Argentina's Currency Black Market • Hacker News Board

Re: Argentina's Currency Black Market

#91

Post by Nicholas_C » Tue, Oct 29, 2013, 12:52 AM UTC

rafaelm wrote: post #58

antsar wrote: post #41

Earlier quoted context omitted.

Possibly ignorant American here. You have a limit on what you are allowed to spend on online purchases? How is it enforced and by whom?

Yes, it's enforced by the government. Same goes for those travelling abroad. You get a maximum of $2500 per year for travel. The govt office in charge of the control is called cadivi.

I work for a company that does business in Venezuela. Companies that go through Cadivi have a hard time paying us, the government just doesn't want to let money out of the country. Doing business with any Venezuelan company unless it's government owned is an absolute pain. Those that are government owned, from what I have seen, don't have to go through Cadivi. The strange thing is, some companies have minimal problems with Cadivi and require a lot less paperwork, while others have a terrible time getting any USD to us. I'm guessing some of them are greasing the wheels a little more than others.

Re: Argentina's Currency Black Market

#92

Post by kyllo » Tue, Oct 29, 2013, 1:25 AM UTC

aliston wrote: post #60

jhandl wrote: post #26

Earlier quoted context omitted.

The Cedin trades for official dollars... How is that better than selling bitcoins?

As I understand it, this isn't really a money loop. The 6:1 exchange rate really only applies when you're a tourist going to pesos from dollars through a bank. You could also go to pesos from dollars at 10:1 on the black market. However, going the other way is really difficult -- to exchange at a lowly 6:1, you will need to have a receipt indicating that you purchased at 6:1 and to fill out some paperwork... and even…

It's really just, "make lots of dollars outside of the country, sell them at the black market rate, and live like a king off the large number of pesos/bolivars you get."

Re: Argentina's Currency Black Market

#93

Post by rafaelm » Tue, Oct 29, 2013, 1:40 AM UTC

Nicholas_C wrote: post #91

rafaelm wrote: post #58

Earlier quoted context omitted.

Yes, it's enforced by the government. Same goes for those travelling abroad. You get a maximum of $2500 per year for travel. The govt office in charge of the control is called cadivi.

I work for a company that does business in Venezuela. Companies that go through Cadivi have a hard time paying us, the government just doesn't want to let money out of the country. Doing business with any Venezuelan company unless it's government owned is an absolute pain. Those that are government owned, from what I have seen, don't have to go through Cadivi. The strange thing is, some companies have minimal problem…

You are not far from the truth. Those companies owned by government officials and their friends get to buy dollars via Cadivi at the official rate of Bs.6.3 per dollar, while everyone else is stuck buying at the black market rate of Bs.50 per dollar.

You can imagine how lucrative that is. It's basically a money printer. Buy at Bs.6.30, sell at Bs.50 then repeat...

But the government tries to blame the inflation and corruption on some venezuelan tourist that takes their $2500 yearly allowance and finds a way to convert that to cash.

Re: Argentina's Currency Black Market

#94

Post by dbpatterson » Tue, Oct 29, 2013, 1:48 AM UTC

jamesaguilar wrote: post #74

icebraining wrote: post #49

Earlier quoted context omitted.

No, you only pay in advance when you take the bus. When you take a cab/taxi, you set the rate in advance, but only pay at the end (when the currency is less valuable).

I still don't get it. Let's say the real price is 1 peso per mile for both services. You want to travel 100 miles. On the bus, you pay 100 pesos up front. In the taxi, the meter is set to one peso per mile. Then you pay 100 pesos at the end. Unless you are going to convert from some other good into pesos and then pay, the cost is still the same.

It only makes sense if you were going to (hypothetically) do something with the pesos. Let's say you bought 100 pesos worth of bananas when you hopped in the cab. Then, when you got out, before you paid, you sold the bananas. Because of inflation, you got more pesos for the bananas (say, 150 pesos), and still only had to pay 100. So at the end of the trip you have 50 pesos you wouldn't have had if you had to pay at the beginning (and couldn't buy your bananas).

Re: Argentina's Currency Black Market

#95

Post by chii » Tue, Oct 29, 2013, 1:55 AM UTC

JVIDEL wrote: post #81

This black market the arbolitos (literally "little trees", a joke on individuals selling "green bills" ergo leaves, you get the point) has existed for decades and comes and goes whether currency exchange controls go up. The real black market is the hidden one, the one where millions are moved every day. Just because members of government banned currency exchange doesn't means they and their friends can't buy dollars…

how does this happen?

How can wealth be sapped like this over a few decades? is it because of true malice, or incompetenance?

What would one do to try and prevent such from happening in one's country?

Re: Argentina's Currency Black Market

#96

Post by chii » Tue, Oct 29, 2013, 2:03 AM UTC

marquis wrote: post #84

droopyEyelids wrote: post #57

Earlier quoted context omitted.

How would a person bring cash into the country?

You can legally carry up to US$10,000 in cash without declaring it at customs, I believe.

i don't get this declaring business - does it mean declaring you have more than $10k USD makes it legal? or does it just mean you've just confessed to a crime?

Re: Argentina's Currency Black Market

#97

Post by marquis » Tue, Oct 29, 2013, 2:08 AM UTC

chii wrote: post #96

marquis wrote: post #84

Earlier quoted context omitted.

You can legally carry up to US$10,000 in cash without declaring it at customs, I believe.

i don't get this declaring business - does it mean declaring you have more than $10k USD makes it legal? or does it just mean you've just confessed to a crime?

It's illegal to not declare if you have more than $10k USD when crossing borders. All the custom forms I have seen around the world have something along these lines, in various amounts and currencies.

Re: Argentina's Currency Black Market

#98

Post by [deleted] » Tue, Oct 29, 2013, 2:08 AM UTC

marquis wrote: post #97

chii wrote: post #96

Earlier quoted context omitted.

i don't get this declaring business - does it mean declaring you have more than $10k USD makes it legal? or does it just mean you've just confessed to a crime?

It's illegal to not declare if you have more than $10k USD when crossing borders. All the custom forms I have seen around the world have something along these lines, in various amounts and currencies.

[deleted]

Re: Argentina's Currency Black Market

#99

Post by dllthomas » Tue, Oct 29, 2013, 2:12 AM UTC

marquis wrote: post #97

chii wrote: post #96

Earlier quoted context omitted.

i don't get this declaring business - does it mean declaring you have more than $10k USD makes it legal? or does it just mean you've just confessed to a crime?

It's illegal to not declare if you have more than $10k USD when crossing borders. All the custom forms I have seen around the world have something along these lines, in various amounts and currencies.

That didn't really answer the question though. Is it a choice between "follow one law by confessing you broke another" vs. "break two laws and maybe not get caught"? Or is it a choice between "break one law" or "don't"?

Re: Argentina's Currency Black Market

#100

Post by yetanotherphd » Tue, Oct 29, 2013, 2:22 AM UTC

The situation is simple and tragic.

Rather than implementing an honest tax, so that they can pay off foreign debt, the government fixes the exchange rate so that it can pay of its debt for cheaper. However doing so is effectively a hugely distortionary tax on its own citizens.