When central planning fails

According to the official exchange rate, which is subject to capital controls, 4.4 pesos buys you a dollar. But on the street people are happy to pay up to 6.7. Inflation runs at 25%. The purchasing power of an Argentine’s peso savings is going down by one-quarter each year.

The government claims inflation is 9.9% and has outlawed calculating or quoting any other inflation rate. Forty percent of dollar deposits have been withdrawn from Argentina since last October. Now there are capital controls. You need special permission to move your dollars overseas.

To take a foreign vacation, Argentines have to apply to a bureaucrat for permission and explain where they got the money for the trip. And there are rumors that it will be made illegal to talk about the existence of the shadow market exchange rate for dollars.
Don't think it can happen here? How exactly do you think government borrowing 40 cents of every dollar it spends plays out when we get beyond the ability of the current Fed/Treasury jiggery-pokery to conceal it?

And remember, Senator Chuck Schumer has already proposed, and Speaker Boehner has indicated approval, of a Reich Flight Tax to confiscate assets of Americans fleeing the Obama regime.


Doo Doo Econ said...

I have to ask, what are the gun laws in Argentina?

SarahB said...

I'm still stuck on outlawing the calulation or quoting of any other rate...like that's gonna help?

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