Strongman VIDEO REPORT: Argentina 25% INFLATION but you can´t buy foreign currency. 4 EXCHANGE rates. You can´t buy gold ... watch it

Strongman, you're all over this, as usual, but let me add a few things that might help those outside of Argentina understand what's happening. First, take a look at the graph on this page:

[link to www.lanacion.com.ar]

For those of you who don't read Spanish, the blue line on the graph is the black market U.S. dollar to Argentine peso exchange rate (this rate is known as the "dólar blue", but is also sometimes referred to as the "dólar paralelo", or "dólar informal") and the green line is the official dollar to peso exchange rate. What jumps out at you, immediately, when viewing the graph, is that the black market rate is absolutely exploding, while the official rate, while definitely trending upwards (meaning that one U.S. dollar will buy more pesos over time, so the peso is falling in value relative to the dollar), is moving quite slowly compared to the black market rate.

The reason for this is that confidence in the peso has been totally lost, and the demand for dollars is absolutely off the charts. This is what happens when the government badly mismanages the country's finances and then ceases to regulate the exchange rate for its currency and leaves it to the black market to do it. There's a free for all among the citizenry, who are trying to get dollars at any cost, and as fast as humanly possible. They've seen this movie before, and they know how it ends for them -- badly.

Essentially, the official exchange rate has been rendered meaningless, since no one wants pesos. When you're on the ground in Argentina, things don't seem particularly amiss, but when you run the numbers, you see what's really going on. Let's say the average salary in a medium-sized town in the country is 5,000 pesos per month (you can correct me, Strongman, if you disagree with that figure). You can actually live decently on that amount here, but you realize in a hurry, when you go to travel outside the country, how badly you're being screwed. While you can manage your expenses and live okay here, as I mentioned, you realize you're becoming impoverished when you see how incredibly expensive it's getting for anyone who earns his or her living in pesos to travel.

Three months ago, your 5,000 pesos were worth $796 dollars (you can follow the day to day black market exchange rate here, if you're interested: [link to twitter.com (secure)] but today, those same 5,000 pesos are only worth $667 dollars. That's in just THREE MONTHS! Domestic inflation is bad enough, though it doesn't seem crazy when you're here, but the real fucked up shit is that Argentines are being isolated in their own country. As the black market rate skyrockets, it will become harder and harder for Argentines to be able to afford to buy dollars and to protect themselves, since it will take a disproportionately larger and larger percentage of their income to do it. Eventually, only the very wealthy, who make huge salaries in pesos, or do business directly in dollars, will be able to afford to travel.

But that's really just a symptom of what will be a terminal disease. Since no one trusts the peso, nor wants it, it has become a hot potato, with citizens getting out of it the second they're paid and into dollars. That trend is only going to accelerate, which means one of two things -- hyperinflation of the peso or an outright peso collapse, overnight. The peso is toast, and smart Argentines are well aware and are doing what they can to protect themselves.

The reason this is so important is that it's a case study for what is coming to all countries, everywhere, only instead of the Argentine peso you can select your fiat currency of choice, and instead of the U.S. dollar you're going to have in its place the only real money extant -- gold and silver.

You can't eat gold !!

Thank you for the report. I have tried to follow what is happening in Argentina because I believe the same will happen here.

Buy Bitcoin or digital gold online. Then you can convert it into any currency you like if you want. Or purchase physical gold out of the country online.

How can they successfully attack Bitcoin?

It's decentralized P2P.

So if the economy implodes into hyperinflation, what are you going to do?

Bug-out to a farm in the mountains?

Bug out of the country to Uruguay or Brazil?

Will the barter system pick up the slack in a hyperinflated economy?

Interesting how they prevent you from doing some of the things that could save your ass.

Your government is TRULY trying to turn you into perpetual peasants.

Bump, because even though our countries have our differences i think Strongman is a good guy and is only trying to educate and help us.

Carpenters - Don't Cry For Me, Argentina
[link to www.youtube.com]

We should cry for ourselves, tears of the moon

Best question in this thread so far.

Argentina produces nothing,exports nothing(exept beef maybe)..a lot of lazy parasites(sucking goverment/parents' titties)its like greece/spain of south america.

Just wait for food stamps..cheers

Peace

No market at all...no buyers and no sellers

No market of realstate

That can be interpreted both ways. No market as in no value for sellers?

Huge single floor apartments for 10k-20k usd for example would sound like a good market to me.

Argentina just tell Europe to give back all the silvef they stole

STRONGMAN:

5* - excellent job.

The use of Credit Cards to access 'cheap rate' dollars is a useful survival tip. The UK will be going into the same disaster soon, I can see it. The Governments will do anything and everything they can to trap you so the answer is of course gold / silver in your hands and ideally some stored in a 'safe' country, if such a thing exists.

CANT EAT SILVER!

You FUCKING CAN if your pesos buy shit-all and you can get some food with your silver, so piss off, idiot.

You will starve when the UK goes through this, and don't kid yourself: it will.

prices were booming thanks to a exports boom.

now the real estate prices are falling in US dollars.
there is a specific exchange rate for real state.
which is the average between the black market and the official rate in order to satistfy the seller and buyer the most.

CANT EAT GOLD EITHER!

the guy Paul believes inflation is "good" and it is not theft
he should visit argentina

there is a family farm 300 kilometers away from the big city . I may go to there in case of civil war.

Hey man,try and hang in there !!!
Maybe you need to go across the the Uruguay river or the River Plate and head to Uruguay my friend.
Or cross the Andeas and head for CHI-CHI-CHILE.......
You have my prayers, 'Tinians can get a LITTLE WILD, CRAZY AND VIOLENT WHEN THINGS GO BAD ECONOMICALLY, WHICH IS EVERY 5 OR 6 YEARS........

and that´s a global plan !

Interesting.

I take it the first time this happened it didnt quite work like that.

I heard stories of people in Argentina hedging in US dollars then buying huge half a million peso/dollars property after the entire financial system went kaput for like 25k usd.

People were so desperate to eat and survive everybody put property on the market and saturation resulted in a decline in USD value.

Technically the properties probably went up in pesos though right?

So the moral of the story is hedge your wealth in something outside of the current financial system of the country collapsing.

The exact same thing happened in Germany in the 1920's

yup

I cannot access the vid. Can someone post the Youtube or url link please.

[link to www.youtube.com]
Argentina Multiple exchange rates. Severe Capital Controls by Strongman Shelford

Thanks for Argentina updates Strongman. 5*

I think Krugman was exactly right, and he gave a short, correct argument that went straight to the point. You can invest in inflation protected bonds. But that was for Spain not Argentina.

Argentina is different:
(1) Krugman says Spanish inflation is 3%. That's nothing. You say Argentine inflation if 10% official or 25% actual. That's a whole different ballgame.

(2) If you don't have access to inflation hedges like gold, maybe you don't have access to inflation protected bonds either.

You have real problems that Spain, and this attractive young woman, do not have. Don't dignify her by taking up her cause. To ignore the plight of Spain's unemployed, for the sake of 3% inflation, suggests to me that this patrician young lady is quite ugly inside. I would expect her to say "let them eat cake."

You should have access to inflation hedges. Your situation is quite different from Spain. You have a left-wing government in place. Spain has Mariano Rajoy, who acts like an employee of the IMF. Quite different indeed.