Excellent post once again, Mara. Absolutely loved my time in Argentina earlier this year — all the diverse natural wonders, the women, and yes, the blue dollar rate for USTT. Was planning to come back early 2023 and visit Patagonia mountains again but I’m not so sure now given the turmoil. Appreciate your honest advice and insights into the shit situation. An absolute shame that bad actors in politics (for decades now) have ruined such a potentially-great country. Wish everyone down there well
Thanks man! Yeah I think this year will be a decisive one (elections next year). A lot of shuffling going on already - the minister mentioned in the article already left her post after talking to the IMF; she didn’t even last 1 month! Probably around/after election time next year would be good
Yes, definitely; it could become a bit more turbulent but even in 2001 it wasn’t anything like what we’ve seen in Sri Lanka for example. If you have 100% WiFi if worse comes to worst you can always take the boat to Uruguay and be there in 1 hour (which is a see of Swiss boredom compared to Argentina)
We’ve been keeping our eye on Argentine peso for a while. We have even considered hiring developers in Argie on a strictly BTC based relationship.
Textbook economics really. Capital controls are toxic for a country, and in a sovereign individual world, people are going to punish bad governments that implement control by leaking value out of the tradFi system into computer coins.
I can definitely recommend hiring local devs here. Level is very high and many already work full WiFi for USTT. This is one sector of the economy the government has zero grip on, and I love to see it. They’ve tried everything in terms of capital controls etc, but with crypto there’s just nothing they can do.
Usually done in stablecoins, and then local devs swap those for cash USTT later. Massive market for anything dollar related. Also third party transfers are used a lot to get dollars in, so x needs dollars offshore, y needs them in Argentina. Y transfers to X outside of Argentina and the match makers (cuevas) charge 4% to make that transaction happen. All off the grid in terms of government control.
It looks like most of the advice is "be a tourist" and earn tourist money. Any advice from a local perspective? What business/industry survive and thrive in a hyperinflation environment?
Have had 2 local service businesses - very hard to thrive in this environment. If it’s not inflation, it’s labor conditions and insane tax burdens. People who do well no matter what in Argentina: lawyers (specifically labor law), accountants, plastic surgeons (mainly usd based pricing), notary’s, and fast moving consumer goods. Living on USTT income doesn’t mean you have to live like a tourist. I have my kids here, my family and local friends. My life is 100% Argentine, I just prefer not to depend on the local economy for my personal economic stability.
Another sector that has always been a stable bet is RE, and particularly short term Airbnb rentals in the upper segment. Except for the pandemic years without tourism, managing multiple rentals is usually an above average income, but it requires a lot of work in terms of management.
For the older generation it is tougher, especially for retirees on a peso pension; almost undoable without family help if they retired from an average paying job
If you’re spending time in Argentina, is it better to use your American credit card or to convert dollars into pesos on the black market? Which gets the better rate?
What happens when capital controls come in though? At a certain point my own country suddenly split currencies (local vs external) and as such you couldn't get the USD in without using the central bank. Do you leave at that point?
My largest issue with saying that people will overthrow governments and remove them from power is that post populism there always seems to be a worse politician elected, and through taxes, exchange control and other issues we get a worse situation (since often the passport of that country gets rekt too and you struggle to migrate to better countries). Rather panic early than panic too late. I've been living like an expat in my own country for a decade now, just in case SHTF.
Capital controls have been here since forever and nobody cares. Only during the previous presidency they were lifted and then at the end reimplemented. In my previous post on BTB I explain how people go around this in a traditional way and now with crypto there is absolutely nothing any government can “control” in terms of capital. We have a small nation state of developers and marketers living inside the country that survive completely outside of the legacy financial system, and get around by trading to peso on the black market from time to time to pay for expenses. It has been that way since 2011 more or less.
No issues in terms of taxes and trading crypto then - or is this all done p2p rather than exchanges? They not looking at any official rates similar to the CGT you mention in the article?
I expect my own country will get there - we don't have currency collapse and hyperinflation, yet.
Yes, the p2p option on Binance for example is very common; most people will also use a "cueva" service, which is basically a black-market exchange service (with delivery service). I go a bit deeper into the details of this mechanic in the first post on BTB: https://bowtiedbull.substack.com/p/how-to-survive-in-a-world-of-hyperinflation
This is so good. Citizen journalist theory come true.
Thanks Revkin!
Absolutely brilliant point on taxation of bonds bought by tourists.
Excellent post once again, Mara. Absolutely loved my time in Argentina earlier this year — all the diverse natural wonders, the women, and yes, the blue dollar rate for USTT. Was planning to come back early 2023 and visit Patagonia mountains again but I’m not so sure now given the turmoil. Appreciate your honest advice and insights into the shit situation. An absolute shame that bad actors in politics (for decades now) have ruined such a potentially-great country. Wish everyone down there well
Thanks man! Yeah I think this year will be a decisive one (elections next year). A lot of shuffling going on already - the minister mentioned in the article already left her post after talking to the IMF; she didn’t even last 1 month! Probably around/after election time next year would be good
Love this post Mara
The comment about Switzerland is such an Argentinian thing to say, video here:
https://www.youtube.com/watch?v=4q_BvCEMvfY
@BowTiedMara, even if you do have 100% WiFi $$, would you still recommend visiting Argentina given the political turmoil?
Yes, definitely; it could become a bit more turbulent but even in 2001 it wasn’t anything like what we’ve seen in Sri Lanka for example. If you have 100% WiFi if worse comes to worst you can always take the boat to Uruguay and be there in 1 hour (which is a see of Swiss boredom compared to Argentina)
We’ve been keeping our eye on Argentine peso for a while. We have even considered hiring developers in Argie on a strictly BTC based relationship.
Textbook economics really. Capital controls are toxic for a country, and in a sovereign individual world, people are going to punish bad governments that implement control by leaking value out of the tradFi system into computer coins.
I can definitely recommend hiring local devs here. Level is very high and many already work full WiFi for USTT. This is one sector of the economy the government has zero grip on, and I love to see it. They’ve tried everything in terms of capital controls etc, but with crypto there’s just nothing they can do.
Is BTC seriously the optimal/efficient way to do compensation with a dev team there? Curious.
Usually done in stablecoins, and then local devs swap those for cash USTT later. Massive market for anything dollar related. Also third party transfers are used a lot to get dollars in, so x needs dollars offshore, y needs them in Argentina. Y transfers to X outside of Argentina and the match makers (cuevas) charge 4% to make that transaction happen. All off the grid in terms of government control.
It looks like most of the advice is "be a tourist" and earn tourist money. Any advice from a local perspective? What business/industry survive and thrive in a hyperinflation environment?
Have had 2 local service businesses - very hard to thrive in this environment. If it’s not inflation, it’s labor conditions and insane tax burdens. People who do well no matter what in Argentina: lawyers (specifically labor law), accountants, plastic surgeons (mainly usd based pricing), notary’s, and fast moving consumer goods. Living on USTT income doesn’t mean you have to live like a tourist. I have my kids here, my family and local friends. My life is 100% Argentine, I just prefer not to depend on the local economy for my personal economic stability.
Another sector that has always been a stable bet is RE, and particularly short term Airbnb rentals in the upper segment. Except for the pandemic years without tourism, managing multiple rentals is usually an above average income, but it requires a lot of work in terms of management.
Thanks Mara for sharing. The picture you paint helps reset the perspective of anyone on the outside. How is the older generation taking it?
For the older generation it is tougher, especially for retirees on a peso pension; almost undoable without family help if they retired from an average paying job
If you’re spending time in Argentina, is it better to use your American credit card or to convert dollars into pesos on the black market? Which gets the better rate?
What is hiking and outdoors activity like in Argentina?
What happens when capital controls come in though? At a certain point my own country suddenly split currencies (local vs external) and as such you couldn't get the USD in without using the central bank. Do you leave at that point?
My largest issue with saying that people will overthrow governments and remove them from power is that post populism there always seems to be a worse politician elected, and through taxes, exchange control and other issues we get a worse situation (since often the passport of that country gets rekt too and you struggle to migrate to better countries). Rather panic early than panic too late. I've been living like an expat in my own country for a decade now, just in case SHTF.
Capital controls have been here since forever and nobody cares. Only during the previous presidency they were lifted and then at the end reimplemented. In my previous post on BTB I explain how people go around this in a traditional way and now with crypto there is absolutely nothing any government can “control” in terms of capital. We have a small nation state of developers and marketers living inside the country that survive completely outside of the legacy financial system, and get around by trading to peso on the black market from time to time to pay for expenses. It has been that way since 2011 more or less.
No issues in terms of taxes and trading crypto then - or is this all done p2p rather than exchanges? They not looking at any official rates similar to the CGT you mention in the article?
I expect my own country will get there - we don't have currency collapse and hyperinflation, yet.
Yes, the p2p option on Binance for example is very common; most people will also use a "cueva" service, which is basically a black-market exchange service (with delivery service). I go a bit deeper into the details of this mechanic in the first post on BTB: https://bowtiedbull.substack.com/p/how-to-survive-in-a-world-of-hyperinflation