I'll admit it. The last week in Argentina I was counting the days until I left. Not because I couldn't wait to get the hell out of there, but because I wanted on to the next adventure. The last 7 days there seemed to crawl by. Partially because I had wrapped all my projects at work and couldn't start any new ones without having to abandon them to my coworkers and partially because, one by one, everyone I had been hanging out with had up and left. Oh well, c'est la vie.
But once I landed in Minneapolis, my world got turned upside down. I didn't have enough time to catch up with everyone I wanted to, and for that, I'm sorry if I missed you. I really tried, there was just too much to do to get ready for Asia and too much that went by the wayside while I was out of the country. The few days I spent there flew by without enough time in the day to get everything done.
I ticked a few things off my list, including my first MN State Fair in a few years and drinks (men have drinks, Carrie Bradshaw has cocktails) at bars I haven't been to in a while. And again, I find the time in Seattle is preciously short. Barely enough time to do everything I need to do in order to be gone again for a month. Fortunately all I really have left to do is write a few papers for summer classes (currently procrastinating) and put a bunch of crap in a backpack. All that stands between me and a month in sunny, warmer climes are drinks with the guys, some last minute paperwork and shopping and a DMB concert at The Gorge (oh drat!).
Gonna be epic. Stay tuned!
P.S. I have been thinking about putting photos up on here. Which should I do? Go back and place them appropriately in previous entries? Or do a photos-only entry?
Thursday, August 30, 2012
Wednesday, August 22, 2012
Disregard Females, Acquire Currency
A brief word on why middle school math is important.
What is 80/4.5 ?
Can't do that in your head? Well you should. That's the approximate value of a nice steak in Buenos Aires. 80 pesos. And the 4.5? Well that's the rough estimate of how many Argentine Pesos equal one US Dollar. I say rough because when I arrived in June the official rate of exchange was 1:4.45, and as of yesterday the official rate had climbed to 1:4.62. In two months. When I was here in 2009, the rate was 1:3.8. So its been climbing, but the inflation rate has accelerated recently. So, as a side note, if you (for some unfathomable reason) decided to invest in the Argentine Peso, you should probably get the hell out.
Simple math. It's important. Because without it, you can very easily get lost in a foreign currency. Admit it, you go to buy something, you think in dollars. I STRONGLY doubt any American considers what her tube of toothpaste costs in Euros. But that quickly becomes a problem when you leave the US. And admit it, that problem is because you're lazy and you hate numbers. I'll wait, the first step is admitting you have a problem.
Why? Because when you show up in a new country, one of the very first things you do is acquire the local currency. How should you do it? ATM. Never, for any reason, use the airport exchange booths. They are a business, they try to make money off of your money. The ATM will give you an up-to-date and accurate exchange rate that, if it varies at all, varies only slightly from the currently accepted international exchange rate for the host country and yours. Second choice should be a bank, preferably one where you are an account holder, because if they charge fees of any kind, they are generally pretty low. They're too busy making money off all the credit cards to care about their margins on forex transactions.
So what happens once you have Euros or Pesos or whatever else you're after? The first thing you probably do is look at how pretty and non-boring-green it is. The 100 ARS notes are kinda pink and purple and have a bunch of cute little horseys on em. Seriously? Knock it off. You are currently holding about US $21.66. Fortunately in Argentina, the bills translate pretty well to a denomination Americans are used to handling. But its very easy to get distracted because you'll never again see a price in USD.
Mental gymnastics become the order of the day. Every time you see a price, you have to do a rough calculation and decide if that price is appropriate. If you're staying for a long time, it becomes easier to ballpark these things because you can spot somethings that are generally priced higher or lower than you are used to and you can instinctively purchase or avoid them. For instance, anything electronic in Argentina carries a 100% import tariff if it wasn't assembled in Argentina from more than 12 pieces.
(Interesting sidebar, electronics companies in Asia will fully assemble their goods, as normal, and ship them to Ushuaia, Argentina. During the voyage, the company (Samsung for example) will pay a crew of who-knows-who to disassemble these various computers and TVs and things into 13 pieces. They will then be offloaded in Ushuaia, the closest port city to Asia, and taken to a warehouse where they are then reassembled. Often by the same people that took them apart. But since they were assembled from more than 12 pieces in Argentina, they are excluded from the import tariff and stamped with a "Industria Argentina. Fabrica en Ushuaia" sticker. All for a lower cost than the 100% import tariff. Technical Barriers to Trade, anyone?)
The bottom line is, if you can't do the currency conversion in your head, carry a pocket calculator and MEMORIZE the current exchange rate. If you're staying a long time, check in on the rate to see if it has changed.
If you don't take the time to do these calculations, you will definitely spend far more than you anticipated. For example, Argentina isn't nearly as cheap as it once was. In 2009 it was easy to have 2 meals a day, a room in a hostel and a few beers with friends for $20 a day. Now, $20 will get you your meals, but anything over and above will cost you more. Emerging economies, eh?
Bottom line: Keep an eye on your budget. Know the exchange rates. Force yourself into the math for every transaction. And hopefully you won't let all of that get in your way of having a good time.
For those of you in Minneapolis and Seattle, I will be back in the states starting the 24th until the 1st. MPLS 24th-28th and SEA the 28th-1st. I hope I can catch up with everyone in that time, especially those of you in the cities that I didn't get to see last time around. Take care, I'll probably post once or twice in the next week and half, but if not, I'll catch you all in Hong Kong!
What is 80/4.5 ?
Can't do that in your head? Well you should. That's the approximate value of a nice steak in Buenos Aires. 80 pesos. And the 4.5? Well that's the rough estimate of how many Argentine Pesos equal one US Dollar. I say rough because when I arrived in June the official rate of exchange was 1:4.45, and as of yesterday the official rate had climbed to 1:4.62. In two months. When I was here in 2009, the rate was 1:3.8. So its been climbing, but the inflation rate has accelerated recently. So, as a side note, if you (for some unfathomable reason) decided to invest in the Argentine Peso, you should probably get the hell out.
Simple math. It's important. Because without it, you can very easily get lost in a foreign currency. Admit it, you go to buy something, you think in dollars. I STRONGLY doubt any American considers what her tube of toothpaste costs in Euros. But that quickly becomes a problem when you leave the US. And admit it, that problem is because you're lazy and you hate numbers. I'll wait, the first step is admitting you have a problem.
Why? Because when you show up in a new country, one of the very first things you do is acquire the local currency. How should you do it? ATM. Never, for any reason, use the airport exchange booths. They are a business, they try to make money off of your money. The ATM will give you an up-to-date and accurate exchange rate that, if it varies at all, varies only slightly from the currently accepted international exchange rate for the host country and yours. Second choice should be a bank, preferably one where you are an account holder, because if they charge fees of any kind, they are generally pretty low. They're too busy making money off all the credit cards to care about their margins on forex transactions.
So what happens once you have Euros or Pesos or whatever else you're after? The first thing you probably do is look at how pretty and non-boring-green it is. The 100 ARS notes are kinda pink and purple and have a bunch of cute little horseys on em. Seriously? Knock it off. You are currently holding about US $21.66. Fortunately in Argentina, the bills translate pretty well to a denomination Americans are used to handling. But its very easy to get distracted because you'll never again see a price in USD.
Mental gymnastics become the order of the day. Every time you see a price, you have to do a rough calculation and decide if that price is appropriate. If you're staying for a long time, it becomes easier to ballpark these things because you can spot somethings that are generally priced higher or lower than you are used to and you can instinctively purchase or avoid them. For instance, anything electronic in Argentina carries a 100% import tariff if it wasn't assembled in Argentina from more than 12 pieces.
(Interesting sidebar, electronics companies in Asia will fully assemble their goods, as normal, and ship them to Ushuaia, Argentina. During the voyage, the company (Samsung for example) will pay a crew of who-knows-who to disassemble these various computers and TVs and things into 13 pieces. They will then be offloaded in Ushuaia, the closest port city to Asia, and taken to a warehouse where they are then reassembled. Often by the same people that took them apart. But since they were assembled from more than 12 pieces in Argentina, they are excluded from the import tariff and stamped with a "Industria Argentina. Fabrica en Ushuaia" sticker. All for a lower cost than the 100% import tariff. Technical Barriers to Trade, anyone?)
The bottom line is, if you can't do the currency conversion in your head, carry a pocket calculator and MEMORIZE the current exchange rate. If you're staying a long time, check in on the rate to see if it has changed.
If you don't take the time to do these calculations, you will definitely spend far more than you anticipated. For example, Argentina isn't nearly as cheap as it once was. In 2009 it was easy to have 2 meals a day, a room in a hostel and a few beers with friends for $20 a day. Now, $20 will get you your meals, but anything over and above will cost you more. Emerging economies, eh?
Bottom line: Keep an eye on your budget. Know the exchange rates. Force yourself into the math for every transaction. And hopefully you won't let all of that get in your way of having a good time.
For those of you in Minneapolis and Seattle, I will be back in the states starting the 24th until the 1st. MPLS 24th-28th and SEA the 28th-1st. I hope I can catch up with everyone in that time, especially those of you in the cities that I didn't get to see last time around. Take care, I'll probably post once or twice in the next week and half, but if not, I'll catch you all in Hong Kong!
Sunday, August 19, 2012
More Important Than You Imagine
To many people, Argentina is just another country they have heard of, but know very little about. Like Lithuania, or Finland. Or Canada. But the modern world and American cultures have a surprising number of influences from Argentina, or Argentines. Allow me to forcibly educate you about some things you may or may not know are Argentine:
Eva Peron - For many people, this sort of starts and ends with Madonna's self-indulgent portrayal in Evita. But here, she is a true folk hero. The entrance to her tomb is always well covered with flowers and there is almost always a line of people, locals and tourists, waiting to file by and pay their respects. She was a populist hero, who fought for the poor of Argentina at a time when no one else really bothered.
Toms Shoes - Founded outside Buenos Aires in 2006, the logo is the Argentine flag without its sun in the middle. The shoes are slightly more fashionable versions of traditional gaucho alpargatas, which the Argentine cowboys (gauchos) have been wearing for centuries. The original recipients of the donated half of the buy-a-pair-give-a-pair business model were Guarani Indians in Argentina's Missiones province.
Lionel Messi - Born in Argentina, he is the world's greatest still-playing footballer. Unfortunately, or fortunately depending on your perspective, he never played for an Argentine League club. He was diagnosed with a growth hormone deficiency (he's a small guy) and none of the Argentine clubs could afford to pay for his treatment. In steps FCB to save the day. Currently the center forward for FC Barcelona and famous for never taking a dive, in a sport obviously rife with its share of actors. He is currently FCB's leading all-time scorer and just this year, made UEFA history by becoming the first player in that organization's history to score five goals in one match. He also holds the world record for most goals scored in a season, at 73. And he is undoubtedly my favorite player.
Ernesto Guevara - Born in Rosario Argentina in 1928. Most people recognize him as a Marxist revolutionary. The nickname "Che" came from his prodigious use of the phrase. It is a common Porteno (resident of Buenos Aires) phrase or interjection. Che can be used in normal speech as either the equivalent of "eh?" (think Canadians) or as the SoCal-style "bro" or "dude".
Chacos - Chaco is one of the 23 provinces of Argentina. It is famous for being totally unremarkable and almost last in any sort of social, economic or political indicator in the country. Half of the population lives below the poverty line and approximately 40% of its children are malnourished. It is also an indigenous tribe, primarily in Paraguay, who were famous for their oral tradition and stone edifices. Most of you will recognize the name from the awesome Jesus-style hiking sandals.
Law of Gender Identity - Argentina was the first country in South America to legalize gay marriage. More importantly, it was the first nation in the world to enact a "Law of Gender Identity" which essentially provides that a person can be identified on any legal document as their preferred gender without needing surgery. The law also provides that some of the costs of gender reassignment surgery can be covered under the national prepaid medical plan. Essentially, this makes Argentina the country with the most gay-friendly laws and regulations in the world.
Yerba Mate - The national beverage of Argentina. It's made by steeping the dried leaves and twigs of the mate plant in hot (not boiling) water. Traditionally, and correctly, consumed by filling a hollow gourd with the shredded leaves and twigs and placing a metal straw into the gourd. Hot water is then poured over the mate and the resulting "tea" is drank through the metal straw. Mate is a customarily social practice, with two or more people passing around the gourd and sharing conversation. The flavor is somewhat reminiscent of green tea and mate itself is highly caffeinated, the leaf having at least twice the amount of caffeine as a coffee bean.
So there you go, a bit of Argentine culture you may be aware of or even encounter in everyday life.
Eva Peron - For many people, this sort of starts and ends with Madonna's self-indulgent portrayal in Evita. But here, she is a true folk hero. The entrance to her tomb is always well covered with flowers and there is almost always a line of people, locals and tourists, waiting to file by and pay their respects. She was a populist hero, who fought for the poor of Argentina at a time when no one else really bothered.
Toms Shoes - Founded outside Buenos Aires in 2006, the logo is the Argentine flag without its sun in the middle. The shoes are slightly more fashionable versions of traditional gaucho alpargatas, which the Argentine cowboys (gauchos) have been wearing for centuries. The original recipients of the donated half of the buy-a-pair-give-a-pair business model were Guarani Indians in Argentina's Missiones province.
Lionel Messi - Born in Argentina, he is the world's greatest still-playing footballer. Unfortunately, or fortunately depending on your perspective, he never played for an Argentine League club. He was diagnosed with a growth hormone deficiency (he's a small guy) and none of the Argentine clubs could afford to pay for his treatment. In steps FCB to save the day. Currently the center forward for FC Barcelona and famous for never taking a dive, in a sport obviously rife with its share of actors. He is currently FCB's leading all-time scorer and just this year, made UEFA history by becoming the first player in that organization's history to score five goals in one match. He also holds the world record for most goals scored in a season, at 73. And he is undoubtedly my favorite player.
Ernesto Guevara - Born in Rosario Argentina in 1928. Most people recognize him as a Marxist revolutionary. The nickname "Che" came from his prodigious use of the phrase. It is a common Porteno (resident of Buenos Aires) phrase or interjection. Che can be used in normal speech as either the equivalent of "eh?" (think Canadians) or as the SoCal-style "bro" or "dude".
Chacos - Chaco is one of the 23 provinces of Argentina. It is famous for being totally unremarkable and almost last in any sort of social, economic or political indicator in the country. Half of the population lives below the poverty line and approximately 40% of its children are malnourished. It is also an indigenous tribe, primarily in Paraguay, who were famous for their oral tradition and stone edifices. Most of you will recognize the name from the awesome Jesus-style hiking sandals.
Law of Gender Identity - Argentina was the first country in South America to legalize gay marriage. More importantly, it was the first nation in the world to enact a "Law of Gender Identity" which essentially provides that a person can be identified on any legal document as their preferred gender without needing surgery. The law also provides that some of the costs of gender reassignment surgery can be covered under the national prepaid medical plan. Essentially, this makes Argentina the country with the most gay-friendly laws and regulations in the world.
Yerba Mate - The national beverage of Argentina. It's made by steeping the dried leaves and twigs of the mate plant in hot (not boiling) water. Traditionally, and correctly, consumed by filling a hollow gourd with the shredded leaves and twigs and placing a metal straw into the gourd. Hot water is then poured over the mate and the resulting "tea" is drank through the metal straw. Mate is a customarily social practice, with two or more people passing around the gourd and sharing conversation. The flavor is somewhat reminiscent of green tea and mate itself is highly caffeinated, the leaf having at least twice the amount of caffeine as a coffee bean.
So there you go, a bit of Argentine culture you may be aware of or even encounter in everyday life.
Friday, August 17, 2012
One week to go...
And then another month left before I'm truly back home and settled.
My checklist is thoroughly crossed off. I've gotten to do nearly everything I wanted to do, and the stuff I haven't gotten to will either be accomplished this weekend, or I can live without.
I've had a fantastic time here. I've learned a lot at work, had some very interesting experiences and quite varied assignments. I've met some really fun people, both Argentines and expats. I got to see far more of the city than I did last time, part of that owing to the length of time I was here this time and the other part is that I got all the touristy stuff out of the way on my first go-round.
I still have a few things to wrap up, like writing up a few papers and a power point on my experience in Argentina, but I'm also starting to transition into thinking about the work that needs to be done for the study tour in SE Asia. Which is a lot.
This isn't a final blog post, remember I've still got a week here and a month in Hong Kong, Vietnam and Cambodia, but I am starting to wrap things up in my head. I can't wait to get back to MN, Seatlle and the summer weather. But I'm also going to miss being here. It was such a fun experience. I finally got my study abroad, so to speak. And it was so worth it.
My checklist is thoroughly crossed off. I've gotten to do nearly everything I wanted to do, and the stuff I haven't gotten to will either be accomplished this weekend, or I can live without.
I've had a fantastic time here. I've learned a lot at work, had some very interesting experiences and quite varied assignments. I've met some really fun people, both Argentines and expats. I got to see far more of the city than I did last time, part of that owing to the length of time I was here this time and the other part is that I got all the touristy stuff out of the way on my first go-round.
I still have a few things to wrap up, like writing up a few papers and a power point on my experience in Argentina, but I'm also starting to transition into thinking about the work that needs to be done for the study tour in SE Asia. Which is a lot.
This isn't a final blog post, remember I've still got a week here and a month in Hong Kong, Vietnam and Cambodia, but I am starting to wrap things up in my head. I can't wait to get back to MN, Seatlle and the summer weather. But I'm also going to miss being here. It was such a fun experience. I finally got my study abroad, so to speak. And it was so worth it.
Saturday, August 11, 2012
Smart and Sketchy, A Cautionary Tale
I was just party to one of the shadiest attempted currency exchanges I have ever seen, experienced or heard of.
As I usually do on weekends, I was out wandering around. I was told of a shwarma place somewhere in the not-so-immediate vicinity of my apartment. And, not having had a decent gyro since mid June at Falafel King in Uptown, I set out to find this place. All I knew was that it was somewhere near the bar I was at last night. And find it I did. It was good, a tasty gyro, albeit with a slight Latin American twist. The fries were another story entirely, the greasiest potatoes I've ever had. Yuck.
And so, feeling several pounds heavier and expecting an imminent acne bloom, I attempted to leave the restaurant. However, I was waylaid at the exit by one of the employees scrambling into the shop with a patio umbrella. After dodging the jousting lance, I was again stopped at the door. This time by Mother Nature herself. And it seems down here she has that fiery latina temper that Penelope Cruz does so well. Blissful, charming and seductive one minute, and the next minute, all hell is breaking loose. It had rained once earlier in the day today, but I was in a cafe reading and didn't take any mind. In fact I used it to my advantage and snapped a few really pretty pictures of a rain-soaked Casa Rosada you'll have to see to believe. As I went to leave the second time, I discovered the reason for my near-impalement. The sky had opened up and it was pouring outside. I waited a few minutes for a break in the bipolar downpour cycle and made a break for it.
Alas, that was not to be. Not 30 yards out of the door, I had to duck under an awning to avoid another downpour. It was here I was joined by Jesus. No, not that Jesus. (Sorry, I couldn't resist the joke.) Or his name was Jose, I'm not sure. I can't be sure, not because I don't remember, but because during the course of the next 20 minutes he used both names. Not immediately, but well after I had my guard up and was looking for the exit. Let me explain.
Jose/Jesus came running up to me under the awning, looking for shelter same as I. And, as people are wont to do, we struck up a halting conversation about the crappy weather. It was halting because his English sucked as much as my Spanish, but we were able to chat amiably for a minute or two. At which point he came to the conclusion that the rain wasn't about to quit and that I should accompany him into the bar for a beer. Everything seemed ok and normal up to this point, so why not? We turned and went in to the bar we were standing in front of where we had a rather lengthy debate about what we should drink. He seemed wildly insistent on either expensive mixed drinks or expensive liquor, while I insisted a beer would do just fine. My suspicions were starting to tingle at his determination to drink something unnecessarily expensive, but I managed to haggle him down to a bottle of Warsteiner at AR$20 (US$4.50) each.
He paid, in pesos, and we went and sat at a booth as the rain began to calm down. The conversation, already rocky enough because of our mutual ignorance regarding the other's language, took a turn for the bizarre at this point. Jesus/Jose kept repeating the same 4 or 5 lines of dialogue or questions, which really got my hackles up. I can see this red warning light flashing in my head. And the klaxon finally went off when he brought up American dollars and insisted I pay him for the beer in dollars. I always assumed I would pay for the beer, its just easier to pay the bartender together and then pay the payor separately. But the part that really drove home my suspicions was the amount of cheers-ing and handshakes and fist bumps that were occurring. That and his amazing insistence that we were best friends because we were both from out of town (he claimed to be from Peru).
He asked me what was I doing tonight? Where are your friends? Where are your friends from? We should go meet them! I will come with you to meet them and we can have drinks together! I will pay! It will be fun! It was about here that he switched from Jesus to Jose. And that did it for me. I may be American but I'm not an idiot. Fortunately at this point the rain had stopped, I thanked him for the beer and threw 20 pesos on the table and booked it out the door looking over my shoulder the whole way back to my apartment.
But think about it. It's a damn smart hustle. Make an American friend, show them a good time, buy drinks and insist on being paid later. Meet the American's American friends, buy them drinks and have a good time. Drink your beer slowly and be the most charming and engaging foreign friend you can, get them drunker and drunker and at the end of the night ask to be paid in dollars for the drinks that you buy the American. By the time they stumble home (having had a great and memorable night) they may even accidentally give you some extra dollars for being such an awesome local tour guide or because they lost track of how much you spent and you give them a nice round (large) figure. Then you take all those dollars they gave you (at least enough to cover the drinks you paid for in pesos) and you sell those dollars on the alternative (black) market for a 30% return on your investment. Think about it, the standard government rate is 4.5 pesos to the dollar, but people want dollars so badly that they pay a premium for them, as much as 6.75 pesos per dollar. That's a 30% or more rate of return. Not bad for a nights work. Spend no money, drink with some fun people, and then get paid 30% of the total bar tab at the end of the night. Pretty slick.
If it wasn't so obvious I was being gamed.
As I usually do on weekends, I was out wandering around. I was told of a shwarma place somewhere in the not-so-immediate vicinity of my apartment. And, not having had a decent gyro since mid June at Falafel King in Uptown, I set out to find this place. All I knew was that it was somewhere near the bar I was at last night. And find it I did. It was good, a tasty gyro, albeit with a slight Latin American twist. The fries were another story entirely, the greasiest potatoes I've ever had. Yuck.
And so, feeling several pounds heavier and expecting an imminent acne bloom, I attempted to leave the restaurant. However, I was waylaid at the exit by one of the employees scrambling into the shop with a patio umbrella. After dodging the jousting lance, I was again stopped at the door. This time by Mother Nature herself. And it seems down here she has that fiery latina temper that Penelope Cruz does so well. Blissful, charming and seductive one minute, and the next minute, all hell is breaking loose. It had rained once earlier in the day today, but I was in a cafe reading and didn't take any mind. In fact I used it to my advantage and snapped a few really pretty pictures of a rain-soaked Casa Rosada you'll have to see to believe. As I went to leave the second time, I discovered the reason for my near-impalement. The sky had opened up and it was pouring outside. I waited a few minutes for a break in the bipolar downpour cycle and made a break for it.
Alas, that was not to be. Not 30 yards out of the door, I had to duck under an awning to avoid another downpour. It was here I was joined by Jesus. No, not that Jesus. (Sorry, I couldn't resist the joke.) Or his name was Jose, I'm not sure. I can't be sure, not because I don't remember, but because during the course of the next 20 minutes he used both names. Not immediately, but well after I had my guard up and was looking for the exit. Let me explain.
Jose/Jesus came running up to me under the awning, looking for shelter same as I. And, as people are wont to do, we struck up a halting conversation about the crappy weather. It was halting because his English sucked as much as my Spanish, but we were able to chat amiably for a minute or two. At which point he came to the conclusion that the rain wasn't about to quit and that I should accompany him into the bar for a beer. Everything seemed ok and normal up to this point, so why not? We turned and went in to the bar we were standing in front of where we had a rather lengthy debate about what we should drink. He seemed wildly insistent on either expensive mixed drinks or expensive liquor, while I insisted a beer would do just fine. My suspicions were starting to tingle at his determination to drink something unnecessarily expensive, but I managed to haggle him down to a bottle of Warsteiner at AR$20 (US$4.50) each.
He paid, in pesos, and we went and sat at a booth as the rain began to calm down. The conversation, already rocky enough because of our mutual ignorance regarding the other's language, took a turn for the bizarre at this point. Jesus/Jose kept repeating the same 4 or 5 lines of dialogue or questions, which really got my hackles up. I can see this red warning light flashing in my head. And the klaxon finally went off when he brought up American dollars and insisted I pay him for the beer in dollars. I always assumed I would pay for the beer, its just easier to pay the bartender together and then pay the payor separately. But the part that really drove home my suspicions was the amount of cheers-ing and handshakes and fist bumps that were occurring. That and his amazing insistence that we were best friends because we were both from out of town (he claimed to be from Peru).
He asked me what was I doing tonight? Where are your friends? Where are your friends from? We should go meet them! I will come with you to meet them and we can have drinks together! I will pay! It will be fun! It was about here that he switched from Jesus to Jose. And that did it for me. I may be American but I'm not an idiot. Fortunately at this point the rain had stopped, I thanked him for the beer and threw 20 pesos on the table and booked it out the door looking over my shoulder the whole way back to my apartment.
But think about it. It's a damn smart hustle. Make an American friend, show them a good time, buy drinks and insist on being paid later. Meet the American's American friends, buy them drinks and have a good time. Drink your beer slowly and be the most charming and engaging foreign friend you can, get them drunker and drunker and at the end of the night ask to be paid in dollars for the drinks that you buy the American. By the time they stumble home (having had a great and memorable night) they may even accidentally give you some extra dollars for being such an awesome local tour guide or because they lost track of how much you spent and you give them a nice round (large) figure. Then you take all those dollars they gave you (at least enough to cover the drinks you paid for in pesos) and you sell those dollars on the alternative (black) market for a 30% return on your investment. Think about it, the standard government rate is 4.5 pesos to the dollar, but people want dollars so badly that they pay a premium for them, as much as 6.75 pesos per dollar. That's a 30% or more rate of return. Not bad for a nights work. Spend no money, drink with some fun people, and then get paid 30% of the total bar tab at the end of the night. Pretty slick.
If it wasn't so obvious I was being gamed.
Friday, August 10, 2012
Ramping Up and Winding Down
It's official, less than 2 weeks to go until I'm on a plane back to Minneapolis. For those of you keeping track of where I will be when, and those of you waiting with bated breath for my glorious return, I'll be in Minneapolis the morning of Friday the 24th and in the Cities until the 28th. At which point I relocate to Seattle until September 1st.
The last two weeks will be a flurry of activity, I can already tell. I made the classic rookie mistake of compiling a list of everything I wanted to do with my time in Buenos Aires. And then I methodically looked at things on the list and said "there'll be time for that later". And now I've got a relatively lengthy list and next to no time to do any of it. Fortunately I'm not really over reaching, I have enough time to do everything but I've lost the luxury of a leisurely pace.
What's left on the hit list? Dinner at Gran Parilla del Plata, home of the greatest steak I've ever eaten (going tonight actually). A few boliches (raucous night clubs that go until after the sun has risen) and one or two more restaurants and speakeasies. The Boca Juniors (the single greatest futbol club in all of Latin America) are in town at home this weekend and next, so hopefully I can find someone who wants to go with me. Gonna try and make an adventure of the trip out to El Tigre during my last weekend, we'll see how well that goes. Those things and some souvenir shopping, and I'll pretty much have it knocked out.
Other than that, I can't really think of anything else. I don't have the list in front of me, so I'll just have to add some stuff later.
In other news, the strike is still going, but getting in to work only took an extra half hour today. Which I factored in by leaving early and managed to get there on time today. Thankfully. And the weather has been really pleasant here for the past week or so, winter is really nice down here. Mid 50s and sunny. Life is good!
The last two weeks will be a flurry of activity, I can already tell. I made the classic rookie mistake of compiling a list of everything I wanted to do with my time in Buenos Aires. And then I methodically looked at things on the list and said "there'll be time for that later". And now I've got a relatively lengthy list and next to no time to do any of it. Fortunately I'm not really over reaching, I have enough time to do everything but I've lost the luxury of a leisurely pace.
What's left on the hit list? Dinner at Gran Parilla del Plata, home of the greatest steak I've ever eaten (going tonight actually). A few boliches (raucous night clubs that go until after the sun has risen) and one or two more restaurants and speakeasies. The Boca Juniors (the single greatest futbol club in all of Latin America) are in town at home this weekend and next, so hopefully I can find someone who wants to go with me. Gonna try and make an adventure of the trip out to El Tigre during my last weekend, we'll see how well that goes. Those things and some souvenir shopping, and I'll pretty much have it knocked out.
Other than that, I can't really think of anything else. I don't have the list in front of me, so I'll just have to add some stuff later.
In other news, the strike is still going, but getting in to work only took an extra half hour today. Which I factored in by leaving early and managed to get there on time today. Thankfully. And the weather has been really pleasant here for the past week or so, winter is really nice down here. Mid 50s and sunny. Life is good!
Thursday, August 9, 2012
Culinary Staples
The food in Argentina is both stunningly good and
confoundingly awful. It sorta depends on
what you order. Food, as it is anywhere,
is a social and communal experience. The
people who prepare it take great pride in it and the people who share in eating
it, enjoy it. So the last thing I want
to do is insult the sensibilities of anyone who reads this. Food is an intensely personal
preference. Everyone has their own
tastes. That being said, don’t bitch at
me, I don’t want to hear it.
Obviously, anyone who knows a smidgen about Argentina knows
how sinfully delicious the beef is. I’ll
get there in a minute, with the minor caveat that vegetarians (I’m looking at
you Lauren) will struggle in this city, but its not impossible. The place I want to start is the food of
Italian origin. The two largest
immigrant populations in Buenos Aires are Spanish and Italian. And the culture that governs the VAST
majority of the food prepared here is the Italian tradition.
Every single café or resto in this city serves pasta. All of them.
You can’t avoid it. In fact, the
culinary culture of this city makes it next to impossible to avoid carbs. Atkins addicts, avoid at all costs. You can’t walk a block in the capital without
passing a bakery. Walls full of delicious
pastries, breads and desserts. The
diabetic me is cringing at the potential of a future without a foot. They are all delicious, and they’re
everywhere, so self control is the measure of the day. To add to the carb binge comes every corner
café, which far removed from the American definition of café, will serve you
coffee and pastries as well as sandwiches, pastas and grilled meat. Every.
Single. Restaurant. In. This.
City. has pasta on the menu. When in
doubt, order it. It’s a decent standby.
The problem is, the Argentines can’t cook Italian for shit. And its not their fault. Let me explain why. With such a massive influx of south
western-Mediterranean cultures flooding this city, it was only obvioius that
the city took up the mantle and an Italian food culture was born. (While the residents speak Spanish, this
seems to be a remnant of early colonialism as I haven’t been able to find
paella or ceviche anywhere) The problem,
for me, is that it was so far removed.
From so many things. So far from
Italy. Far from the US, where I’m used
to that version of Italian. But most of
all, too far south for the spice trade to come through the port. And as a result, most of the food in this
city is pretty bland. Like I said, not
their fault, but a matter of circumstance.
There is just an absolute dearth of spices here in Buenos Aires. The stuff I see at the grocery store? Black and white pepper, oregano, parsley,
garlic, salt and occasionally spicy red pepper.
Basically, the exact same spice cabinet a frat house has. Actually, that’s not true, I’ve never seen
oregano in a frat house. Basil? Forget it.
Cinnamon? Never. And heaven help you if you want a curry.
The next issue I take is how the food is prepared. Italian food, such a staple of this culture,
is not overwhelmingly difficult to prepare.
Mario Batali might take issue with that “easy” comment, but at the level
its prepared in a standard sit-down restaurant, it’s not hard. Tomato, oregano or basil, garlic. Boil pasta, cover in sauce, serve. Bread the chicken, sauté, cover in sauce,
serve. Dough, sauce, cheese, oven,
serve. Very little nuance if you’re
paying six bucks for spaghetti. BUT FOR
GOD’S SAKE COOK THE PASTA CORRECTLY!!!!
The Argentines have never, ever, ever, ever, ever (and I can’t stress
this enough) EVER heard of al dente. If
I had a 90-year old grandma with no teeth that didn’t know what spaghetti
should taste like, she would keel over in ecstasy at the pasta here. Seriously, is it so hard to take it out of
the pot before it turns to mush?
Now that I have the tirade out of the way, I figure I can
point out a few things that I do love about the food here. And let me stress, for as cathartic as I
think the rant above is, I love the food far more than I dislike it. I have found a pizza place I enjoy (Pizzeria
Guerrin). They do pizza exactly how I
love it. Think Chicago deep dish; crispy
and buttery outside crust, thick and doughy inside, enough sauce to flavor but
not overwhelm and a healthy (or unhealthy) dose of gooey melty mozzarella on
top. The kind of pizza you have to cut
and eat with a fork because it doesn’t fold.
Mmmmmm, lunch tomorrow I’m thinking.
But more than anything, the meat. Oh my god, the meat. Keep it simple stupid, right? The great American BBQ argument flummoxes
me. I have come to the conclusion that
we need the sauces, smokes, dry rubs and other things because our meat has no flavor. Mostly due to the feedlot style of raising
our hormone and antibiotic injected beef products. Fortunately, BBQ doesn’t exist down
here. What’s the process for
grilling? Kill the cow, cut it up and
throw it all over a wood fire. Simple. The
single greatest steak of my life was served to me here in 2009. I can still, despite the beer and wine,
remember most of that meal. And while
nothing I’ve had so far during this trip has come close to that good,
every piece of beef or chicken or sausage or organs I’ve had on this trip has
exceeded anything I’ve eaten in the States in terms of flavor and quality. I have a sneaking suspicion that it has
something to do with all of Argentina’s beef being free range, but mostly I
just think that it is so ingrained in the culture that they can’t not be good
at it. America is too much of a
hodgepodge. We, as a nation, are a jack
of all trades and master of none.
So how does one experience this, pardon the parlance, meat
market? Any one of Buenos Aires’s
parillas are a good start. Even the most
mediocre, run of the mill, neighborhood restaurant will serve you a steak as good
as any Texan can claim he’s grilled in his life. But the best way is to grab at least one
other friend and order the “parillada completo”. Think big wooden slab piled high with an
amazing array of grilled items; cuts of beef (ribs, skirt, sirloin, filet,
ribeye), chicken, sausage (spicy [and I use that term loosely: see above],
savory, herb, blood) vegetables (onion, squash, tomato, carrot, parsnips) and
organs (kidney, liver, intestines).
Order a bottle or two of wine or some beers and indulge
yourself in the greatest slow death by meat poisoning you’ve ever experienced. Unbelievable.
That’s all I’ve got for now, but tomorrow night I’m going
back to the restaurant that served me the “single greatest steak of my
life”. I’ll let you know how it
goes. I have high hopes, but one way or
another I won’t be disappointed if this one fails to top the last time.
Tuesday, August 7, 2012
Transit Chaos - Day 5
Boy this is fun! Ok well, it's a pain in the ass, to be perfectly honest. But this sort of stuff doesn't happen like this back home. It's currently day 5 of a transit worker strike, and I've been able to learn a bit more about what's going one and how everyone got to where they are.
Some fun facts:
- 2 million passengers per day on the BA Subte system (now forced to other transport means).
- 5 transit workers union strikes since January 2012.
- the government claims around 10% annual inflation rate.
- private (non-gov't) economists peg the current Argentine Peso inflation rate at 23-25% per year.
- 28% wage increase demanded by union during current strike.
- 23% wage increase granted to union during last strike, in May.
- 0 hours of meetings held between government and union officials so far during this strike.
So on the surface, it seems the workers unions are merely demanding their wage rates keep up with inflation. But there's two things wrong with that. First, if the unions are granted wage concessions amounting to about 13% every quarter, as they appear to be demanding, their wage increases far outpace annual inflation. Second, the government maintains their inflation rate of 10% +/-2% is accurate (which, by all accounts, it isn't). And even if that were the case, granting wage increase demands of 20+% every few months would DEFINITELY outstrip the actual inflation rate, let alone the artificial government rate. So the government, logically, has refused to acknowledge the requests this time around, and the stalemate continues.
The other angle the unions are taking is the demand of improvement of working conditions and increased spending on maintenance of the subway infrastructure. Which is logical, the BA subway isn't the nicest in the world and it could use the work. And their case for this got a huge bump yesterday when one of the commuter trains derailed en route to the capital and injured 31 people.
Yet the fiery political rhetoric continues. The President was elected as a populist, but is now being accused of going back on her word because she won't grant each concession demanded by the labor unions that had a huge hand in electing her. The unions accuse the mayor of BA of failing to cooperate, when technically its not even his issue. The national government is in charge of the companies that operate the subways. So far the only remedy that I have seen has been the deployment of 500 school buses, post school run, to drive the same routes the subway lines would otherwise have run.
I hesitate to say I'm amused by all this. Actually amused is the wrong word. I am utterly fascinated to watch this unfold. The political system of the country bears the same resemblance to the one in the US, but the inner workings and party politics of it are so completely different. As inflation rises and the disputes between parties, unions and the electorate continue, I can't help but think I'm watching a train wreck in slow motion. Only question now is, how bad will it be?
Some fun facts:
- 2 million passengers per day on the BA Subte system (now forced to other transport means).
- 5 transit workers union strikes since January 2012.
- the government claims around 10% annual inflation rate.
- private (non-gov't) economists peg the current Argentine Peso inflation rate at 23-25% per year.
- 28% wage increase demanded by union during current strike.
- 23% wage increase granted to union during last strike, in May.
- 0 hours of meetings held between government and union officials so far during this strike.
So on the surface, it seems the workers unions are merely demanding their wage rates keep up with inflation. But there's two things wrong with that. First, if the unions are granted wage concessions amounting to about 13% every quarter, as they appear to be demanding, their wage increases far outpace annual inflation. Second, the government maintains their inflation rate of 10% +/-2% is accurate (which, by all accounts, it isn't). And even if that were the case, granting wage increase demands of 20+% every few months would DEFINITELY outstrip the actual inflation rate, let alone the artificial government rate. So the government, logically, has refused to acknowledge the requests this time around, and the stalemate continues.
The other angle the unions are taking is the demand of improvement of working conditions and increased spending on maintenance of the subway infrastructure. Which is logical, the BA subway isn't the nicest in the world and it could use the work. And their case for this got a huge bump yesterday when one of the commuter trains derailed en route to the capital and injured 31 people.
Yet the fiery political rhetoric continues. The President was elected as a populist, but is now being accused of going back on her word because she won't grant each concession demanded by the labor unions that had a huge hand in electing her. The unions accuse the mayor of BA of failing to cooperate, when technically its not even his issue. The national government is in charge of the companies that operate the subways. So far the only remedy that I have seen has been the deployment of 500 school buses, post school run, to drive the same routes the subway lines would otherwise have run.
I hesitate to say I'm amused by all this. Actually amused is the wrong word. I am utterly fascinated to watch this unfold. The political system of the country bears the same resemblance to the one in the US, but the inner workings and party politics of it are so completely different. As inflation rises and the disputes between parties, unions and the electorate continue, I can't help but think I'm watching a train wreck in slow motion. Only question now is, how bad will it be?
Monday, August 6, 2012
More Transport Nightmares
Seems like all I've been doing on this blog is reporting on one form of transport or another. I promise to quit, but this was too good to pass up. Its a chance to comment on the differences between established and emerging economies.
Getting in to work today was amazingly difficult. My commute, by bus, took an hour and 45 minutes. Normally it takes around 35. Of course it didn't help that I had a case of the Mondays and got a bit of a slow start.
There are two parts to include in this emerging economy commentary. First is the subway strike that started at Friday. And the other is the rate hike that was implemented this morning. Both of which will be very intriguing to someone who is accustomed to public transit actually working.
At 9pm Friday the subway workers unions went on strike, or "paro", because they didn't get their paychecks from the company that operates the subways, Metrovias. The train system in the capital is HEAVILY subsidized by the government, allowing fares to stay really low. Fares for the Subte currently run AR$2.50 per ride, or US$.55. Cheap, eh? Well, yes. Until you factor in the relative corruption in the company that operates the trains. The argument by the workers on strike is that the officials are pocketing a lot of the money from the subsidies and then there isn't enough for regular operations, like paying wages. But, I guess, to add insult to injury, the worker's unions are demanding a 30% wage increase. Which is a bit comedic considering if they accuse their bosses of pocketing the money and leaving insufficient funds for paychecks, what makes them think they'll be getting paid more?
The other side has a bit to do with that crisis of coinage I've mentioned so much. In the ongoing effort to reduce the general population's reliance on coins, the government introduced the reloadable fare card, SUBE. Initially it was so popular that all the hallmarks of a market with low supply levels were seen. Hours long lines to obtain the card, cards being sold on the black market for insanely high prices and everything else you'd expect from people desperate to get their hands on one. Well that hubbub calmed down after a while and everything was good. You can go to any office that sells the card and typically you can find them, the only hassle is having to wait in line at the post office where they are sold. I got one, no big deal, no undue fuss (Yale, I'll give you mine when I get back). But now the government wants to force people to use the card.
How do they do it? Fare hike of course, but the fare increase was only put in place on buses and trains, not the subway. For anyone riding the bus and using the SUBE card, the fare stays at AR$1.20. Anyone who is paying by coins must pay AR$2.00. Did I mention yet that the fare hike was announced only 2 weeks ago? That's a 66% fare increase, for those of you wondering. It's no surprise that people are pissed. Couple that with the Subte strike, and it makes for a lot of angry commuters.
So what brings me to writing this today? Well, for one, a long ass commute this morning that I didn't anticipate. Partially my fault for not reading the Spanish language news this weekend, but mostly I just wasn't paying attention. Bus lines this morning were amazingly and unusually long, which should have been my first clue. But mostly I figured out something was up when bus after bus after bus (6 in total) drove by my stop without stopping because they were jammed full to bursting. Then, because so many commuters were forced onto the streets from the subway tunnels, every road in the city was completely gridlocked. So I spent an hour and a half standing shoulder-to-shoulder in a sardine can of a bus in all-stop-and-very-little-go traffic. It would have taken me less time to walk.
But mostly I wanted to give you an idea of how different an emerging economy is from the US. The people who live here come to expect this sort of thing, and nobody even looked up when I walked in 2 hours late to work. Argentina's government is a populist government, you can't win an election unless you're a Peronist (use wikipedia for a quick explanation). But often, while one uses the populist Peronist sentiment to win elections, it becomes obvious very quickly that a government can't function efficiently in that manner. Campaign promises get broken and then the unions get angry with the government and its austerity programs and make a big fuss with strikes and the like.
If you go to the grocery store, you'll see normal milk sitting on shelves in TetraPak boxes, unrefrigerated. It's ultra-pasteurized so it's safe, but it doesn't taste good. It's done this way to give it a long shelf life. And the joke goes that the milk is so safe that the truck drivers can load up, go on strike and return to work without the milk spoiling.
Getting in to work today was amazingly difficult. My commute, by bus, took an hour and 45 minutes. Normally it takes around 35. Of course it didn't help that I had a case of the Mondays and got a bit of a slow start.
There are two parts to include in this emerging economy commentary. First is the subway strike that started at Friday. And the other is the rate hike that was implemented this morning. Both of which will be very intriguing to someone who is accustomed to public transit actually working.
At 9pm Friday the subway workers unions went on strike, or "paro", because they didn't get their paychecks from the company that operates the subways, Metrovias. The train system in the capital is HEAVILY subsidized by the government, allowing fares to stay really low. Fares for the Subte currently run AR$2.50 per ride, or US$.55. Cheap, eh? Well, yes. Until you factor in the relative corruption in the company that operates the trains. The argument by the workers on strike is that the officials are pocketing a lot of the money from the subsidies and then there isn't enough for regular operations, like paying wages. But, I guess, to add insult to injury, the worker's unions are demanding a 30% wage increase. Which is a bit comedic considering if they accuse their bosses of pocketing the money and leaving insufficient funds for paychecks, what makes them think they'll be getting paid more?
The other side has a bit to do with that crisis of coinage I've mentioned so much. In the ongoing effort to reduce the general population's reliance on coins, the government introduced the reloadable fare card, SUBE. Initially it was so popular that all the hallmarks of a market with low supply levels were seen. Hours long lines to obtain the card, cards being sold on the black market for insanely high prices and everything else you'd expect from people desperate to get their hands on one. Well that hubbub calmed down after a while and everything was good. You can go to any office that sells the card and typically you can find them, the only hassle is having to wait in line at the post office where they are sold. I got one, no big deal, no undue fuss (Yale, I'll give you mine when I get back). But now the government wants to force people to use the card.
How do they do it? Fare hike of course, but the fare increase was only put in place on buses and trains, not the subway. For anyone riding the bus and using the SUBE card, the fare stays at AR$1.20. Anyone who is paying by coins must pay AR$2.00. Did I mention yet that the fare hike was announced only 2 weeks ago? That's a 66% fare increase, for those of you wondering. It's no surprise that people are pissed. Couple that with the Subte strike, and it makes for a lot of angry commuters.
So what brings me to writing this today? Well, for one, a long ass commute this morning that I didn't anticipate. Partially my fault for not reading the Spanish language news this weekend, but mostly I just wasn't paying attention. Bus lines this morning were amazingly and unusually long, which should have been my first clue. But mostly I figured out something was up when bus after bus after bus (6 in total) drove by my stop without stopping because they were jammed full to bursting. Then, because so many commuters were forced onto the streets from the subway tunnels, every road in the city was completely gridlocked. So I spent an hour and a half standing shoulder-to-shoulder in a sardine can of a bus in all-stop-and-very-little-go traffic. It would have taken me less time to walk.
But mostly I wanted to give you an idea of how different an emerging economy is from the US. The people who live here come to expect this sort of thing, and nobody even looked up when I walked in 2 hours late to work. Argentina's government is a populist government, you can't win an election unless you're a Peronist (use wikipedia for a quick explanation). But often, while one uses the populist Peronist sentiment to win elections, it becomes obvious very quickly that a government can't function efficiently in that manner. Campaign promises get broken and then the unions get angry with the government and its austerity programs and make a big fuss with strikes and the like.
If you go to the grocery store, you'll see normal milk sitting on shelves in TetraPak boxes, unrefrigerated. It's ultra-pasteurized so it's safe, but it doesn't taste good. It's done this way to give it a long shelf life. And the joke goes that the milk is so safe that the truck drivers can load up, go on strike and return to work without the milk spoiling.
Saturday, August 4, 2012
Boom, Bust and Bus
It’s fairly widely known that in late 2001 and early 2002,
Argentina’s economy exploded. And not in
the “welcome to the developed world” kind of way, that had already happened in
the 90’s. It exploded in the same way a
racing car does, a spectacular fireball that makes everyone watching go “oooooh,
aahhhh” and take a huge step back.
And I’m going to tell you the story of that default and why
it makes riding the bus (something I’ve already covered) so damn difficult.
It was the largest sovereign default in history. Argentines wanted to play with the big boys,
but the recession of the 90’s was wreaking havoc on its economy. Inflation was out of control, we’re not
talking German-Weimar-Republic-tote-your-cash-around-in-wheelbarrows bad, but
prices had skyrocketed around 1000%. Because
prices had gone up, the government had to print money in higher and higher
denomination bills, meaning coins became worth less than their weight in metal
and began disappearing altogether (this is key, remember this). And if you know very little about what this
means, take a look at what is currently happening when you put your money in a
savings account and earn 1% annual interest (which is probably your savings
account APR right now) in the U.S.
Inflation in the U.S. is around 3% now, which means your savings account
is being out-paced by the inflation rate, which also means you are LOSING MONEY
because you aren’t earning enough interest to cover the loss in value due to
inflation.
Now imagine the same sort of concept in Argentina, only with
a catastrophically higher inflation rate.
If you put your money in a savings account, it would literally be
worthless the next day. So everyone held
on to their cash, including foreign investors.
So what is the solution? Admit defeat. Tell the world “we’re powerless to control
the value of our own currency.” Just
give up. Give up, and then say “Ok
folks, each peso is worth exactly one U.S. dollar.” One-for-one exchange with the dollar, pure
genius.
Why pure genius?
Because inflation meant that there were a TON of pesos floating around
that had been worth 1/1000 of a dollar last week, and they were now 1:1 with
the dollar. Everyone was suddenly
incredibly rich. Everyone who walked
into a bank with a peso could, literally, walk out with a dollar. Imports skyrocketed and the economy was
booming. Seeing this incredible growth,
investors started dumping money onto the country and Argentine bonds (instruments
of national debt, think U.S. T-bonds) became a hot commodity. For 7-8 years, this was amazing. And it worked, until it didn’t.
Imports from outside of Argentina were amazingly cheap,
which allowed people in Argentina to afford things they never had been able to
previously. Think Argentine playboy
rolling around Monte Carlo in a Lamborghini.
But on the flip side, Argentine exports were suddenly expensive,
manufacturing suffered. Crop exports
couldn’t compete on the global market.
And as a result, unemployment started to creep up. To counteract it, and keep the good times
rolling, the Argentine government started to borrow more and more money. (Those familiar with the Greek debt crisis
can start to see a few parallels, right?)
The country was basically surviving on credit and fell into another
recession. But Argentina couldn’t do
anything to solve the problem; they were powerless because they had previously
declared that one peso was equal to one dollar.
So people panicked.
There were riots and week-long stretches of violence. And then a light bulb slowly started to turn
on in the minds of the wealthy and fiscally-minded folks. They could see disaster looming over the
horizon, this wasn’t going to end well.
So they did what smart and fiscally-minded individuals do, they tried to
avoid losing money. How? Well, at that time the peso was still pegged
to the dollar, so they quietly began to transfer their money out of Argentine
banks and change it into U.S. dollars in foreign accounts. Think a 1920’s era bank-run, but in slow
motion and over the internet. All of the
dollars that the Argentine central bank needed to maintain the 1:1 peg had up
and left.
So what did the government do?
They closed the banks and forbade any and all withdrawals. Literally, shuttered and boarded up with
fences erected to keep the mobs of people away.
They stayed that way for a week or more.
The people lost it. They had
already been rioting, but now they lost it.
Sustained violence and general disorder went on for weeks because all of
these formerly (and yes, artificially) wealthy people were now broke and in a
recession with incredibly high levels of unemployment. Paper money had all but disappeared and
through it all, in an attempt to quell the chaos, the Argentine government kept borrowing
money. But as they continued, the
interest rates on the loans shot up because of the unrest. The more they needed the money to stabilize
the country, the more expensive it got for the government to borrow it.
The government had lost control. In the first two weeks of 2002, the country
went through five different Presidents.
The third of those five is the one who left the legacy. He suspended payment on all foreign
debt. Total default. Total loss of faith in the government. Total suspension of belief in the banks. People didn’t even trust their own paychecks. Cash became king, and people hoarded it like
crazy. Eventually, the 1:1 currency peg
was severed and the value of the peso spiraled down to around 3:1 or about 33
U.S. cents per peso.
To this day, people are still trying to regain the money
they lost when Argentina defaulted.
Think international repo men trying to nab battleships and anything else
of value belonging to Argentina. The
country owes somewhere in the neighborhood of $16 billion USD, plus interest,
to creditors who invested in Argentina when it was artificially booming. And they aren’t paying. Any funds the country has have been moved to
the Bank of International Settlements, conveniently located in Switzerland
under all of the immunity from appropriation that the Swiss are famous for providing.
So what does this mean nowadays? Well, it would be totally legal for any
entity that Argentina is indebted to, to seize any Argentine asset they can
find in order to service that debt.
Which means that Argentina, to this day, is essentially and effectively
barred from raising any money in international credit markets. Any money that they raise, can be
seized. And the long-term effect is that
no one, for the foreseeable future, will loan them any money.
Now why did I tell you this long story? Well for one, absent the bail out, Greece is
currently in the exact same situation that Argentina was right before the
Argentines walled up the banks. The
other, and more relevant, issue is physical currency. Because the initial problem was inflation, and
coins became worthless, Argentina went through a coin crisis in late 2008 and
2009. It is still suffering through it
because the central bank refuses to mint more coins out of fears of
inflation. And so the main mode of
transportation in Buenos Aires, riding the bus, becomes really difficult.
As I said earlier in the blog, buses take payment in the
form of coins or the rechargeable RFID payment card called Sube. And up until recently it was only coins. So people hoard coins much in the same way
they hoarded any cash in early 2002.
Shopkeepers will flat out refuse to change a 2-peso note for coins. The only way to get coins is to purchase
something that guarantees change in coinage or to go to a bank and ask for
coins. But even then, there is a maximum
of 10 pesos in coins per transaction at the bank.
People adapt though.
It hasn’t stopped people from moving around the city. People here are used to this kind of minor
challenge and they just find a way to keep moving ahead.
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