Argentina tightening up capital controls

pmbug

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For posterity:


Economic conditions today are just a continuation of the problems from a decade ago. I just shake my head when I hear folks trumpet how we have a recovery here in the USA. The fundamental problems remain and will percolate back to the surface again.
 

swissaustrian

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If you got any relatives or friends in Argentina, warn them.
The CDS market is implying 60% probability of an IMMINENT default.

 

pmbug

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Well, I'll tell them, but I know what they are going to ask me - what can I do about it? The banking system is already on lockdown.
 

swissaustrian

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Get some food and water reserves and enough bullets to defend yourselves. Buy gasoline, cigarettes and alcohol as trading items.
 

DoChenRollingBearing

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Argentina in the last 100 years has never seemed to learn. YES to what SA says, any of YOU or you with relatives should try to buy PMs or survival and barter items.

Same advice for forward (!) thinking Americans. Coming to an Amerika near you soon?
 

pmbug

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... Today, in a futile attempt to halt inflation, the government of Cristina Kirchner announced a two-month price freeze on supermarket products. The price freeze applies to every product in all of the nation’s largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies’ trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government’s news agency Telam reported. As AP reports, "The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1."
Perhaps they will. What consumers will certainly do is scramble into local stores to take advantage of artificially-controlled prices knowing very well they have two short months to stock up on perishable goods at today's prices, before the country's inflation comes soaring back, only this time many of the local stores will not be around as their profit margins implode and as owners, especially of foreign-based chains, make the prudent decision to get out of Dodge while the getting's good and before the next steps, including such measures as nationalization, in the escalation into a full out hyperinflationary collapse, are taken by Argentina's female ruler.
...
So to summarize: first capital controls, then a currency crisis, then expectations of sovereign default, then a rise in military tensions, and finally - price controls, after which all out chaos usually follows.

Study this sequence well: it is coming to every "developed" country near you in the months and years ahead.

But, as with every other hyperinflationary implosion, there is a silver lining: the stock market is soaring...
More: http://www.zerohedge.com/news/2013-...et-prices-halt-soaring-inflation-chaos-follow

:(
 

DoChenRollingBearing

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...

Argentina is shitting into its mess-kit faster than $25 hooker rides her johns.

By now, the WHOLE WORLD knows that price controls (particularly on food staples, etc.) DO NOT WORK. President Cristina probably has some other agenda she is working on here, I wonder what is going on in that devious mind of hers. Skim-and-scoot? Even she knows this will not end well for Argentina nor for her legacy.

Legacy? Bwa ha ha ha ha ha ha ha ha!
 

pmbug

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Yeah, I'm afraid this is a desperate measure. Time may be running short for Argentina.
 

ancona

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I remember the 90 day price freeze back when Nixon was Preezy, remember how well that worked?
 

Unbeatable

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Days After Freezing Prices, Argentina Bans All Advertising

http://www.zerohedge.com/news/2013-02-09/after-freezing-prices-argentina-bans-all-advertising

in the latest stunner of a government decree (which like Venezuela yesterday is merely a harbinger of what is coming everywhere else), has banned advertising in the Argentina's newspapers in an attempt to weaken what's left of a private, independent media, and to punish those who don't comply with the government's propaganda.
 

pmbug

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Unbelievable. When do the Argentine people get riled up enough to revolt?
 

Unbeatable

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That video you posted above PMbug shows quite a few revolting near the end. It's also set to a song/rap that's subtitled, very powerful to listen to/read when you think of what's coming our way soon. I will be interested to see how the people respond to this as a sign of what could happen here when they start doing similar
 

swissaustrian

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Residents of the Falkland Islands voted almost unanimously to stay under British rule in a referendum aimed at winning global sympathy as Argentina intensifies its sovereignty claim.

The official count on Monday showed 99.8 percent of islanders voted in favor of remaining a British Overseas Territory in the two-day poll, which was rejected by Argentina as a meaningless publicity stunt. There only three "no" votes out of about 1,500 cast.
http://www.reuters.com/article/2013/03/12/us-falklands-referendum-idUSBRE92B02T20130312

99.8% ??? That's hard to believe...
 

swissaustrian

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Sure, a lindslide was to be expected, but 99.8%. That's a soviet style result. There should have been a few more pro-Argentinian votes imho.
 

stockjockee

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Argentina Turns To Gold As Inflation Tops 26%

Despite an increase in risk appetite in recent months, systemic risk remains. As Reuters' Pedro da Costa noted the "global impact of events in Cyprus casts doubt on the notion that the financial system has gotten a lot stronger since the crisis." The Cypriot deposit levy is creating jitters among some investors who are increasing their gold positions.

Argentines are buying more gold than ever to protect their savings from the Western Hemisphere’s fastest inflation reported Bloomberg.

Banco de la Ciudad de Buenos Aires, Argentina’s only bank offering gold bullion coins and bars to investors and savers is negotiating with mining companies to purchase gold direct as surging demand depletes the scrap supply.

The bank began marketing gold to clients after Argentina tightened currency controls in October 2011, selling 280 kilos in year one for 102.6 million pesos ($20 million).

Argentines are utilizing gold to hedge their savings as economists forecast the peso will lose more value than any currency in the world, and President Cristina Fernandez de Kirchner forbids dollar purchases.

The nation’s inflation rate of 26% is also eroding Argentina’s peso- denominated bonds to fall 5.5% ytd.

“I’m buying gold every chance I get,” Guillermo Acosta, a 27-year-old security guard, said inside a branch of Banco Ciudad in downtown Buenos Aires. “With this inflation, I feel like my savings will evaporate if I keep them in pesos.”

Acosta’s initial investment of 10 grams of gold in February last year has returned 47% as the price per gram rose to 381.5 pesos from 260 pesos.

With Argentina printing pesos to finance itself, the growth of pesos in the economy has rose 38% in the past year, leading analysts to predict that the currency will depreciate 12.9% through year-end, the highest of currencies tracked by Bloomberg.

Banco Ciudad is the only bank left that trades in gold after Fernandez banned the purchase of certified 99.99% pure gold for savings in July. The bank sells it at 99.96% purity, according to Carlos Leiza, who oversees the lender’s gold trading.

There is a 35% gap in the prices to buy and sell physical gold at Banco Ciudad, while there’s no premium to sell the country’s benchmark 2017 dollar bond in the local market, according to the Buenos Aires-based Open Electronic Market, known as MAE.

Gold sold by Banco Ciudad also isn’t recognized internationally, making it more difficult to determine its value, he said.

The cost of 100 grams of gold in Argentina as of last week was 36,646 pesos. In New York, the same amount based on the benchmark troy ounce (31 grams) sold for about $5,126.

The bank multiplies that price by 0.95 to account for the lower quality of the gold to get a dollar price of $4,870.

“Historically, gold has been seen as a store of value, so as long as options for doing that in Argentina are limited, people are going to keep buying it,” Banco Ciudad’s Leiza told Bloomberg.:wave:

http://goldsilver.com/news/argentina-turns-to-gold-as-inflation-tops-26/
 

pmbug

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According to Google, 36,646 Argentine pesos equals $7,190.86.

($7,190.86 / 100 grams) * (31.1034768 grams / troy ounce) = ~ $2,236.61 per troy ounce

Whoa!
 

pmbug

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The streets of Buenos Aires are full of revolting Argentinians this evening as they protest President Cristina Fernandez de Kirchner's (CFdK) plans to 'increase' state control of the court system. CFdK's proposal looks to limit the judicial system's ability to bring actions against the state, as Bloomberg reports, leaving citizens and companies unprotected against state actions affecting their finance or assets (i.e. mass nationalization or confiscation). ...
More (incl. pics): http://www.zerohedge.com/news/2013-...-government-push-take-control-judicial-system
 
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