Argentina: Where Cash Is King And Robberies Are On The Rise

[bobg]

http://www.npr.org/blogs/parallels/2014/12/09/369616448/argentina-where-cash-is-king-and-robberies-are-on-the-rise

 

[camel]

From the article:

"I would never put my money in a bank, because I know it could disappear," he says. "A bank is no more secure than underneath my mattress."​

I've never understood why mattress theft isn't more common in Argentina.

 

[ElQueso]

Kind of a very disjointed article. Doesn't really explain anything and has some confusing pieces.

They started the article off with an anecdotal story of motochorros and the robbers knowing exactly how much the guy who got robbed was carrying, inferring that someone in the bank called the robbers and alerted them to follow the gringo that was robbed, after he left the bank. May be the case, but an article that tries to tie Argentines fears into bank employees alerting robbers about gringos just doesn't really ring true to me.

They mention the Corralito (without calling it that) as another reason to fear putting money in the banks by saying:

"After the 2001 default, banks were locked down and accounts raided, which wiped out the savings of ordinary Argentines. Many people lost a lifetime of accumulated funds."

While true enough, they almost make it sound like the bank employees, or the moto-chorros that started off the story, did the "raiding". They don't mention that it was the government who locked the banks down, replaced dollar accounts only with a 1-to-1 number of pesos then devalued the peso by 66% the following day.

Then, talking about inflation as a reason to not trust the banks here:

"When inflation begins to creep up and you have some extra pesos and you put it in a certificate of deposit in a bank, but the interest rate is below the inflation rate, then you have negative rates and you're losing money," Ciblis explains.
Let's say inflation is at 40 percent a year in Argentina. The government doesn't provide reliable figures, but that's what most economists estimate is the current annual rate.
The bank, meanwhile, may be giving you only 20 percent interest. That means your money is losing its value.

I mean, you don't really lose money, do you? Is there something I'm not getting about this being a CD that makes things different than, say, a loan? do they actually make you pay when you have a CD with an interest lower than inflation? Or does the money just lose value?

It says both things there, one in a quote from Ciblis and the other, without distinguishing the difference between losing value and actually losing money in a negative interest situation.

In fact, seems to me that you actually make out better than if you had purchased a bank's CD. In a CD or in a mattress, your peso is going to lose value. Not quantity, neither one. It loses less value if you are paid 20% more than you put in at the end of that year. I.E. you have 20% more quantity of pesos than you did when you bought the CD. But it loses more value if it sits in a mattress because the quantity of pesos never grew there.

The only way it makes sense that putting money in a CD is actually losing value over having it in a mattress is if you were going to spend your pesos at the moment you got them, instead of buying a CD.

Then in the next paragraph they go on to say:

As a result, most people would rather risk the possibility that a thief gets into the house and steals the money hidden in the drawer, than face the near certainty that they will lose money in the banking system these days.

Which shows they aren't talking about spending the money, they are talking about saving it in the drawer (they mentioned mattress at some other point previously) and therefore would have been better off putting it in the bank in a CD if they were trying to save - or convert it into dollars and hide it away.

Of course, it would be more interesting to have pointed out that the manner of saving in Argentina often led Argentinos to save by buying Dollars and sticking them under the mattress or sending them overseas to bank accounts and talk about how cuevas are maybe more trusted than banks in some way.

The story seemed to me like it was written by a junior writer who didn't really understand much about the subject matter and was not reviewed with any seriousness by an editor.

 

[lucha54]

Once there was a travel show about travel scams that was featuring Buenos AIres. The host was dead set on proving that he would get a fake bill from a cab driver.
He basically announces that there are so many fake bills that he is going to get scammed into ending up with one.
He gets a 10 peso note from a cabbie, takes it to a "local" who confirms that it's fake, and then announces to the audience, "See? A fake 10-peso note! I knew it would happen to me."

Haven't read the article yet but ElQueso's breakdown above just reminded me of that show...

and it's NPR for crying out loud!!

 

[garryl]

From the article:

"I would never put my money in a bank, because I know it could disappear," he says. "A bank is no more secure than underneath my mattress."​

I've never understood why mattress theft isn't more common in Argentina.

They do check under the mattress, and you do not want to test it.

Talk about the safety, I live by Junin and Juncal, every night I come back from dance, I walk on the street at 3am, I saw people walking too, a couple walking their dog,
young men walk around, even single young women, and on Sat morning at 3am, teenage girls walk on the street in groups. How can you say areas like that are dangerous ?

I live in a nice neighborhood outside San Francisco, I never dare to walk outside around 3am. If I do, and see another person, I would freak out and probably shoot the sucker who follows me in the dark. When I studied at USC in downtown LA, I got robbed all the time, and it didn't bother me much(now it's a little disturbing that they start to shoot at people there).

I still walk around BsAs at night, just need to use common sense, and let go the wallet and dinero if anything happens.