Tuesday, October 28, 2014

Warning signs for Argentina? Bitcoin in Argentina?

Clearly you were right that it was time to get out of Argentina.  They are having very high inflation once again.   What did you see as the warning signs?  How did you know it was time to bug out?
Also, do you know if people in Argentina have taken to using Bitcoin as a store of value or for trading?   It seems like it could be handy if you want to avoid pesos or to get money out of Argentina.   Is it getting more popular fast?
   -- Vince

Hello Vince,
The right time to leave Argentina was right before the economic collapse of 2001, when you could have left taking 1 US dollar for every Argentine peso you had saved during your life. For those that didn’t leave then, 2002 was the year in which hundreds of thousands escaped the sinking ship. Since then the country has been sliding into an ever darker shadow of its former self, with rampant inflation, crime and sociopolitical problems.
For years I kept waiting for an opportunity to move to USA. Several times there were a few glimpses of hope, someone being able to offer me the necessary work contract in America, but it always ended up falling apart for one reason or another.  It was number of events that made us see we were running out of time. 

Regarding crime and security we realized we were no longer living. Constantly afraid to even walk around our neighborhood and being careful where you went at all times. That level of crime paralyzes you and you basically stop living just so as to survive.
The death of a friend of mine from my shooting club was another slap that woke us up to the reality around us: People were getting gunned down around us, it was a matter of time until we ran out of luck ourselves.
Finally it was Cristina Kirchners reelection the thing that made us understand we simply had no more time left. Many statements had been made suggesting an eventual USd dollar ban and tighter control over the media as well as the general population.  You could see that they wanted to crack down on the purchase of foreign currency, street currency dealers where getting arrested and intimidated.

Because of all these reasons I ventured to guess (and it turned out I was right) that the government was simply waiting until they got reelected before taking some of the more unpopular, draconian measures. Right after they won, in a matter of days the restrictions, control and intimidation campaign was on full force.

Regarding Bitcoin, it has received some attention in Argentina with about 10.000 users, given that people are always looking for ways to escape from the Argentine peso. Bitcoin mining was until not long ago fairly attractive. The price of electricity made Bitcoin mining viable but in the last year with power prices rising and inflation making mining hardware very expensive the interest in Bitcoin is slowing down some. Bitcoin isnt as popular as in other countries but it is accepted in some stores, even for the buying of real estate although on street stores its more of a curiosity.

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