Thursday, June 7, 2012

Need your advice about restriction of US dollars buying in Argentina

Hola Ferfal,
My Argentine girlfriend who lives in Buenos Aires asked me for her help about the situation of Argentine government’s restriction of US dollars buying in Argentina.  Argentine people are deeply worried about high volatile unstable pesos that could happen again back to 2001 economic collapse because the Argentine government forced Argentine people to de-dollarization the economy and use pesos.  Probably, you already heard this information last week.  
My girlfriend Maria wrote this email to me.
“We couldn’t sign the resevation of my mothers house sale. When I arrived at the bank, near my mothers house, the buyer said he didnt have the dollars, and he will not have them, until the man who is buying his house gives him the dollars for his house. The difficulties with the sales in dollars has almost stopped business of selling and buying properties. We´ll have to continue waiting to see if we can sell it. I dont want pesos, I dont know where to invest a mountain of pesos! Everybody is very worried here, me too of course!” 
 She needs help for your advice about a mountain of pesos after her mother’s home will be sold.  What is any of your suggestion for protecting her wealth without using pesos and buying US dollars?  There must be a loophole for buying US dollars.  Please let me know as soon as possible.  I will contact her about this situation.  I would appreciate your help when I hear from you.  Muchas gracias!  Sonrisa!
Hi Jeffrey, I’m very sorry about your girlfriends situation.
Unfortunately it had been going on for some time now, and it became awfully clear this would happen sooner rather than later after Kristina K was reelected. That’s why I left kind of in a hurry!
For those that don’t know what’s all this about, soon after Cristina’s reelection last year the situation got very bad and has been worsening since then. At first there was a limit to how much dollars you could buy, then they started jailing the “arbolitos”, street dollar vendors now hunted criminals after the new “Anti-terrorist” law. Importations frozen and its an impossible ordeal to get goods imported into Argentina. To make matters worse, local producers and manufacturers are sitting on their merchandize until the dust settles and inflation jumps even more. In some places there’s problems finding sugar, oil, even the famous Argentine basic staple, the yerba mate.

Your girlfriend probably saw a tv show called Periodism Para Todos, an Argentine program by well known independent journalist Jorge Lanata. He showed how even himself, a guy that has  millions, wasn’t allowed in the governments website to buy a SINGLE US dollar. Not one dollar! A guy that makes and owns millions! The message in the website said he lacked the funds to make that usd purchase… Telling it as it is, USD are just banned in the Argentine market.

Since there’s such a problem finding US dollars the real estate business has basically frozen. Historically, since the Argentine peso is so unstable and loses 25% of its value to inflation each year, people have bought and sold things such as real estate, high end cars, quality guns (Glocks for example), all in US dollars. Now without dollars, people prefer to stick to what they have instead of dealing in pesos. In Clarin and La Nacion newspaper its being said that those that are willing to accept pesos  ad between %25 to %30 more to the price, but that’s generally for less valuable property.

I know some “arbolitos” in Buenos Aires, guys that I’ve known for years. As I posted here, right before leaving I sold my last pesos to one that I often dealt with. He was very nervous because the AFIP and SIDE (Argentine Intelligence) were arresting many of them. He told me he only sold or bought from “faces” he new well. Anyone else, they would just be walking into one of the thousands gift shops of downtown Buenos Aires. It’s the same thing for getting money out of the country, many “travel agencies” of the Captial district provide such a service  (I’m guessing the rates have recently increased) but they will only deal with people they’ve known for years. You girlfriends’ only chance of getting dollars is finding someone that can introduce her to one of these places, as in going to them with her. Think people that work in banks, travel agencies, people that own their business, even small ones if they make importations, these are the kind of people that know someone that can help her out. Its worth asking in hotels because they deal with tourists, but you have to be discrete and again, better do it with someone you already know.
Of course it used to be a lot easier to get started in all this. Not a year ago, you walked into a store and bought or sold dollars in peace with a Federal police officer watching the main door of the establishment. It was in those days when you were supposed to build up your network, your contacts. Now you´ll probably need someone to introduce you.
Maybe a possibility is finding a buyer that holds an off shore account. If she can open a foreign account she could have the money sent to it.

What many Argentines are doing these days is buying cars as a way of protecting their money, like they did in Venezuela. A vehicle will usually retain its value in USD or go up in price along with inflation. Car sales have gone up 30% last month because of this. For someone that just wants the money though, that’s not much of a solution.
I’m sorry I cant be of more help, unfortunately it will continue to get more complicated in Argentina. I left because I saw all of this coming, it was just too much. Argentina is becoming Venezuela and its not pretty.
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Totalinvestor said...

Fernando,can she not just buy gold or silver with her pesos, or is that also banned?

Anonymous said...

I'm curious how many dollars an ounce of gold now demands in Argentina. London Spot or Local Spot?

Disgruntled said...

Sounds like Argentina is destined to suffer another hyperinflation and corralito in the banks. However, most people aren't as prepared as FerFAL. However, better to prepare late than never. If I were there I'd be buying precious metals, food, ammunition and other real items.

The same thing can happen in the United States. It is best to start preparing now. The capital controls are being tightening such that it is essentially impossible for a US citizen to get a foreign bank account.

Do what they say in the stock market: sell on the first denial.

Anonymous said...


I have a favorite saying (my own creation as far as I am aware) which seems to hold true with public figures, managers, etc. but especially with politicians.

It's this: Nothing is official until it has been officially denied.

Don Williams said...

Reuters reports that Argentina banks have lost one third of their dollar deposits since last November --that about $100 million in dollars is being withdrawn per DAY.

Don Williams said...

1) Reuters also reports that there appears to be a slow motion run on banks in Greece, Spain, Italy and on French banks exposed to Greek debt:

Money appears to be flowing into British-based banks.

Anonymous said...

Atleast Kirchner has a great sense of humour:

"I've just had one fixed term account in dollars for some time," President Fernandez said on Wednesday. "And I've decided to put it in pesos, it's more profitable to have it in pesos."

Maldek said...


Haha great one!

Mrs Kirchner is a great politician. I would bet she didnt even lie. She just forgot to mention the word "gold" in front of peso, and suddenly it makes sense!