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

[BitHodler]

They used multiple currencies at the same time in the end, they were also printing USD bills (if I remember correctly)

Zimbabwe printing US dollars? That's probably one of the biggest crimes there is from the perspective of a government. I don't think that's what happened, otherwise it would big big news covered worldwide.

It might be that some crime syndicates there have printed fake US dollars and that it came into circulation, but the central bank of Zimbabwe doing that is highly unlikely in my opinion.

Last year I saw news coverage that some local governments in Zimbabwe have created their own currency, only usable within their state. This is quite an ingenious way to stop losing purchasing power.

People traded their near worthless Zimbabwean dollars for these non official state currencies, which looking back now, was a fantastic move. It's a big f-you to the main leaders of Zimbabwe.

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[o_e_l_e_o]

Zimbabwe printing US dollars?

They weren't printing USD. What they were printing were what they called bond coins and bond notes, which were officially pegged 1-to-1 with USD, but in reality traded for far less than this. These bond notes later went on to become part of their new currency which was launched earlier this year when the government declared all foreign currencies are no longer legal tender.

These bond notes were initially pegged at 1-to-1, but actually traded around 3 or 4-to-1. Since becoming part of Zimbabwe's new official currency, they are supposed to trade at 2.5-to-1 with USD, but currently go for around 11-to-1, and continue to rapidly devalue.

Another great use case for bitcoin, but you'll pay a premium trying to buy it in Zimbabwe. Still, within a month or two you would have lost far more value from holding a rapidly devaluing fiat.

[BitHodler]

They weren't printing USD. What they were printing were what they called bond coins and bond notes, which were officially pegged 1-to-1 with USD, but in reality traded for far less than this. These bond notes later went on to become part of their new currency which was launched earlier this year when the government declared all foreign currencies are no longer legal tender.

These bond notes were initially pegged at 1-to-1, but actually traded around 3 or 4-to-1. Since becoming part of Zimbabwe's new official currency, they are supposed to trade at 2.5-to-1 with USD, but currently go for around 11-to-1, and continue to rapidly devalue.

Thank you for your explanation. It makes sense now. If they can't even maintain a peg to the US dollar, that just tells you how problematic the situation in that country is. What a joke. Who's ever going to trust that government again?

Another great use case for bitcoin, but you'll pay a premium trying to buy it in Zimbabwe. Still, within a month or two you would have lost far more value from holding a rapidly devaluing fiat.

The premium you pay to buy Bitcoin in order to finally be free from that horrible currency, is a small price to pay for long term price appreciation and financial freedom. It's an opportunity of a lifetime for them. Literally.

We can't fathom how much stress these people go through to find out that their fiat buys them less groceries today than it did yesterday, and that for years straight. Much respect to these innocent people who fell victim to their mafia government.

[Slow death]

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.

I read a news a few days ago that said that even if Mauricio Macri or Alberto Fernández win, by 2020 Argentina will still be in economic crisis. The biggest problem for Argentina and many countries is the lack of a good alternative to govern the country. Political parties that are years in power, the same people who are years in power cannot bring in new energy, cannot bring in a new healthy system.

What happens is this: A guy X that have 60-year-old and his 30-year-old political party that govern the country win the election. The guy X that have 60-year-old governs the country for 10 years and can't change anything in the country, after 10 years the guy loses elections or another guy from his political party starts running the country.

people will look again the guy X that have 60-year-old (now 75) wanting to govern the country again. Let's face it, what kind of changes can there be? nothing is going to change

[1Referee]

We can't fathom how much stress these people go through to find out that their fiat buys them less groceries today than it did yesterday, and that for years straight. Much respect to these innocent people who fell victim to their mafia government.

Perhaps not to that extent, but most people with some sense in their head have converted a portion of their net worth to Bitcoin or even Gold. It's not that hyper inflation is something that we just got to witness; it has existed for many decades, which should have made people more interested in alternative forms of money.

For some reason people tend to wait and hope for the government to introduce changes that will help improve the economy, but these in most African countries have never really yielded anything. People's 'next time things will be different' mentality works against them. Things haven't been different for the better, only different for the worse. Peolpe need to wake up and help themselves.

[thehun]

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.

I read a news a few days ago that said that even if Mauricio Macri or Alberto Fernández win, by 2020 Argentina will still be in economic crisis. The biggest problem for Argentina and many countries is the lack of a good alternative to govern the country. Political parties that are years in power, the same people who are years in power cannot bring in new energy, cannot bring in a new healthy system.

What happens is this: A guy X that have 60-year-old and his 30-year-old political party that govern the country win the election. The guy X that have 60-year-old governs the country for 10 years and can't change anything in the country, after 10 years the guy loses elections or another guy from his political party starts running the country.

people will look again the guy X that have 60-year-old (now 75) wanting to govern the country again. Let's face it, what kind of changes can there be? nothing is going to change

The main problem I see is the deep rooted social(ist) system that started with Peron. There are millions of people living/surviving on welfare, a state that has all the natural resources in the world but doesn't invest in modernising its infrastructure to be able to exploit them properly and a small percentage of people who have to pay the huge bill (the middle class).

And then of course you have the trade unions, a real mafia that dictates who will work where, and with which salary and won't hesitate to paralyse the country if the government tries to take away an inch of their power. They have made the once prosperous Argentinian industry completely irrelevant after all these years of meddling.

Any party (right or left wing) that tries to cut the ruinous welfare system can say goodbye to ever being elected or reelected, and as we all know the main interest of politicians is not the well-being of the country but their reelection.

[Harlot]

A volatile currency won't be the solution here for their country. They will just be risking the money they have left if they tried to enter the market. If they can't even manage the stable fiat currencies they have what made you think that they can also handle a asset that changes price to quickly? On a investors point of view then definitely each citizen must put it into consideration that Bitcoin might be a safe haven for them but are they even ready to enter the market yet? I would rather encourage them to hold of the money they have and play it safe on falling stock prices in their stock market just to be safe, buying some bluechip companies is also a good alternative for them.

[bbc.reporter]

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.

Agreed. However, John F Kennedy had a more lasting legacy in America and passed on that legacy to the bitcoin community. He invented the phrase we are going to the moon hehehe.

[o_e_l_e_o]

They will just be risking the money they have left if they tried to enter the market.

They are risking the money they have left if they do nothing. Their currency is devaluing constantly. It is currently around 60 pesos to the dollar. A month ago it was 45 pesos to the dollar. A couple of years ago it was 10 pesos to the dollar. If I were Argentinian, I'd be holding as little of my net worth in pesos as possible.

I would rather encourage them to hold of the money they have and play it safe on falling stock prices in their stock market just to be safe, buying some bluechip companies is also a good alternative for them.

Two problems with this. How many average Argentinians do you think have an easy on-ramp in to the stock market, and how many people have enough money to buy on the stock market? These are people living in poverty. They are looking to stop their money devaluing so they can use it to buy food, water, pay bills, etc. The government have just made it harder for people to trade pesos for dollars, which is historically what they did to protect themselves against rampant inflation.. The stock market isn't a viable alternative and can't be spent on day to day needs. Bitcoin can.

[Carlton Banks]

^^^

I can't figure out whether to give o_l_e_o a merit or 2 for the above post


on one hand, the points made are solid arguments

on the other, why encourage arguments with such ignorants?


if Harlot thinks saving steadily depreciating currencies is better than saving volatile appreciating currencies, who are we to argue? if Harlot actually believes that, then we'll get we deserve, and so will Harlot

[BitHodler]

if Harlot thinks saving steadily depreciating currencies is better than saving volatile appreciating currencies, who are we to argue? if Harlot actually believes that, then we'll get we deserve, and so will Harlot

Fact is that the depreciating currencies will save themselves eventually by imploding. It's only a matter of time before this happens, but then we get another shitty government currency people are forced to use.

At the end of the day, we don't have to be dragged down by fiat to the fullest and painful extent. If people by now haven't allocated a portion of their net worth to Bitcoin or other assets they're just begging to lose 99% of their purchasing power.

Also, Bitcoin doesn't need to be saved. It has shown growth in terms of price and hashrate consistently throughout the years, and that while people thought this concept was doomed to fail. That's extremely bullish.

[cr1776]

If Argentina will use bitcoins in order to build economic potential it will be just fine, both for traders and for the country itself

Argentina won't. Their power-hungry political class won't let them.  They have demonstrated that for many, many decades.  Likewise, many citizens won't let them because they want "free" something so they'll continue to vote for socialism, fascism etc because they are greedy and want someone else to pay for their own choices and the consequences of those choices.

Individual citizens of Argentina might do so though, through self interest and individual choice.  That probably won't save Argentina, but it will save those people who are smart enough to make intelligent choices.

Nothing will save Argentina, Venezuela or anywhere else in the world as long as people think they have the right to vote themselves money that someone else earned.

[bbc.reporter]

@cr1776. It will then be their political class' fault if they lose the trust of the people. In the next election or the next change in regime, the people will choose the opposite of the incumbent. I have read about a country electing a murderer for a president. I reckon the president before him must be learned, belonging to a political class but very corrupt and who failed his people.

[cr1776]

@cr1776. It will then be their political class' fault if they lose the trust of the people. In the next election or the next change in regime, the people will choose the opposite of the incumbent. I have read about a country electing a murderer for a president. I reckon the president before him must be learned, belonging to a political class but very corrupt and who failed his people.

It may be the political class' fault but if the history of Argentina tells us anything, the people won't choose the opposite, they will choose more of the same:  voting for the people who promote envy and promise "free" stuff.

[Vishnu.Reang]

They are risking the money they have left if they do nothing. Their currency is devaluing constantly. It is currently around 60 pesos to the dollar. A month ago it was 45 pesos to the dollar. A couple of years ago it was 10 pesos to the dollar. If I were Argentinian, I'd be holding as little of my net worth in pesos as possible.

The point to be noted here is "as little of my net worth in pesos as possible". Is it that easy to convert your wealth to some stable asset such as gold or United States Dollar in Argentina? From what I have heard, it is not. And that's why they have capital controls. The situation is not as bad as Venezuela, but they are definitely moving in that direction.

[Carlton Banks]

The point to be noted here is "as little of my net worth in pesos as possible". Is it that easy to convert your wealth to some stable asset such as gold or United States Dollar in Argentina? From what I have heard, it is not.

define "stable"


in these circumstances, paper dollars are the only option if dollars is what you want. and paper is easy to confiscate, and not so easy to hide.

hence the reason for this story. Bitcoin is, in practical terms, more valuable than the dollar in Argentina.


There's nothing stable about having $10,000 as pieces of paper on Friday, then only having an empty space where the pieces of paper were previously sitting on Saturday morning.

[o_e_l_e_o]

Is it that easy to convert your wealth to some stable asset such as gold or United States Dollar in Argentina?

No, and the government just made it harder. They are trying to force people to use the peso rather than instantly offload it to some other currency, which helps to drive it's rampant inflation. If no one wants a currency, if no one believes it has any value, then it becomes worthless. This is pretty much exactly what happened in Zimbabwe. The populace lost faith in the government and in their currency. The government banned all foreign currencies and tried to force people to use their currency. This didn't stop people buying other currencies, just created a black market and made the government currency even less valuable than it already was.

The situation with the peso will not improve while the current Argentinian government continue down this path. Inflation will continue, and the rate of inflation is likely to increase. Holding peso only guarantees a massively loss of purchasing power. Bitcoin is rapidly becoming the most obvious (and easiest to access) alternative.

[bbc.reporter]

@cr1776. It will then be their political class' fault if they lose the trust of the people. In the next election or the next change in regime, the people will choose the opposite of the incumbent. I have read about a country electing a murderer for a president. I reckon the president before him must be learned, belonging to a political class but very corrupt and who failed his people.

It may be the political class' fault but if the history of Argentina tells us anything, the people won't choose the opposite, they will choose more of the same:  voting for the people who promote envy and promise "free" stuff.

I was implying more about the people choosing the candidate with an opposite image. Look at America since the 1990s. There was Bush then Clinton, Clinton then George W, George W then Obama, Obama then Trump hehehe.

However yes, they are all the same corrupt gang of thieves, only with different agendas.

[bryant.coleman]

There's nothing stable about having $10,000 as pieces of paper on Friday, then only having an empty space where the pieces of paper were previously sitting on Saturday morning.

I agree with what you posted. But do you think that in case there is an emergency, it will be easier to convert Bitcoin back to fiat currency? They have all these capital controls and converting fiat to BTC and vice versa is going to be extremely difficult. Suppose a particular individual had opted for BTC instead of USD. It will make him immune to confiscation by the authorities. But let's say he suddenly faces a cash requirement, in the form of medical expenses or similar issues. The hospital authorities are not going to accept BTC, and they'll accept only the Peso or USD. And it may not be easy to convert large amount of BTC to fiat without attracting the attention of the authorities. If he had gold instead of BTC, then it will still be easier.

[o_e_l_e_o]

And it may not be easy to convert large amount of BTC to fiat without attracting the attention of the authorities. If he had gold instead of BTC, then it will still be easier.

How will this be easier?

In both scenarios, he is trading something for cash. To trade gold without the attention of the authorities, he must be storing the gold himself in his house and trading one-on-one with another person? That's incredibly risky. Or is it being stored by a bank or other institution? That's even riskier since the government can confiscate it whenever they want, and any trades done via said institution will be visible by the authorities.

With BTC, it's as simple as sending coins from one wallet to the other and handing over the cash. Quick and easy, and also invisible to the authorities. Also, as pesos become more worthless, and foreign currency becomes ever more difficult to obtain, bitcoin will become accepted as a method of payment by more and more vendors and retailers. Trading it for fiat will become less necessary as time goes on.