Blue Dollar 2013 Projections .... Blue Sky...!!

[John.St]

[font=Arial'].... Instead, I was talking about how foreigners with access to $US obtaining a black market rate in BA to buy pesos nurtures the growth of a black currency exchange market and the illegal activities these depend upon or breed. I was questioning the propriety of supporting that so as to enable oneself to have things for 30% less than what they cost the 90% of Argentines who don’t use or budget their peso expenditures in terms of what they’d cost in $US at the black rate. [/font]

Why is there a black ("blue") US$ market?

Did the foreigners create it or is it the result of a totally erratic economic policy, made in Argentina?

 

[ElQueso]

Sockhopper, maybe you missed our point in response to yours. the truth is, i understand what you are saying, but I don't understand at all where that feeling comes from when all things are considered, and I refuse to validate it.

The black market rate exists for both Argentinos and foreigners. The problem is NOT the black market rate, but the Argentine economy and the idiot things the government does to hide problems and try to control things. Certainly not the foreigners' fault.

A black market currency rate does not exist in the US because it doesn't need to. The fact that there is a black market rate in Argentina merely demonstrates that contrary to whatever a government wants to do, it simply cannot control human desires. A free market will always arise where controls are implemented and it's called "black" because it is contrary to whatever arbitrary policies the government has put into place. The fact that it exists proves that those who are involved in it do not agree with the government's ideas, and in this case there are a lot of people involved, an extremely small minority of those being foreign visitors or residents.

Now, you said "[font=Arial']how foreigners with access to $US obtaining a black market rate in BA to buy pesos nurtures the growth of a black currency exchange market and the illegal activities these depend upon or breed."[/font] The first thing I would ask is, is it just the illegality of this that you are concerned with? Or do you think that this is somehow causing a violent criminal class similar to the "War on Drugs" kind of policies like the States has, which does indeed breed violence and other issues, that ends up really hurting the Argentine people? And if so, in what way, exactly, does this currency black market do that, or hurt the people in any way?

This concept of "[font=Arial']Argentinos deserve the same respect from us when we’re in their country[/font]" is a bit strange to me when applied to this precise situation. How is buying currency on the black market disrespecting Argentinos? I guarantee you, those Argentinos who have dollars, or other currencies, are not dumb enough to go to an "official" place and lose 30%+ on their transaction if they want to buy pesos. Of course, they don't WANT to buy pesos because they realize that it is not a good investment. And there are PLENTY of Argentinos who have dollars and exchange them on the black market. I have never met a foreigner when I go to my cueva to pick up my money, but rather all Argentinos. I used to do business at another place, and the mixture was much more even between foreigners (mostly Asian) and Argentinos, but that was an official exchange house (run by ARGENTINOS) who also heavily traded in currencies and provided "cueva" services as well. I see more Argentinos exchanging money on Florida (at least where I go) than I do foreigners. When I go to see the guy I use, he's almost always talking to an Argentino who is a client and comes as well to change money.

If someone tells you they resent us coming here and changing our money and getting better than the current rate, you are talking to either A) people who are "true believers" in Cristina's class of Peronism or B ) people who don't have dollars and are jealous or C) people who dislike foreigners to begin with and whatever WE do, even if it's EXACTLY what they do, they are going to complain, or D) any combination of the above. I suppose I may have left some class out, but I think those are the main ones.

Do you realize that the government is lying through their teeth on so many things here, and keeping their currency at an artificially low rate in relation to the dollar has more to do with benefiting the government debt than anything else, cheating investors who have already been cheated once by the default?

On top of that, who the hell says that I don't have the right to go to someone and exchange currency with that person if we are both consenting to such a practice?

Have you ever gone to buy something at a store and the owner tells you that if you don't ask for an invoice he will give you a discount? That discount just happens to be 21%. Why do you think that is? Maybe because he doesn't have to report that sale to the government so they get their "fair" share? Are you going to pay the extra 21% when he's offering you a discount? Maybe you would, maybe there are many who would, and that's ok, I have no problem with that. What you are respecting, though, is not the Argentine people, but the Argentine government. Just be sure you are clear on what it is you are doing. Because the Argentine people, for the really big part, find ways to get around their government. Why should you respect something many don't? I was always taught to beware people doing things for altruistic reasons. This example is more "wrong" than trading currencies, in my opinion, but it is done many times a day, by Argentinos and those who speak the language and understand what's going on.

Thing about governments and paying taxes is that when the government is responsive to the people, and the proceeds from the taxes at least are used to do what everyone has agreed should be done, I can understand people saying "everyone should pay their fair share." But do you think that's what happens here? Hell, even in the US, where there is less open corruption and more money makes it to where it's supposed to go than here, the government doesn't really comply with what has been agreed upon. Here, those in power use a good portion of the money collected in taxes to line their own pockets and pay for their allies. I mention this because it relates, again, to what the government is doing in trying to manipulate their currency. Like inflation caused by government policies, it is a form of theft. I don't respect a government that steals, personally, but that's my own code.

And we're not talking about taxes in this specific example. We are talking about two commodities, both currencies, and a government is trying to tell everyone what the value of one of the commodities should be, not letting the two parties agree between themselves what their relative value is, that people should take a hit here in Argentina "because they say so" and pay what they say the price is.

Would it be alright with you if I went across the border to Uruguay and traded my dollars for pesos AR at a rate that is not the Argentine "official" rate? If not, why not? Are you saying that because the government printed the money it has the right to determine the value of that currency and enforce that value internationally? Even if the value is not agreed on by anyone else? That's like a judge trying to enforce a contract between two people, on a third party who was not a participant in the contract. There is no one in this world, except for the government itself and its true believers, who even says that the official rate is the real value of the currency.

Now, if Argentinos don't like foreigners with money coming into their country, that's a different thing. When they create such a law, I'll be among the first to leave. Until then, if I have dollars and someone else has pesos, and they want dollars enough to pay me more than the government says those pesos are worth, I will make that exchange every time and anyone who thinks that this is somehow insulting people, in my opinion, are free to pay the official rate and take a loss. And accept the derision from everyone else in the process - including, (most likely) those same Argentinos who you seem to think resent this.

Personally, I've never met a single one.

 

[EricM]

I think it is important to remember that for every dollar sold, a peso is purchased by someone who wants one, and the only thing that can be done with a peso is purchase goods or services in Argentina. The exchange exists because people who have pesos and need dollars (to buy parts for their factory that are not made here, for example), can trade with people who have dollars and want pesos (to buy goods or services in Argentina). If the government supported this valuable exchange, as 193 other countries in the world do (ok, I excluded China and Myanmar), this issue would not exist. However, exchange rate would be the blue rate because it is the one the free market has determined is correct.

At this point the official rate is simply a tax the government imposes on those it is able to box in to in order to get more money for themselves.

 

[camberiu]

[font=Arial']Brazilians who shop in the US aren’t using black market rates in the US or supporting a black currency market there. They’re exchanging money at the bank rate of banks and exchange houses that are legal and authorized to conduct exchanges. This IS what assures Americans, for example, that Brazilians aren’t paying less than US citizens pay for goods and services sold in the USA. [/font]

Do you know why Brazilians in the US or Americans in Brazil do not use the black market to exchange currency? Is it because they are nice or honest? No. It is because there is no black market for currency. None. Zero. You could not find an arbolito or cueva in Miami or Sao Paulo if your life depended on it. It is not that they are well hidden. It is not that there are few of them. They just simply DO NOT EXIST. You need to ask yourself why there is a currency black market in Argentina and there is not one in Brazil, USA, Chile, Uruguay, Paraguay, Thailand or most other countries of the world. Once you are able to answer the question of why there is a black market for currency in Argentina, unlike most other countries, you will have solved this riddle. And you will see that foreigners have nothing to do with this.

 

[Rich One]

[font=Arial']If foreigners visited my country and were effectively charged 35% less than I pay, I’d be outraged. [/font]

Should foreign vsitors feel welcome in Argentina or be outraged to pay Much HIGHER domestic airfares and hotel rates than locals??
Never heard of this practice in Thailand Spain or Greece?

 

[glasgowjohn]

Should foreign vsitors feel welcome in Argentina or be outraged to pay Much HIGHER domestic airfares and hotel rates than locals??
Never heard of this practice in Thailand Spain or Greece?

If you are a legal resident of canary islands or Balearic Islands in Spain , you get a 25% discount on domestic airfares

 

[Rich One]

If you are a legal resident of canary islands or Balearic Islands in Spain , you get a 25% discount on domestic airfares

A discount for a small minority of residents of the Balearic Isles, as a Foreigner in Spain I pay the same as all residents of the Iberian Peninsula.!!!

 

[camberiu]

So now that the Fed just announced that will spend (PRINT) US$45 billion A MONTH to buy US treasuries, it will be interesting to see how that affects the blue rate.

 

[solerboy]

Should foreign vsitors feel welcome in Argentina or be outraged to pay Much HIGHER domestic airfares and hotel rates than locals??
Never heard of this practice in Thailand Spain or Greece?

If fact, residents of the Spanish Islands get a 30% reduction on air and boat fares.

 

[solerboy]

So now that the Fed just announced that will spend (PRINT) US$45 billion A MONTH to buy US treasuries, it will be interesting to see how that affects the blue rate.

I dont think

So now that the Fed just announced that will spend (PRINT) US$45 billion A MONTH to buy US treasuries, it will be interesting to see how that affects the blue rate.

I dont beleive what happens outside our little bizzaro world has any effect whatsoever on what happens here. My guess ? No effect whatsoever.