Monday, November 16, 2015

Blue Dollars and the nonsense of it all

This is Mike...
For those unfamiliar with "Blue Dollars", it is an unofficial exchange rate for dollars in Argentina and is much higher than the official exchange rate. Prior to visiting Argentina we stocked up on a couple thousand US dollars in Peru so we could take advantage of this exchange rate. Essentially, Argentina has been struggling economically since they defaulted on their debt in 2001. In an effort to control inflation the government instituted measures curbing imports through taxation or outright bans. The net effect of their government's mismanagement has meant very difficult times for the regular people. Sadly, we saw long lines at consumer lending companies as people are borrowing on credit to eek by. In one mall, near Salta, half of the stores were "Money stores" offering credit or short term financing and each of them had lines out the door.
   For those of us lucky enough to use "Blue Dollars" the exchange rate is roughly 15 Pesos to the dollar. The official exchange rate is 9 pesos to the dollar. If you charge anything on your credit card or go to an ATM while in Argentina you are losing 40% on each transaction. As a tourist, it is preferable to bring dollars and exchange them on the "Street" - I will come back to that later. This bazaar system enables those fortunate enough to obtain US dollars 40% off on anything in Argentina.
    The import restrictions and/or taxes are making the everyday products more expensive. For example, the caretaker at the lodge where we were staying was complaining that the same large flat screen TV in Chile costs about 7,000 Argentinian pesos compared to 30,000 pesos in Argentina. Unfortunately, there are far too many examples to share regarding this, the people are really struggling in Argentina.
   If you are planning on visiting Argentina plan on bringing crisp and clean (no imperfections) $100 bills from the US. As we found out the hard way, the Argentinian "Blue Dollar" buyers like clean Hundies and give you the best exchange rates. We had a boat load of 20s which meant we had to fight for the best exchange rates. Our exchange rates varied from 13.5 to 15 pesos to the dollar, still better than charging anything on our credit card or withdrawing from an ATM.
   I exchanged dollars in pharmacies, stores, ice cream parlors, and in a home by asking locals who freely give you info on how to do it. I even asked a weirdo looking clown dressed like a hatchet murderer, in Maipu, if he knew where I could get "Blue Dollars". There is nothing quite as exhilarating as walking up to a perfect stranger, in a foreign country, with your pockets stuffed with money, looking shiftily from side to side and asking, "Hey, you know where I can do an all cash transaction?"
   Needless to say we are happy to be in Chile where we can act as we do at home. No gimmicks, no hoops just good ole fair prices for all. What a concept!

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