Argentine withdraw 120$ Million per day from dollar accounts

[ghost]

That is impressive! Nice round number.
http://www.reuters.com/article/2012/06/08/argentina-dollar-idUSL1E8H8EJA20120608

 

[wreReynolds]

I don´t a simgle Argentine who keeps their US$ savings in a bank account. They all keep cash and either put it in a safety deposit box (if they can get one) or under the matress.

Thye mostly remember 2002, when their US$ in banks suddenly lost 70% of their value overnight.

RR

 

[ghost]

I don´t a simgle Argentine who keeps their US$ savings in a bank account. They all keep cash and either put it in a safety deposit box (if they can get one) or under the matress.

Thye mostly remember 2002, when their US$ in banks suddenly lost 70% of their value overnight.

RR

Many save in "Dollar" accounts. I even did once. Not now.

 

[Gringoboy]

No surprise there then!
Not exactly what Mummy wanted

 

[el_expatriado]

Argentine bank accounts are not a safe place to put your money. The government can just take your cash out of there whenever they please.

 

[elalancito]

In late 2001, a peso was worth one dollar as it had been since almost 1989. Most people did not distinguish between the peso and the dollar (check out the movie from 2000 "Nine Queens," for example--they refer to pesos as mangos (bucks)). Most people kept their money in peso accounts because the value was exactly the same as it had been for 10 years. When the government devalued the peso and closed the banks, the peso was worth considerably less (from 1-1 to 3.35-1). The dollar, of course, retained its value. Those who had dollar accounts (not many--it was more unusual then), were able to keep their dollars. The majority, however, lost a considerable percentage (70%) of their savings. Now with the dollar being so difficult to come by, I can see why so many would prefer to keep their savings in a safe deposit box rather than trust the banks. In 1933, in the height of the Great Depression, several US banks failed and there was a great run on banks by depositors to remove savings from banks. New President FDR closed the banks for three days. However, unlike 2001 here, when the banks re-opened, all deposits were federally insured for up to $100,000 (now $250,000). With the federal guarantee, people elected to keep their money in US banks. No such safeguard occurred in Argentina after the banks closed and re-opened three days later with a devalued peso. People should be concerned now. There are no federal protections and Cristina has acted in a manner somewhat less than balanced in the past several months. Cristina seems to want to rid the country of greenback dollars. Who knows? She may freeze dollar accounts and insist they be converted to pesos. No one knows, so why not keep any dollars you may have somewhere where they are safer--like under your mattress?

 

[el_expatriado]

It wasn't just in 2001. The gov't can also clean out your account if they say you owe them taxes (they can do this administratively, without a court order, and without notifying you first of the supposed debt). Not just federal, but also city or provincial taxes also.

For example, they have a system here called SIRCREB and if they add you to this list a percentage of all the money you deposit into any bank account gets scooped up. I sold an apartment once and deposited the cash into my bank account and the gov't took a chunk of this. I never got them to return the funds.

You learn quickly (I learned the hard way unfortunately) never to trust your money to the banks.

 

[starlucia]

However, unlike 2001 here, when the banks re-opened, all deposits were federally insured for up to $100,000 (now $250,000). With the federal guarantee, people elected to keep their money in US banks. No such safeguard occurred in Argentina after the banks closed and re-opened three days later with a devalued peso. People should be concerned now.

This is something I find unfathomable about the banking system here. After such an infamous catastrophe, why on EARTH wasn't some kind of deposit insurance program enacted? The US, EU, Canada, India, Russia, Australia... even Uruguay has realized that insurance is fairly critical to boosting confidence and preventing bank runs during economic crises. So how can Argentina expect any half-sentient person to leave more than the bare minimum in an uninsured account, especially when the corralito is still such a recent memory? Hell, Americans still got jittery about their deposits in 2008, and that was a whopping 79 years after our last bank run.

 

[el_expatriado]

This is something I find unfathomable about the banking system here. After such an infamous catastrophe, why on EARTH wasn't some kind of deposit insurance program enacted? The US, EU, Canada, India, Russia, Australia... even Uruguay has realized that insurance is fairly critical to boosting confidence and preventing bank runs during economic crises. So how can Argentina expect any half-sentient person to leave more than the bare minimum in an uninsured account, especially when the corralito is still such a recent memory? Hell, Americans still got jittery about their deposits in 2008, and that was a whopping 79 years after our last bank run.

Argentina has a deposit insurance scheme. I think (but don't quote me on it) that the limit is $20,000 pesos per depositor. The problem is that you are insured by the Argentine government, and we all know what their promises are worth.

Now if Argentina contracted with the FDIC or with Germany to provide their deposit insurance, people might be willing to put their cash back into the banks here.

 

[John.St]

Now if Argentina contracted with the FDIC or with Germany to provide their deposit insurance, people might be willing to put their cash back into the banks here.

- at a premium of 80 percent of the deposit?

Nobody in their right mind would offer a deposit insurance at less