Argentina's Central Bank running out of dollars as inflation hits 100%

[Majestic-milf]

 Ever since Argentina's economy nosedived in 2018, it hasn't fully recovered since then, and annual inflation rate has been above 50%, and according to the World Bank, they have spent more time in recession more than any other nation.
 At present, nearly 40% of adults live in poverty as against the 25% at the beginning of the crisis. But this fades in comparison to the first hyperinflationary crisis experienced by the nation from 1989-1991 where it surpassed 3000% annually.
 To make matters worse, Argentina is expected to experience a drought and coupled with inflation, I think the economy is going to suffer a lot as this will affect their key commodity exports: corn, soy and wheat.
 From the outlook of things, the government seem to be at their wits end, and coupled with the fact that they need to remit a lot of money back to the IMF, I think a solution for their predicament need to be thought up and fast.
 Is this the point where Bitcoin comes in handy??

https://www.washingtonpost.com/business/2023/04/06/why-70-inflation-is-just-one-of-argentina-s-problems-quicktake/0d56242a-d499-11ed-ac8b-cd7da05168e9_story.html

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[Don Pedro Dinero]

Ever since Argentina's economy nosedived in 2018,

In 2018? As far as I remember, in 2001 they already had a "corralito" and there was a massive emigration of Argentines, many of them to Spain, but the problems had been there before that.

<...> annual inflation rate has been above 50%, and according to the World Bank, they have spent more time in recession more than any other nation.

Unfortunately, Argentina's economy is a disaster.

Is this the point where Bitcoin comes in handy??

It comes handy for ordinary people. Not just bitcoin, but gold, dollars, anything that does not devalue by leaps and bounds like their local currency, which they spend immediately because they know that they will be able to buy less tomorrow than they can today.

For a government that keeps spending and spending more and more, I don't think bitcoin will do it much good. If we were talking about a more responsible government in this sense, it would be a different matter.

[Latviand]

~

Aren't they the country that has a free healthcare and college? I think I've heard that about Argentina before, they're inflation is constantly rising. Hopefully they find a way to not remove that free healthcare and college despite the constanty rise in inflation in the country.

[adaseb]

The issue with Argentina might be with many other more developed countries. They had bad inflation before Covid but it seemed to be under control because they hiked fast. Then Covid happened and they cut rates slightly and then the inflation returned and got much much worse. And this time it got worse because it took them longer to hike.

With many countries suffering from inflation this might also become the norm. They hike too slow or they cut rate too early and there is a second wave of inflation worse than the first.

[fillippone]

Is this the point where Bitcoin comes in handy??

It comes handy for ordinary people. Not just bitcoin, but gold, dollars, anything that does not devalue by leaps and bounds like their local currency, which they spend immediately because they know that they will be able to buy less tomorrow than they can today.

I am wondering how much Bitcoin was able to be used in this mix of “hard currencies”.
Are people relying only on dollars? (I have seen the blue dollar rate going vertical after the news).
How much bitcoin usage is widespread amongst the population as an anti inflationary tool?

[EarnOnVictor]

The situation in Argentina is so pathetic and undermanaged as things are getting out of hand monthly. Truly, inflation has been bitting hard since late 2021 but many countries are using measures to tame it, but not Argentina with the recent uprising figures. While the 100% that your topic captioned was not just hit, their inflation figure has been moving above that level at least since February according to Focus Economics.

Their annual average as of Match was 84.8%, but this might continue to rise if a decisive measure is not applied.

[Don Pedro Dinero]

I am wondering how much Bitcoin was able to be used in this mix of “hard currencies”.
Are people relying only on dollars? (I have seen the blue dollar rate going vertical after the news).
How much bitcoin usage is widespread amongst the population as an anti inflationary tool?

As far as I know, and I recently saw a programme about this, people spend the money as soon as they get paid because inflation is so high that it is better to spend today than to wait until tomorrow because in general things will be worth more, and people who can save, what they do with what is left over after spending they immediately convert into dollars, normally on the black market.

I have no data on the use of bitcoin but I think my local forum partner darxiaomi is Argentinian, I will tell him to stop by and let us know.

[DrBeer]

Ever since Argentina's economy nosedived in 2018, it hasn't fully recovered since then, and annual inflation rate has been above 50%, and according to the World Bank, they have spent more time in recession more than any other nation.
 At present, nearly 40% of adults live in poverty as against the 25% at the beginning of the crisis. But this fades in comparison to the first hyperinflationary crisis experienced by the nation from 1989-1991 where it surpassed 3000% annually.
 To make matters worse, Argentina is expected to experience a drought and coupled with inflation, I think the economy is going to suffer a lot as this will affect their key commodity exports: corn, soy and wheat.
 From the outlook of things, the government seem to be at their wits end, and coupled with the fact that they need to remit a lot of money back to the IMF, I think a solution for their predicament need to be thought up and fast.
 Is this the point where Bitcoin comes in handy??

https://www.washingtonpost.com/business/2023/04/06/why-70-inflation-is-just-one-of-argentina-s-problems-quicktake/0d56242a-d499-11ed-ac8b-cd7da05168e9_story.html

Inflation and problems in the economy - the dollar is to blame for everything! We urgently need to join the BRICS, where everyone will be "helped" by China with the yuan, and in a couple of years the country will simply dream of such inflation and such problems!
This is a joke, no offense please

Depends on a situation. There is a claim that one of the reasons for the SYSTEMIC defaults and problems in Argentina is a law passed in the late 80s that pegged the value of the Argentinean currency, the peso, to the expensive dollar. And they say that due to the fact that Argentinean goods have become uncompetitive (expensive), this has led to the decline of the industry.
Sounds good, but far from reality.
Firstly - if you see that such a decision negatively affects the economy - cancel it! And do not use 30+ years! Moreover, everyone is well aware (or is the Argentine government stupid?!) that an expensive currency for the country's economy is bad. Then why pass such laws?
Secondly, it is always easier to "shift the blame on someone / something" than to admit your mistakes and correct them.
Thirdly - the complete absence of "work on the mistakes."

As a result, there are growing fears of a local / global recession and a rapid rise in inflation in the country, which causes investors' fears about possible defaults, and, of course, the unfulfilled tasks of the International Monetary Fund, the political unrest that follows, which leads to problems in the economy, inflation and investment unattractiveness ... This is a classic vicious circle that must be broken, harshly and abruptly, otherwise it will turn into an endless "series"

[davis196]

The economy and finance of Argentina had been a rollercoaster for the last 50 years.
I know that Argentina was a rich and prosperous country in the 19th century up until the first half of the 20th century. I don't know what happened afterwards. Political instability, corrupt and incompetent governments, bad fiscal and monetary policies, the global terms of trade changing to more harsh conditions for the Argentinian export. There are many factors to be blamed for the economic downfall of Argentina.
The government of Argentina will have to cut costs and lower the budget deficit, in order to fight the inflation(and stop money printing, of course). Unfortunately, Argentina is turning into "the new Venezuela".

[darxiaomi]

Well, first to all thanks to Don Pedro Dinero who reach me and noticed me about this thread.

Im Argentinian and i live in Argentina. So if you wanna know something drop your question below and i will try to answer.

How much bitcoin usage is widespread amongst the population as an anti inflationary tool?

Lets talk about this, i think its WIDELY spread the BTC in that mix.

Like in the whole world the old people still full USD or gold/ stock markets assets.
But the youngers are having some BTC in that, in the 2017 bullrun for example a lot of people buy BTC for save, and after that it was a option for ever.

We have here some big national companies who are dedicated to this for example, SatoshiTango, and Rippio. The only porblem with them its they are full KYC and they share all the information with the AFIP (IRS of Argentina, tax authorities).

Binance here in the P2P markets its really really strong now, they make publicity in the streets and also you can check they sponsorship the Argentina League of Football.

We also have a lot of others crypto-companies like buenbit, Lemoncash, etc who also they give debit cards.

After saying that i have to say the more common crypto save in argentina its DAI and USDT, yes some virtual USD. The cultural background still important.

All this its more common in the mid-mid high and high class. WE also have a lot of youngs who develops platforms and some ending being really big.
But in the low class, forget about it, they also still save in pesos (if they have the opportunity), its really sad to see how this people month to month lose his money for the inflation.

So in resume.

Between the young people of the mid and mid high class, YES they have some crypto it can be USDT DAI USDC BTC or ETH.

Are people relying only on dollars? (I have seen the blue dollar rate going vertical after the news).

Full yes, Argentina its the country with the most ammount of USD dollars in money paper, more than USA you can check this fact.

And yes the blue dollar went up, among a internal crisis in the goverment and a big external problem in the macroeconomical side. But the USD blue still behind the inflation rate, so you can expect more up, but lets see tomorrow how the markets open here, its gonna be another amazing day in the never boring Argentina.

I cant explain so much about this because its really a new world itself the Argentina economy.

[DrBeer]

The economy and finance of Argentina had been a rollercoaster for the last 50 years.
I know that Argentina was a rich and prosperous country in the 19th century up until the first half of the 20th century. I don't know what happened afterwards. Political instability, corrupt and incompetent governments, bad fiscal and monetary policies, the global terms of trade changing to more harsh conditions for the Argentinian exports. There are many factors to be blamed for the economic downfall of Argentina.
The government of Argentina will have to cut costs and lower the budget deficit, in order to fight the inflation(and stop money printing, of course). Unfortunately, Argentina is turning into "the new Venezuela".

Unfortunately, this is not the first and not the last example. It's a shame and it's not clear why, a country that has excellent conditions (geographical location, climate, natural resources, population, a good position in the world, .....) and suddenly - defaults, crises, wild inflation ... At the same time, the country is not at war, it does not suffer from terrible natural disasters, it is not terrorized by terrorist groups, it has not been attacked by marsinae ... But everything is going wrong ... Maybe you really need to change approaches, policies, "grab your head" and do the right things , and not engage in populism and fantasies?

[fillippone]

Well, first to all thanks to Don Pedro Dinero who reach me and noticed me about this thread.

Im Argentinian and i live in Argentina. So if you wanna know something drop your question below and i will try to answer.

Thank you for your super interesting report on Argentinian situation.
When someone tells me Bitcoin has no practical use, I often refers too many countries where hyperinflation is a sad reality. Glad to hear at least part of the population is taking advantage of the orange coin to protect their purchasing power.

[DrBeer]

Well, first to all thanks to Don Pedro Dinero who reach me and noticed me about this thread.
Im Argentinian and i live in Argentina. So if you wanna know something drop your question below and i will try to answer.
......

About Argentina, thanks a lot. I was in Argentina about 10 years ago, but as a tourist, I traveled and watched and rested more than I watched the economy.

You spoke interestingly about cryptocurrencies. And now, from you, as from a real resident of the country, about the causes of the problems that exist in the economy? We can imagine anything about the problems of the Argentine economy, and many media love to distort information. It is interesting to hear a real citizen of the country who deeply knows the real causes of the problems? Can you talk about economic problems?

[fillippone]

Apparently, the news was sourced from a financial market broker, expressing his personal view, and those were ungrounded rumours... for now.
The guy has been fired from his firm, and the ARS was little moved (close to close) vs USD.


This is true for the official exchange rate, while the unofficial exchange rate (blue dollar) continued rolling south:



Argentina’s peso, at record lows in black market, stokes market jitters

[D ltr]

 Is this the point where Bitcoin comes in handy??

I think that with the current situation buying bitcoin is not an alternative to solving financial problems that have sunk very deep, because Argentina needs money to pay off their debts which will grow day by day if they are not paid, as we know investing in btc takes a long time if you want to make a profit the big one

[Majestic-milf]

Well, first to all thanks to Don Pedro Dinero who reach me and noticed me about this thread.
I'm Argentinian and i live in Argentina. So if you wanna know something drop your question below and i will try to answer.

So, uhm I've got a question and was hoping you could provide some answers to. Well, I don't know if you'd be in a position to know this, but let me just ask;
 The Argentine pesos is greatly dropping against the dollar and it would be foolish to have your investment in them hence the reason why investors are looking to Bitcoin trading.
- Do you think Bitcoin can be more than just a trading safe haven and instead act as a buffer to the high inflation they are experiencing?
 - Do you think it can ever be considered for adoption to reduce the strong reliance of the US dollars as El Salvador did?

[siniminomorocomunisakito]

Ever since Argentina's economy nosedived in 2018, it hasn't fully recovered since then, and annual inflation rate has been above 50%, and according to the World Bank, they have spent more time in recession more than any other nation.

Is this the point where Bitcoin comes in handy??

I think this is a concerning situation, especially since inflation reaches 100% and this will lead to a devaluation of the national currency and potentially make it more difficult for the country to engage in international trade. I'm also not sure yet whether In a situation like this, some individuals might consider switching to alternative forms of currency, such as Bitcoin or other cryptocurrencies as each country in tackling these issues will likely sit down together and seek economic policies and structural reforms that are wider.

[darxiaomi]

About Argentina, thanks a lot. I was in Brazil about 10 years ago, but as a tourist, I traveled and watched and rested more than I watched the economy.

You spoke interestingly about cryptocurrencies. And now, from you, as from a real resident of the country, about the causes of the problems that exist in the economy? We can imagine anything about the problems of the Argentine economy, and many media love to distort information. It is interesting to hear a real citizen of the country who deeply knows the real causes of the problems? Can you talk about economic problems?

Yes, but i have to say a thing here, we are not similar to any other latinamerican country or sudamerican country.

Argentina was always like a paradise or like a oasis.

For example what its the most know thing about Brazil? (asides of football) yes "Favelas", and that its because Brasil always be a country with 30% rich people and 70% poor people, Argentina was always pure middle class, like a 10% of poor, 70% middle class and 20% rich , we had so little "villas" (poors people sttelments) 30 years ago, now they were big filled with ton of poor people from Bolivia, Paraguay, Peru, etc who comes for better conditions free healthcare education etc, and plus the argentinians who cant maintain his cost of living.

This happen because in our constitution say " for all the men of the world who want to live on Argentine soil: invoking the protection of God, source of all reason and justice: we order, decree and establish this Constitution, for the Argentine Nation". So everybody who comes its and can start and it will be given the Argentinian citinzeship.

For this last you can also see a rain of ukranian and russian people here in Argentina now making his citinzenship, to acces to our passport who its very strong (you can enter without visa to most of the european countries), so they make the passport and they fly to never come.

Another thing, WE NEVER had criminality like now, for us all the drug trafficking violence, like in Colombia and Mexico were things from poor countries, countries who are shit compared to us, we see the images and cant believe how something like that can happen. But now we are starting to experiencing some of this troubles, in a very little way but its starting.... and dont seems good.

So after 50 years of crumbling they finally make it we finally are falling, its really sad i hope we can like ever comeback but for the first time in my life i started to see the social fabric break down.

We are going to be another Brazil another shit third world country (i know you always see us like that but we werent).

This have multiples explanations but its really long to explain and its also really difficult to exaplain.

For the first time in my life i have a lot of friends in Europe, right now i have 4 friends making his Italian citinzeship in Italy, because we have also that benefit to migrate, we can acces "easily" to any european citinzeship, i also have Italian citinzenship, and can opt for others for my ancestors.
But this for the country its also a setback, because we are exporting the best people, all with degrees to other countries.

Apparently, the news was sourced from a financial market broker, expressing his personal view, and those were ungrounded rumours... for now.
The guy has been fired from his firm, and the ARS was little moved (close to close) vs USD.


This is true for the official exchange rate, while the unofficial exchange rate (blue dollar) continued rolling south:



Argentina’s peso, at record lows in black market, stokes market jitters

Right now just hit the 500 pesos, the only good thing its see the big ammount of memes we are making.

[avikz]

 Is this the point where Bitcoin comes in handy??

Not really! Unless they scrap their own currency system and completely move to bitcoin, there no way bitcoin can help. Adopting bitcoin as a legal tender in Argentina, is not a solution to their hyper inflation issue. It might help a little bit largely it won't have any impact on their economy to be honest.

They will have to eradicate their entire currency supply if they want to come out of this and then the government needs to start sharing bitcoin as per the net worth of their citizens. This entire task is impossible so Bitcoin can't help here.

[Fiatless]

Well, first to all thanks to Don Pedro Dinero who reach me and noticed me about this thread.

Thank you @darxiaomi for this firsthand information. It is always great to hear from bitcoiner that are located in the country of discussion. We also have the same condition in my country where the young are attracted to Bitcoin while the elderly see it as something strange or sometimes a fraud. Our currency is also losing value every day and people are desperately changing their money to other currencies like Bitcoin. The wide acceptance of bitcoin by the younger generation globally is a sign that when this generation takes over both political and economic governance from the older generation, Bitcoin might be treated in a more friendly manner. All that is needed is intensive Bitcoin awareness and education.

.
But this for the country its also a setback, because we are exporting the best people, all with degrees to other countries.

Right now just hit the 500 pesos, the only good thing its see the big ammount of memes we are making.

Very soon there will be no doctors, nurses, teachers, engineers, etc, because the depreciation of the pesos will attract them to migrate to countries where the can earn h dollars.