy is now tourism dependent, we attract lots and lots of Americans, Europeans, Chinese, you name it. Everybody loves it here, and as some have dutifully noted :p we do have maybe the best women in the world ( for reference, i've been in the us and all around western europe ). As result all consumer prices are indexed and tailored against the USD and tourists.

Acquisition power for locals is at very low levels right now, and you got whole sectors of economy in a stale state. An example is real estate. Rents are doing ok (at high costs), but there are no sales.
Land owners are locked in a mentality where they bought at our golden age of "convertibilidad" 1 usd = 1 peso, and prices have only gone up since, always in USD.

So take for example someone like myself, almost 30 with a decent job. A tiny 1 room apartment at a decent area is upwards of 100k usd. At our current of 1 usd = 9 pesos, I need to almost become a millionaire before I can move in to my first own home. Remember, banks are not extending credit, and we have no such thing as your mortgage and double or triple mortgage scammy thingy you got in the US. It looks like I will be renting for a long time.

So that's USD for everyday living, but there's another important reason for USD craze here. The 2001 bank runs are still fresh in everyone's mind. Banks here, are simply not trusted hated.
At that time lots and lots of people lost most of their savings. And more recently the gov' completely looted the 40bn in the retirement companies (and shut them down in favor of the monopolist gov' controled ANSES ). Now people have no savings, and no future. USD is being stored under the matress, "a la gold".

If BTC finds a better oiled way to arbitrage between pesos, USD and btc itself, it will be very attractive to argentinians. As it stands now, there are lots of barriers to entry.

I've only recently found btc.uy but they were not officially live yet. Are they now?

I haven't heard of btcglobal but I'll check em out.

argentinian girls are really really hot

There are always willing travelers/tourists who need to exchange money, it would be a good idea to advertise on localbitcoins.

you have the pesos, they have BTC, good trade.

The best way of course is to mine, after all, If you have a good used video card it is time to start mining; Do not mine litecoins! you will earn far less than just mining BTC directly at this moment.

If you mine with a 5870 for a month you will earn guaranteed 120 USD. if you mine litecoin it will be 40 USD.

Then distribute the BTC to the people for the calculated cost of inflation and your exchange fee. NO illegalities, no hassle, just time and a little effort.

http://listado.mercadolibre.com.ar/bitcoin

Here in the United States, I don't have a lot of incentives to mine bitcoins... but I think if I was in Argentia, I'd be fairly motivated to build a big mining rig. Actually, here's what I would do... since ASICs are hard to come by in Argentina, I would mine Litecoins with as many GPUs as I could get my hands on and then trade them for bitcoins. OK, it's complicated, but in dire circumstances...

Haha I love how we want a country to go bankrupt so that we get another bubble within 2 months of last one 

Question to Argentinians-

What do you think of btc.uy and btcglobal, they as good as they claim?

and how do you think argentinians will stomach btc's volatility, is there any precedent where they engaged in some wildly fluctuating value without caring because the losses were far bigger in their national currency, do they like a bit of a gamble or are they more looking for sleep at night? they do pay massive premiums to buy dollars in the black market, no, so maybe they couldnt care less?

The localbitcoins issue and other (darker) alternatives:

Ideally, local exchangers should be the way BUT remember we have a black market dollar. Thus we have an official dollar rate 1 usd = 5~ pesos and a "blue dollar" (black market) rate of 1usd = 8-9~ pesos.

Local sellers are obviously selling at blue dollar prices, so that makes it really really costly (borderline scammy).
If one could find an open heart altruist btc magnate to sell at official rate, that's jackpot.

A second more realistic scenario, is based on money exchange arbitrage and not a btc thing itself, but it's possible and it is being done, a lot.

In such a scenario I can buy stuff for you on the internet at a (new) credit card dollar rate (official rate + 25%, this is forced by gov' on visa, master, etc.), and you give me btc. Now I've got some BTC and I can hoard and hope for the future; or I could try and do some arbitrage selling in black market, but of course if acquiring btc was hard, imagine how hard it will be to get some liquid USD from my btc, to go and sell in BM.

I have recently found a loophole, where I get a web debit card (mastercard) with a valid ACH, to which I should withdraw my BTC to USD exchange. I then must buy a plane ticket, travel abroad, go to an ATM, withdraw my USD, smuggle them back in and sell in black market.

Of course, after all of these hassles, fees, travel costs, and the inherent criminality of it all.... gains are minimal to non-existant. Risk is uber-high.

EDIT: Realistically, the overall best investment for anyone here (or elsewhere) would actually be to start large scale ASIC mining farm, given we are paying 1/8 the electricity costs. But you would have to be very very very lucky to a) get an avalon unit (at it's official price, not the 10-20x resell price they are going for) and b) smuggle them from the US to Arg.

+ full on corrupt (almost dictatorial) gov' (our Secretario de Comercio Interior Guillermo Moreno holds "meetings" with both feet and a loaded gun above the desk, also the pupeteer behind our crippled economy,  fixed currency rates and official gov' money laundering schemes)

  Wow he sounds like a nice guy, at least you have sexy girls just use silk road he can help you find the supply

Why on Earth should you go such a complex way?

You can use localbitcoins much easier (paying directly with pesos), and even if you don't, I'm pretty sure there are many easier methods (though of course less easy than here).

Hi everyone,

I'm from Argentina. I personally think most of you are being too optimistic. The reality is that even if BTC were to gain mainstream support here (which it does not have, actually nobody even knows what BTC is here), there are extreme (unsurmountable?) barriers to entry, mainly regarding btc acquisition.

Argentina, a country:

+ in technical default
+ going through hyperinflation
+ where we can not legally buy dollars (or any other currency)
+ whose banking system is closed to the world (via exuberant fees)
+ full on corrupt (almost dictatorial) gov' (our Secretario de Comercio Interior Guillermo Moreno holds "meetings" with both feet and a loaded gun above the desk, also the pupeteer behind our crippled economy,  fixed currency rates and official gov' money laundering schemes)

The following is the most efficient way to acquire BTC here (I'll let you be the judge of whether it's "easy" as claimed):

1.Acquire USD through black market (at higher rate) (FEE loss #1)
2.Deposit USD to VirWox through CC or Paypal (FEE loss #2)
3.In VirWox: USD > Linden dollars (FEE loss #3)
4.In VirWox: Linden dollars > BTC (FEE loss #4)
5.Withdraw BTC from VirWox (FEE loss #5)

Of course, pray you have an old VirWox account.. if not, you are capped at 20-50 usd a day, making it so that to be able to buy a SINGLE (1) BTC you need to make 2 or 3 deposits, doubling or tripling the 5 fees above). Also, as a new VirWox user, you'll be happy to find out that BTC withdrawal is a 72hs process with a "manual step" on their side.

Would you want me to buy some BTC for you at these rates?

Our situation is akin to the more known Ciprus case. Our countries are the ones who would benefit most from BTC, but unfortunately at the same time, they are the countries with the most difficulties acquiring
them.

Currently they're worse than cyprus, the inflation in the last 10 years is completely insane. And it doesn't look like is going to stop.

You can actually buy gold in Argentina, but it's very scarce since only a few banks (and obviously illegal locations) sell it.

In Argentina there is "freedom of contract", so buying and selling BTC to goods/services would be extremely difficult to ban (ban would be probably anti-constitutional). But the currency market is totally controlled and restricted, so if the Argentine government declares that BTC is a currency, they could shut down exchanges. It is more probable, though, that BTC would be seen as a commodity or a barter accounting unit. We had an experience with the so-called "créditos" in the 90s, a nationwide alternative "bartering" currency which came into prominence in the economic crisis of 2001 and was not banned but destroyed itself due to bad organization.

It must be stated that we are not in a dictatorship, although some right-wing media say this (see the Economist's Democracy Index or the Reporters Without Borders rankings where Argentina is not doing that bad). But I don't like the Argentine government very much and would be pleased if they lose elections this year and above all in 2015 :p

That's a good question. It's hard to know for sure. As they talk about in that Argentia/Bitcoin documentary video the government already takes a heavy handed approach not allowing citizens to buy gold, dollars etc. legally. I think Bitcoin would pose a different challenge, though. Governments can use different tactics to restrict buying of certain things/currencies, but Bitcoin is hard to restrict because it's so much more nimble. It doesn't really exist in physical form and can be transferred as easily as sending email, without middlemen. Argentinians are already buying dollars illegally so I imagine it would be harder to prevent them buying and using bitcoins.

so since the govt already controlling their currency which you cant exchange to other fiat or gold.

Would the Argentina govt puts up a lot of laws and restrictions on bitcoin when the bitcoin spread more and more in  Argentina.

I think Argentina could be first to take off with Bitcoin used for trade and not only speculation.

The reason is their situation, as has been pointed out in this thread. Most other places in the world, especially the US, have complacent citizens who are happy with their finances, relatively speaking. People may admire some of Bitcoin's strengths but see no real reason to use it for exchange when dollars/euros etc. already work so well.

Argentina is different, though, and people there have a better appreciation for alternatives to their national currency. Indeed shortly after their economic crash in 2001 people desperately tried making other trade/money systems. These failed quickly as they were no more sophisticated than what could be designed and printed, and therefore easily counterfeited, by home computers. So Bitcoin might be very well received.

The other reason I think they're particularly well suited is their economy exists at a lower, truer level. One might easily find someone willing to trade personal services like sewing, nanny, tutor, etc., anything of basic value to begin building a foundation of economic activity based on a currency like Bitcoin. That would mean those citizens could really begin to thrive.

It would take that on a growing scale to affect the Bitcoin US price, though.

A nice Bitcoin/Argentia documentary video for those that missed it:

http://www.247btc.com/bitcoins/154/bitcoins-in-argentina-a-brief-documentary/

We have plenty of traders in Argentina: https://localbitcoins.com/country/AR

Also we recently added ARS "blue market rate" to our pricing engine: http://localbitcoins.blogspot.fi/2013/06/argentina-goverment-fixing-exchange.html

Did someone try to track the BTCARS exchange rate?

Obviously that would be quite difficult, since that's black market, but I guess maybe there are open sites with announcements, like localbitcoins?

are there a lot media report, magazines, online news or whatever covering bitcoin in Argentine?

Cheer up!    No reason to be so pessimistic.  A glass that is half empty is a glass that is also half full.  The recent price drop provides a great buying opportunity for those Argentines who want more bitcoins or who don't have any bitcoins yet, and would like to convert part of their savings over to a currency with purchasing power that bankers and politicians can't steal from them.  Having bitcoins may very well be one of the few ways that will allow them to retire some day.

My own experience is with Brazil in the 1980s when we had to track the cruzeiro vs. dollar rate at least twice a day in order to seal a deal. The phenomenon of parallel and black market currencies is essentially the same across time and space. In Bazil, if you were selling a piece of technical equipment to a factory, for instance, they would always have someone on staff that could structure a barter or a black market (read free market) payment. You would need a large sports bag to carry the local currency and the banks would seal and sign the bundles of banknotes so that one didn't have to count the bills, only the bundles. With U$20 in hand you could go into a top hotel and have three waiters hovering over your table while you paid for a classy meal, with wine, and generous gratuities and leave with change.

You have to see otherwise respectable famiies watch their lifetime of savings disappearing before their eyes on a daily basis and desperate for any currency other than their own. The fact that I spoke passable Portuguese and could produce dollars gave me the breezy air of a VIP and caused me to love the county and the people deeply in the end, quite apart from the money angle.

Have no doubt that Argentina is in this state, thanks to their confiscatory socialist economics and perverse regulatory climate. Anyone who goes there with a good stock of bitcoin in hand (so to speak) would be a social success within 24 hours, but would have to be ready to learn an entire vocabulary and acquire a knowledge of free market practices. It's just too big a story to tell, if you haven't already experienced it.

The greatest frustration is that you can acquire some great stuff, say with your bitcoin, like pallets of vintage reserve wines, but you would never be able to get them home without going through the export regulatory paperwork which would seize all the profit in the deal and make it not worth doing. But there are ways... don't ask.

The juxtaposition of a blind giant and a rising multi-headed behemoth.  
This tool is very useful, infinitely more useful, most of bitcoins features are still dormant right now.
In Argentina this could bring balance to their nation on economic policy, an escape faucet to stabilize
the economy.

Somehow, I believe, the inflationary currencies have created a false environment a giant bubble that
believes that resources are infinite if you only print more money; this serves to only rob far more
wealth than inflation can take, by giving the top players more ammunition, more opportunities to
steal from the poor and give to themselves. Does this community see this? They are getting richer,
establishing more power by magnifying what they(The powerful) can do vs us, the ones being stripped
of our economic voting power. One cannot vote or think in a society that demands every drop of your sweat.

This is happening in Argeninta, a nation that i do not believe works for the people as even a communist
nation would, just one that forces it's people to do as they say through economic terrorism; A small cheque
is just as effective as a gun to motivate people into doing what they do not want. Such a small nation
should not be playing with it's wealth in the way it is, even if they have oil, one cannot drink oil or
build a foundation with it when the larger world has the materials you need to establish it.

They stopped the dollar exchanges, not realizing the larger world uses it to lubricate the goods exchange process.

They nationalized their oil infrastructure without compensating the companies that worked for it bringing on the
wrath of the world banks, further marginalizing their own power in the world.

Even if this is all ideological, they have done a terrible job of boycotting the empire they perceive, so naive...
They could have played to their strengths and used economic forces to bring more resources into their fold,
or mobilized the people from the grassroots, arming them with the skills they need to bring those valuable
resources into their country; Instead they are stuck in the same latin american bullshit mentality of being
their own little banana republic dictators, that is not even remotely close to true socialism.

Bitcoin could go up again, but I really doubt the Argentino money has any chance of going up.

Doug Casey is the only foriegner I've read to understand the madness of Argentina when he says (not exact quote) - 'They have these young people in power with optimism idealistic thinking, almost communist'.

That matched my experiences when I was living there. It's a thinking that everyone can be equal and free. I kind of like this. The problem is that it's all done manually - like in communism, this is too inefficient to work and nobody seems to have the brains to use the market rather than fight it.

The inflation has been high for years and years. Everybody's hardened to it and used to fighting to avoid the gov monster. Everybody trades USD cash in the black market so Bitcoin is an easy adjust. The mailing list is busy now but very quiet. A very long way to go before people are using it as they do the dollar.

The best way for them I think would be to buy Jalapenos. Other than that, many have secret accounts outside the country. Many have family members in places like the USA in order to escape some way financially.

Nicely written. One hopes that bitcoin becomes a tool to protect oneself. :-)

That's today. Situation could be entirely reversed tomorrow. Who knows.

must suck for those argentines who bought btc recently as they lost more in btc than their inflation

Ultimately bitcoin will succeed because of the failures of those managing national currencies, of which Argentina's is currently in crisis.

The rush to preserve value in an inflationary economy will produce a mad rush for any asset, including bitcoin. But at first very few people will know about bitcoin. But later, as info spreads, that will change, and people will realize that holding bitcoin is better than holding other hard assets that need to be converted later on to get value out of them, whereas bitcoin is a currency already.

The reason all fiat currencies must inevitably move into crisis is because the incentives on politicians always push them towards inflation. And inflation is counter to the welfare of the populace. Thus, under enough pressure, the government pursues a dramatically inflationary policy instead of the safe marginal one, resulting in an eventual repudiation of the currency.

The ability to inflate a currency constitutes an existential threat, or 3rd party risk, of using a managed currency. Bitcoin, as an unmanaged and unmanageable currency, is inherently safer for value store--which is one of the primary uses of money.

This is just one of the reasons why bitcoin is a better money than any fiat currency.

But when any fiat currency moves into crisis and the predictable and oft-repeated act of flight into capital goods occurs, in the past there was virtually no way out. You'd buy anything and everything and then convert back to fiat at a later date.

But now, today, in this century, there is a way out in the form of cryptocurrencies.

When people live through a national currency default, they lose typically an entire generation's worth of wealth, decades at a time. That sort of psychic-shock is not easily dismissed. Look at people from the Great Depression in the US who got in the habit of never throwing anything away, became hoarders, because of what they went through.

The idea that with bitcoin, one can never again have their wealth stolen from them by the mechanism of inflation will come to be seen as far better than stuffing bills under your mattress and the like.

The next two decades will be very interesting in financial terms to see if the US and other currencies hold onto stability, or we go into an all-out fiscal trade-war, of which on bitcoin can be the winner.

It is difficult to say how will Bitcoin perform in the very short term, specially since its value has risen significantly in the last few months.

Argentina's monetary policy is in shambles, approaching an inflation rate of 25% per year as stated by unofficial statistics. The government responds it is "only" around 10%, but nobody really believes that, and in fact, Argentina has already been reprimanded by the IMF for not giving accurate inflation data.

On the other hand, Venezuela has already introduced rationing in some basic food products, so inflation can shoot up even higher there.

I hold bitcoins for the long-term, because inflation and asset confiscation has been commonplace along history, and we humans have not changed that much in all this time, so it is very likely history will repeat once again.

Argentina has been in crisis for 20 years.  They are out of an Ayn Rand novel.  The unions and government run the show.  In 2008 the exchange rate was about $0.32/ARS, today it is $.18/ARS.  Thus, if I were Argentine, I would start to convert ARS to bitcoin, tin, aluminum, and nickel.

I have  heard a lot of stories about Argentine and people said it could be another cyprus.
I personally have friends out there crazily try to buy bitcoin from me.
They said there money worse less and less each day and their govt doest seem to be very promising

Could this raise bitcoin price like the one in april?

whats your thought?
I am really interested to hear ideas from mates from Argentin