[2014-06-13] Bitcoin in Argentina - If it can’t make it there

[epere]

http://www.economist.com/blogs/schumpeter/2014/06/bitcoin-argentina

ARGENTINA and Bitcoin would appear to be a match made in heaven. On the one side stands a country which since the second world war has suffered numerous bouts of inflation, and even hyperinflation--rising to as high as 20,000% in the late 1980s (see our recent briefing on the country). Things are better these days, but inflation is still expected to hit 38% by the end of the year.

[1713617316]

1713617316

[1713617316]

1713617316

[Lethn]

I'm amazed that the economist is even talking about this possibility? Why I aren't they doing the usual "Deflation is bad for the economy because I say so!" crap?

[solex]

I'm amazed that the economist is even talking about this possibility? Why I aren't they doing the usual "Deflation is bad for the economy because I say so!" crap?

That article is really good and a balanced view.

The author uses the tagline "Schumpeter" which is significant because Schumpeter knew his stuff and would have crushed the Keynesian inflationistas who infest current governments.

[Bit_Happy]

On the other is a crypto-currency, backed by cold mathematics rather than a populist government. It is meant to provide protection against inflation. And it allows getting around the cepo, the set of legal restrictions put in place to prevent money from leaving the country. Legal purchase of dollars, for instance, is subject to fixed monthly limits at the exchange rate set by the government (usually 30-40% less than the black market rate). Credit-card transactions made outside Argentina incur a 35% surcharge.

Talk about weak competition: 35% surcharges? !
If anyone sees this who lives down there:
Is that a Gov't enforced charge, and if not why doesn't competition make at least one major card charge much less?

[bryant.coleman]

Legal purchase of dollars, for instance, is subject to fixed monthly limits at the exchange rate set by the government (usually 30-40% less than the black market rate). Credit-card transactions made outside Argentina incur a 35% surcharge.

WTF? This is really horrible. Something is seriously wrong with the Argentines, if they don't protest against this blatant exploitation. A 35% surcharge is unheard of in any other part of the world. 

[Bit_Happy]

WTF? This is really horrible. Something is seriously wrong with the Argentines, if they don't protest against this blatant exploitation. A 35% surcharge is unheard of in any other part of the world. 

If government enforced, then it is possibly a "brilliant" way to get their people to spend money at home instead of purchasing from other countries. If not, how could all ~4 credit card companies have the same huge fee without enough competition to make it shrink/disappear?

[CoinMode]

I'm amazed that the economist is even talking about this possibility? Why I aren't they doing the usual "Deflation is bad for the economy because I say so!" crap?

Because the big dogs in banking that control the media have finally figured bitcoin out and started buying in by the millions. There will be some extremely positive news stories about bitcoin almost every day next year.