Dollar Purchase Restrictions May Be Lifted In June

[thorsten]

Yes, profit margins differ all over the world. No, over 100% is obviously not a realistic figure. But if your policies suck, you need someone to blame (and a Navarro who spreads the propaganda).

 

[Rich One]

Wasn´t there a thread about this recently? And one of the outcomes was that the profit margin for supermarkets is not the same all over the world?

Don't remember perhaps varies but not to exceed 10 %, Now 100 % and over .... give me a break!

 

[germano]

Don't remember perhaps varies but not to exceed 10 %, Now 100 % and over .... give me a break!

Just for clarification: with my post I was not trying to support the 100% profit margin theory for Argentina.

 

[Gringoboy]

And the likelihood of restrictions being lifted?

 

[germano]

And the likelihood of restrictions being lifted?

Right! That was the original topic. One thing that I will never understand about the current dollar exchange policies is why a government that needs dollars would implement the policies that are in place right now. Isn't the result that on one side people legally exchange pesos to dollars (government losing dollars) at the official + 20% / + 35% rate - but nobody with an idea of mathematics exchanges dollars to pesos via the official way? Dollars (or other foreign currencies) go mostly to the black market. With that in mind a devaluation of the peso to the current blue rate/dólar tarjeta and getting rid of the 20%/35% taxes would be in Argentinas interest. Maybe combined with removing some of the restrictions or at least making it possible for people with lower income to legally get dollars for savings.

 

[Gringoboy]

Not an economist, so wouldn't know what to suggest.
How did Brazil manage to get the Real to become THE currency of that country? As opposed to the USD, I mean.
Surely here, we need one thing or the other which is why everything is such a mess?

 

[EdRooney]

The answer to your question is: context. The Blue market accounts for 5-10%of dollar transactions (5 according to Indec, 10 according to private consultancies). We seem to lose sight of that because this forum is practically the epicentre of the blue market, but in the overall context of the Argentine economy, it's not a huge thing.

Furthermore, in spite of CFK's silly rhetorical flourishes, the govt's monetary policy has always been in favour of devaluation, but aiming at slow gradual devaluation instead of huge spikes.

 

[thorsten]

Not an economist, so wouldn't know what to suggest.
How did Brazil manage to get the Real to become THE currency of that country? As opposed to the USD, I mean.
Surely here, we need one thing or the other which is why everything is such a mess?

The main prerequisite for a currency is trust. Each bill ist just a cheap piece of paper, what makes it valuable to us is that we can expect to be able to buy about the same number of products tomorrow as we can today. If this is given, there is no widespread need to flee to other currencies. The main issue here is the lack of trust: one one hand, Argentines were fucked over their currency in the past - something like this sticks in general in mind for quite a bit. On the other hand, the current situation does not help in creating trust: a big devaluation at the beginning of the year, shrinking foreign reserves and outstanding credit risks like Club Paris or the hedge funds. Hence, it's natural that anyone who has the possibility keeps their funds in peso low and tries to put the rest of the funds either in other currencies or in material assets such as apartments.

 

[ARbound]

The main prerequisite for a currency is trust. Each bill ist just a cheap piece of paper

This is what's called intrinsic value (the ethics more so, but the economic one works too). After the end of Bretton Woods & Nixon Shock (to the horror of many hardcore libertarians I might add) the United States, Americans, and pretty much every other country and person too learned to put it's faith in the USD even though it was not convertible for its value in gold anymore, why?

It has an intrinsic value:

The United States DOESN'T default on debt repayments, is a huge importer/exporter, is home to the worlds largest multinational companies, has PREDICTABLE economic policies, has large domestic mineral and agriculture supplies, free trade accords and does not have rampant, UNCONTROLLED INFLATION. If Argentina could get its stuff together on the caps lock points then it might be possible to have *some* intrinsic value and faith brought to the peso.

Otherwise we need to get ready for a Nuevo austral or extra 0s at the end of our facturas...

 

[ajoknoblauch]

This is what's called intrinsic value (the ethics more so, but the economic one works too). After the end of Bretton Woods & Nixon Shock (to the horror of many hardcore libertarians I might add) the United States, Americans, and pretty much every other country and person too learned to put it's faith in the USD even though it was not convertible for its value in gold anymore, why?

It has an intrinsic value:

The United States DOESN'T default on debt repayments, is a huge importer/exporter, is home to the worlds largest multinational companies, has PREDICTABLE economic policies, has large domestic mineral and agriculture supplies, free trade accords and does not have rampant, UNCONTROLLED INFLATION. If Argentina could get its stuff together on the caps lock points then it might be possible to have *some* intrinsic value and faith brought to the peso.

Otherwise we need to get ready for a Nuevo austral or extra 0s at the end of our facturas...

Or maybe Argentina will simply adopt the bitcoin, just out of spite: http://www.forbes.com/sites/kenrapoza/2014/04/07/brazil-follows-irs-declares-bitcoin-gains-taxable/