Argentina's Currency Black Market | Hacker News Reader

Argentina's Currency Black Market

flightfox.com

104 pointstodsul111 comments

Funny to see this post here, since I'm in Buenos Aires for the week, for vacations. I didn't know about that "blu dolar" rate before coming, so I didn't bring any cash with me; I literally had 50$usd, used to pay the taxi from the airport to my Airbnb when I arrived, and then had my friend become crazy when she saw me use my american VISA to pay for things. "You're crazy, it's almost twice as expensive this way!".

But it was too late, I didn't have any cash, and no way for me to get any USD - nor getting the black market rate through my credit card. (official rate is 5.88ars/usd, the blue dolar is ~10).

Luckily enough, I started to buy bitcoins a few weeks ago, and for the same reasons the "blu dolar" exists here, bitcoin transactions in person/cash are really valued here, because you can guess, it is also really hard/expensive for Argentinians to buy bitcoins online (because of the rate/price of doing bank transfers in USD).

So thanks to that, I was able today to arrange a cash transaction through localbitcoins.com - allowing me to sell a few bitcoins at the market price, in Argentinians Pesos, to the "blu rate"!

Xoom.com is your friend. You can transfer money from your bank account and pick it up at almost the Blue rate. (Currently, they trade at 1 USD = 8.9633 ARS)

Venezuela's official rate has been about 1/5 of the black market rate for many years. I remember my wife shooing me into a corner at the airport while she traded dollars for bolivares with the security guards.

The differential has caused all kinds of effects. Plane tickets are hard to come by because so many people take advantage of the spread by flying somewhere, buying goods at official, returning for cash then trading at black market. An investment of as little as 500 usd pays for the trip and then some. Officially this does not exist but searching for mercado lechuga (lettuce market) shows a thriving ecosystem.

I took a trip there in 2011 and 1/5 sounds a little off for what tourists could get. Officially at the time $1 would get about 4.5 bolivars. Unofficially, we could get around 7-9 bolivars per $1.

We were pissed because we didn't know about the exchange rate issues or the ATM restrictions. We ended up going to a bank every day to withdraw the max on 3 different cards. Probably would have saved about $60/day if we had simply brought a bunch of cash with us.

You don't know the right people. :) Cash on the street is the way to go but unless you can navigate la vivesa criolla you'll get robbed. I was shooed into the corner because a gringo lookin guy would have killed the deal.

You will always find a Venezuelan who needs or knows somebody who needs to buy dollars at the black market rates! Anyone who comes to Venezuela and exchanges their dollars at the official rate is getting robbed. Of course it can be scary as a tourist if you don't know anyone here.

It wasn't by choice. We only had $100 in our pockets because we didn't know. In most countries I had been to, its easier to use a card to pay for stuff rather than exchange cash. I figured it would be the same way in Venezuela, I just didn't know.

I was there last year and the rate seemed to be between 9-11.

Right now the official rate is Bs.6.3 per dollar. The black market rate is just getting to Bs. 50/$.

Thats one of the reasons we are set to have a 50% inflation rate this year.

My monthly salary has withered away and as an engineer I'm making just over $200/mo.

Fellow Venezuelan here (although living outside of the country right now)

I have hard times explaining to people how the economy works over there. Most people overestimate how harmful is a regime under foreign currency exchange control. But some metrics like the big mac index (http://www.economist.com/content/big-mac-index) can give a rough idea of what is happening.

In Argentina the Big Mac's price is actually regulated by the government (http://www.slate.com/blogs/moneybox/2012/05/01/why_big_macs_... the prices shown in that menu are about double now, except for the big mac, which is still ~30 pesos). Just another example of how much our government controls metrics here. I'm surprised the same thing doesn't happen in Venezuela, though, as Cristina Fernandez seems to have copied almost her entire "economy model" from Chavez's.

Well is hasn't been regulated yet because it is an "imperialist" product hence it is a luxury. But most products are regulated in Venezuela too, and those products are scarcity now because nobody likes to produce without profit and there is not enough money to subsidize all of them and cover the whole demand.

McDonald's has become so expensive here in the last months that it's sometimes cheaper to eat in a relatively decent restaurant. I don't eat in McD but a friend recently had a chicken sandwich, fries, coke and a sundae for close to Bs. 180. It's rid.iculous. At the official rate that's around $30. But at the black market rate that's under $4. Same goes for clothing, electronics, etc.

It seems argentina didn't learn from their past hyper inflation or from Venezuela's economic problems...

$180 doesn't sound right. One of the most expensive combos (say an Angus Tasty or something) is around $90ARS.

Bolívares.not $ ... As he said, using the official rate it would be $30

The distortions these kind of controls generate cannot be explained to someone who lives in a normal economy. Here in Venezuela, it's much better to go in to debt (get loans to buy stuff like refrigerators, TVs, etc) than to use any unexpected or larger than usual income to pay off your debts because of the high inflation rate.

Only in Venezuela can a car cost more the minute you drive it out of the dealerships (if you can find them), than in the showroom floor.

>"Here in Venezuela, it's much better to go in to debt (get loans to buy stuff like refrigerators, TVs, etc)"

That is pretty much true in most countries but for different reasons. Over there, inflation rate is usually higher than the controlled interest rates. On the other hand, in other countries stores give you cheap loans to impulse sales.

In any case I am agreed with you that you have to spent some time over there to understand the distortion of a economy with a high inflation. Also you would understand how easy is for a government to manipulate economic metrics and give a different impression from outside the country.

I remember this little joke about Argentine inflation: It's cheaper to take a taxi than a bus, because in a taxi you pay at the end of the trip.

That is a funny joke but after I read it outloud to my friends I got confused. How is it cheaper? One would enter the taxi with pesos. These pesos do not go up in value. Instead the cost of the rides go up. Thus you would want to pay sooner rather than later. Of course there is no joke in saying the bus is cheaper.

Unless one entered the taxi with US dollars. Yet in theory the exchange rate should match inflation. To me the joke would only make sense under hyper-deflation.

The idea is that you are billed a nominal value, whose rate is fixed when you contract the service. Since the rate is always agreed to at the beginning of the trip, the time of payment has an impact on its value.

This joke is essentially the opposite of debt deflation (theory of recessions), as described by Irving Fisher;[1] the theory states that the debtor loses money during deflation, causing repayment problems. In the bus/taxi joke, the rider is a debtor, and the taxi driver is a creditor, with the length of the ride being the term of the loan. The inflation is essentially devaluing the loan.

[1] http://en.wikipedia.org/wiki/Debt_deflation

I thought you pay in advance when you take the bus too. At least that was the case in the few countries I visited.

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.

First of all it's a joke

But 100 pesos at time T (bus) is worth more than 100 pesos at time T + interval (taxi)

Inflation means that the value of 100 pesos in the future is less than the value of 100 pesos now. In countries under hyperinflation, supermarkets will raise their prices several times a day.

"During the Brazilian inflation of the earl 1990s, for instance, supermarket workers reportedly spent half of their time replacing old price stickers with new ones." -- Essentials of Economics

I don't see how it matters if your asset position is identical in either trial.

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).

I guess the joke is that while you're in the taxi, pesos goes down, but the cab driver didn't have the time to adjust his pricing according to the new (lower) value of the pesos. Therefore he'll charge you the old price which is lower than what it should be by the end of the ride.

I think you have to check what inflation means...

All self-inflicted wounds. Argentinians could have a stable currency and a thriving, functional economy - there's nothing structural that's stopping them. But they choose not to, and have been making this choice for they last 100 years or so. It's a true pity.

That's like saying Americans could stop the wars.

It's self-inflicted in the same way that a mugger stealing your wallet at gunpoint is self-inflicted. After all, you are both citizens of the same country.

Argentina, for years, has chosen an economic policy something akin to a semi-functional alcoholic. I'm not quite sure what about their economic ideologies are somehow forced upon them despite decade after decade of failure.

You don't understand corruption then. High inflation and a low official exchange rate that no one can actually exchange at without insider connections are a way for those with control of the government and currency printing presses to slowly but steadily siphon the wealth of the masses directly to themselves.

You're getting the cause and effect mixed up.

Is it probably disproportionately worse in Argentina compared to the US? Yeah. But it's not innate in Argentinians. Corruption, generally speaking, is a function of something else, usually something that's inherently unfair or unjust. Argentina's economic policies created these incentives to drive people increasingly towards corruption, not the other way around.

Where did I say that the state of affairs is innate to Argentina? In any case, that's a red herring.

You can't simply state that the economic policies unilaterally led to corruption as a self-evident truth without some supporting evidence. Clearly officials who have a history of corruption are more likely to institute new policies that benefit themselves as well. Economies are not so simple that causality is easily stated in an absolute manner, especially in so flippant a manner as "corruption […] is a function […] of something inherently unfair". That's probably the most hand-wavy statement about such a grand topic that I've ever read.

No, the problem is structural: bad routes, no security, no mobile infrastructure, no energy (I am not talking about potential energy), bad education, bad transport of goods between cities. And I am not talking about corruption yet... you can bribe anybody in a direct way with witnesses around.

You can say that Argentina has all the ingredients to be a first world country but it is just a hope to be at that point.

For example, since Argentinian security forces don't work as expected, a shopping center has extra security personnel and on each shop there is another layer of security guards.

I would love to know who is downvoting a comment based on facts.

Maybe some pro-gov guys. They do it everywhere.

I keep expecting to see one of them bring up the Falkland Islands. That's where these threads usually go on the Economist's site.

The self-infliction is electing politicians like Kirchner who don't try to spend time and effort improving their infrastructure and stability and attracting investment to build new things. Instead, they prefer to borrow money to deliver handouts to the populace, then when they can't repay the money, default on their debts and take over the local operations of foreign firms. (This is before we even get into the suppression of the media and other overtures of authoritarianism...)

Not that the poorest of Argentinians aren't in great need of some form of aid like those handouts, but sacrificing the argentinian nation's economic future works out to be a BAD PLAN in the end.

I do believe that the fact that give "handouts" only to people whose kids attend school (which really matters because there was a lot of child labor when they started) shows they are at least trying to address some of the problems. I think they did a lot of things wrong, and there's a lot of things missing, but calling them out in what I see as one of their most effective policies seems wrong. The contradiction between protectionist policies and search for investment, the alliance with groups opposed to the improvement of infrastructure, the blatant corruption and the stuff wslh mentioned seem more accurate to me.

False dichotomy. Brazil has been giving "handouts" - desperately needed aid for the poor - and is doing fine. In fact those "handouts" are one of the main reasons why it has been doing ok: they created a market where there was none.

The reality is far from what you say. What they give is nothing in that economy. Many people just spend that money in 2 days. What Argentina did is just print money without limits and offer many credit lines to anyone with possibilities. That's ok, but to a certain level, when you hide the real value of your coin you're losing investment from outside. Who will invest in Argentina when the money isn't on the real price?

Bad routes - If you mean what I think you mean this is irrelevant.

No security - I am not sure what you mean but I think it's irrelevant. If shopping centers need tons of security to function, this is the effect of economic policy, not the cause.

No mobile infrastructure - This is the effect of economic policy, not the cause.

No energy - First of all, wrong. Argentina is rich with natural gas and oil. But policy has screwed it up. Second of all, Japan and Korea. Countries can do just fine relying on imported energy.

Bad education - This is the effect of economic policy, not the cause.

Bad transportation of goods - This is the effect of economic policy, not the cause.

I don't get you reply. I was not writing a formal proof in my comment. Can you elaborate your ideas about causes and economic policies?

You know, 100 years ago, there was a saying "as rich as an Argentine", like we might say "as rich as a sheik" today. By any reasonable means, they should be enjoying wealth on a par with any First World country. Corruption killed it stone dead, and judging by their current government, the people never learn. We went to war to save them from Fascism (and, umm, to liberate our islands), they had a chance to start over with a clean slate, but that has been squandered now.

There's a popular saying: "nobody can understand why Japan is so rich, while Argentina is so poor"

Half of my family is from Buenos Aires and I often go back to visit. It's crazier than you think over there.

Not too long ago they made it illegal and very difficult for any Argentinean to take out their own money from the ATM. The government is trying really hard to keep everyone inside the country and only spend money within the country.

So for anyone visiting Argentina anytime soon, bring as many US dollars as possible. It almost makes traveling in the country cheap if you black market exchange it. It basically doubles your money.

Are you talking of the "corralito"? That was over ten years ago, so I'm not sure if that's what you mean by "not too long ago". You make it sound like it's still happening.

Sorry, I had meant internationally.

No problem, I see what you mean now.

The disinformation in this one is strong. It's not illegal nor hard to get money from ATMs.

I think he meant international ATMs (outside Arg).

Yes, sorry. Internationally you can not take out money from the ATMs.

You can. In limiting countries you have a ridiculously low limit, and in further countries it's a bit higher. I was able to withdraw about €850 in Europe two weeks ago.

How would a person bring cash into the country?

It looks like there are no restrictions on bringing USD into the country (aside from declaring > $10,000 USD), but taking currency out is restricted to via "authorized" exchanges http://www.iatatravelcentre.com/AR-Argentina-customs-currenc...

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.

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"?

It's legal to enter a country with cash within the limits of what it states on the Customs form, without saying anything about it, and if it's found on you the Customs agents cannot detain you (legally, anyway - be wary regardless). If you have more than the stated amount e.g. $10k USD then you must declare it, else if you are searched and it is found you will definitely be detained.

so what happens if i have $10,001 and declare it?

My point is, what's the purpose of declaring, if it is illegal to enter the country (or leave the country) with more than $10,000 - does declaring it make it legal?

Customs will notify the authorities that you have more than the amount designated, to guard against money laundering.

Example: http://ec.europa.eu/taxation_customs/customs/customs_control...

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 or other foreign currency, and they do, sometimes subsidized by the government given that they buy at the official rate which is near half that of the real market rate.

The only thing keeping this disaster from graduating to hyperinflation is the fact that for the first time in 100 years Argentine exports are back in high demand, back then it was the British and French, now is the Chinese and Indians buying Argentine food products. That source of foreign currency feeds the vaults of the central bank allowing the current government to keep this Jenga-economy from falling apart, let alone stuff their pockets.

Ironically 100 years ago Argentina used that money to build its industry, fund the arts, providing top-level education to the population and build its infrastructure, all with the best of the best. Today this new money is being squandered by a government so corrupt it dwarfs even the worst of the early 20th century Argentine elite. The irony is that Argentina is building nothing today, in fact most of the country still lives everyday using the (now decrepit due to age and lack of maintenance) infrastructure created in those days (or with the wealth from those days) meaning this time it will not only repeat the same mistake of depending too much on primary exports but it will leave nothing for future generations.

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?

This has been going on since the sixties. Half a century is not "a few decades". The military regime got entangled with fights against the syndicates (which were a strong political force back then, and are mostly toothless now, with the exception of the truck-transport syndicate), and dismantling the national industries was used as a resource to weaken them. Also, they systematically killed and "disappeared" basically anyone who got into politics that didn't agreed with hem. So they destroyed both the economical and the political basis of the country. The people who took over after them came from what survived their culling: most of the people who could have grown with a different point of view were dead. In that light it isn't that surprising that Menem's government in the 90's followed a similar policy of dismantling the local industry. Under the pretense of amassing funds to fight inflation, he basically sold all what remained of the national industries, creating a nice but unsustainable period of wealth. Following that, De la Rua's government basically did nothing to address the issues, and that's how we got to the 2001 crisis.

This is obviously not a complete explanation, but it works as a highlight of some of the structural causes of Argentina's situation-

The problem is that nothing ever gets done in this country, the Alianza sole purpose was to fight corruption and they didn't do anything, the FPV has been riding the gravy train like the oligarchs did a hundred years ago and just putting patches on everything.

The military made a disaster but that was almost 40 years ago. Japan was razed to the ground after a devastating war brought by a military dictatorship and 20 years later they were already considered an economic miracle.

> how does this happen?

It's called the new oligarchy.

Argentina's currency black market is just an acknowledgement of the actual price of the Peso that countries in the border have. You can LEGALLY exchange 1 US dollar for about 10 ARS in Uruguay http://www.bcu.gub.uy/Paginas/Default.aspx

That causes a constant stream of Argentineans crossing the border. It's extremely profitable on both sides.

It's caused a major disruption of commerce here in Uruguay, lots of people go to Buenos Aires to buy stuff (mostly clothing, etc).

My girlfriend studies in Buenos Aires because it's cheaper to take the ferry and pay courses in Argentinean pesos than to pay the course in Uruguay ! (plus, Buenos Aires is a much larger city and has a better selection).

I've been living in Buenos Aires for over 4 years now. The secret for infinite money basically is selling Bitcoins to USD and then selling the USD to Ar$ Pesos.

Right now 1 USD = 10.10 Ar Pesos.

Here are some references:

1 Bus ticket from 1.50 to 3 Pesos.

1 Bic Mac about 45 pesos.

1 Coca Cola 8 or 9 pesos.

1 Dinner in a medium to fancy restaurant 150 pesos (200+ if you drink wine).

If any hacker is in town, let me know.

> The secret for infinite money basically is selling Bitcoins to USD and then selling the USD to Ar$ Pesos.

Bitcoins are free?

No, you pay them with your electricity bill.

How do you get the $ to buy bit coins? I've been thinking about doing that in Venezuela but we only get $400 per year for online purchases.

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?

Out of country sites likely won't accept Argentinian pesos, so the enforcement can be done at the level of the banks/money changers (by just requiring them to document who for and why they exchanged some dollars or whatever).

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.

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.

I was working (and living) in Rio once when a Venezuelan came in asking about doing some sort of side deal in order to "buy" what we were offering. It was very long-winded but the gist is that he could only take out a very small amount from the ATM (a month?) and so he was looking for someone to do business with him another way. It took a while to get what he was saying because I just didn't trust that what he was saying was true. Anyways, it was my bosses call and the guy had to look elsewhere.

If you have the means to buy Bitcoins i feel there are better ways to get into this money loop, specially the last few months with the recent capital repatriation tax amnesty.

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 then, there are no guarantees. With bitcoin, you'd run into the same problem since nobody will sell bitcoin at the implied government exchange rate.

For this to actually work as a money loop, you'd need to find someone willing to sell dollars at 6:1, which is unlikely since they would be losing money.

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."

How is this getting infinite money? There must be some loop here, but I don't see what it is.

If you did BTC -> USD -> Pesos -> BTC and so on, you'd have to get a good price for Pesos -> BTC, and that would hugely surprise me.

But yeah, I'd be totally willing to go on a vacation to Argentina if there's a good way to make money.

Why would you trust a government that rigs their inflation figures in such a drastic way that their economists simply refuse to sign for it? If you want people to trust your currency you shouldn't treat them as fools and get the inflation back to more sane levels of 10% or less.

At various locations, large value foreign bills can be exchanged at a rate significantly above the market here in Bangkok. (Obviously, normally a physical exchange business buys below and sells above. In this case they buy above... presumably because certain clients they onsell to want a physically compact means of storing or transmitting a internationally recognized, relatively (to local currency) stable store of value in a semi-anonymous way.)

I work for a company that does casino/gaming equipment, we recently had to upgrade a cruise-liner that allowed to use onboard credit on the casino floor.

Apparently the biggest concern for the staff working on the casino floor was the Argentinean problem. The would take the biggest credit that they could get (this would create net account liquidity problems for the casino department etc).

I wanted to look up what the deal was and forgot until this article.

I spent time in Buenos Aires and can attest that people go across to Uruguay, gamble and take back the winnings in US dollars. Also the article said there is just one black market - not true at all, there is a huge underground market for luxury non-Argentian commodities such as Apple computers.

By the way, this not only applies to Dollars, but also to other currencies like Euros (Although we barely buy those, since we don't need them).

We also have problems buying online, for example, if I buy something on Steam, since the money is going outside of the country, I have to pay 20% more in taxes (I think that's the correct number) although we get the official dollar price.

Thats not a problem, its an opportunity. You are able to pay things in dollars at a much lower rate than the illegal dollar.

So? It's still more expensive than the official price (of the product), since I pay 20%+ more.

The official number is definitely way cheaper than it should be. If it werent, the government would not need to prohibit currency exchanges because the income/outcome of dollars would be balanced.

Credit card dollars are a huge opportunity, thats why its becoming the N1 concern for the government.

This explains why bitcoins are so much more expensive in Argentina, then.

On the plus side, this makes it very pleasant to travel to Argentina if you're from the US. Just don't forget cash.

As long as you don't get robbed, like I did.

One incredible inconsistency is that credit card companies have to pay their clients'debts in dollars, but have to abide by the central's bank currency rate.

For a few months people were going to uruguay and get cash advances on their credit cards, then go back to argentina and sell those dollars. They could make 2-3k pesos per credit card that way, which is basically a minimum wage. In a single day.

Lots of restrictions were made to prevent this, but the issue still applies.

The saddest part of this office is their lack of understanding of economics and Gresham's law. At this pace it is unavoidable that dollars will flee the country because no-one that can keep dollars instead of pesos will.

Honestly, the dollar being 10 pesos is insane. 2 years ago the peso was 4.11 to the dollar. Not to mention that public officials know all the illegal market places and dont shut them down, pointing to a large corruption scheme.

I'm wondering about some of these citations:

--SNIP--

According to the latest figures, Argentina's Central bank is losing US$ 47.5 million each day from their international reserves. This is the same as US$ 8 million every hour.

-- SNIP --

Citation here: http://en.mercopress.com/2013/10/21/argentine-central-bank-l... We'll add a link to this in the post now.

That doesn't mean it makes sense. $47.5 million/day being the same as $8 million/hour implies that there are 5.9375 hours per day.

8 hours a day minus an hour for lunch is 7 hours .. perhaps exchange operations close an before the daily close of business? Wouldn't surprise me, and that's ~5.9375 (6 to be precise). Then of course there's bank holidays and weekends...

The goverment has declared an unprecedented number of holidays last year (i.e. moving holidays from weekends to mondays, declaring "bridge" holidays when a holiday happens on tuesday or thursday, 2012 had 5 more than 2011). 2013 will have 17 bank holidays.

You're right, it doesn't make sense. We're adjusting our numbers to what the central bank has actually reported here: http://www.bcra.gov.ar

Reserves at 31 Dec were US$43.29b and at 18 Oct were US$34.25 = total loss of US$9.04b. Since there has been 291 actual days in the year up to 18 Oct, the daily loss is $31.08m.

Some argentinians are also using bitcoins to deal with the inflationary peso: http://www.youtube.com/watch?v=e__m-w4N7NI

There is also this post with some more details around how the black dollar market works in Argentina. http://thebluemarket.wordpress.com/2012/10/18/bitcoin-dollar...

Venezuela, Iran and Egypt also have massive currency Black Markets due to similar troubling economic and political undercurrents. Some of Argentina's figures are very surprising!

Yes, in Argentina we have different dollar/peso parities, the most popular are "Dólar blue" $9,93 per dollar. "Dólar tarjeta" (Credit card, +20% over official exchange rate) 5.89*1,20=$7,068 per dollar. "Conta con Liqui" (local stock market and Wall Street arbitrage) $9,35 per dollar.

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.

The Barter (Trueque) Markets in Argentina is also an interesting parallel economy. I'm not sure if they're still happening, though.

http://www.youtube.com/watch?v=dsn_cCXHAvE

Some people in DC should read this blog post and maybe then, they will start to double thing this whole thing about gov shutdowns, debt ceilings, and the actual harm it can do to the "confidence" in our $$

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