Argentines Are Hoarding 1 Of Every 15 Cash Dollars In The World

Tyler Durden's picture

With the shadow (or blue) market for Argentina Pesos already devalued by an incredible 50%, it is little surprise that the population is bidding for any store of value. Demand for luxury cars is soaring (BMW sales up 30% in the last 20 months) and Bitcoin activity is often discussed as the population transfer increasingly worthless Pesos into a fungible "currency" or domestic CPI protection; but it is USD that are the most-cherished item (despite a ban on buying USD) as hyperinflation hedges. But as Bloomberg Businessweek reports, a lot of US Dollar bills are tucked away somewhere in Argentina (in stacks of $100 bills since the number in circulation has risen from 58% of the total to 62% since 2008). One table is a 2012 Fed paper on demand abroad for US currency shows net inflows to Russia and Argentina has increased by 500% since 2006 (compared to US demand up around 10%). In fact, demand for large dollar transfers to Argentina since 2006 has outstripped demand for dollar cash overall in the world. It is safe to surmise from the data (that is relatively well guarded by the government) that over $50bn is being hoarded in Argentina (or well over one in every fifteen dollars). It is little wonder that the government is furiously digging at the country's undeclared (stashed under the mattress) wealth.

Blue (black market currency) versus green (official) exchange rate


Buying cars as CPI protection (via Bloomberg):



Argentines are buying more BMWs, Jaguars and other luxury cars as a store of value as inflation decimates their deposits and pummels the nation’s bonds.


Purchases of cars from Germany’s Bayerische Motoren Werke AG (BMW) and Jaguar Land Rover Automotive Plc, owned by India’s Tata Motors Ltd. (TTMT), jumped the most in April among brands sold in Argentina. The sales were part of a 30 percent surge in car sales from a year earlier that was the biggest increase in 20 months, according to the Argentine Car Producers Association. While used-car prices rose in line with inflation last year, or about 25 percent, peso bonds tied to consumer prices fell 13 percent. The drop was the biggest in emerging markets.



Hoarding USD Bills (via Bloomberg):

...estimated that in the early 1990s Argentines held $20 billion in cash, a number that by 2006 had grown to “perhaps $50 billion or more.” That year there was a total of about $768 billion worth of dollar-denominated cash in the world, which means that someone in Argentina held at least one out of every 15 cash dollars.




The Fed is chary with its data releases. One table in a 2012 Fed paper on demand abroad for U.S. currency tells us that the annual net inflow of commercial shipments of bills denominated in dollars to Argentina and the former Soviet Union has increased since 2006 by 500 percent. In 2011, that growth rate stood at 48 percent, while total demand for U.S. currency, in America and abroad, has increased only about 10 percent. It’s unlikely that all of that growth came from the former Soviet Union alone; otherwise, why include Argentina at all? Demand for large dollar cash transfers to Argentina since 2006, then, has outstripped demand for dollar cash overall in the world.




That is, the number of dollars has grown faster than growth in the U.S. economy and inflation would suggest, which means the dollars are going elsewhere.




...foreign use of U.S. dollars is tied not to average inflation over time, but a specific generational memory of hyperinflation.




We know that the number of hundreds in foreign circulation rose from 58 percent to 62 percent between 2008 and 2011. We do not have an estimate of where they went. The Fed does. It’s a good bet Cristina Kirchner does, too.

Charts: La Nacion

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LawsofPhysics's picture

"Winning" - Can't wait for those dollars to start flowing back to the U.S. < sarc off >

Tortfeasor's picture

Not happening. Ferfal took them all to Ireland when he escaped.

francis_sawyer's picture

the JOKE is on them...


Would you like some "wine" to go with your cheesepopebux?

French Frog's picture

I knew that there had to be at least 1 positive somewhere in the world from TheBernank throwing $100 bills out of his helicopter


WakeUpPeeeeeople's picture

Has anyone heard what the going rate is for a dating/girlfriend experience in BA  (in USD, of course)? Might as well take advantage of the strong dollar while the taking is good.

SafelyGraze's picture

1 out of 15 units of M1 withheld from circulation/velocityOfMoney

price-deflationary, at a rate of 6.7 percent

and the effect on the larger measures of money supply?

multiply by 5? 10?

of course, somewhere there is someone dis-hoarding M1 at a similar rate

at least, for the moment

Offthebeach's picture

It's tough on the green shoot chewing sheeple. One minute you are discussing the latest Kardashian tramp ass, then you get crushed by a crate of falling Benjamins,shoved out the ramp of a unmarked Chinook with a bearded crew chief.

Salah's picture

Remember when Argentina came 'this close' to full dollarization? but their little crooked Prez Carlos Menem queer'd the deal

If things get bad enough with the looney-tunes running the place....they'll go all the way this time.

TeamDepends's picture

They had better cash those chips in real soon because the Big Winne Ponzi Casino  Royale (no spelling error) is about to go belly up.

DeadFred's picture

The Argentines get the award for the country that has screwed the most given the rich resources they were blessed with. It's like they've had Obama for president for over a century... Sad

Freddie's picture


These people are some of the most corrupt and clueless f**ks ever. Natural resources, plentiful food and these people practically created Detroit on the Pamapas.   Fools. They are corrupt frauds like that dope head loser and cheat Mardonna.  Fat idiot.

putaipan's picture

freddie your hollywood/reality displexia is showing again....

caconhma's picture

Luxury cars as a store of value? WOW! How stupid people can be?

Then, it is the US$ as a store of value. Somehow I do not feel sorry for these idiots.

Well, Argentina has a democratically elected president and a larger Jewish population. This is a perfect combination for an economic catastrophe (unless it is Israel who milks its American colony high and dry).

Is Argentina something we shall be looking to in a not too distant future?




Herd Redirection Committee's picture

Whats crazy to me is...  The solution is right there, in the name of their country!

Weisshaupt's picture

Argentina is a wonderful place for Americans to move to in order to esacpe the comming collapse and police state.  When the dollar collpases the people there will just LOVE American refugees. You know, as long as they can pass for natives and never mention once they are originally from America. 

Freddie's picture

Yeah Doug Casey and Simon Black keep telling us that.  I worry that I might get "disappeared" on the back nine of Doug's golf course.  I would never make it back to my N Argentona mcmansion hacienda Doug designed for the expats.

My posting on ZH has probably screwed any chance of me getting into Switzerland because the Tylers mysterious war with the Swiss.  F them!  Some of us posters are Team America - so you better watch out Switzerland.  America F Yeah!

F the Swiss and their censorship.  America or really Al Gore invested the Internet.

Matt Damon

Schlomo Bergstein's picture

So that's where all the inflation went.

mayhem_korner's picture



Cleanest dirty toilet paper?

venturen's picture

Wow they are picking the wrong currency!

El Hosel's picture

....  And somebody's pulling the Gold finger.

syntaxterror's picture

The IRS is our national health care provider now. Nothing to see here! move along!

Offthebeach's picture

Free IRS dentistry for selected critics of Dear Leader.

" Is it safe?"
"Is. It. Safe?"

freewolf7's picture

CA judges vs. IRS.

This'll be good.

francis_sawyer's picture

"all hilarity will ensue" [in parlance]

Son of Loki's picture

EMR (electronic medical records) = end of any hint of privacy

Stuck on Zero's picture

Gresham's Law at work.


mayhem_korner's picture



Ben must be sending the Argentinians cart loads of soccer balls every day as a "thank you" for keeping all those clownbux out of the US.

francis_sawyer's picture

Soccer balls?... Come on man!... You know that Diego Maradona needs 'something' to toot coke up his nose...

syntaxterror's picture

Good to hear somebody still wants dollars. Guess they haven't heard the news.

Dr. Engali's picture

I'm glad the people of Argentina are dumb enough to take our inflation for us. That gives me more time to stack and stock up.

Harbanger's picture

Don't laugh, capital controls are coming to the US soon. In Argentina's socialist war on economic reality, President Cristina has banned dollars in an attempt to stop capital flight out of the country. In the last three years, Argentina's government has seized private pensions to pay for all it's social welfare programs and raised government spending to 38% of GDP. Just like the Obama administration, they're lying about inflation and unemployment statistics and are now printing money like crazy.

Dr. Engali's picture

I'm not laughing at any of this. the whole thing pisses me off. I know capital controls and more theft is coming. I've been preparing for just that. But the fact still remains that every U.S. dollar the people of Argentina hold is one less dollar's worth of inflation we have to deal with.

Harbanger's picture

I know what you mean.  I just don't think it makes much difference to our inflation.  We're printing much faster than they're hoarding.

mick_richfield's picture


But the fact still remains that every U.S. dollar the people of Argentina hold is one less dollar's worth of inflation we have to deal with.

Unless they ... um .. you know ... are printing their own.




Yen Cross's picture

     Argentina should bundle luxury cars into paper contracts, and sell it like MBS. /s  Go for the Gusto you commie SOBs...

the black arrow's picture

We are headed down to BA second week of June, any advice on bring us cash into the country? 100s 50s 20s 10s???

jstalin's picture

Use to transfer $ into pesos at the blue rate. Everything will be 40% off.

Harbanger's picture

The point is to bring cash dollars and trade them there, not convert to pesos at a better rate.  The people there don't want pesos, they're being forced to use them.  Think of it as bringing blue jeans into the former soviet bloc, guaranteed to get you laid.

the black arrow's picture

We plan on bringing cash, 100s easier to carry, but would 10s and 20s be easier to trans act with? Going for a week. Was fixin to bring 2000.00 US.

Harbanger's picture

I was there 10 yrs ago.  $2000 for a week is a ton of cash there and that was before the capital controls.  Dinner for 2 in top restaurants with wine and dessert was never over $50.  as far as transactions they'll take any denomination but prices are cheap so you may want some change ;) also don't let people there know you have too much cash on you, deperate people will do desperate things.

machineh's picture

'But would 10s and 20s be easier to trans act with?'

No. What they want is hundreds. 

Blue market dealers will take 10s and 20s, but at a slight discount to the better rate on hundreds.

the black arrow's picture

Thanks for the intel, this could be the value trip of the year. Any idea if hotels will take US cash at a better rate than the"official" rate?

machineh's picture

If you're paying in dollars, you're likely to be paying tourist prices.

Hotels are highly visible businesses. They don't want to get dinged by AFIP (the local IRS) for illegal forex dealing.

Change dollars to pesos at the blue market rate, then pay for everything in cheap pesos at local prices.

BeaverFever's picture

Obama is a dictaster. He doesn't want dollars shoved down his throat, as he prefers the Oscar Meyer.

ZeroPoint's picture

Another effect of hyperinflation. Peope desperate to unload their pesos buy ANYTHING that has perceived value. In turn, this further worsens the inflation on goods for sale as the demand is boosted.