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Argentina’s black-market USD rate climbs 24% in two weeks

argentinareports.com

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Re: Argentina’s black-market USD rate climbs 24% in two weeks

#41

Post by tristor »

mastax wrote: post #40
azinman2 wrote: post #2

Why does Argentina always have such a volatile currency?

I'm no expert, but my understanding is that: 1. Low value of exports leads to a trade imbalance and long term decline in foreign currency reserves. 2. The government prints money to spend not on productive investments to solve 1. but on vanity projects or more-or-less bribes for their constituents to stay elected, leading to inflation. 3. Many historical periods of high ARS inflation leads to a lack of confidence in…

This is pretty accurate, but somewhere between step 8 and 9 or step 9 and 10 is "Argentinian government 'resets' the currency, causing even deeper loss of confidence"

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#42

Post by argentinian »

the_af wrote: post #30
kragen wrote: post #23

Earlier quoted context omitted.

As this comment illustrates, partisan propaganda in Argentina is effective at getting much of the population to blame anybody except the ruling party, who somehow believe that "widespread speculation" is something that doesn't happen in countries like the US, the UK, Taiwan, Japan, etc. The current ruling party (the one that likes to blame the agricultural sector) just signed up for some new unpayable loans from the…

Please follow HN's guidelines and be respectful. I've no particular respect for the current government, and I did mention "it's not just the government", meaning I believe part of the blame is theirs. Do you deny the agricultural sector is one of the most powerful in Argentina, and one that speculates on the dollar and has a vested interest in it going higher? Do you deny the illegal dollar market is relatively small…

Prices of commodities are expressed in dollars and are global. The agricultural sector thinks in dollars, not in pesos. It's not that the dollar goes higher: the peso goes down.

The illegal dollar market is not small, and its prices change similarly to the legal dolar market (mep, ccl).

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#43

Post by tptacek »

likortera wrote: post #22
azinman2 wrote: post #2

Why does Argentina always have such a volatile currency?

I lived for 20 years there. In my opinion the root of all problems there is that it is embedded in the culture to be as egoist as possible and to steal as much as you can from everyone else in the most ruthless and shameless possible way. People usually complain about the government being corrupt and stealing to the people. But most people are the same, at their own level. They will try to steal as much as they can a…

If you want to make whatever point you're trying to make here, you have to write it a lot more carefully than this. Imputing negative traits to entire nations or cultures is explicitly not OK on HN:

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#44

Post by rr888 »

paraph1n wrote: post #20
gringoDan wrote: post #16

Reminds me of the old line that there are 4 types of economies: 1. Developed 2. Underdeveloped 3. Japan 4. Argentina

What's unique about Japan's economy?

Not much any more, but in the 90s and 2000s, having zero, or negative interest rates was a real peculiarity. People couldn't figure out how it could happen or why Japan couldn't fix it. Meanwhile 20 years later we've all been in the same boat.

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#45

Post by wbsss4412 »

mastax wrote: post #40
azinman2 wrote: post #2

Why does Argentina always have such a volatile currency?

I'm no expert, but my understanding is that: 1. Low value of exports leads to a trade imbalance and long term decline in foreign currency reserves. 2. The government prints money to spend not on productive investments to solve 1. but on vanity projects or more-or-less bribes for their constituents to stay elected, leading to inflation. 3. Many historical periods of high ARS inflation leads to a lack of confidence in…

11. Due to extremely taxes and an extremely unfavorable official exchange rate, citizens hoard dollars illegally and it exacerbates their currency reserve problems.

Note that 11 is really an issue of both government policy and the culture. Tax evasion is both a response to inflation and a result of a culture that doesn’t see an issue with putting private benefit over public good.

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#47

Post by wbsss4412 »

the_af wrote: post #11
azinman2 wrote: post #4

Earlier quoted context omitted.

But this isn’t the first time. You’d think they’d learn their lessons. So something is amiss— perhaps they don’t have a choice? And if so, why?

It's not just the government. There's a broader problem, including unpayable loans from the IMF, lack of dollars leading to restrictions, some things are traded in dollars since our last dictatorship (e.g. real estate) and this is difficult to change, and widespread speculation of our agricultural sector (one of the most powerful groups in Argentina). Also: the black market of dollars is relatively small and also eas…

How can you verify the actual size of the black market dollar?

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#49

Post by axlee »

_plg_ wrote: post #25
paraph1n wrote: post #20

Earlier quoted context omitted.

What's unique about Japan's economy?

"As of 2022, the Japanese public debt is estimated to be approximately US$12.20 trillion US Dollars (1.4 quadrillion yen), or 266% of GDP, and is the highest of any developed nation." https://en.wikipedia.org/wiki/National_debt_of_Japan

Also unique in that the public debt is mostly held by citizens or local corporations (92%).

For reference, that figure is ~75% for the US, and between ~75 and 50% for most EU countries. Fun fact, the largest foreign debt holder of the US is...Japan.

Re: Argentina’s black-market USD rate climbs 24% in two weeks

#50

Post by odiroot »

likortera wrote: post #22
azinman2 wrote: post #2

Why does Argentina always have such a volatile currency?

I lived for 20 years there. In my opinion the root of all problems there is that it is embedded in the culture to be as egoist as possible and to steal as much as you can from everyone else in the most ruthless and shameless possible way. People usually complain about the government being corrupt and stealing to the people. But most people are the same, at their own level. They will try to steal as much as they can a…

This sounds very familiar to a person from an ex-Warsaw-Pact state. My family told me similar stories about our communist times, when I was growing up.

People just got by with stealing and hustling.

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