Argentina, The house of cards is beginning to sway.
8642 sats \ 34 comments \ @fbv000 22 Apr 2023 bitcoin
TLDR
  • Rumors of a 50% currency devaluation in Argentina
  • Exchange market closed Friday and next Monday
  • Central Bank ran out of dollars and started "using" local banks customer USD deposits
  • Argentina's government is focused on recalibrating the agreement with the IMF and strengthening foreign exchange payment systems.
  • Global Central Bank hiked rates by another 300 bps to 81%. Their YoY inflation rate is at 104%.
https://www.lanacion.com.ar/economia/economia-enfrenta-las-versiones-de-devaluacion-y-prepara-sus-proximos-pasos-nid21042023/
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1011 sats \ 4 replies \ @purpurato 22 Apr 2023
I lived there back when BTCUSD was @ 600 but most of my orange pilling fell in deaf ears, I hope many of them already realized why it was important to allocate part of their savings into it. It hurts me to see how central powers f* up the country so badly, it's a beautiful place.
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643 sats \ 3 replies \ @MastercardMaximalist 22 Apr 2023
Same here, was amazing to see that Argentineans were not really interested in BTC, even though they have a crazy high inflation. I asked them 7 years later if they bought bitcoun - none of them did.
Pretty stunning to me.
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295 sats \ 2 replies \ @franzap 22 Apr 2023
The peso has been such a shitshow for so many decades that people have become obsessed with the USD and can't see anything beyond it.
And most people who are into Bitcoin are also into shitcoins. Those who exchange "crypto" only want fucking Tether.
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0 sats \ 1 reply \ @joda 23 Apr 2023
Better than the peso. And easier to understand than Bitcoin
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0 sats \ 0 replies \ @SpaceHodler 23 Apr 2023
If you already understand the dollar. Which i don't.
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659 sats \ 8 replies \ @faithandcredit 22 Apr 2023
how hard can it be to fix your currency? seriously :D
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763 sats \ 6 replies \ @SwearyDoctor 22 Apr 2023
extremely hard.
When you don't have a reserve currency and world trade is done in someone else's money, what you can do is limited. They need dollars to serve debts, which are denominated in dollars. The debt-givers - that same IMF they keep running with here - forces them to sell everything of value they have and invest in resources only, as conditions for the loans. That means they can't create much value-added production in the country. Meanwhile, the world market prices for their resources are out of their hands. They get less inflow than outflow in dollars, those dollars appreciate, meaning they get fewer dollars for their resources, which again cuts their funds inflow. All the while the interest on the debt, also in dollars, of course, keeps rising.
This is a dollar/international financial system problem which systematically leads to all developing countries' currencies to fall over time against the dollar and euro - as that upholds the luxury living of the north by making southern resources dirt cheap. It's a racket.
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224 sats \ 0 replies \ @nkmg1c_ventures 22 Apr 2023
someone's been listening to the Saifedean podcast
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63 sats \ 0 replies \ @franzap 22 Apr 2023
The peso is a racket. It could be solved tomorrow by eliminating the BCRA.
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0 sats \ 3 replies \ @franzap 23 Apr 2023
and invest in resources only, as conditions for the loans
Yes the IMF puts conditions for loans, but what do you mean by "invest in resources only" or where did you get it from?
I despise the IMF but it's the first time I hear "conditions" like that.
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100 sats \ 2 replies \ @SwearyDoctor 23 Apr 2023
longer story. Up until the 60s/70s, the dominant development strategy for emerging economies was to industrialize; industry and production create high value-added products you can sell abroad, creating wealth. The problem with this is a) this creates competition for developed economies and b) it raises incomes and wealth levels in these countries, making their use for cheap labor and resources for the north very difficult. Thus, it was in the interest of developed countries to prevent this.
Added problem now: if you talk about "free trade" all the time, imposing import regulations on products by these countries is politically difficult on the right. If you talk about "helping development", putting the brakes on them is politically difficult on the left.
So, miraculously (ahem) the global development paradigm changed after the 70s (this is what people talk about when they throw the word "neoliberalism" around). With reference to the economic theory of competitive advantage, the argument became: hey, Chile is really good at getting resources out of the ground, really cheaply (why? shhh, don't ask). It's not really good at making cars. It should invest in what it's good at. If they're in economic peril, we have to help them make money with what they're good it. Thus, a loan application for a factory, for train infrastructure that doesn't just run from the mine to the port? Crazy! You'll lose money!
Yes, now, you will; in 20 years, you'll do a lot better with it. But in the short term yes, this is a bad investment. But without it, you'll never get started. And, also, you'll never become a competitor for the developed world, and will keep producing cheap resources for northern industry.
The IMF, as a fundamentally neoliberal institution, works on this paradigm. It makes an analysis of how they can make more dollars to repay the loans (all the IMF really cares about), and resources it is. But local governments often collaborate willingly as well: the quick resource buck allows them to build a few more buses now and maybe fix the roads. Developing a productive economy takes patience and longer term planning, but would allow you to develop a high speed train network that is the envy of the world in 20 years.
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0 sats \ 0 replies \ @franzap 23 Apr 2023
By the way: in Argentina the agricultural sector has historically been neglected by the government, which heavily tax them. The rail system for transporting commodities to the ports is completely destroyed. That is kind of a counterexample to what is supposed to happen with IMF influence. All the IMF money ends up in spending to buy votes - not investment.
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0 sats \ 0 replies \ @franzap 23 Apr 2023
Thank you for the explanation. I think you're right and this is why democracy and politicians will never get us out of this hole, as democracy is only a short term PR game.
It's not all IMF's fault though, this exists way before the 60s. In Argentina they have been talking about the "modelo agroexportador o industrialización" since at least the 1910s. The lack of strong property rights and a junk currency played a large role in the lack of longer term private investment.
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0 sats \ 0 replies \ @clr 22 Apr 2023
Why would they want to fix their currency?
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623 sats \ 1 reply \ @botsforcash 22 Apr 2023
One more data point from my boots on the ground: “Arbolitos” (underground money-changers) are not taking USDT operations for the last 2 days.
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0 sats \ 0 replies \ @franzap 23 Apr 2023
Can confirm
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727 sats \ 5 replies \ @gmd 22 Apr 2023
Sad 😢
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64 sats \ 4 replies \ @franzap 23 Apr 2023
lol what if I told you it's 100% worse?
You will never get a bitcoin for 6.6 million pesos. It's at least 13 million. You're referencing the official USD rate which is not accessible to 99% of the population.
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33 sats \ 0 replies \ @jk_14 23 Apr 2023
so tomorrow's potential devaluation looks like just finishing the fiction for a very short period of time, probably...
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33 sats \ 1 reply \ @joda 23 Apr 2023
Do they have access to any P2P exchanges?
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33 sats \ 0 replies \ @franzap 23 Apr 2023
Yes
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0 sats \ 0 replies \ @gmd 23 Apr 2023
Seems to track for USD as well :/
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468 sats \ 0 replies \ @samuelorji47 22 Apr 2023
The hiked rate of USD on the Argentina government is a high new crisis, Argentina are facing currently
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177 sats \ 1 reply \ @sea_monster 22 Apr 2023
Argentina being Argentina. It is the 3rd or 4th time this is happening in my lifetime. They are the terra Luna of countries.
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10 sats \ 0 replies \ @sea_monster 22 Apr 2023
An Spaniard/Argentine entrepeneour I follow once said "saving in pesos is like saving in ice cream, it will melt rather quickly"
At this point all they can do is laugh. I hope they recover quickly. They are a huge and beautiful country. Their people are amazing.
¡Ojalá se recuperen pronto pueblo querido!
Meanwhile, let's have a laugh!
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127 sats \ 0 replies \ @sandbeach123 22 Apr 2023
Fiat are shitcoins, and the argentine peso is no exception. I hope it does not occur, but I fear a massive bank run (to swap ARS to USD and withdraw), and also a bank shut down (like the corralito).
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63 sats \ 0 replies \ @036f00e397 22 Apr 2023 freebie
Thx for sharing
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102 sats \ 2 replies \ @franzap 22 Apr 2023
Que se vaya todo al carajo asi gana Milei
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90 sats \ 0 replies \ @juanito 22 Apr 2023
vamoooooooooo
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0 sats \ 0 replies \ @botsforcash 22 Apr 2023
Famous last words:
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0 sats \ 0 replies \ @cypher_ar 24 Apr 2023
"inflation (countable and uncountable, plural inflations) An act, instance of, or state of expansion or increase in size, especially by injection of a gas. The inflation of the balloon took five hours. (economics) An increase in the quantity of money, leading to a devaluation of existing money."
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0 sats \ 0 replies \ @xz 23 Apr 2023
though long-term cyclical problems of refinancing debt and steep taxes on local productivity may the problem, was this loan deal not the final nail that prevented Argentina becoming a sovereign Latin American nation again?
Argentina’s IMF bailout deal includes a wild clause that rips cryptocurrencies Fortune (March 18, 2022)
"Argentinean senators just approved a $45 billion bailout deal with the International Monetary Fund (IMF) on Thursday that will help the country avoid an imminent default on its debts.."
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0 sats \ 1 reply \ @nullama 23 Apr 2023
This has been happening for more than a decade in Argentina.
Over the span of the last 10 years you can see the decline of their currency against USD
Also, note that this comes from earlier, one Argentinean Peso used to be worth one USD:
The Convertibility plan was a plan by the Argentine Currency Board that pegged the Argentine peso to the U.S. dollar between 1991 and 2002 in an attempt to eliminate hyperinflation and stimulate economic growth.
Today one Argentinean peso is worth 0.00457783 USD. That's less than a cent.
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0 sats \ 0 replies \ @franzap 23 Apr 2023
Yes, but it started much earlier. Started around the 1940s with several episodes of hyperinflation along the way. The 1990s convertibility was an exception.
That said I'm looking forward to peso-sat parity
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