Monday, October 31, 2011

About to devaluate: Argentina restricts the purchase of Dollars

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.
Read more about it:

Argentina Ups FX Controls to Slow Capital Flight; Risks Seen

Buying dollars in Argentina just got a lot tougher

Join the forum discussion on this post


Cingoldby said...

On the BBC news website it said that ''Argentine President Cristina Fernandez de Kirchner has won re-election in a landslide victory, on the back of strong economic growth in the country.''

I am honestly confused. What is going on in Argentina? Why am I reading in different media outlets that Argentina is doing very well at the same time I am reading from individuals such as yourself that things are going badly?

In other countries that do badly, we hear it reported, how is Argentina such a special case?

FerFAL said...

Because the Argentine "model" is being implemented in USA as I write this. In plain words, your already getting... f.(having sexual intercouse without you knowing)... and they are telling you its ok becuase it worked for Argentina. Check the links. Some here are already calling it the "green" corralito.

Anonymous said...

Not to nit pick, but soldering rims together will last right up until the solder (very low melting point)
melts. Perhaps brazing or welding?

Taylor Harbin said...

I foresee a future when the central government of these nations dissolve because of financial impotence, prompting the revival of a system not seen in America since the 1920s-30s. Powerful organizations will carve out territory for themselves, no matter what moral code they do or don't follow, and the federal government will become irrelevant. See John Dillinger, Al Capone, etc.

stusual said...

Not to nit pick but solder would last until the temp reached the melting point of solder(very low). Perhaps brazing or welding?

Anonymous said...

I feel for you, FerFal. Thank God that you have your eyes wide open. I feel terrible for the middle class and poor folks who do not.

Anonymous said...

The difference being that in the US, when the dollar goes, there won't be anything else to convert to. Which is the end game. The whole world will be forced to trade their worthless currency into whatever the globalist bankers tell us the currency will be called. Then they will own it all under one umbrella and we all might as well go up to the mountains and hide in the caves. Doesn't the bible say something like that? Just saying. I really don't see any way in the world to stop it. Of course, the bankers may find it hard to hold that tiger by the tail, once the mass of people realize what has happened. Well.....maybe not. As I've grown older, my appreciation for the masses has diminished to nothing. Most will tear their hair out to get let into the plantations, to slave for them in exchange for some pizza and TV. You know, most of the masses kinda deserve what is coming. It's just to bad for the rest of us.

Loup Espiègle said...

Terrible situation indeed ! It's like handling a wet soap bar, you have no grip on your wealth.

The difference being that in the US, when the dollar goes, there won't be anything else to convert to. Which is the end game. The whole world will be forced to trade their worthless currency into whatever the globalist bankers tell us the currency will be called.

Ever heared of precious metals (or even steel, lead & brass) ?

Anonymous said...

Hi Ferfal,

For the "Thomas doubting" who is skeptic of what you are reporting until he didn't see it by major news agency, here it is:

Al the best for you and your readers!

Keith C. said...

Hey, brother. I know you've been working on it but how close are you to getting yourself and family elsewhere? Not that we all aren't on the same road but some are further to the rear than others.

Anonymous said...

hey, sorry to say that gold purchases are also restricted. As they are "foreing exchange" purchases, same for dollars, euros, yens, etc.

gaga said...

Here it is at the FT, which has a more sceptical tone than most

When you leaving ferfal ?

Anonymous said...

I just heard a report on NPR about an hour ago about how wonderful the economy is in Argentina now, and how they have totally wiped out all the bad effects of the collapse back in the early 2000's. They said you guys are getting rich from soy beans and selling cars to Brazil.

I wonder is the media talking up the 'new' Argentina because they want other people to go down the same road?