Do they never learn? Argentina headed for trouble (again)
From
Reuters:
Argentina loses a third of its dollar deposits
Argentine banks have seen a third of their U.S. dollar deposits withdrawn since November as savers chase greenbacks in response to stiffening foreign exchange restrictions, local banking sources said on Friday.
Depositors withdrew a total of about $100 million per day over the last month in a safe-haven bid fueled by uncertainty over policies that might be adopted as pressure grows to keep U.S. currency in the country.
The chase for dollars is motivated by fear that the government may further toughen its clamp down on access to the U.S. currency as high inflation and lack of faith in government policy erode the local peso.
"Deposits keep going down," said one foreign exchange broker who asked not to be named. "There is a disparity among banks, but in total it's about $80 million to $120 million per day."
Nothing says stability like a run on the bank. So who is running the show down there?
Feisty populist leader Fernandez was re-elected in October
vowing to "deepen the model" of the interventionist policies
associated with her predecessor, Nestor Kirchner, who is also
her late husband.
Since then she has limited imports, imposed capital controls and seized a majority stake in top energy company YPF.
Great -- choosing charisma instead of leadership. She screws with the commerce, fixes prices and nationalizes companies. Of course things are going to go down the tubes.
So how bad is the inflation?
She wants Argentines to end their love affair with the greenback and start saving in pesos despite inflation clocked by private economists at about 25 percent per year.
25% per year? Failed economic policies, the citizens start using a (reasonably) stable alternative currency and she gets her knickers in a bunch.
Don't cry (again) for me...
Posted by DaveH at June 9, 2012 8:15 PM