Is It Time To Close The Blue Market?

[internationalguy]

Joe, please you're just making it more painful. The only way to end the blue rate is to stop restricting access to dollars. Unfortunately they've made such a mess that whoever decides to end the restrictions (when and if they do) will have to face hoards of Argentines wanting to get dollars because with these crazy governments you never know what's going to happen. If you like to have currency exchange restrictions you should actually move to Venezuela... they have a much bigger spread between the blue and the official rate and it's a criminal offense to exchange currency outside government approved channels. You should move there if you really want to get royally screwed.

 

[Dublin2BuenosAires]

Joe, please you're just making it more painful. The only way to end the blue rate is to stop restricting access to dollars. Unfortunately they've made such a mess that whoever decides to end the restrictions (when and if they do) will have to face hoards of Argentines wanting to get dollars because with these crazy governments you never know what's going to happen. If you like to have currency exchange restrictions you should actually move to Venezuela... they have a much bigger spread between the blue and the official rate and it's a criminal offense to exchange currency outside government approved channels. You should move there if you really want to get royally screwed.

Agreed, but what is the proposed migration to normality plan here?

Tomorrow, if the exchange rate was normalised by international standards, what would happen? A rate of about 20 to 30 dollars to the peso would be my guess as there would effectively be a run on dollars held in Arg. The BCRA would have $0 UDS in reserve in about a month. There would be a run on current accounts as people took every cent out they had to convert to dollars either legally or on the street corners. The arbolitos would be the last men standing when the official dollars dried up. They could charge what they want.

There would be a legal and illegal dollar gold rush.

Until the peso is a trustworthy currency (anyone that optimistic) with a relatively stable forex rate I cannot see how anyone can propose that the currency market is liberalised.

It really is the right thing to do, but it would be so painful for a couple of years that I would not want to be around for the chaos.

What's best? Russian style liberalisation, take the pain and chaos and emerge years later as a potential stable strong economy led by those oligarchs who rode it out or were ruthless enough to take their slice or like king canut feebly try and manage the incoming tide?

The damage has been done, I have no idea how to escape it.

...and no, I don't think flat-lining and economy already in ER with higher interest rates will cut the mustard either.

Dazed and Confused.

 

[John.St]

There's already a mechanism to buy dollars at the official rate. With people converting their foreign currency at official banks there would be less of a shortage of dollars to provide to travelers. Piece of cake.

As far as closing the Blue Market, give me a badge, a pair of jack boots and AFIP's finest SWAT team and the cries of "Cambio, Cambio" would be a distant memory.

- add Gulags and concentration camps.

 

[joemama]

Joe, please you're just making it more painful.

Don't feed the trolls.

 

[AmigoArtistico]

I have all my money in CEDINs.

 

[John.St]

... Russian style liberalisation, take the pain and chaos and emerge years later as a potential stable strong economy led by those oligarchs who rode it out or were ruthless enough to take their slice

The difference would be 'a potential stable strong economy', as the ruthless oligarchs have been running the show for at least 60 years.

or like king canut feebly try and manage the incoming tide?

You've got that completely backfoot - you are certainly not alone in this. Knud (Canut, Cnut) was a very competent king, who was so tired of sycophants and flatterers that he decided to show that he was a mortal human.

The first written account of the Canute episode was in Historia Anglorum by chronicler Henry of Huntingdon, who lived within 60 years of the death of Canute (995-1035 AD). According to the story, the king had his chair carried down to the shore and ordered the waves not to break upon his land. When his orders were ignored, he pronounced: "Let all the world know that the power of kings is empty and worthless and there is no King worthy of the name save Him by whose will heaven and earth and sea obey eternal laws," (Historia Anglorum, ed D E Greenway).

 

[John.St]

I have all my money in CEDINs.

CED-IN IN-DEC

Good luck, my boy - you'll certainly need it!

 

[cbonanni]

Don't feed the trolls.

Joe is not a troll. He is a veteran poster who has made some hilarious contributions to this forum. He just falls off the reality wagon sometimes......

 

[Dublin2BuenosAires]

The difference would be 'a potential stable strong economy', as the ruthless oligarchs have been running the show for at least 60 years.

You've got that completely backfoot - you are certainly not alone in this. Knud (Canut, Cnut) was a very competent king, who was so tired of sycophants and flatterers that he decided to show that he was a mortal human.

The first written account of the Canute episode was in Historia Anglorum by chronicler Henry of Huntingdon, who lived within 60 years of the death of Canute (995-1035 AD). According to the story, the king had his chair carried down to the shore and ordered the waves not to break upon his land. When his orders were ignored, he pronounced: "Let all the world know that the power of kings is empty and worthless and there is no King worthy of the name save Him by whose will heaven and earth and sea obey eternal laws," (Historia Anglorum, ed D E Greenway).

Interesting, I stand corrected.

I bet most of these oligarchs and monopolies aren't too affected by the tide either.

 

[ajoknoblauch]

Agreed, but what is the proposed migration to normality plan here?

Tomorrow, if the exchange rate was normalised by international standards, what would happen? A rate of about 20 to 30 dollars to the peso would be my guess as there would effectively be a run on dollars held in Arg. The BCRA would have $0 UDS in reserve in about a month. There would be a run on current accounts as people took every cent out they had to convert to dollars either legally or on the street corners. The arbolitos would be the last men standing when the official dollars dried up. They could charge what they want.

There would be a legal and illegal dollar gold rush.

Until the peso is a trustworthy currency (anyone that optimistic) with a relatively stable forex rate I cannot see how anyone can propose that the currency market is liberalised.

It really is the right thing to do, but it would be so painful for a couple of years that I would not want to be around for the chaos.

What's best? Russian style liberalisation, take the pain and chaos and emerge years later as a potential stable strong economy led by those oligarchs who rode it out or were ruthless enough to take their slice or like king canut feebly try and manage the incoming tide?

The damage has been done, I have no idea how to escape it.

...and no, I don't think flat-lining and economy already in ER with higher interest rates will cut the mustard either.

Dazed and Confused.

Putin the Peronist: http://www.mareeg.com/putin-the-peronist/ (note the author)