BUENOS AIRES – Argentines have long been known for their passion for wine, steak and tango. But the unspoken object of desire for the past few decades has been the cash U.S. dollar, which sells for about double the official exchange rate on the black market here.
On a brief stroll down Calle Florida in downtown Buenos Aires and you will hear a veritable Palestrina of shady black-market money changers singing, “Cambio, cambio caballero/a, cambio,” in a thousand different tones.
The Argentine government has imposed stiff regulations on trading with U.S. dollars here, an anti-U.S. policy, characteristic of the populist Argentine Presidenta Christina Fernández Kirchner.
Venezuela also has such a policy, which is meant to keep money inside the country and steer investors back home.
It doesn’t help that the Argentine peso – which officially exchanges for AR$5.7 to the dollar – is worth less than half of what it was five years ago.
Strapped for cash, I sold a U.S. $100 bill on Calle Florida this weekend for $940 Argentine pesos – nearly twice the official exchange rate. The official rate is what you pay at a bank, ATM or with a credit card.
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It doesn’t take long for the thrill of doubling your money in 30 seconds behind a magazine kiosk to wear off, when you realize you are not the only one who knows this trick.
I spoke with several porteño merchants in this bustling city who told me that most every business in Argentina fixes its prices to the AR$10-to-US$1 exchange rate, regardless of what the government tells them.
Such a revelation gives you an idea of how far the ripples in the local economy go.
Most every aspect of Argentine life is disrupted by the country’s false currency figures, said Carlos Gonzales, a salesman in Buenos Aires’ San Telmo neighborhood.
A common complaint is that, when Argentines want to travel abroad, obtaining foreign currency is nearly impossible. As a result, many purchase U.S. dollars or Euros on the black market, but have to pay double the price. This discourages international travel.
“I have relatives in foreign countries that I can never go visit because I can only get a couple hundred dollars,” Gonzales said. “What can I do with two hundred dollars? Nothing.”
The noble lie
A January article in the Economist magazine titled, “Don’t lie to me Argentina,” called the Argentina’s inflation coverup an “extraordinarily elaborate deception.”
For some Argentineans, their government lying about its currency is a metaphor for Kirchner’s presidency and party politics; For other’s it is more forgivable.
Laura Paris, who co-owns a tea company in Buenos Aires, said that she likes “Christina” and her policies, just not the currency manipulation.
“Sure, she makes mistakes, just like every president of every country, because there are things that you have to solve diversely,” Paris said. “I like to live in this country because anyone can find work if you have the drive, and other parts of the world aren’t like that.”
Comparison’s between Kirchner and Eva “Evita” Peron have been made because of their shared socialist policies and expressed compassion for the poor.
Friends, foes
As the shop owners and I discussed money and the actions of Argentina’s liberal president, comparisons to “Chavismo” inevitably came up.
Kirchner’s presidency, along with the administrations of Bolivian President Evo Morales, Ecuadorian President Rafael Correa and the life-after-death policies of the late Venezuelan president Hugo Chavez have shown a focus on helping indigenous and poor, populist ideals, in their respective countries.
Evita’s husband, Juan Domingo Peron, who was the 29th and 40th president of Argentina, was considered a populist.
Money drawn from the Argentina’s Central Bank to support social programs during the Kirchner administration has greatly devalued Argentina’s currency. Journalists, such as Merco Press, a South Atlantic media agency, have predicted that the country would fall into a deeop economic depression in 2014.
Jorge Panzar, a semi-retired businessman from the south of Argentina and a member of the opposition, said that the country’s currency problem was a result of a big ego on the part of the politician in power.
“It is pride,” he said. “She values only herself, and for the rest of us, we have to pay.”
Interesting article and I like the marionette, it is a great way to conclude the video.