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Government highly regulates and practically prohibits the dollar here in Argentina. As a consequence, black market dollar is the only available and it's obvious

by aortega 13y ago

Government highly regulates and practically prohibits the dollar here in Argentina. As a consequence, black market dollar is the only available and it's obviously more expensive. Huge inflation of 25% or more makes the black-market dollar even more attractive. Today the dollar exchange here is 5.50 ar$, and black-market dollar is 8.7 ar$. There are several ways to circumvent the prohibition, for example using credit cards. But the clever government implements all kind of crazy pseudo-taxes on dollar purchases to close the loophole. Bitcoin is another example of such loopholes, but very expensive and illiquid at the moment. By the way, the same situation happens in Venezuela but the grip is harder and has been happening for far longer, official dollar is 6.3 Bs. while black-market "lechuga" dollar is a whopping 34 Bs., so bitcoin exchange should be even more attractive there.

rafaelm 13y ago
I'm in Venezuela and unfortunately I've never heard anyone talking about Bitcoin here.I haven't really looked hard,to be honest. Dollar purchases are totally prohibited here , we only get $400/year for online purchases and ~$2500 for travellers. The black market here is just out of control, like you said, just today a friend sold $1000 at Bs.32. The Government only gives dollars at the official rate (Bs.6.3) to their close friends (corruption). Venezuela does not produce anything other than oil. So , everything we consume here is imported (food,clothing,etc). If you are in commerce and need to import something, you go to the black market. And that explains why the projected inflation for this year is ~45 - 50%. Argentina already suffered hyper-inflation not too long ago. I cannot understand why they did not learn from their mistakes.
- aortega 13y ago
  Well, because of course it was not a mistake. Inflation is a way to transfer wealth from the general population to the guys with the printing press (The gov friends). The only way to escape this trap is to save money in a hard currency, for example the dol...wait a minute...
  - rafaelm 13y ago
    Talk about govt friends. The govt friends here are the only ones that get dollars at the official rate. They are supposed to be importing food, medicine, electronics,etc. They ask for $1mill from the govt for importing 1000 refrigerators at $1000 each. They get them at Bs.6.3 so they have to pay Bs.6.300.000 for the $1mm They import only 500 refrigerators and bribe everyone from the national guard, customs officers,etc. to say they imported 1000 refrigerators, paying their supplier only $500.000. They sell the 500 refrigerators at Bs.15 per dollar, keep the rest of the $500.000 outside of Venezuela and then sell enough of them at the black market rate of Bs.35 to buy the next $1mm at the official market rate. Then they ask for more dollars from the government. And the cycle continues. Multiply this by a LOT more. Almost every govt official is in on it and it has produced a ton of multi-millionaires.

by aortega 13y ago

rafaelm 13y ago

I'm in Venezuela and unfortunately I've never heard anyone talking about Bitcoin here.I haven't really looked hard,to be honest. Dollar purchases are totally prohibited here , we only get $400/year for online purchases and ~$2500 for travellers. The black market here is just out of control, like you said, just today a friend sold $1000 at Bs.32. The Government only gives dollars at the official rate (Bs.6.3) to their close friends (corruption). Venezuela does not produce anything other than oil. So , everything we consume here is imported (food,clothing,etc). If you are in commerce and need to import something, you go to the black market. And that explains why the projected inflation for this year is ~45 - 50%. Argentina already suffered hyper-inflation not too long ago. I cannot understand why they did not learn from their mistakes.

aortega 13y ago
Well, because of course it was not a mistake. Inflation is a way to transfer wealth from the general population to the guys with the printing press (The gov friends). The only way to escape this trap is to save money in a hard currency, for example the dol...wait a minute...
- rafaelm 13y ago
  Talk about govt friends. The govt friends here are the only ones that get dollars at the official rate. They are supposed to be importing food, medicine, electronics,etc. They ask for $1mill from the govt for importing 1000 refrigerators at $1000 each. They get them at Bs.6.3 so they have to pay Bs.6.300.000 for the $1mm They import only 500 refrigerators and bribe everyone from the national guard, customs officers,etc. to say they imported 1000 refrigerators, paying their supplier only $500.000. They sell the 500 refrigerators at Bs.15 per dollar, keep the rest of the $500.000 outside of Venezuela and then sell enough of them at the black market rate of Bs.35 to buy the next $1mm at the official market rate. Then they ask for more dollars from the government. And the cycle continues. Multiply this by a LOT more. Almost every govt official is in on it and it has produced a ton of multi-millionaires.