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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

#161

Post by the_af »

bloomingeek wrote: post #102
likortera wrote: post #22

Earlier quoted context omitted.

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 wife and I vacationed in Buenos Aires a few years ago because we read it was the Paris of the south. We enjoyed our trip, but what we found was far from Paris! We rented a nice apartment from an expat from Michigan who married a Argentinian. In an email he practically begged us to bring $100 bills, which he would exchange for pesos at a much better rate then was available from local banks, which he thankfully did.…

> My wife and I vacationed in Buenos Aires a few years ago because we read it was the Paris of the south. We enjoyed our trip, but what we found was far from Paris!

When people describe Buenos Aires as "the Paris of the south", this is what they mean:

That we have a great deal of Parisian looking architecture, especially in our "historic" sections of the city, such as microcentro.

That we have a greater deal of European influence than our Latin American neighbors. (There's also a racist implication that we are "whitest". Argentinians care a lot about skin colors, and for us, calling someone a "negro" is a common insult. There's a confusing exception here -- "negrito", "negri" or "negro" is an endearing term you can call a friend, but it's always insulting if you refer to poor people, "esos negros", "qué negros", etc).

Historically, the upper classes of Buenos Aires looked up to Paris. This has been replaced for admiration of the US, a long time ago, and is no longer relevant.

As for scheming locals and dubious tours: I find these to be the norm in many European cities as well. I was marked for tricking/mugging in Paris, Barcelona and Rome, so... another European influence I guess?

Dirt and poorly maintained infrastructure: sadly, you're right. We porteños -- the people from Buenos Aires -- are a very dirty people and we like throwing garbage on the streets, breaking public stuff, urinating in whatever place, etc.

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

#162

Post by kragen »

Retric wrote: post #158
notch656a wrote: post #147

Earlier quoted context omitted.

These kind of fluctuations that average out make the money useful on an immediate or long-term timeline, with the cost of medium-term fluctuations (think hold under a few months or over 5 years). Fiat as currently found in places like the US makes the money useful in the immediate or medium term timeline (think under 5 years). I think which you prefer depends on your station in life and your spending choices. Persona…

Being able to store value as currency for long periods is a bug not a feature as it does bad things to the economy. Lets’s say you want to store gold in your basement for bad times like a famine. Great you and everyone else has 1+ oz of gold when a famine hits, but society didn’t actually get any more food so everyone having gold is not just pointless but wasteful both to mine the stuff and to keep it protected from…

This is a specious (ha!) argument because the total amount of effort required to safeguard precious metals is so small, because the metals themselves are so small. Gold currently costs US$55.92 per gram. Gross world product is US$80 trillion per year over 7.9 billion people; this works out to US$10.1k per person per year, or US$770k per person per 76-year lifetime. The lifetime earnings of an average person are thus 14 kg of gold, less than a liter.

It does not require a significant fraction of your lifetime to dig enough of a vault to protect a liter of gold from thieves, nor to mine it. The impact on overall economic productivity is probably similar to that of spelling "through" as "through" rather than "thru".

You can easily wear a year's wages as jewelry, or a lifetime's wages with more difficulty, which has historically often been useful when you're fleeing famine-stricken areas. Stocks have usually been less useful; protecting a stock portfolio from disaster requires active investment management and is generally infeasible during wars and famines.

It is true that collectively we need to store food, not gold, to prepare for famines. It is a mistake to leap from this fact to the conclusion that everyday people should not be allowed to save money. You might or might not be aware that until roughly the transition to fiat currency in 01971 saving money was a canonical example of responsible adult behavior in the US, much like doing your tax returns, separating your recycling, or investing in an index fund today.

I've presented a better argument for why being able to store value as currency is harmful in https://news.ycombinator.com/item?id=32258546. I'm not completely convinced by it but it's at least not completely specious.

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

#163

Post by notch656a »

Retric wrote: post #158
notch656a wrote: post #147

Earlier quoted context omitted.

These kind of fluctuations that average out make the money useful on an immediate or long-term timeline, with the cost of medium-term fluctuations (think hold under a few months or over 5 years). Fiat as currently found in places like the US makes the money useful in the immediate or medium term timeline (think under 5 years). I think which you prefer depends on your station in life and your spending choices. Persona…

Being able to store value as currency for long periods is a bug not a feature as it does bad things to the economy. Lets’s say you want to store gold in your basement for bad times like a famine. Great you and everyone else has 1+ oz of gold when a famine hits, but society didn’t actually get any more food so everyone having gold is not just pointless but wasteful both to mine the stuff and to keep it protected from…

I was going to write a rebuttal, but instead I focus on an amusing byproduct of your points and points above:

1) low inflation good because long-period storage bad

2) Government mishandling of fiat policies also bad

3) 3rd party custody is expensive

The solution: radioactive commodity money of high enough density for self-custody. Maybe one with a half-life of like 20 years. Tritium is a close candidate. Keep your life's wealth in tritium in one pocket and your gat in the other.

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

#164

Post by kragen »

FabHK wrote: post #148
notch656a wrote: post #145

Earlier quoted context omitted.

I see we're allowed to pick arbitrary timescales for measuring inflation. Lets measure a few 50 year periods instead of annual periods: 1970-2020 : ~560% 1920-1970 : ~ 94% 1870-1920 : ~ 53% 1820-1870 : ~ 12% If memory serves, we went completely fiat in ~1974, or roughly the beginning of the 1970-2020 period.

Inflation over half a lifetime is not really relevant. For investors, large savings should be in productive assets (debt or equity), and real rates (on bonds) or real returns (on shares) have been positive. For non-investors, real wages are much more important. But even including the high inflation in the 1970s and early 1980s (which Paul Volcker famously vanquished), that period from 1970 to 2020 averages less than…

See https://news.ycombinator.com/item?id=32258546 for why 4% inflation over decades is relevant to average people. Dollar inflation over the past year has been I think 9%, higher than at any time since Volcker supposedly vanquished it. It's anybody's guess whether the vanquished inflation will be 0% or 15% over the next year.

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

#165

Post by fomine3 »

plantain wrote: post #52
likortera wrote: post #22

Earlier quoted context omitted.

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...

Do you offer different price by country, like Netflix? If so, possibly worldwide abusers just impersonate as Argentinian and share the account.

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

#166

Post by kragen »

yuan43 wrote: post #63

> Although Argentines are used to high inflation, during the first semester of 2022, inflation hit over 36,2%, and in the last 12 months it registered a 64% increase. Wikipedia notes: > In 1956, Phillip Cagan wrote The Monetary Dynamics of Hyperinflation, the book often regarded as the first serious study of hyperinflation and its effects ... . In his book, Cagan defined a hyperinflationary episode as starting in the…

24% every two weeks would be 59.6% inflation per month, but I don't think we're there yet; I think it's been about 35% so far over the last month. But I don't see why you'd say it's "far away from hyperinflation". We might go over the hyperinflation line next month.

The INDEC inflation figures are, yes, 100% fake, and the controversy didn't end in 02015 (my guess is that somebody wrote that paragraph of that article in 02015). In 02001 AR$1 was worth US$1 (US$1.67 in 02022, deflating according to US BLS CPI figures according to https://www.usinflationcalculator.com/) and today it's AR$321 per US$1 according to https://preciodolarblue.com.ar/, thus AR$536 today is worth AR$1 in 02001. That's an average of 34.9% inflation per year. Some years it's been higher than that — 02001 is when the government dropped the dollar peg that had been strangling our economy but holding back inflation, at which point the peso immediately lost about 75% of its value before bouncing back — but the INDEC figures don't come anywhere close to the truth. A friend of mine was one of the numerous people who resigned from INDEC over this.

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

#167

Post by kragen »

outworlder wrote: post #86
randyrand wrote: post #46

How 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's an official exchange rate. If you are a tourist and you want to buy pesos, you have to buy at the official exchange rate. Of course, there will be other places that will give you rates that are closer to that the actual market value is. They may be disguised as place selling collectable coins or whatever. At some stores, they may give you a much higher rate if you buy their stuff with foreign cash. USD and BR…

About 30% of the stores in "arbolito" areas are willing to buy dollars at the black-market rate, and maybe 0.1% of them will report you to the police for asking.

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

#168

Post by kragen »

likortera wrote: post #107
bloomingeek wrote: post #102

Earlier quoted context omitted.

My wife and I vacationed in Buenos Aires a few years ago because we read it was the Paris of the south. We enjoyed our trip, but what we found was far from Paris! We rented a nice apartment from an expat from Michigan who married a Argentinian. In an email he practically begged us to bring $100 bills, which he would exchange for pesos at a much better rate then was available from local banks, which he thankfully did.…

You can consider yourself lucky if you didn't have your phone stolen at gun point

No post body was provided.

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

#169

Post by Retric »

kragen wrote: post #159
Retric wrote: post #155

Earlier quoted context omitted.

Averaging inflation over 50 years is dressing for the average annual temperature rather than how hot it actually is today. The best measurement of stability is to take the absolute magnitude (1) value of inflation or deflation and average that. 20% deflation does horrific things to the economy and alternating randomly between 25% inflation or 20% deflation would insanely destructive. (1) 20% increase and 20% decrease…

Surely we can all agree that fiat currencies are often less volatile than commodity currencies but have higher average (signed!) inflation, but looking at the development of the US economy during the 01776–01932 period we're talking about, I wonder what you are thinking of when you say "does horrific things to the economy ... would [be] insanely destructive". You may or may not be aware that during that time period t…

It’s hard to compare economies over such timescales, but in terms of PPP per capita the US was shockingly flat from 1776 to 1900.

The overall GDP exploded due to a larger population and industrialization was in full swing, but people where also forced to farm more marginal land in the mid west largely using the same techniques from 130 years prior. The US started with extreme abundance of old growth forests, wild animal and fish populations, and farming some of the most productive land on the planet. The US was considered a land of opportunity for so long largely because there was so much to exploit, but people didn’t move to the west and then Alaska because the economy was booming.

From 1900 to 1970 things far more consistently expanded with multiple boom times, but the Great Depression also shouldn’t be ignored. If anything it shows that a steady and growing economy is largely preferable to one with moderately faster growth but significantly more wild swings.

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

#170

Post by Retric »

kragen wrote: post #162
Retric wrote: post #158

Earlier quoted context omitted.

Being able to store value as currency for long periods is a bug not a feature as it does bad things to the economy. Lets’s say you want to store gold in your basement for bad times like a famine. Great you and everyone else has 1+ oz of gold when a famine hits, but society didn’t actually get any more food so everyone having gold is not just pointless but wasteful both to mine the stuff and to keep it protected from…

This is a specious (ha!) argument because the total amount of effort required to safeguard precious metals is so small, because the metals themselves are so small. Gold currently costs US$55.92 per gram. Gross world product is US$80 trillion per year over 7.9 billion people; this works out to US$10.1k per person per year, or US$770k per person per 76-year lifetime. The lifetime earnings of an average person are thus…

First you can most of the benefits of gold as a currency by just buying gold and then selling it in 40 years. At a personal level a gold backed currency doesn’t change much. Anyway, if gold was actually the words medium of exchange it’s value would be vastly higher.

A reasonable estimate is the value of the worlds gold would equal the value of the words current money. As it’s a nice round number the US’s 20 Trillion M1 money supply and ~20% share of the world GDP suggests something like 100 Trillion for a reasonable estimate for the words supply of gold in that hypothetical situation.

The actual supply of gold is around 400,000,000 lb. So in that hypothetical world 1 lb of gold would in theory be worth ~100,000,000,000,000 / 400,000,000 = 250,000$/lb. Let’s again simplify to ~10x as much.

But wait if it’s worth 10x as much two things happen first it’s used less often in electronics etc which directly hurts the economy, but next it’s vastly more profitable to mine and thus the world spends more effort mining stuff that just sit’s in a vault. Except, governments can’t safely issue currency without being able to back it up with gold so they need to buy up most of this mined gold and then securely transport, store, inspect it etc.

As to keeping it in your own vault, you can secure it all you want that just makes home invasion vastly more profitable. As long as you have access to your gold at home, so does anyone with a gun to your head.

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