Supermaket Association Juan Vasco Martinez, showing the “Supercard” which of course has to be red…

You thought that the Argentine government had gone nuts when they froze prices and banned supermarkets from advertising in newspapers? Well, that’s the beauty of Cristina Kirchner’s government, whenever they do something ridiculous in an attempt to stop sky rocketing inflation you can rest assured that their next measure will be even more bizarre.

Say hello to the “Supercard”, the credit card that the Argentine government will force people to use while boycotting the ones already found on the market. Domestic Trade Secretary Guillermo Moreno came up with this brilliant idea. Why let Mastercard or Visa keep 3% when you can force everyone to use “Supercard” that charges just 1%? Isnt it fantastic how these people chose what’s best for you? There’s the small matter of individuals actually having the freedom to use whatever kind of card they want, rather than being forced to use a shady credit card created by corrupt politicians and their associates. For now, Supermaket Association  Juan Vasco Martínez said “no one’s talking about banning anything… but” said Martinez smiling like a weasel “ lets say the dynamic created by the Supercard will end up excluding the others, because of the market…”.

The Argentine Ripoff BS – English translation would be: The government got together with the main big name supermarkets and together planned to get rid of credit cards and force everyone into using their own lousy credit card called “Supercard”.

I cant wait to see what snake oil solution they’ll come up with next.

FerFAL

I’ve read your book and I have a great respect for your opinion.

Having gone through the economic collapse that you experienced, what

do you think of holding money in Swiss francs or Canadian Dollars as a

safe guard?

Dan-

Hi Dan, I think both the Canadian Dollar and the Swiss Franc have been pretty stable in the last few years, the Swiss Franc clearly being the one sought after as a safe haven in complicated financial times. This actually caused the SF to be over-valuate and measures had to be taken so as to stop it from going up further.

It is worth reminding everyone that the Swiss Franc is no longer backed by gold as it once was. That stopped in May 2000 after a referendum.

In the case of Argentina it worked out the following way:

Knowing that our peso currency was weak, people saved in dollars, both cash stashed in home and USd accounts in banks. Back then the currency exchange rate was 1 to 1, so it made sense to save up on the much more reliable Usd than the unstable national currency. Besides, who were we kidding?  One dollar equals one peso with our country’s track record of  hyperinflation and devaluation? As soon as people saved up a bit of money, they turned it to USD and saved it in the bank. When the economy collapsed people rushed to the banks to close their accounts in USd, since all of a sudden those dollars where worth 3 pesos, then 4 the following day. The banks froze everyone’s accounts and closed their doors. Eventually going against the law and constitution they converted people’s accounts in dollars to pesos at a 1,4 exchange rate. Given that everything had gone up in price indirectly proportional to how the peso was being devaluated, you ended up loosing about 60% of your savings.  Just as the peso went from 1:1 to 1:4, prices had suddenly gone up 300% or more, somewhat keeping up with devaluation.

After the economy collapsed and people had to get by as best as they could what you did was again, save up little by little and convert your money to USD or Euros as soon as possible, and only digging into your cash stash if you had to. As years went by and learning from what happened with banks during the collapse, a lot of wealthy people stored the physical cash, mostly USD, Euros and gold, in bank safe deposit boxes. Eventually the word got around: Money was again in the banks, but not in the accounts! It got to a point where gov. officials wanted to start opening safe boxes so as to see who was hiding physical money and precious metals.  I suppose they never went ahead with that idea because many politicians had they money hidden that way themselves!

2013 Silver Eagle Dollar BU in Airtite Coin Capsule

If something like that ever happens to USA and the dollar goes through a process of devaluation, Swiss Francs will protect most of your purchasing value. In a more extreme case where the dollar devaluates harder or fully collapses, then the SF may get hit hard, in which case precious metals would be the safest haven for your savings.

FerFAL

Hey Ferfal,

Long time follower/reader. I’m shocked to see you haven’t addressed

Kirchner’s newly instituted price controls and ban on advertising.

What’s going on in your old homeland!?!

Taylor G.

Fox News about a civil war and what is happening in the US and Argentina. Found it interesting.

http://www.foxnews.com/opinion/2013/01/03/were-now-one-step-closer-to-america-coming-civil-war/?intcmp=obnetwork#ixzz2H35m4sbt

Have a happy new year!

K-

We’re now one step closer to America’s coming civil war

The New Year has started with a monstrosity of a budget deal, one that proves that neither political party, Democrats or Republicans, is really serious about controlling the growth of big government.

But soap opera dramatics about fiscal “cliffs” and sequestration shouldn’t deflect from where President Obama is really taking this country. Consider this story from the Wall Street Journal a few days before Christmas:

“Thousands of people in several Argentine cities ransacked supermarkets for a second day in the latest challenge to President Chistina Kirchner, who is struggling to revive a weak economy…In the central city Rosario, two people were killed during the incidents and 137 people arrested.

“The violence puts Mrs. Kirchner in a difficult position as the poor are [her] core constituents…Her government spends billions of dollars a year to help low income families, including free health care…[Yet] Argentine activists who claim to represent the poor traditionally block access to supermarkets in the month of December to demand free food and other items…The latest events were some of the worst acts of looting and vandalism in years…. Local media showed dozens of men, women, and children hauling away televisions, refrigerators, and food.”

Some have said my warnings about a coming civil war between makers and takers are exaggerated. It’s true that Argentina’s politicians have been waging class warfare since Juan and Eva Peron–and they aren’t fazed when it turns bloody. Obama and the Democrats are relative newcomers to the game. But Argentina reveals who really suffers when those who create a nation’s wealth get mugged by those who spend it–as just happened this week in Washington.

It’s the poor and the middle class, the very ones big government says it’s trying to protect.

Hello Fernando,

I read this article http://abcnews.go.com/International/wireStory/argentines-prepare-huge-anti-government-march-17669749 about a planned march against Kirchner.  How do you think this will play out? Would a huge turnout possibly ignite a movement to oust her as President such as the guy before the K’s? Will her political opponent in the last election try to take advantage of it as a “See, I told you so”?

Also I’ve always wondered, while you were in Argentina did you ever worry about the Kirchners moving to silence your criticisms of them? It seems like socialists have thin skin when it comes to criticism.  Did you ever receive any threats by their associates or anything?

Dan

HI Dan,

Yes, I’m well aware of tonight’s protest, called 8N. The name 8N is in reference to 7D, next December 7^th, the day the government is supposed to take over the Clarín Media group which is the last bastion of free speech in Argentina. This is possible thanks to a recent media law called “Ley de Medios K” which the government swiftly approved so as to take over printed press, TV and radio.

Tonights 8N is a popular outcry against that, but also against the government not recognizing both the financial problems and most important, the crime problems that the K government refuses to admit. Most of my readers are well aware of this huge issue, and were often surprised not to see more reference to it from other sources.  Tonights protest is an outcry to such censorship and denial of such an obvious problem that rips through the lives of Argentines each day.

This protest is a clear grass roots movement, organized by people that are simply fed up. Of course, politicians try to take advantage of the protest but due to popular request most politicians from opposing parties said that while they do support the claims of 8N, they will not go themselves or send people with flags so as to not pollute a legitimate popular claim. Unlike pro government “popular” rallies, these aren’t people that are paid to go protest and take the streets, these are mostly working class and middle class people that feel identified with what the protest stands for: Acceptance of the crime problem in Argentina, that the government acknowledges the true inflation instead of cooking the numbers, and that the government stops meddling with peoples business in terms of personal freedom and freedom of press. I’ll change channels if I don’t like watching one, you are not supposed to decide for me what I read, listen on the radio or watch on TV. Those that identify with these claims will have a chance to make themselves heard tonight. The protest is not only in Argentina, but also in other places where Argentines expats are living, most of us forced to live elsewhere because of the current situation in Argentina.

I don’t believe it will cause Cristina Kirchner to resign as president, even though she may want to after tonight. Most people are making it clear that they do NOT want her to resign, most just want her to listen and stop acting like a dictator (which she will not do, because that’s exactly what she is) but we learned the damage that kind of thing does to a democracy. I believe it might just stop her enough so as to not seek a change in the constitution for indefinite reelections. That alone will be enough. It may also give strength to other political sectors so that Argentina may have a true chance of finally rebuilding itself in the next elections. My American friends, take note. This could be you 1-4 years from now.

About threats, yes, I did receive them, but nothing too serious. Believe it or not it wasn’t easy to find me in Buenos Aires unless I wanted to be found. I even got threats from people who benefited from expats moving from US to Argentina, seems I was damaging their real estate business by telling the truth. I don’t know what kind of fool thinks Salta is a good place to live in but go figure. I got threats by email and got my website attacked many times because of that.

FerFAL