[2019-09-02] Argentina capital controls, a strong case for bitcoin

[bbc.reporter]

I reckon that there might be a stronger case for the Argentinian government to hold bitcoin in their reserves if they want to remove themselves of state intervention.

Some of you might not know this but if a powerful country like America or China loans US dollars to a 3rd world country, it is not because those powerful countries want to help. The 3rd world country borrowing the money has given America or China some control in its economy or policy making in exchange.

The IMF and the World Bank are also 2 institutions that make these kind of deals.



The government of Argentina has imposed capital controls on its citizens in a response to growing financial issues for the country. The South American country has limited dollar purchases to only $10k per month after $3 billion was drained out of their foreign currency reserves on Thursday and Friday alone. Is it time to switch to Bitcoin?

Argentina’s national currency, the peso, has been in free fall the past few weeks as the government attempts to pay off their short term debts. The peso is down over 25% in the last month alone. Interest rates spiked heavily as the Argentinian central bank tried to control their debt, making the decision Wednesday to delay payments on the $7 billion of debt this year.

The decision comes from President Mauricio, who ran on the promise to get rid of state intervention in the economy. He is now doubling back on his ideals by imposing currency controls. The current political landscape in Argentina is suggesting Mauricio and his party will lose power in the upcoming October election. This fact is scaring many investors in the country.

The opposition has been calling for currency controls, claiming that the government was in a “virtual default.” The reserves of the central bank fell nearly $12 billion due to political uncertainty

Read in full https://bitcoinist.com/argentina-imposes-capital-controls-strong-case-for-bitcoin-adoption/

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[Kakmakr]

It is a well known fact that the loans that are being granted to these third world countries, comes with a lot of strings attached and that the country giving the loans, gets their teeth into their prey, when they do this. They get the power to influence the economic policies of these countries to favor them.

They also add interest and levies to these loans to make it harder for these countries to pay back the loans and this helps them to have control over those countries. < https://www.imf.org >

Bitcoin cannot help these countries to get rid of the debt, but if they invest a small portion of their capital in Bitcoin and the price goes up, then they might take those profits to pay back some of the loans. 

[cr1776]

Argentina has been mismanaged for decades, they keep selling bonds and then defaulting. And yet the people of Argentina keep electing the same old statist/progressive/fascist/socialists and wondering why the results aren't different.

One wonders why more Argentines don't take money off shore or use bitcoin, because although the politicians keep saying "this time is different", it really isn't. 

When the people vote for something for nothing and envy (envy isn't one of the seven deadly sins for no reason) they will keep getting nothing for something and always be much worse off than if they voted for freedom.

[gentlemand]

And yet the people of Argentina keep electing the same old statist/progressive/fascist/socialists and wondering why the results aren't different.

There may be no alternatives, or those offering an alternative might be so off the wall they're not even worth considering.

That's how Bolsonaro got in. Everyone before was so shit I guess the electorate decided he was worth a try even if he came round and personally raped you.

It seems to be repeating everywhere now. In the UK we either have a bunch of right wing pricks who are clueless, or we have a bunch of commies stuck in the 70s who are even more clueless.

I don't understand where the competent people have gone. These days it's either psychopaths or the fractious and ineffective.

[hugeblack]

I reckon that there might be a stronger case for the Argentinian government to hold bitcoin in their reserves if they want to remove themselves of state intervention.

It’s horrible advice. The Argentine government should consider finding real solutions to the problem by encouraging production rather than looking for more loans.
The dependence of the national economy or reserve on a highly volatile currency makes the adoption of economic policies really unknown.
Even individuals who invest in BTC should not put all their capital in this currency. "Don't invest more than you can lose."

I agree with you that relying on the US dollar as a single reserve is not right

[buwaytress]

I think the countries themselves already know this. Give in to aid packages and you basically sign away some form of our country to the devil. Mahathir knew this in the late 1990s when the World Bank offered to bail Malaysia out of the great Asian crisis. His refusal was slammed by most of the West as callous, but then later that particular brand of Mahathirism was lauded for preventing the country from getting into an inescapable pact with the banking powers.

But it's difficult to break out from the cycle. People want to remain in power for as long as possible. Aid packages that delay the inevitable long enough for you to retire before everything crumbles, so you can handover the doom to your successor? That's just irresistible.

[Lucius]

I don't understand where the competent people have gone. These days it's either psychopaths or the fractious and ineffective.

Politicians are just pawns in the hands of the powerful who use them to control people and pass laws to control them. This is particularly pronounced today, it is enough to look at who leads the most powerful countries in the world, these are certainly not people who have the honor, morals or feelings for the people. There have been good politicians in the past (JFK), but they don’t last long in a world like this.

I do not see how people in Argentina can just like that switch to BTC, capital control means that they can exchange their domestic currency in limited amount every month for $, but this restriction is quite sufficient for ordinary citizens. People still choose to buy fiat ($), rather than BTC, and I do not believe that will change so easily.

[Carlton Banks]

It seems to be repeating everywhere now. In the UK we either have a bunch of right wing pricks who are clueless, or we have a bunch of commies stuck in the 70s who are even more clueless.

I don't understand where the competent people have gone. These days it's either psychopaths or the fractious and ineffective.

it's not a coincidence

Some people in the UK media have been promoting Boris Johnson as a political personality for over 15 years. Ask yourself: what for?

he's a total buffoon. he has almost nothing to offer, and yet he became the ostensible most powerful figure in UK politics. There are hundreds of representatives in the British parliament, and the editorial wing of the UK media chose to devote untold amounts of pages/minutes to someone with no redeeming features or skills, as if those qualities are in and of themselves newsworthy? "WORST POLITICIAN YET" was the perennial gist of every Boris story, ever

and these people supposedly have even the slightest sense of responsibility for starting that downward spiral?

the apparent fact is that people like Boris Johnson can become well-known for being bad at doing everything, then become Prime Minister. If just getting alot of TV time can do that, there's something seriously wrong with this garbage culture, as it's this sort of supposedly mindless behaviour by the media that has caused the rise of the "incompetent leader" all over the world, not just the UK. And the media did this worldwide, in synchrony? While international relations are breaking down for unrelated reasons?

There have been good politicians in the past (JFK), but they don’t last long in a world like this.

John Kennedy was as bad as the rest of them, plenty of skeletons in that cupboard. He made the mistake of trying to upset the rest of the established power structure, and someone was sufficiently pissed to have him murdered. The whole hero worship thing was just what you do when head of state is killed, all the more so when some people in the media knew they had to help cover up the circumstances of the shooting. Making out JFK as an angel sent from heaven strengthened the effect of the "have some respect for the dead" argument when people speculated about inconsistencies in the official narrative.

[cr1776]

I don't understand where the competent people have gone. These days it's either psychopaths or the fractious and ineffective.

Politicians are just pawns in the hands of the powerful who use them to control people and pass laws to control them. This is particularly pronounced today, it is enough to look at who leads the most powerful countries in the world, these are certainly not people who have the honor, morals or feelings for the people. There have been good politicians in the past (JFK), but they don’t last long in a world like this.

I do not see how people in Argentina can just like that switch to BTC, capital control means that they can exchange their domestic currency in limited amount every month for $, but this restriction is quite sufficient for ordinary citizens. People still choose to buy fiat ($), rather than BTC, and I do not believe that will change so easily.

JFK?   You can't be serious he was a drugged-up stooge on the path to socialism. 

[Naida_BR]

Argentina is a great case to see how bitcoin is going to reach / help or not, countries that face economic problems.
I believe that due to the capital controls, the Argentinians will try to find new ways of funding their economic activities or strengthen their purchasing power. This can be achieved easily with Bitcoin... My question now is: Is the Argentinian government Bitcoin friendly or not?

[o_e_l_e_o]

One wonders why more Argentines don't take money off shore or use bitcoin, because although the politicians keep saying "this time is different", it really isn't.

One wonders why more Americans/Germans/Brits/insert Western country here don't do the same. Everyone the world over is being fed the same lies - "this time it's different", "we're all in this together", "working for you", "make us great again", blah blah blah. And every time the politicians get more corrupt, the banks consolidate more control, the rich get richer, and the average people suffer. The economy tanks and the banks and billionaires use it as an opportunity to buy up more assets cheaply, while large portions of society struggle to keep up with their bills or feed their children. Who cares about the poor dying though, right? Think about the profits!

He made the mistake of trying to upset the rest of the established power structure, and someone was sufficiently pissed to have him murdered.

At least back then they went to the effort of making it look like it was a Soviet defector who did it. Now they can just openly murder people like Epstein in his cell and nobody can touch them.

[LeGaulois]

Kakmakr

It is a well known fact that the loans that are being granted to these third world countries, comes with a lot of strings attached and that the country giving the loans

Yeah, it's what I call the colonization. It starts economically and ends politically

Bitcoin cannot help these countries to get rid of the debt

The debt country perhaps not, but it can help the citizens there to protect their wealth, that's what the OP wanted to show. Even knowing the crypto market is volatile they have maybe more chance to save it than their national currency, loosing already 25% (?). It could be another traditional currency, not necessary BTC

Remember about the Zimbabwean currency? The currency had been devalued to such an extent that the country was printing Zimbabwean $100 trillion bills lol. After they stopped to use the currency for another. They used multiple currencies at the same time in the end, they were also printing USD bills (if I remember correctly)

[cr1776]

One wonders why more Argentines don't take money off shore or use bitcoin, because although the politicians keep saying "this time is different", it really isn't.

One wonders why more Americans/Germans/Brits/insert Western country here don't do the same. Everyone the world over is being fed the same lies - "this time it's different", "we're all in this together", "working for you", "make us great again", blah blah blah. And every time the politicians get more corrupt, the banks consolidate more control, the rich get richer, and the average people suffer. The economy tanks and the banks and billionaires use it as an opportunity to buy up more assets cheaply, while large portions of society struggle to keep up with their bills or feed their children. Who cares about the poor dying though, right? Think about the profits!

He made the mistake of trying to upset the rest of the established power structure, and someone was sufficiently pissed to have him murdered.

At least back then they went to the effort of making it look like it was a Soviet defector who did it. Now they can just openly murder people like Epstein in his cell and nobody can touch them.

Agreed. Everyone should be doing it, just some people have a little more urgency.

[Carlton Banks]

JFK?   You can't be serious he was a drugged-up stooge on the path to socialism. 

well, let's be fair:

they're mostly drugged up, all stooges, and all more than half way there to socialism

[cr1776]

JFK?   You can't be serious he was a drugged-up stooge on the path to socialism. 

well, let's be fair:

they're mostly drugged up, all stooges, and all more than half way there to socialism

Fair enough. Lol.

The ones who are full on board (e.g. Bernie, Warren, AOC, et al) are the ones who couldn't make it in the real economy so need to use force to impose their ideas on everyone else. Socialism-ideas so good they have to be imposed by force. (Applies to any form of authoritarianism - fascism, communism etc).

[thehun]

One wonders why more Argentines don't take money off shore or use bitcoin, because although the politicians keep saying "this time is different", it really isn't.

Any Argentinian who has half a brain and considerable savings has done that already. You wouldn't believe how well they can play the system, decades of disastrous governments have kind of made them this way.

Back in 2014 I spent most of the year in Buenos Aires and at that time there was an "official" exchange rate for the Peso and a real one (that was between 50% and 100% above the official rate). You could buy Pesos at the official rate, but not foreign currency, so people had to resort to the black market to get dollars or euros. The center of the city was full of small clandestine offices exchanging currency, along with many dodgy-looking street exchangers. In all these places you could always find a queue of people waiting to get rid of their Pesos before the next devaluation.

The most creative ones would find ways to buy USD at better rates with different methods, for example using their credit cards in casinos in Uruguay to buy chips (at official exchange rate) and then cashing them out into USD.

As bank transfers to other countries were also blocked, there were offices that did so-called "giros". You could take your currency (local or foreign), give it to a person and they would make sure that it would appear in a bank account anywhere in the world, for a small fee.

The most tech-savvy people however already knew about BTC and took good advantage of it. There was a company called Satishitango (it still exists and actually it got really big and legal now) that would purchase your BTC at Bitstamp-2% and blue (good) exchange rate and send a guy on a moped to your flat with the cash in hand. It literally solved my problems to transfer money into the country as my first and last attempt of sending a wire got my money lost forever.

Back in those days there was already a quite big Bitcoin club in Argentina, and some good startups emerged from that scene such as Ripio, Flixxo or RSK. Mauricio Macri spoke out as a big supporter of Bitcoin, not sure though if it will still fit well with his latest plans.

Today I know that there are still plenty of offices that use BTC to send money in and out of the country, and I bet they will multiply like mushrooms in the short future.

[bbc.reporter]

I reckon that there might be a stronger case for the Argentinian government to hold bitcoin in their reserves if they want to remove themselves of state intervention.

It’s horrible advice. The Argentine government should consider finding real solutions to the problem by encouraging production rather than looking for more loans.
The dependence of the national economy or reserve on a highly volatile currency makes the adoption of economic policies really unknown.
Even individuals who invest in BTC should not put all their capital in this currency. "Don't invest more than you can lose."

I agree with you that relying on the US dollar as a single reserve is not right

There was nothing in my post that implies that Argentina should look for more loans. Did I not already say that loans from the World Bank, the IMF or China and America are troublesome for 3rd world countries?

[Carlton Banks]

[snipped Argentina anecdote]

in other words, places like Argentina are where the real Bitcoin culture is actually taking place, people in that country actually need it. Out of >300,000 tx/day, a significant proportion are happening in places with strict capital controls and/or monetary chaos, out of actual necessity (so also Venezuela, Turkey, China, Brazil...)

These are the real marketplaces for the cryptocurrency space. Only idealists are interested in places with (relatively) stable local fiat, in Argentina, BTC is realism

[Lucius]

JFK?   You can't be serious he was a drugged-up stooge on the path to socialism.  

And that's why they killed him, you would probably do the same, the killing culture is very developed in USA.

The mere fact that he was one of the most popular president in recent American history probably doesn't mean anything to you, but if you are American you must be proud with George W. Bush or Trump.

[o_e_l_e_o]

Only idealists are interested in places with (relatively) stable local fiat, in Argentina, BTC is realism

The implication is then that as more countries devolve in to monetary chaos, bitcoin usage doesn't just become advantageous but pretty much necessary. It begins with countries like Zimbabwe and Argentina which have rapidly devaluing currencies, but all fiat currencies are, by nature, devaluing. "Strong" currencies such as USD, EUR, GBP and so forth are still facing a horrendous few years: impending recession, out of control and ever growing debts and deficits, increasing inflation, chronically low interest rates, trade wars and new tariffs, etc.

People are feeling squeezed. The same paycheck doesn't go as far anymore. Rents going up. Food prices going up. Insurance going up. Fiat value going down. Bitcoin looks ever more attractive.