It's started......

[coolhunter]

Looks like people are starting to panic and take money from the banks (pesos & dollars) and apparently the banks no longer have dollars:-

http://www.lanacion.com.ar/1422233-el-gobierno-asegura-a-los-bancos-la-provision-de-dolares

It's going to be a bumpy ride for the next few months!

 

[sesamosinsal]

Thanks for the article.

I didn't know that the some of the dollars in bank accounts were also apart of the BCRA reserves:

"'Supposing that everyone takes out her/his dollars, we'll be left with $40 billion in reserves. Even though we would like those dollars to stay in the reserves, if they were to take them out, what would be the problem?', Boudou asked."

But if the BCRA is spending from $600 million (such as in January) up to $2.1 billion (in October) per month trying -- and failing -- to keep the peso where it's at, what happens when that money runs out?

 

[French jurist]

Thanks for the article.

I didn't know that the some of the dollars in bank accounts were also apart of the BCRA reserves:



But if the BCRA is spending from $600 million (such as in January) up to $2.1 billion (in October) per month trying -- and failing -- to keep the peso where it's at, what happens when that money runs out?

Total of the deposits in a foreign currency is about 14 billions of USD as of now.
As you said, part of this amount is deposited at the CB to serve as a guarantee (don't know which percentage though). But if that's 50%, the 46 billions of reserves can be diminished by 7 billions with no problem (furthermore USDs will enter the market with the liquidation of soy/corn/etc. exports).

Actual situation is due:
-Panic (sheep effect: people looking at the colas in front of the banks and going OMG) -> A pesificacion (transforming USD into pesos) would have already occured imho so there's no real need to be afraid. Hoping I'm right.
-Anti-K people who still didn't swallow the last election results (being elected with 54% on the first round can make people jealous indeed) & try to fuel the panic (I know someone who knows someone who knows someone who said : OMG!).
-Logic aftermath (was the government prepared enough? Don't know) when such a reform occurs.
-etc.

 

[dennisr]

It is a run, the dollar is cheap. It is a given the peso will depreciate, buy dollars now and make a cool 20% by doing nothing but wait. Everything to gain and nothing to loose. What did they think would happen, everyone roll over and play dead?

 

[snowboarder]

It would be amusing to watch the K apologists squirm as the dollar rises, if it wasn't so sad to see a great country continue to be ruined by "vivos" and their cult of personality zombie followers.

 

[JWB]

Actual situation is due:
-Panic (sheep effect: people looking at the colas in front of the banks and going OMG) -> A pesificacion (transforming USD into pesos) would have already occured imho so there's no real need to be afraid. Hoping I'm right.
-Anti-K people who still didn't swallow the last election results (being elected with 54% on the first round can make people jealous indeed) & try to fuel the panic (I know someone who knows someone who knows someone who said : OMG!).
-Logic aftermath (was the government prepared enough? Don't know) when such a reform occurs.
-etc.[/quote]

LMAO!! Even with the facts and reality right in front of you there will never be an admission of stupidity, will there? Another reason things will never change in this country.

 

[snowboarder]

In all fairness this "squirminess" is kinda like some sort of questioning of the K machine:

"-Logic aftermath (was the government prepared enough? Don't know) when such a reform occurs."

 

[elclandestino]

You fools made once the world's 3rd richest country a 3rd world country! Well done! It takes an incredible amount of stupidity, detachment from reality and commitment to do it!

If there weren't Peronists and militants, Argentina would have easily outdone Australia

It wasn't that long ago that you were a heaven for newly arrived immigrants

 

[ndcj]

It would be amusing to watch the K apologists squirm as the dollar rises, if it wasn't so sad to see a great country continue to be ruined by "vivos" and their cult of personality zombie followers.

Except that the dollar rising is necessary for Argentina's continued growth, regardless of which side of the argument you are on.

The dollar is/was being kept artificially low to prevent capital flight and for political gain before the election.

Reducing the value of the peso will help, not hinder, the government's social spending. Think about it for a minute

- Most domestic consumption in Argentina does not have any international inputs, thanks to the protectionist policies such as import restrictions. Subsidies and other types of social programs, like building dignified housing, etc, are paid for in pesos.
- The bulk of the tax base is paid for as a result of "hard" currency transactions (exports of soya, but also other thing).
- Argentina has relatively low levels of "hard" currency debt

So, it stands to basic logic that if the peso can be devalued beyond domestic inflation levels that the government can actually spend more in real terms on its programs.

This obviously hinges on taking real action in keeping not just real but also perceived levels of inflation in check, so that wage and price growth can also be slowed, otherwise there's a risk that inflation simply follows the devaluation of the currency and that makes it a zero-sum game.

 

[Bv3]

It is a run, the dollar is cheap. It is a given the peso will depreciate, buy dollars now and make a cool 20% by doing nothing but wait. Everything to gain and nothing to loose. What did they think would happen, everyone roll over and play dead?

It's more like "buy dollars now and hope to stay even by doing nothing but wait." It's almost certain the peso will depreciate by a good percent, but it is also almost certain that inflation will meet or exceed that percent. People are just trying to avoid losing the value of their money.