Crisis in Argentine

[syn999]

I have  heard a lot of stories about Argentine and people said it could be another cyprus.
I personally have friends out there crazily try to buy bitcoin from me.
They said there money worse less and less each day and their govt doest seem to be very promising

Could this raise bitcoin price like the one in april?

whats your thought?
I am really interested to hear ideas from mates from Argentin

[steelhouse]

Argentina has been in crisis for 20 years.  They are out of an Ayn Rand novel.  The unions and government run the show.  In 2008 the exchange rate was about $0.32/ARS, today it is $.18/ARS.  Thus, if I were Argentine, I would start to convert ARS to bitcoin, tin, aluminum, and nickel.

[Shawshank]

It is difficult to say how will Bitcoin perform in the very short term, specially since its value has risen significantly in the last few months.

Argentina's monetary policy is in shambles, approaching an inflation rate of 25% per year as stated by unofficial statistics. The government responds it is "only" around 10%, but nobody really believes that, and in fact, Argentina has already been reprimanded by the IMF for not giving accurate inflation data.

On the other hand, Venezuela has already introduced rationing in some basic food products, so inflation can shoot up even higher there.

I hold bitcoins for the long-term, because inflation and asset confiscation has been commonplace along history, and we humans have not changed that much in all this time, so it is very likely history will repeat once again.

[Anenome5]

Ultimately bitcoin will succeed because of the failures of those managing national currencies, of which Argentina's is currently in crisis.

The rush to preserve value in an inflationary economy will produce a mad rush for any asset, including bitcoin. But at first very few people will know about bitcoin. But later, as info spreads, that will change, and people will realize that holding bitcoin is better than holding other hard assets that need to be converted later on to get value out of them, whereas bitcoin is a currency already.

The reason all fiat currencies must inevitably move into crisis is because the incentives on politicians always push them towards inflation. And inflation is counter to the welfare of the populace. Thus, under enough pressure, the government pursues a dramatically inflationary policy instead of the safe marginal one, resulting in an eventual repudiation of the currency.

The ability to inflate a currency constitutes an existential threat, or 3rd party risk, of using a managed currency. Bitcoin, as an unmanaged and unmanageable currency, is inherently safer for value store--which is one of the primary uses of money.

This is just one of the reasons why bitcoin is a better money than any fiat currency.

But when any fiat currency moves into crisis and the predictable and oft-repeated act of flight into capital goods occurs, in the past there was virtually no way out. You'd buy anything and everything and then convert back to fiat at a later date.

But now, today, in this century, there is a way out in the form of cryptocurrencies.

When people live through a national currency default, they lose typically an entire generation's worth of wealth, decades at a time. That sort of psychic-shock is not easily dismissed. Look at people from the Great Depression in the US who got in the habit of never throwing anything away, became hoarders, because of what they went through.

The idea that with bitcoin, one can never again have their wealth stolen from them by the mechanism of inflation will come to be seen as far better than stuffing bills under your mattress and the like.

The next two decades will be very interesting in financial terms to see if the US and other currencies hold onto stability, or we go into an all-out fiscal trade-war, of which on bitcoin can be the winner.

[wopwop]

must suck for those argentines who bought btc recently as they lost more in btc than their inflation

[Anenome5]

must suck for those argentines who bought btc recently as they lost more in btc than their inflation

That's today. Situation could be entirely reversed tomorrow. Who knows.

[cr1776]

Nicely written. One hopes that bitcoin becomes a tool to protect oneself. :-)

Ultimately bitcoin will succeed because of the failures of those managing national currencies, of which Argentina's is currently in crisis.

...

[jago25_98]

Doug Casey is the only foriegner I've read to understand the madness of Argentina when he says (not exact quote) - 'They have these young people in power with optimism idealistic thinking, almost communist'.

That matched my experiences when I was living there. It's a thinking that everyone can be equal and free. I kind of like this. The problem is that it's all done manually - like in communism, this is too inefficient to work and nobody seems to have the brains to use the market rather than fight it.

The inflation has been high for years and years. Everybody's hardened to it and used to fighting to avoid the gov monster. Everybody trades USD cash in the black market so Bitcoin is an easy adjust. The mailing list is busy now but very quiet. A very long way to go before people are using it as they do the dollar.

The best way for them I think would be to buy Jalapenos. Other than that, many have secret accounts outside the country. Many have family members in places like the USA in order to escape some way financially.

[Birdy]

must suck for those argentines who bought btc recently as they lost more in btc than their inflation

Bitcoin could go up again, but I really doubt the Argentino money has any chance of going up.

[Prophet]

The juxtaposition of a blind giant and a rising multi-headed behemoth.  
This tool is very useful, infinitely more useful, most of bitcoins features are still dormant right now.
In Argentina this could bring balance to their nation on economic policy, an escape faucet to stabilize
the economy.

Somehow, I believe, the inflationary currencies have created a false environment a giant bubble that
believes that resources are infinite if you only print more money; this serves to only rob far more
wealth than inflation can take, by giving the top players more ammunition, more opportunities to
steal from the poor and give to themselves. Does this community see this? They are getting richer,
establishing more power by magnifying what they(The powerful) can do vs us, the ones being stripped
of our economic voting power. One cannot vote or think in a society that demands every drop of your sweat.

This is happening in Argeninta, a nation that i do not believe works for the people as even a communist
nation would, just one that forces it's people to do as they say through economic terrorism; A small cheque
is just as effective as a gun to motivate people into doing what they do not want. Such a small nation
should not be playing with it's wealth in the way it is, even if they have oil, one cannot drink oil or
build a foundation with it when the larger world has the materials you need to establish it.

They stopped the dollar exchanges, not realizing the larger world uses it to lubricate the goods exchange process.

They nationalized their oil infrastructure without compensating the companies that worked for it bringing on the
wrath of the world banks, further marginalizing their own power in the world.

Even if this is all ideological, they have done a terrible job of boycotting the empire they perceive, so naive...
They could have played to their strengths and used economic forces to bring more resources into their fold,
or mobilized the people from the grassroots, arming them with the skills they need to bring those valuable
resources into their country; Instead they are stuck in the same latin american bullshit mentality of being
their own little banana republic dictators, that is not even remotely close to true socialism.

[syn999]

The juxtaposition of a blind giant and a rising multi-headed behemoth.  
This tool is very useful, infinitely more useful, most of bitcoins features are still dormant right now.
In Argentina this could bring balance to their nation on economic policy, an escape faucet to stabilize
the economy.

Somehow, I believe, the inflationary currencies have created a false environment a giant bubble that
believes that resources are infinite if you only print more money; this serves to only rob far more
wealth than inflation can take, by giving the top players more ammunition, more opportunities to
steal from the poor and give to themselves. Does this community see this? They are getting richer,
establishing more power by magnifying what they(The powerful) can do vs us, the ones being stripped
of our economic voting power. One cannot vote or think in a society that demands every drop of your sweat.

This is happening in Argeninta, a nation that i do not believe works for the people as even a communist
nation would, just one that forces it's people to do as they say through economic terrorism; A small cheque
is just as effective as a gun to motivate people into doing what they do not want. Such a small nation
should not be playing with it's wealth in the way it is, even if they have oil, one cannot drink oil or
build a foundation with it when the larger world has the materials you need to establish it.

They stopped the dollar exchanges, not realizing the larger world uses it to lubricate the goods exchange process.

They nationalized their oil infrastructure without compensating the companies that worked for it bringing on the
wrath of the world banks, further marginalizing their own power in the world.

Even if this is all ideological, they have done a terrible job of boycotting the empire they perceive, so naive...
They could have played to their strengths and used economic forces to bring more resources into their fold,
or mobilized the people from the grassroots, arming them with the skills they need to bring those valuable
resources into their country; Instead they are stuck in the same latin american bullshit mentality of being
their own little banana republic dictators, that is not even remotely close to true socialism.

great thoughts. but lets focus on the bitcoin. Do you think this could effect the popularity in Argentine and shoot the price up once again?

dont want to talk about politics

[canadense]

My own experience is with Brazil in the 1980s when we had to track the cruzeiro vs. dollar rate at least twice a day in order to seal a deal. The phenomenon of parallel and black market currencies is essentially the same across time and space. In Bazil, if you were selling a piece of technical equipment to a factory, for instance, they would always have someone on staff that could structure a barter or a black market (read free market) payment. You would need a large sports bag to carry the local currency and the banks would seal and sign the bundles of banknotes so that one didn't have to count the bills, only the bundles. With U$20 in hand you could go into a top hotel and have three waiters hovering over your table while you paid for a classy meal, with wine, and generous gratuities and leave with change.

You have to see otherwise respectable famiies watch their lifetime of savings disappearing before their eyes on a daily basis and desperate for any currency other than their own. The fact that I spoke passable Portuguese and could produce dollars gave me the breezy air of a VIP and caused me to love the county and the people deeply in the end, quite apart from the money angle.

Have no doubt that Argentina is in this state, thanks to their confiscatory socialist economics and perverse regulatory climate. Anyone who goes there with a good stock of bitcoin in hand (so to speak) would be a social success within 24 hours, but would have to be ready to learn an entire vocabulary and acquire a knowledge of free market practices. It's just too big a story to tell, if you haven't already experienced it.

The greatest frustration is that you can acquire some great stuff, say with your bitcoin, like pallets of vintage reserve wines, but you would never be able to get them home without going through the export regulatory paperwork which would seize all the profit in the deal and make it not worth doing. But there are ways... don't ask.

[shawshankinmate37927]

must suck for those argentines who bought btc recently as they lost more in btc than their inflation

Cheer up!    No reason to be so pessimistic.  A glass that is half empty is a glass that is also half full.  The recent price drop provides a great buying opportunity for those Argentines who want more bitcoins or who don't have any bitcoins yet, and would like to convert part of their savings over to a currency with purchasing power that bankers and politicians can't steal from them.  Having bitcoins may very well be one of the few ways that will allow them to retire some day.

[syn999]

are there a lot media report, magazines, online news or whatever covering bitcoin in Argentine?

[Lohoris]

Did someone try to track the BTCARS exchange rate?

Obviously that would be quite difficult, since that's black market, but I guess maybe there are open sites with announcements, like localbitcoins?

[kangasbros]

Did someone try to track the BTCARS exchange rate?

Obviously that would be quite difficult, since that's black market, but I guess maybe there are open sites with announcements, like localbitcoins?

We have plenty of traders in Argentina: https://localbitcoins.com/country/AR

Also we recently added ARS "blue market rate" to our pricing engine: http://localbitcoins.blogspot.fi/2013/06/argentina-goverment-fixing-exchange.html

[acoindr]

I think Argentina could be first to take off with Bitcoin used for trade and not only speculation.

The reason is their situation, as has been pointed out in this thread. Most other places in the world, especially the US, have complacent citizens who are happy with their finances, relatively speaking. People may admire some of Bitcoin's strengths but see no real reason to use it for exchange when dollars/euros etc. already work so well.

Argentina is different, though, and people there have a better appreciation for alternatives to their national currency. Indeed shortly after their economic crash in 2001 people desperately tried making other trade/money systems. These failed quickly as they were no more sophisticated than what could be designed and printed, and therefore easily counterfeited, by home computers. So Bitcoin might be very well received.

The other reason I think they're particularly well suited is their economy exists at a lower, truer level. One might easily find someone willing to trade personal services like sewing, nanny, tutor, etc., anything of basic value to begin building a foundation of economic activity based on a currency like Bitcoin. That would mean those citizens could really begin to thrive.

It would take that on a growing scale to affect the Bitcoin US price, though.

A nice Bitcoin/Argentia documentary video for those that missed it:

http://www.247btc.com/bitcoins/154/bitcoins-in-argentina-a-brief-documentary/

[syn999]

so since the govt already controlling their currency which you cant exchange to other fiat or gold.

Would the Argentina govt puts up a lot of laws and restrictions on bitcoin when the bitcoin spread more and more in  Argentina.

[acoindr]

so since the govt already controlling their currency which you cant exchange to other fiat or gold.

Would the Argentina govt puts up a lot of laws and restrictions on bitcoin when the bitcoin spread more and more in  Argentina.

That's a good question. It's hard to know for sure. As they talk about in that Argentia/Bitcoin documentary video the government already takes a heavy handed approach not allowing citizens to buy gold, dollars etc. legally. I think Bitcoin would pose a different challenge, though. Governments can use different tactics to restrict buying of certain things/currencies, but Bitcoin is hard to restrict because it's so much more nimble. It doesn't really exist in physical form and can be transferred as easily as sending email, without middlemen. Argentinians are already buying dollars illegally so I imagine it would be harder to prevent them buying and using bitcoins.

[d5000]

so since the govt already controlling their currency which you cant exchange to other fiat or gold.

Would the Argentina govt puts up a lot of laws and restrictions on bitcoin when the bitcoin spread more and more in  Argentina.

You can actually buy gold in Argentina, but it's very scarce since only a few banks (and obviously illegal locations) sell it.

In Argentina there is "freedom of contract", so buying and selling BTC to goods/services would be extremely difficult to ban (ban would be probably anti-constitutional). But the currency market is totally controlled and restricted, so if the Argentine government declares that BTC is a currency, they could shut down exchanges. It is more probable, though, that BTC would be seen as a commodity or a barter accounting unit. We had an experience with the so-called "créditos" in the 90s, a nationwide alternative "bartering" currency which came into prominence in the economic crisis of 2001 and was not banned but destroyed itself due to bad organization.

It must be stated that we are not in a dictatorship, although some right-wing media say this (see the Economist's Democracy Index or the Reporters Without Borders rankings where Argentina is not doing that bad). But I don't like the Argentine government very much and would be pleased if they lose elections this year and above all in 2015 :p