Guest Post: Argentines Escaping Capital Controls With Bitcoins

Tyler Durden's picture

Submitted by Simon Black of Sovereign Man blog,

Several hundred miles east of Kinshasa in the Democratic Republic of Congo, the mighty Kasai river forms the boundary between two little known tribes of central Africa-- the Bushong and the Lele.

Ostensibly there should be scant difference between the two; they're separated only by a river, and they share a common language, art, and ancestry.

Yet their economic differences between are vast. As anthropologist Mary Douglas put it, "The Lele are poor, while the Bushong are rich... Everything that the Lele have or can do, the Bushong have more and can do better."

We've seen these differences before-- East vs West Germany. North vs. South Korea. Similar people, different ideals. On one side, economic freedom flourishes. On the other, it's central planning and totalitarian control.

South America is becoming a similar case study, with the Andes forming a sort of "Golden Curtain" separating two clear sides.

On this side, the Chilean economy is thriving. The peso is strong. Corruption is low. Economic freedom is high. And their standard of living is rising.

On the other side of the Andes, President Cristina Fernandez has a stranglehold over what's left of the Argentine economy. Inflation is rampant, corruption is incorrigible, and freedom is waning.

We've talked about this before; a month ago, I was in Buenos Aires on the day that Fernandez announced a ban on coupon-style advertising, just days after she imposed a price freeze at grocery stores around the country.

Price controls, media controls... they're all part of the same tired playbook that morally bankrupt politicians in financially bankrupt countries have routinely fallen back on for centuries.

Fernandez's most insidious move has been to FORCE Argentines to hold the rapidly depreciating Argentine peso. She has restricted her people from changing pesos into other currencies, including gold, as well as created obstacles to move funds abroad.

Many Argentines have reached their breaking points and are doing something about it. We're seeing this first hand by the steady stream of Argentine citizens lining up at the immigration office in Santiago seeking residency.

My friend Sir Charles at PricedinGold.com wrote me this morning from Argentina's Salta province (near Doug Casey's lovely property in Cafayate) and told me that TEA Turismo, a local tour operator and rental car agency there has started accepting BITCOINS.

If you're not familiar, bitcoins are digital currency units that are not controlled by any government. Bitcoins can be exchanged for goods, services, and other currencies, privately and anonymously.

For obvious reasons, Bitcoins are becoming increasingly popular in Argentina as people seek any means necessary to survive the economic destruction.

Needless to say, it would have been a hell of a lot easier to take these steps BEFORE it all hit the fan... not after.

This is an important lesson for the rest of us. There are consequences to printing money with wanton abandon. There are consequences to reaching an unsustainable debt situation. And, when the writing is on the wall, there are consequences when you delay taking action to protect yourself.

Diversifying income, assets, and personal interests abroad is a critical aspect of this. International diversification is something that the wealthy have been doing for centuries. But with so much modern technology at our disposal, these options are now available to ANYONE.

At least, while the window of opportunity is still open.

The pace of Draconian legislation is changing the landscape quickly. Very quickly. That's why I put together the Offshore Tactics Workshop we're holding here in Chile at the end of this month.

It's too late to sign up for the event... the workshop sold out a few months ago almost immediately. But I've hired a professional Hollywood crew to film every minute of it.

Quite simply, the event (and the video kit) will showcase the most powerful set of actionable international diversification options ever presented, along with step-by-step instructions.

Ship your IRA overseas? Set up a rock solid trust and foreign bank account?  Establish residency in Chile? Move gold abroad? Contact these exact people, and follow these precise steps, 1, 2, 3.

To be completely candid, there's simply no one else out there with the experience or contacts to be able to deliver such a vast array of experts and actionable intelligence.

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fonzannoon's picture

simon please send pictures of your "event". I'd love to see one with you and your keynote speaker Snufalufugus.

DJ Happy Ending's picture

Why is Simon always telling people to store their money thousands of miles from where they live? Doesn't seem very practical if the SHTF.

CH1's picture

Wait, I though Bitcoin was the Devil's spawn.

It must be bad, must be bad, must be bad. Right?

Hurry up, you trolls - say something witty!

WayBehind's picture

Is the new Pope also using Bitcoin? 

nmewn's picture

If he is, its going to make passing the offering plate interesting...paper or digital?...lol.

zaphod's picture

Geez, a few people in SA started using bitcoins and the price has exploded $10 to $45 in a month or so. Just wait till it goes mainstream in 1 or 2 countries like this, then a few more, then the USoA.

nmewn's picture

Let me know when employers start paying with them ;-)

Half_A_Billion_Hollow_Points's picture

All those who laugh at bitcoin will buy it when TBTF or currencies collapse.  EVERYONE.  

 

As TSHTF you might just suddenly discover that you have to send value to your kid or family member 10 military checkpoints away, by then you will come to some thug that has bitcoin, and you will beg him to take your junk silver for it.  Not having bitcoin is a major mistake, I believe.  

 

But who am I to say anything?  Just one more fucking moron on ZH.

Haywood Jablowme's picture

I've actually done my last 10 purchases on GunBroker via BTC.  In the same manner that PM's didn't make sense to most just 4 years ago (and still even today), BTC falls in the same realm.  

Yes, it's digital.  Yes there's risk just like anything else but I for one like having the added option of not needing to back up the truck and move all my PM's around should that time come.  

Bubble / speculation it may be, but I got in last year thanks to Mr. Keiser so I ain't complainin'.

 

NoDebt's picture

Ya know, I'm getting tired of all this bitching and complaining about BitCoin.  Or bitCoin or Bit Coin or however the fuck it's actually spelled.  I'm going to try it.  I'm certainly not going up to my eyeballs in it, but I'll load up maybe a grand and try using it for real-world stuff.  Hell, it's all just fiat anyway, right?

I just can not possibly even understand the discussion if I've never tried it and have no frame of reference.

Plus it appeals to my inner "diversification demon".  Not all eggs in one basket (nor gold in one tragic boating or sinkhole accident).

Ya fucking happy now?  I'm gonna try it.  You got a convert.  Now leave me the fuck alone for a few months.  If the black helicopters come flying up over the ridge at me or my internet connection mysteriously fails, well, I guess you'll be waiting a lot longer than a few months to hear back from me.  But when I come back with my verdict on this very unusual "currency" I won't be taking and crap from those who haven't actually used it.

 

EscapeKey's picture

don't put all your eggs in one basket.

it's just one of several alternatives. gold springs to mind.

Half_A_Billion_Hollow_Points's picture

I have gold.  But the price supression there is fucking raging.  

What the price of bitcoin tells me is that when gold moves, it will explode like a volcano--there will be no physical anywhere.

EscapeKey's picture

it isn't really.

i've got gold. i've got silver. i don't need to check the price on a daily basis - in fact i don't give a shit.

if you can't afford to invest money, then don't do it.

RideTheWalrus's picture

Deep Packet Inspections. The internet is the last place you want to be hiding anything in a few years.

 

Half_A_Billion_Hollow_Points's picture

...says a guy with zero understanding of cryptography and steganography.  All that DPI can see is that there's pure randomness being transferred.  And if you use steganography, you can send anything hidden in a video, image, or song.  

Of course, everything has to be open-source.  

http://en.wikipedia.org/wiki/Steganography

Papasmurf's picture

. . . says a guy with zero understanding of what fiat ponzi is

TraderTimm's picture

You're right Papasmurf, you have zero understanding of what a ponzi is.

Thanks for coming clean.

RideTheWalrus's picture

"Steganalysis is the art and science of detecting messages hidden using steganography; this is analogous to cryptanalysis applied to cryptography."

http://en.wikipedia.org/wiki/Steganalysis

In the future IF bitcoins gain any real form of popularity besides this current honeymoon phase of early adopters, you can bet your sweet ass there will be just as many counter-measures put in place by authorities with Utah-sized data centres, bullshit crazy computer power and unlimited funding to discover who is sending packages across the internet out of clear view of Saurons eyeball. Just having some obfuscation on your packets will be enough to focus Saurons eye on you if the authorities get their internet laws in place. It's all just the beginning of this stuff, the beginning of bitcoins and the beginning of a draconian internet. At some point their paths will cross and you don't want to be holding the bag of bitcoins when that happens.

I agree if you have money to spare, play the bitcoin roulette and if your lucky you might make some money but if your listening to the hype and thinking they'll be worth a $100,000 or a million dollars in the future and plan to pour your money into them to get rich - your going to be left holding a bunch of rotten tulips.

BitCoins have a long hard road ahead of them before becoming anything other than a novelty.

Half_A_Billion_Hollow_Points's picture

Yeah, because a gov't that is too incompetent to win any war or to even run a fucking postal office will *simultaneously* break RIPEMD160() & SHA256() & Private keys.  

Without a single Bradley Manning warning people.  No amount of violence can break the laws of mathematics.

Yeah, they're going to pull that off.  I'm sure they will.

 

 

 

RideTheWalrus's picture

The wars aren't to be won, they are to be dragged out for contracting, big money profits and especially for human behaviour and crowd control studies to prepare humanity for the next phase of their New Order. Haven't you worked that out yet? They could win any war they wanted pressing the right buttons but what advantage does that bring them when these wars have never been a contest they are trying to win.

Running super high tech facillities to control the internet and EVERYTHING that passes across the exchanges is exactly what they are spending their time on - it's part of the larger war effort by the control freaks.

Look it up, hit up google and do some research on the other side of the technology - the NSA and DOD have already been running steganalysis programs for years and are well aware they need to be able to identify and even break these methods. It's not something only the super smart bitcoins uses know about even if they think that's the case, the spooks are well aware of it and working on having an answer to it.

While i think bitcoins can make money in the short term, any success they gain into the future will be thwarted by a much larger brain trust with unlimited funding and technology that will render them useless if their only use now is privacy.

My point is - don't be the last one holding the bag. Make your money now, buy them low, sell them high but don't listen to the calls of $100,000 or a Million$ because ANY success for bitcoins will result in a 10 fold attempt by the spooks to identify and counter their use. That's the fundemental problem for bitcoins and there's no legit answer to that problem - only because right now it isn't an issue. 

You can make money on lots of early startup concepts but most fail after the initial hype. What bitcoins needs is some assurance they won't fail when Saurons eye notices them, unti then it's not a legit investment for people to park money into, you might as well just gamble on football or tennis if you want to flip your money quickly. Bet on Federer and Djokovic since they win 95/100 times. That's easy money too.

 

Robsabi's picture

They're breaking Swiss banking secrecy laws as we speak. Once upon a time, these were considered inviolable too. Where the money is that's needed to preserve the entrenched power structure, they'll go, and find a way to collect their due. Either by brute force attacks, or finessing the right resources behind scenes. I've seen too many scientists declare things to be impossible, until it turned out they weren't. Airplane impacts will never cause the World Trade towers to collapse. "Oh, we were thinking only about the impact forces, we didn't consider the effect of burning jet fuel." We only need to make the sea walls around the Fukushima power plant able to withstand a 5.7 meter tsunami, because powerful earthquakes don't happen here. "Oh, we didn't realize there was a subduction zone off the coast capable of causing megathrust earthquakes."

It's not that the laws of physics and mathematics are flawed. It's the scientists/engineers who consistently mistake all the contingencies they're aware of for all the contingencies that are possible that are the issue.

At least you can hide your gold in little pockets buried all over the place, if that is your wont. But the internet can have its plug pulled in one fell swoop, should the powers that be decide it's in their best interests. As indeed the US government is trying to get the right to do even now. Good luck digging up your bitcoins from their virtual hidey holes then.

fonestar's picture

The "internet" as we know it will evolve and adapt into P2P darknets.  What we can't do, we code towards.  Where we can't get, we route around.  What we want to hide, we encrypt.  Look for the unintended consequence dupes in government to push for more internet legislation.  The end result will be an increase in robustness, privacy and ease of use.

A Nanny Moose's picture

TSA deeply inspected my packet last time I boarded an airplane. Next time I expect dinner, and drinks

DPI cannot decrypt, without private keys. This is why we call SSL the Universal Firewall bypass.

Haole's picture

I don't know why you bother anymore Half_A_Billion... I have better things to do than to waste time talking about BTC on ZH anymore but good on ya'.

Hey look! Just one day after the "crash" in which a global currency was fixed in 25 minutes and all the BTC slag pumpers on ZH were wetting their pants talking like it went to zero, it's higher and demand is strengthening markedly.

All I can do is laugh at most ZH comments on BTC now because the majority of them are made by people that don't have the faintest idea what they're talking about.

Cheers HAB!

EscapeKey's picture

meh, discussing in btcoin threads is like masturbating with a cheese grate - slightly amusing, but mostly painful (thanks, andrew dice clay)

Half_A_Billion_Hollow_Points's picture

It's like a sociological experiment.  

We've all read all those stories about the morons at Xerox showing the entire mac to Steve Jobs, who stole it all; the stories of the morons at yahoo who didn't buy google for 100k (or something like that), the massive takeover of linux, wikipedia, and so on and so forth.  

Here we are again on the start of a great breakthrough, a key moment of creative destruction, and it's just fucking FUN to see that some people simply do not know what's coming.  They simply cannot see it--by any means.  

When bitcoin fell to $4.50 last year I screamed to a very close friend "you have to run and get this shit now", and he said "yeah, sounds good".  The phrase that I hear most frequently by my close friends is: "goddammit I should have bought some btc".   Last week he comes to me and says, "you should have screamed more, put a gun to my head," and so on.  

 

 

 

 

 

bdrichards's picture

OK, so currencys "collapse", and our friend "Half a Billion" assumes the internet will just go chugging along as if nothing happened. I don't know whether BitCoin will survive and prosper or crash and burn, but I am always constantly amazed that kids, sitting in front of their computers or smart phones all day long, have total faith in all the infrastructure that goes into allowing us to use these devices. Really, if you think currencys are going to collapse, this implies far more serious disruptions to our society than you might imagine. Consider yourself lucky to have electricity for an hour a day under those dire circumstances.

pods's picture

I have nothing against bitcoins.  Or any other alternative currency.

But you bring up a very important point.  If things go really downhill, the last thing we are going to have is electricity and functioning networks.

If things muddle along they way they are and we have some semblance of normalcy, bitcoins are not going to reach the value that many propose.  If it becomes a large enough threat it will be stomped out.

And since a very small minority have or use bitcoins, the majority will have little problem stomping out the minority's rights. (Ask Bernard von Nothaus how that works.  And a Bitcoin is a COIN.)

Same as it ever was.

Riddle me this, what if there was a concerted effort on the part of our alphabet soup agencies to show the al CIA Duh was using bitcoins to move their dirty terrist money around?

Not only would most be afraid to accept them, but those who have them would be sitting on a digital pile of treason.

Compare that with gold or silver, which is recognized and accepted almost anywhere in any conditions, and the answer is pretty simple.

pods

A Lunatic's picture

I saw an article in the MSM a few months back which made an attempt to link gold mining in South America to the financing of Terrorists. We can't have the peons simply picking it up off the ground and making an unsupervised living now can we??

pods's picture

I hope so, because that is EXACTLY what I am doing in my free time.

Hard work for a hobby, but rewarding.

pods

A Lunatic's picture

That is what I do all summer long.

pods's picture

It is very addicting.  Last night found my first picker.  :)

The small creek that is close is low flow, so after every rain I dump in my bazooka gold trap.  

Gold Fever.

pods

A Lunatic's picture

Get a metal detector if you have not already done so. I do a lot of desert prospecting and it makes it real nice. I'm still buried in snow, so I'm still in research mode, lol.

pods's picture

That is something I have been researching.  Here in the east, it is tough to find land to prospect (all private) and detecting is even worse (civil war sites, etc off limits).  There is the beach though.  Most of the gold I have come across is small, and even a pinpointer coil would miss so I would be limited to coin shooting.

I should still be researching, but someo of they yellow showed up in my test pans.  :)

Good luck!

pods 

A Lunatic's picture

Gold is where you find it. Good luck to you!!

Chariots of the Feds's picture

Well said pods, my thoughts exactly.  ZH taught me that if you don't physically hold it, you don't own it nor can you protect it.  The dangerous assumption in dealing with BTC is of stability and technology.  If things become less stable or completely unravel, good luck getting access to it or kiss it goodbye.  If the power grid is down/unrealiable, the internet is kill switched or the TPTB see it as a threat they will do all in their power to crush it, and then, poof it's gone.  Maybe it's a great insurance to add to planning, but I would not put all my eggs in one basket.  

Half_A_Billion_Hollow_Points's picture

-->"OK, so currencys "collapse", and our friend "Half a Billion" assumes the internet will just go chugging along as if nothing happened."

 

When markets are optimistic, they overshoot to one side.  When they are pessimistic, they overshoot to the other side.

Internet in Zimbabwe is running just fine, before, during, and after currency collapse, brother: 

http://www.internetworldstats.com/af/zw.htm

 

Zwelgje's picture

I reckon there is going to be a big difference between the collapse of the ZIM $ and the possible collapse of the US $. Zimbabwe was kept running by the out side world.

Citium's picture

So we have one of the main bitcoin guys going through the CIA's front company In-Q-Tel to talk about bitcoin within days of it flash crashing to ZERO with no buyers. You know the  Bitcoin is now officially been co-opted by the CIA. Also you guys have no idea who this Satoshi even is. Please explain the first flash crash which was said to have been hacked and this last flash crash of almost 25% of its worth was due to overload or some problem within the system itself.

 

SO with knowing all of these things how in God's name can you put your faith into something with absolutely zero intrinsic value that obviously has serious concerns with it's stability. I want something that people can touch and know has real wealth and protects purchasing power.... Silver and Gold have 5,000 years of history backing them as real money not currency. Like one other person said when this collapse happens and the digital illusory wealth in back accounts and bitcoins dissapears you will need hard assets. That is the paradigm shift happening is that we want competing currencies and that could be bitcoin but to trust anything that has all the problems and holes in it's function seems a bit retarded. Most of the people on here supporting bitcoin have to try to talk over everyone and become militant about its function as a decentralized currency. The precious metals folks have thousands of years of history on our side and a product that doesn't need a power source, USB drive, passwords, internet connections just to buy an apple at a market or a chicken off a farm.

 

Trade in my worthless silver??? LOL !! Seriously I Have no problem with people owning bit coins. Good luck is all I can say you are playing with fire. These people telling you that bit coins are the new hit wealth preserver and that you can make all this money by doing absolutely nothing sounds just like people trying to tell you to get into the stock market right now at all time highs. I'm sorry I will stick with whats real:

 

Precious Metals

Farm Land

Animals

Workable Buildings/Farms

Storable Food & Water

Guns/Ammo

CH1's picture

Let me know when employers start paying with them

Smart employees started taking it some time ago.

nmewn's picture

Well thats news to me...what employers?

newdoobie's picture

I'll harvest your crop for 6 bitcoins

pods's picture

Do they have virtual farmer's daughters?

pods

digitalhermit's picture

nmewn: Let me know when employers start paying with them ;-)

The internet archive has started paying a portion of employee salaries with Bitcoin (at their request). But that was last month's news:

http://blog.archive.org/2013/02/21/employees-to-be-paid-in-bitcoin-pleas...

nmewn's picture

Thanks for that...and thats fine.

I believe what myself and others are saying is, we just don't want people to get hurt financially. When a currency implodes, the lights go out because workers at the power plant and communications providers (and taxis drivers and ships captains bus drivers, you name it) won't accept that currency for their labor.

No power, no communications, no internet, no access to money. You better have something tangible in your pocket to trade for.

TheCanadianAustrian's picture

I know it's just her dollars that she's made publicly known, but let me be the first to say that I would "invest liquidity" in her "bit coin".

A Nanny Moose's picture

More importantly, How resilient are BTC to maritime mishaps? Does my laptop need to become flotsam, or jetsam?