The last measure by the recently re-elected Crisitna Kirchner can only be described as pathetic and desperate. While the “official” dollar price is 4.26, on the street they are selling it for as much as 4.86 if you can find it.
Last Friday the vice president announced that to buy US dollars people will have to show their IDs, their wage bill to determine income, and then go through a background check with the Argentine tax collection office, the AFIP. What was embarrassing was to see that today as people panicked to buy US dollars, the media that is in the government’s pocket explained why people should not worry. One lame reporter tried to explain that which lacks any logical explanation: “ Its like when using a credit card, people. Instead of checking automatically with the credit card company to see if you have credit, here they check you up with the AFIP (Argentine IRS). The AFIP can either authorize or not the purchase. According to what? Wellll… according to anything they want. They check your bank account, your salary, loans, if they even “feel” you shouldn’t be buying US dollars for whatever reason, and that nearly always the case, they just deny it. Lets suppose you’re traveling on business or pleasure and you need dollars or Euros (this goes for all foreign currency) . Now you need to show plane tickets, hotel reservations, and also the AFIP approving you based on whatever they desire as before. As you can imagine, most people get denied. And then there’s the little detail of 50% of the population working on the side for cash and not existing according to the AFIP, those folks they can forget about buying a single dime, ever. I’ve heard that since Friday there has been problems at the usual “caves” and “arbolitos”, black market USD dealers, and the police has shut down the ones that are most known.
Here’s an easy question guys: What do you think will happen with the USD and peso now that the exchange is heavily restricted? Of course, its going to go up like crazy. 1 to 5 exchange rate next month? 1 to 10 next year? Who knows? During the last hyperinflation a certain eminent government minion suggested that people with USD should be shot. Isnt that a wonderful form of democracy? These last desperate measures where expected. Anyone with half a brain cell could see this coming after the election. That’s why I wrote the post titled. “And so it ends for Argentina” just a few days ago.
This is supposed to be a measure to stop the flee of capital. Over 16 billion USD have left Argentina in the past 6 months. Makes sense right? Take this measures after the elections and the big fish, the politicians in the know included, (and those of us that saw this coming) could send their money out. The only one that gets busted with this measure is the working middle class and poor which are trying to protect some of their savings.
I expect heavy restrictions coming for the purchase on gold and silver any time soon.
Ah! That’s what they meant folks! When they said on CNN and NBC that that Argentina’s economy was booming? Its booming, you know, like going boom… like a bomb… like something that explodes and causes mass amounts of destruction.
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