the exchange rate of argentine pesos to usd really started to go bad about 10 years ago - in late 2013 it was 6:1 - now it’s 350:1. what happened?
People in the USA complaint about the government “printing money” (which devalues each unit of currency) and the USA last did in 2020, but Argentina does have a history of borrowing money from other nations or from the IMF and “printing money” to pay back the loans. Its a really vicious cycle because when they do “print” more money they have to increase the interest rates to attract anyone willing to hold the currency (usually in government bonds). Since Argentina has a bad reputation for doing this, they have to have REALLY ATTRACTIVE interest rates.
For USA as a frame of reference, our prime interest rate is currently 8.5% which is high compared to the last 30 years or so (it was 12% ish back in the late 1980s when it was considered REALLY bad). Now back to Argentina. In October, they raised their interest rate from 118% to 133%!
I feel really bad for the people of Argentina. From the outside it looks like the whole country is a debt trap for the average person. How can they possibly get out of that on their own at the individual level?
Probably you’d want to spend money as soon as you have it, to put it into something that isn’t depreciating as fast. As stupid as it sounds, gold or silver coins might be a good idea, if you can get your hands on it, but any physical asset would do, maybe? Buy a bunch of jetskis. :p
so the argentine govt intentionally devalued their own currency? wow
Let me guess, their ruling class is doing fine.
Argentina should start using another currency that isn’t inflating like crazy by switching to the more stable USD, or perhaps a deflationary currency.
I would like to travel to Argentina but the hassle of having to pay with crisp, high denomination US dollar bills, and everything that goes along with that is too much.
Don’t cry.
