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As I live here and have a consulting company here, I'm familiar with the complexities of dealing with dollars. I'm a hacker by nature and spend a lot of time no

As I live here and have a consulting company here, I'm familiar with the complexities of dealing with dollars. I'm a hacker by nature and spend a lot of time now trying to 'hack' the financial world of the Argentine peso. In that sense I think the article is worth posting. Incidentally, Argentina must do this because they have no access to foreign capital markets due to things like seizure of YPF, devaluation of the peso in 2001, and failure to pay back the lenders they still owe, etc. Foreign currency reserves just keep dwindling. As China slows down and demand for soybeans drops, Argentina is really, really going to have a hard time. So though it seems crazy there is some "reason" for it (I'm not trying to make a political comment, I personally think it's crazy and they should radically open the market, but my point is that it's not exclusively xenophobia that is driving this policy). Unfortunately the policy just pushes the trade to the black market. One of the interesting things here is that if you need pesos, and you have some access to USD, you make an instant 20-25% on your money. The "black market" (they call it "blue" here because it seems nicer) continues to diverge. If you're a hobbyist economist like myself, it's really fascinating to watch market risk priced into a currency in realtime as seen by the "blue"-vs-official rate spread.

kokey 14y ago
Having to fake an exchange rate sounds like the economic conditions in badly run countries like Venezuela, Zimbabwe, Russia, etc. What I am wondering is, with a depressed economy like that in Argentina, what is crime and personal safety like? I am particularly wondering about violent crimes for money, because how people react to a bad economy is determined quite strongly by culture and not just the economic situation alone.
- adjwilli 14y ago
  The Argentina economy isn't in a depression or recession, just oddly managed. But yes, crime, especially robberies, is extremely high.
  - wslh 14y ago
    If you look at these months results it is going to the recession route
- batista 14y ago
  >Having to fake an exchange rate sounds like the economic conditions in badly run countries like Venezuela, Zimbabwe, Russia, etc. "Badly run countries"? Zimbabwe maybe, but for Venezuela and Russia, I beg to differ. They are doing things THEIR way, not the US/neo-liberals way that would like a better slice of the pie, but Venezuela is much better off than all the dictatorships and banana republics in the region, and Russia is way better than when Yeltsin did things that benefited certain foreign interests...
  - tatsuke95 14y ago
    Things always look dandy in the oil exporting countries when oil prices are high. Iran, Venezuela and Russia all fall under this category. Their political, social and economic cracks begin to show when they can no longer throw oil dollars at problems.
    - rafaelm 14y ago
      Chavez announced a couple of years ago that Venezuela had a "bulletproof" economy and that we would not be affected by the evils of the capitalist breakdown. As soon as oil prices went down, our economy started shrinking. When oil prices are lower, the government cannot keep the fake value of the Bolivar and they have to devalue. In the end, the people pay the price with ultra-high inflation rates (28% in 2011).
  - rafaelm 14y ago
    The Venezuelan way is faking the value of the Bolivar and pushing everyone to the black market to buy dollars.The official rate is Bs.4.30 per dollar. The black market rate is almost Bs.10 per dollar. Are you aware that most of the products we consume here are imported? Venezuela almost does not produce anything other than oil. So , the clothes you buy, the medicines,food,etc,etc, everything has to be imported. Not everyone gets access to dollars from the government , so you have to buy dollars in the black market to import products. This causes the 25-28% yearly inflation rate we have. In the end, the people pay the price. The solution from the government against the black market rate : make it illegal to even talk about the black market rate. Basically,censor it. I hardly think that is the proper way to run an economy.
- diegofr 14y ago
  Depressed economy? Argentina's economy is growing since 2002 http://en.wikipedia.org/wiki/File:Latin_America_GDP_per_capita_1991-2011.png http://en.wikipedia.org/wiki/File:Latin_America_GDP_per_capi...
  - wslh 14y ago
    Argentinian Economy is slowing. Just look at this year results. It seems to go to an stagflation stage. If you are Argentinian you know why the economy was growing since 2002: A local minima on previous years, devaluation, Soy and other commodities rising more than 2x and the farm sector investment on improving the efficiency with technology.
    - diegofr 14y ago
      Thanks for confirming my point. But, I'm afraid I can't confirm your presages.
      - wslh 14y ago
        I was not confirming your point... you only said that Economy was growing since 2002. Obviously nobody (that I know) see the future.
        zfran 14y ago
        You did confirm it. He said the economy has been growing since 2002 and that's true even if the growth rate has slowed down. Going from 7% to 3% annual growth rate is still a growing economy.
        wslh 14y ago
        Discounting inflation the economy is contracting in June
- olegious 14y ago
  Russia has it's issues, but lumping it with Zimbabwe and Venezuela is ridiculous and shows how little you know about all three countries.
  - olegious 14y ago
    Here are some quick facts for the downvoters- Russia has one of the world's largest foreign currency reserves, a tech scene that has produced some world-known companies/products (Yandex, Rambler (nginx), KupiVIP, etc) and a fairly lively startup scene. It also isn't bad place to visit for a tourist- I can go on and on, but the point is even a rudimentary knowledge of the subject should prevent people from making these types of generalizations.
    - olegious 14y ago
      I love the downvoters who don't respond, just downvote.
    - dredmorbius 14y ago
      It's also among the most corrupt major economies in the world. On a ten-point scale (higher is better), Italy is at 3.9, Greece at 3.4, Mexico at 3. Russia? 2.4. http://cpi.transparency.org/cpi2011/results/ http://cpi.transparency.org/cpi2011/results/ I hear they kill entrepreneurs there too. http://news.ycombinator.com/item?id=4201668 http://news.ycombinator.com/item?id=4201668
      - olegious 14y ago
        Corruption is Russia's biggest problem and certainly some entrepreneurs are in prison due to official corruption but that doesn't justify lumping it with Venezuela and Zimbabwe. Also, it should be noted that the word "entrepreneur" has a far different history in Russia than it does in the West. Many entrepreneurs got started in the 80s as "cooperatives" selling cheaply made jeans and other consumer goods in open air markets to a populace that had cash but little consumer goods to spend it on. This kind of private "profiteering" was illegal in the USSR thus the people doing this were already breaking the law and were getting used to getting away with this "crime." With the collapse of the USSR many of these groups expanded into other businesses- currency exchange, car sales, etc. Unfortunately, since the roots were illegal, many of the 80s entrepreneurs came from the elements of society that were willing to risk breaking the law to make money- often these people had a different view of competition- rather than make a better product or offer lower prices, it was much easier to beat up or sometimes kill your competition. As the 80s transitioned into the 90s, the violent groups became more and more powerful, with the early 90s becoming associated with open warfare among these groups. Those that survived into the late 90s, turned into legitimate businessmen - gone were the illicit activities, now these guys run banks, shopping centers, dealerships, real estate firms, etc. However many of them do have blood on their hands (and I'm not even talking about the large scale oligarchs and how they got their wealth)- should they be allowed to get away with murder or theft? How do I know this (other than a general interest in the subject)? My dad was intimately involved with the cooperatives in the 80s, we fled to the US during the early 90s, some of his friends (and sometimes their families) that remained in business didn't survive. I remember going back home in the mid-90s when things were still a bit crazy and driving through the city with armed escorts- some of the stories that I heard would raise the hair on your neck.
roel_v 14y ago
How do you get information on these spreads? Are people who accept illicit trades openly advertising their services or maybe even rates? Or is this more underground like moonshine or drug trade, and do you need to be 'on the inside' to have access to these services? That last situation would seriously hamper liquidity and dampen the 'real-time' aspect tremendously, no?
- zfran 14y ago
  Online newspapers post the rates daily. Buying from the black master is just a matter of heading downtown and looking for people offering exchange in the streets. It's accessible for anyone.
- rafaelm 14y ago
  In Venezuela, it's illegal to even offer dollars at the black market rate. But you can even go to a public square in front of the Congress and find people selling and buying dollars in the street. The government even went as far to block websites that published the black market rate online. You can imagine how effective that was. These kind of controls only generate corruption in the end. Its widely known that if you are willing to pay enough and know the right people in the government, you can get dollars assigned at the official rate for anything you want.
- wslh 14y ago
  People in the streets buy/cell. They are called "arbolitos" (little trees) For big sums it is not that hard to find a "cueva" (cave)
- rubyrescue 14y ago
  http://dolarblue.net/ http://dolarblue.net/

kokey 14y ago

Having to fake an exchange rate sounds like the economic conditions in badly run countries like Venezuela, Zimbabwe, Russia, etc. What I am wondering is, with a depressed economy like that in Argentina, what is crime and personal safety like? I am particularly wondering about violent crimes for money, because how people react to a bad economy is determined quite strongly by culture and not just the economic situation alone.

adjwilli 14y ago
The Argentina economy isn't in a depression or recession, just oddly managed. But yes, crime, especially robberies, is extremely high.
- wslh 14y ago
  If you look at these months results it is going to the recession route
batista 14y ago
>Having to fake an exchange rate sounds like the economic conditions in badly run countries like Venezuela, Zimbabwe, Russia, etc. "Badly run countries"? Zimbabwe maybe, but for Venezuela and Russia, I beg to differ. They are doing things THEIR way, not the US/neo-liberals way that would like a better slice of the pie, but Venezuela is much better off than all the dictatorships and banana republics in the region, and Russia is way better than when Yeltsin did things that benefited certain foreign interests...
- tatsuke95 14y ago
  Things always look dandy in the oil exporting countries when oil prices are high. Iran, Venezuela and Russia all fall under this category. Their political, social and economic cracks begin to show when they can no longer throw oil dollars at problems.
  - rafaelm 14y ago
    Chavez announced a couple of years ago that Venezuela had a "bulletproof" economy and that we would not be affected by the evils of the capitalist breakdown. As soon as oil prices went down, our economy started shrinking. When oil prices are lower, the government cannot keep the fake value of the Bolivar and they have to devalue. In the end, the people pay the price with ultra-high inflation rates (28% in 2011).
- rafaelm 14y ago
  The Venezuelan way is faking the value of the Bolivar and pushing everyone to the black market to buy dollars.The official rate is Bs.4.30 per dollar. The black market rate is almost Bs.10 per dollar. Are you aware that most of the products we consume here are imported? Venezuela almost does not produce anything other than oil. So , the clothes you buy, the medicines,food,etc,etc, everything has to be imported. Not everyone gets access to dollars from the government , so you have to buy dollars in the black market to import products. This causes the 25-28% yearly inflation rate we have. In the end, the people pay the price. The solution from the government against the black market rate : make it illegal to even talk about the black market rate. Basically,censor it. I hardly think that is the proper way to run an economy.
diegofr 14y ago
Depressed economy? Argentina's economy is growing since 2002 http://en.wikipedia.org/wiki/File:Latin_America_GDP_per_capita_1991-2011.png http://en.wikipedia.org/wiki/File:Latin_America_GDP_per_capi...
- wslh 14y ago
  Argentinian Economy is slowing. Just look at this year results. It seems to go to an stagflation stage. If you are Argentinian you know why the economy was growing since 2002: A local minima on previous years, devaluation, Soy and other commodities rising more than 2x and the farm sector investment on improving the efficiency with technology.
  - diegofr 14y ago
    Thanks for confirming my point. But, I'm afraid I can't confirm your presages.
    - wslh 14y ago
      I was not confirming your point... you only said that Economy was growing since 2002. Obviously nobody (that I know) see the future.
      - zfran 14y ago
        You did confirm it. He said the economy has been growing since 2002 and that's true even if the growth rate has slowed down. Going from 7% to 3% annual growth rate is still a growing economy.
        wslh 14y ago
        Discounting inflation the economy is contracting in June
olegious 14y ago
Russia has it's issues, but lumping it with Zimbabwe and Venezuela is ridiculous and shows how little you know about all three countries.
- olegious 14y ago
  Here are some quick facts for the downvoters- Russia has one of the world's largest foreign currency reserves, a tech scene that has produced some world-known companies/products (Yandex, Rambler (nginx), KupiVIP, etc) and a fairly lively startup scene. It also isn't bad place to visit for a tourist- I can go on and on, but the point is even a rudimentary knowledge of the subject should prevent people from making these types of generalizations.
  - olegious 14y ago
    I love the downvoters who don't respond, just downvote.
  - dredmorbius 14y ago
    It's also among the most corrupt major economies in the world. On a ten-point scale (higher is better), Italy is at 3.9, Greece at 3.4, Mexico at 3. Russia? 2.4. http://cpi.transparency.org/cpi2011/results/ http://cpi.transparency.org/cpi2011/results/ I hear they kill entrepreneurs there too. http://news.ycombinator.com/item?id=4201668 http://news.ycombinator.com/item?id=4201668
    - olegious 14y ago
      Corruption is Russia's biggest problem and certainly some entrepreneurs are in prison due to official corruption but that doesn't justify lumping it with Venezuela and Zimbabwe. Also, it should be noted that the word "entrepreneur" has a far different history in Russia than it does in the West. Many entrepreneurs got started in the 80s as "cooperatives" selling cheaply made jeans and other consumer goods in open air markets to a populace that had cash but little consumer goods to spend it on. This kind of private "profiteering" was illegal in the USSR thus the people doing this were already breaking the law and were getting used to getting away with this "crime." With the collapse of the USSR many of these groups expanded into other businesses- currency exchange, car sales, etc. Unfortunately, since the roots were illegal, many of the 80s entrepreneurs came from the elements of society that were willing to risk breaking the law to make money- often these people had a different view of competition- rather than make a better product or offer lower prices, it was much easier to beat up or sometimes kill your competition. As the 80s transitioned into the 90s, the violent groups became more and more powerful, with the early 90s becoming associated with open warfare among these groups. Those that survived into the late 90s, turned into legitimate businessmen - gone were the illicit activities, now these guys run banks, shopping centers, dealerships, real estate firms, etc. However many of them do have blood on their hands (and I'm not even talking about the large scale oligarchs and how they got their wealth)- should they be allowed to get away with murder or theft? How do I know this (other than a general interest in the subject)? My dad was intimately involved with the cooperatives in the 80s, we fled to the US during the early 90s, some of his friends (and sometimes their families) that remained in business didn't survive. I remember going back home in the mid-90s when things were still a bit crazy and driving through the city with armed escorts- some of the stories that I heard would raise the hair on your neck.

roel_v 14y ago

How do you get information on these spreads? Are people who accept illicit trades openly advertising their services or maybe even rates? Or is this more underground like moonshine or drug trade, and do you need to be 'on the inside' to have access to these services? That last situation would seriously hamper liquidity and dampen the 'real-time' aspect tremendously, no?

zfran 14y ago
Online newspapers post the rates daily. Buying from the black master is just a matter of heading downtown and looking for people offering exchange in the streets. It's accessible for anyone.
rafaelm 14y ago
In Venezuela, it's illegal to even offer dollars at the black market rate. But you can even go to a public square in front of the Congress and find people selling and buying dollars in the street. The government even went as far to block websites that published the black market rate online. You can imagine how effective that was. These kind of controls only generate corruption in the end. Its widely known that if you are willing to pay enough and know the right people in the government, you can get dollars assigned at the official rate for anything you want.
wslh 14y ago
People in the streets buy/cell. They are called "arbolitos" (little trees) For big sums it is not that hard to find a "cueva" (cave)
rubyrescue 14y ago
http://dolarblue.net/ http://dolarblue.net/