Why does Argentina always have such a volatile currency?
Simply bad monetary policy. Argentina has a long history of resorting to money printing for its budget deficit and every generation thinks they will get away with it.
Argentina’s black-market USD rate climbs 24% in two weeks
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Re: Argentina’s black-market USD rate climbs 24% in two weeks
#52Why 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…
My SaaS product has problems with users sharing accounts - more than half the problematic users are Argentinians :(
Inevitably I will simply have to withdraw from the market there...
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#53Earlier 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
More:
* Huge asset bubble in the 1980's.
* The Nikkei 225 stock market indicator reached a high of about 40k in 1989, but dropped to a quarter with the collapse of that asset bubble, and has not recovered that yet (it just recently hit 30k). This period was known as the "lost decade" [1]
* Japan has had very low (near zero) rates for nearly three decades, more than twice as long as the rest of the world.
* Demographics: the transition to low birth rates, shrinking and ageing population started earlier than most other countries
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#54Why 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…
> 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
This sounds like an issue with capitalism and the rest of your comment aligns with that too. You also pointed out the dissonance between the complaints people have about the govt and the similar actions they take - I think a lot of that has the same cause. We have bad incentives at multiple levels because it's the water we're all swimming in
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#55Why 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 is a common argentinian conception, and it is a big misconception. Gov corruption is a lot worse in the united states. It's just that corruption is not a 1-1 correlation with the success of an economy.
Argentina has a poor economy because it is a half-capitalist half-socialist country.
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#56For those on the "it's-fine-to-print-money-at-will" bandwagon, please meditate on at least this part: > “everything starts with a large fiscal imbalance, which becomes a monetary imbalance due to printing [money] to finance the deficit.” Says the chief economist of the Agricultural Foundation for the Development of Argentina. A.k.a. someone in one of the best places in the world today to really know this stuff.
Sounds like they should separate fiscal policy and monetary policy like the US, Congress/President and the Federal Reserve.
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#57Earlier quoted context omitted.
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).
The illegal dollar market is not where major operations are done, and so, it doesn't affect anything to a great degree. It's small in the sense a few big whales can manipulate it.
> It's not that the dollar goes higher: the peso goes down.
Well, yes. If you are from Argentina, you know what I meant. If the agricultural sector only "thinks in dollars", then why do they regularly push for a peso devaluation, talk about "competitivity" of the peso vs the dollar, and must be forced to liquidate their dollars in a reasonable time? They obviously care about the relative value of the peso vs the dollar.
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#58Earlier quoted context omitted.
But it is , just the government. They refuse to cut down on deficit spending, keep a hopelessly intractable tax system, and they keep the money printer running non-stop to keep up. It doesn't help that they keep one of the most unenviable levels of corruption, either. And it's not limited to the current government, their previous one was woefully incompetent at fixing deficit spending. But it can't also be denied tha…
> But it is, just the government. I really don't think it is just the government, nor is it the lack of cutting down deficit spending, nor the tax system. I try to take a more historically grounded view. I don't think there are easy answers though. I believe the view that "there's the government, and there's this bunch of innocent businessmen at the mercy of big bad government" is not very compelling, for various rea…
The dictatorship is 'some businessmen' to you? That's an strange interpretation.
And Macri's business become big thanks to its links to government (you can check the story of 'grupo macri' in wikipedia).
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#59How does the "official" exchange rate work? The gov says the peso is worth way more than it really is, so can't you exploit that to get really cheap dollars? Do they only allow "one way" official exchanges, from dollars to pesos?
You have an infinite amount of restrictions around how much, when and what you need to do to get them. Basically rationing.
Re: Argentina’s black-market USD rate climbs 24% in two weeks
#60How does the "official" exchange rate work? The gov says the peso is worth way more than it really is, so can't you exploit that to get really cheap dollars? Do they only allow "one way" official exchanges, from dollars to pesos?
There are many draconian measures in effect making practically any attempt at arbitraging illegal.