Economy What it looks like when a country doesn’t trust its banks

[FrancisFlex]

At least this story is written by someone who lived here. Still it is aimed towards those who have not, explaining how the recent USA bank runs can be compared to life in Argentina. Better written, and better researched than the other “I was a tourist for weeks/months and you will not believe how it is in Argentina” articles that have been published this year.

What it looks like when a country doesn’t trust its banks

 

[RichardOne]

It's good to read a clear description of what is happening in the financial sector in Argentina. However not a clear what the future will bring..?

 

[FlowRose]

At least this story is written by someone who lived here. Still it is aimed towards those who have not, explaining how the recent USA bank runs can be compared to life in Argentina. Better written, and better researched than the other “I was a tourist for weeks/months and you will not believe how it is in Argentina” articles that have been published this year.

What it looks like when a country doesn’t trust its banks

Why doesn't everybody in Argentina have one of these?:

https://www.amazon.com/Counter-Mach...sprefix=argentine+peso+counter,aps,148&sr=8-1

 

[Milton12]

I must admit I didn’t know money counting machines detect fakes too but given that they do then presumably all property lawyer offices have them too?

 

[RinderHerts]

This is a pretty simplistic article.
first, everybody I know in Argentina uses their bank every day, and pay for everything from a coke at the kiosko to their utility bill by transfering money direct from their bank account.
So its not exactly they dont "trust" the bank.
Its that the peso is not safe against the constantly increasing value of the dollar. And that interest rates paid by banks on savings are not worth risking the loss of value against the dollar.
Since most imports, and most of argentinas exports, are priced in dollars, the FX issue is a giant part of what people call "inflation".
The US hundred dollar bill is the paper currency of choice in huge swaths of the globe- Argentina is not unique in this respect.
Approximately half of all US hundred dollar bills are outside of the US, being used for a stable currency. A lot of this is illegal business, or tax avoidance.
Which is another thing the article skips over- a lot of the cash use in Argentina is to avoid taxes.
In the US, the laws and banking system work much better to track untaxed transactions, and tax them- hence the lower use of cash.
The Argentine use of US cash is more a testimony to how bad the enforcement systems and laws are on things like property transactions.
Argentines risk trusting banks in the US and Uruguay, for example, even though there is risk of bank collapses in both countries.
Argentines often point to the coralito, in 2000, as a reason not to trust banks here, and to keep there money in Urugayan banks- but in 2002, the Urugayan bank crisis caused a huge run on the banks, and five major banks collapsed, and hundreds of millions of deposters money vanished- and yet, Argentines still "trust" Uruguayan banks, which really means, tax evasion.

 

[earlyretirement]

I must admit I didn’t know money counting machines detect fakes too but given that they do then presumably all property lawyer offices have them too?

You have to be VERY careful. Some of the counterfeits are very very good. I once sold an apartment and we counted the money and even used those money counting machines that detect fakes. One single $100 bill passed all tests.

Anyone that goes to a closing of a property sale/purchase in Buenos Aires probably has all dealt with these money counting machines. Typically at the ones that I went to, first it went through a machine and then people would always count it.

One bill I got was actually made with real money but I guess they somehow bleached a $1 bill and reprinted it but it looked exactly genuine. It passed all tests and even had what looked like a water mark on it. It was the best fake bill I ever saw.