Tuesday, October 19

The dollars in ‘the mattress’ of the Argentines exceed 230,000 million


At the end of 2001, Argentines were competing to hoard dollars in their homes. The persistent rumor that the Convertibility Law, that established the equivalence between the dollar and the peso, was on the way to being the chronicle of an announced death of that forced change, which lasted for a long decade, became a reality. Twenty years later, the peso begins to resemble those quasi-coins of the provinces, of little value, which in its day the Minister of Economy, Roberto Lavagna, managed to bury although some were resurrected. Today, as yesterday, the only currency in which Argentines have faith, the greenback, continues to be the most precious asset and distrust in banks continues to be reflected

of doors inside the houses where, according to the Indec (National Institute of Statistics and Censuses) they store more than 230,000 million.

The tradition of keeping dollars under the mattress went down in history. The hiding place is too obvious and the Argentines, famous for their creativity, invented or resorted to other secret spaces at first glance. Some examples illustrate this trend; the cut hems, the movable plank of the parquet floor, the double bottom of the garbage bags, the width of the doors that are not solid and the most commercial, the bottle of detergent that you can buy in a store and that in actually, it is a well disguised piggy bank. In these spaces and other unknown areas, the population hides, according to the Indec, more than five times the debt that Argentina maintains with the International Monetary Fund (IMF). If such capital were to come to light, as he declared to Efe, Marcos Buscaglia, founder of Alberdi Partners, We would be talking about a sum equivalent to 55 percent of Argentine GDP. “They are dollars – he assures – that can be in a safe in an Argentine bank … hidden in people’s houses or in ‘offshore’ accounts” of “Uruguay, the United States or some tax haven.” According to his estimates, “it is much more silver (money) than there is in the Argentine financial system”, since bank deposits, he calculates, add up to about 67,000 million dollars to the parallel exchange or ‘blue’, as it is known colloquially for sale in ‘arbolitos’ (street moneychangers) or private exchange houses.

According to Indec, in the second quarter of this year, the round figure of hidden millions of dollars would be 233,323. The reason for this decades-old habit is explained in a local saying, “He who was burned with milk, sees a cow and cries.” In the words of Buscaglia, it is due “to fear of deposit confiscations, devaluations and inflationary instability.” Only in August of last year inflation exceeded 51% and today the gap between the official exchange rate and the ‘blue’ is 88%. The other is not worth mentioning.

These data come at a time of political turbulence. The Government is weakened by the defeat of the primary where it lost 16 of the 24 Argentine provinces, equivalent to four million votes that were its own and they went down the drain of discontent.

Elections in November

The pulse between the president, Alberto Fernández, and his vice president, Cristina FernándezAfter the crash it became more evident than ever and seems to have no end. The authority of the first is questioned along with the performance of the Minister of Economy, Martín Guzmán, and the change of half a dozen ministers imposed by CFK, acronym by which the widow of Néstor Kirchner is known, does not seem to have the desired effect. In the face of the November 14 elections, where the Congress and the Senate are partially renewed, the restrictions due to the covid have been eased but the discomfort of the population persists. Mariel Fornoni, Managment & Fit director pointed out that “the polls indicate that 7 out of 10 Argentines believe that the confrontation between the president and the vice president weakened the government coalition and more than 6 out of 10 believe that the changes in the Cabinet they will not generate positive changes. What’s more, 35% believe that it will make it worse. In short, “it is difficult to assume that the result can be reversed in November.”

More than 40% of the population lives below the poverty line and the spirits, in the longest confinement that are remembered, does not seem that they are susceptible of modification no matter how much one tries to irrigate with subsidies and handouts. Argentina urgently needs investments to grow sustainably but capital is not willing to take risks that cannot be hidden. “Between the fact that there is little saving (within the financial system) and that saving is destined to finance the Government, there is very little to finance the private sector,” Buscaglia developed. That explains that whoever can continue to keep the greenbacks in a safe place.

At the Council of the Americas last year Miguel Pesce, president of Banco CentralHe then considered: “Our estimate is that there are one hundred billion dollars in banknotes in our territory, a liquidity greater than that handled by some regions of the United States Federal Reserve.” With that number multiplying day by day and the not-so-distant memory of the ‘corralito’ that put a limit on cash withdrawals, it is seen that the Argentines of cows, the only thing they want is to see them on the grill and from there, straight to the plate .



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