Money troubles

» Posted by kwak on 21 Jun 2012 in argentina | 0 comments

Rampant counterfeit currency, chronic coin shortage, fictional exchange rates, mounting foreign debts…

Argentina has some serious money problems.

The cashier at a lunch counter politely refused my shiny new 100 peso. “Perdón,” she said, it was fake. I protested that I’d gotten it from an ATM. She nodded and said something I understood to be: “That happens.” Soon her coworkers and others waiting in line began passing around the bill, examining it and agreeing that it was, indeed, as real as a unicorn. The cashier apologized profusely and even knocked a few pesos off my check.

This struck me as bizarre. If some non-English speaker tried to pass off fake money in the US, we’d call Homeland Security. Here, the locals were sympathizing with the clueless foreigner, and even apologizing as if they bore part of the responsibility. What’s going on in Argentina?

Later, I read just how rampant the problem was. You can get fake money anywhere, though cabbies seem to be the most frequent culprits: some locals even recite the serial number when paying with a 100 in order to ensure that the driver doesn’t switch it out with a counterfeit.

“We Argentinians are used to money troubles,” said Josefina, my landlady of three days in Salta, philosophically. “We’re used to disappointments.”

At the turn of the 20th century, Argentina, with its vast resources, was poised to become a world superpower. Instead, it went through a number of booms and bigger busts, economically languishing pretty much in the same place as the rest of Americas charged forth.

There’s a museum, albeit a small one, dedicated to Argentina’s economic woes. The Museum of Foreign Debt, a permanent display and a mobile exhibition van based at the University of Argentina, chronicles some of Argentina’s unwise financial policies, starting with the predatory 19th century loan from the UK financier Baring Brothers, and going all the way to that disastrous Argentine Currency Board decision that pegged of the peso to the dollar, essentially resulting in a fiscal meltdown in 2001.

The museum has some propaganda-esque cartoons and even a board game titled along the line of “foreign debt: playing with our future.” I’d call them the most telling souvenirs I got in Argentina if it weren’t for that fake bill.

A decade since the crisis, Argentinians are still reeling. Inflation is out of control: Prices are comparable to those in the US, though wages aren’t. And though the official exchange rate was $1 to 4.5 pesos, the black market rate came closer to 6. (You know an economy is headed to serious trouble when the official exchange rate differs so radically from the market value.) Argentinians I spoke to complained that the government doesn’t let them withdraw the US dollars they have in their accounts (!).

Argentina has another fiscal problem: coins. No one–people, supermarkets, even government bureaus–has enough change. Shopkeepers routinely round up or down the total (or give you unwanted candy); a postal worker gave me extra stamps instead of change, shrugging as she showed me her cash register’s completely empty coin compartments. No wonder ordinary folks hoard coins. After two weeks, I found myself holding on to every centavo I could get, straight-out lying to clerks that, no, I didn’t have change, so they’d better break that ten pesos I just gave them. This may seem like just a nuisance, except coins are essential in everyday life in Argentina. (Try to pay with a bill on a bus and see how quickly the driver boots you off.) The fact that the authority can’t predict the demand for its currency speaks loudly about its competence.

On my first day in Buenos Aires, I tried to get on a bus with my newly exchanged bills. Of course, the driver wasn’t having any of it. A fellow passenger opened her coin purse and paid my fare. Now that I understand how precious those coins were, I realize what a generous gesture it was. That’s how Argentinians get by: things are bad, but they help one another.

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