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Hyperinflating Argentina Forces Government To Increase Banknote Denomination
For the first time in years, as PanAm Post reports, lawmakers from Argentina’s ruling Front for Victory coalition have proposed upping the size of the country’s largest denomination banknote to AR$200. While some 42% of Argentineans deemed it necessary in a 2014 survey the Cristina Kirchner administration has ignored repeated requests by economists, banks, and other financial institutions to issue larger-denomination bills. Indeed, Congressman Carlos Kunkel, author of the current bill initiative, claims the measure has nothing to do with inflation, but would "reduce the cost of printing and circulating money."
In the past, opposition lawmakers have unsuccessfully lobbied for the printing of AR$200, AR$500, and AR$1,000 bills in the past to cope with mounting inflation... which the government argues is under control.
Contrary to government figures, the Massachusetts Institute of Technology’s Billion Prices Project found that the price of essential foods has increased six-fold in the South American nation since 2008.
And so as PanAm Post reporrts,
For the first time in years, lawmakers from Argentina’s ruling Front for Victory coalition have proposed upping the size of the country’s largest denomination banknote to AR$200.
Congressman Carlos Kunkel, author of the initiative, claims the measure has nothing to do with inflation, which runs at 25-35 percent annually, according to private estimates.
Instead, the larger bill — US$12.50 at the black-market rate — would “reduce the cost of printing and circulating money,” Kunkel told a local radio station on October 8. “It will be more convenient for the people.”
...
The new banknote’s design features former President Hipólito Yrigoyen (1916-1922 and 1928-1930), a renowned leader of the opposition Radical Civic Union (UCR) party, and celebrates the Cry of Alcorta, an agrarian rebellion of the early 20th century.
The move, however, has UCR activists up in arms, who say they don’t want their leader associated with the loss of purchasing power. The party’s community manager derided the initiative by publishing an image of the former Radical president...
The Cristina Kirchner administration has ignored repeated requests by economists, banks, and other financial institutions to issue larger-denomination bills. Some 42 percent of Argentineans deemed it necessary in a 2014 survey by Argentina-based pollsters Poliarquía.
However, President Kirchner chose to redesign existing notes instead. Earlier this year, the government introduced a new AR$50 bill depicting the Falkland Islands, an archipelago in the South Atlantic ocean subject to a lingering territorial dispute between Argentina and the United Kingdom.
In 2012, Kirchner launched a AR$100 bill with the face of Eva Perón, the wife of former President Juan Perón and an iconic figure for Peronists. Most recently, the government updated the AR$10 note, adding security improvements and revamping the image of founding father and creator of the Argentinean flag Manuel Belgrano.
The new designs, however, have done nothing for Argentineans’ increasingly bulky wallets.
“Printing money out of control generates inflation, and that renders larger denomination bills necessary,” Iván Carrino, an economic analyst for IG and author of Cleptocracia, tells the PanAm Post. “Trading large sums has become an inconvenience.”
In a country where real-estate transactions are normally done in cash, even buying a new car can be burdensome and potentially dangerous. Since a new vehicle costs no less than AR$100,000, buyers need to carry at least 1,000 bills, Carrino explains. “You need to take a bag with you.”
According to the Central Bank of Argentina, two-thirds of the notes in circulation are AR$100 bills. ATMs quickly run out of smaller denomination notes as withdrawal rates increase. “Today, you go to an ATM, and they don’t have AR$50 or AR$20 notes anymore,” Carrino says.
The Argentinean National Mint has been unable to cope with the public’s demand for cash, and the government has outsourced the printing of bills several times. This year, the government has contracted Chilean and Brazilian mints to print additional cash ahead of the holiday season, according to local media reports.
Between January and August 15, 2015, the Central Bank printed 519.4 million AR$100 bills — 52 kilometers worth, if the bills were placed side by side.
Argentineans know inflation all too well. Since the creation of the Central Bank in 1935, the country has only experienced five years of inflation between 0 and 2 percent, according to Nicolás Cachanosky, Denver Metropolitan State University assistant professor of economics.
“Inflation is a consequence of money printing, and this leads to the necessity of larger denomination bills,” Carrino concludes.
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"the measure has nothing to do with inflation"
or, put another way:
"There are no American infidels in Baghdad. Never!"
– Mohammed Saeed al-Sahhaf, aka Baghdad Bob
Why stop at $200 why not a 10,000 or 100,000,000 maybe even a Trillion dollar bank note like US next strategy print 20 Trillion Dollar coins, Pay off all debts and buy 1.5 Trillion in Gold.
More 0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000's bitchez!
I'm long zeros or (ling1 in pinyin). We are sure our product, with proper marketing, will find buyers in all countries around the world.
Second tone: "ling2" in pinyin.
https://en.m.wiktionary.org/wiki/%E9%9B%B6
And, you can save money by printing in black and white on one side only. It worked for Weimar Germany.
Zimbabwe here they come, Argentina is going to be a failed state just you wait.
Denial: not just a river in Egypt.
their stock market is getting zimbabweized.
I wonder if Fonestar will stop collecting BTC and Zimbabwe high denomination notes now there's a competitor
I'll just leave this here in the special kids room;
http://www.coindesk.com/research-bitcoin-price-higher-repressed-countries/
"Bitcoin is a low-cost option which allows citizens of these nations (Argentina) to bypass their domestic financial system."
Premiums on scarce commodities, Bitchez.
an alternative strategy would be to invest in a wheelbarrow manufacturing plant, ask VW they may have some line space.
And THAT is how you get rid of debts.
Lesson coming to a country near you.
The Argentinean National Mint has been unable to cope with the public’s demand for cash, and the government has outsourced the printing of bills several times. This year, the government has contracted Chilean and Brazilian mints to print additional cash ahead of the holiday season, according to local media reports.
So how does that work, exactly? Do they still pay them with currency... with the notes they just printed, or... do they just print their paycheck first and then hand over the rest to the gubmint? I'm confused. That has to be a mindfuck when you send an invoice to the country whose currency you yourself print.
I kind of feel like this fiat currency thing is bullshit...
</dupe>
They are doing it wrong.
1) Take the larger denomination bills out of circulation.
2) Ban cash so people do not have a visible reminder that wheelbarrows of 'money' are the new normal.
Voila!
Everything is awesome.
Go long on sign companies. "Please do not use currency for toilet paper, it clogs the pipes."
Didn't agentina default on the IMF loans? These guys need to go the way of Iceland.
Cool, can't wait to add an Argentinian $100 Trillion note to my collection next to my Zimbabwe one.
Argentina is so fucked up I expect them to print a special note to pay off their bonds that will be un-redemable.
Latina Lover .... what to do ?
First thing ya do is buy a survey...............................
I do believe that I could be comfortable carting THE trillion dollar coin around.
That is so typically socialist .... blame the people they demagogue to ? The raied fore arm and fist .... with the other fore arm crossed over it at the elbow .... an Italian gesture .... the fist is the engorged glans and the forearm is the penis shaft .... it means insert this .... remember the Argentinians are Italians .... who speak Spanish .... but, think they are English "A wrist tocracy" (aristocracy) ?
All I read here is Brazilian beaver, Green and Gold beaver...etc. etc.
Now, if you want smoking hot pussy go down to Argentina. Italian plus Spanish extraction in a sub tropical climate.
And some of the best steaks and table reds in the world.
BA is beautiful - too bad about the dictatorship of assholes they have. But not too different from the United Statians.
Eventually coming to the US.
The Fed would wet in their pants with that type of inflation.
A Keynesian PhD's dream.
They do have that type of inflation, its just not in their market basket of measures.
Argentina always breaks my heart. They sit atop some of the most fertile soil on Earth; the quality of their dairy and beef can't be overstated. They should be a frighteningly strong agricultural exporter, commanding high prices for premium products and stacking up the cash. Instead, they're a strong contender for Most Mismanaged Non-Communist Nation on Earth. Soil fertility is the only thing keeping them above Caribbean poverty levels.
Prior to WWI, they were one of the richest countries on the planet.
Constant economic mismanagement by various stripes of socialists ever since (socialists includes fascists, since fascism is hardly distinguishable from socialism in terms of its economic program).
quote on Argentina:
Argentines cannot decide if they are Latin Americans or Europeans. It has been said that an Argentine is a Spaniard who speaks like an Italian,dresses like a Frenchman,and thinks he is British. (Foster, et al., Culture and Customs of Argentina) ...
What's the name of those prostitutes again?
< wheelbarrow boobies
< argenta asspiece
Zimbabwe, 2001, the largest bank note was a $100 (zim dollar) bill.
It took 6 years to get to the $Z100,000,000,000,000,000 note....got a calculator? I'll find the rate of inflation...its some where between 'OMG' and 'Argentine'.
More digits than Bitcoin ?
Zimbabwe is the Federal Reserve's econmic plan although they will deny the inflation rate all the way.
The Fed and government will report 2% inflation while the real inflation goes 50%.
All part of the Fed's deception.
Moody's just downgraded Brazil. BULLISH!
Argentina from an economic standpoint of how to wreck an economy is quite interesting.
Since 1914 Argentina has had 5 currencies
Pesos moneda nacional (1914-1969)
Pesos ley (1970-1983)
Pesos argentino (1983-85)
Australes (1985-1991)
Peso (1992-current date)
The current peso is equal to 37 trillion pesos of 1914
I have an actual bank note of one million pesos issued during the Peso Ley currency law, worth almost nothing at the end of that era
Is it me, or is Hipólito Yrigoyen giving the people a big "Fuck You" in his portrait on the Argentine $200 note?
Zimbabwe bucks. Comming to Amerika soon enough in one form or another.
The guy on the banknote would look a lot tougher without the bowler hat. RP is right I think. Their .gov has no shame.
I have a One Hundred Trillion Dollar zim banknote on my wall as a reminder....
And that bank note came after they had already cut off a total of about 20 zeros from previous "revaluations". At the peak, inflation in Zimbabwe was almost 100% per DAY.
I had a few beers with friends in Bulawayo, and it actually increased in price between the time we ordered and paid for it.
Tyler Homework assignment: Hyperinflation of currency.
As Oldrepublic noted... Argentina has had five currencies since 1914. (and this: The current peso is equal to 37 trillion pesos of 1914)
Pick any country that has hyperinflated their currency or has changed their currency. For each currency change what was the root cause: 1) Civil War 2) Military Takeover 3) A correction of Socialism run amok 4) Inflation 5) Fill in the blank _______________. How much hyperinflation occurred before the currency was changed over?
I recall Brazil as well... The modern real was introduced in 1994, when it replaced the old currency, the cruzeiro real, as part of the Plano Real, a substantial monetary reform package that aimed to put an end to three decades of rampant inflation.
Standard Disclaimer: This could be the best chart porn ever!
The old Real was a currency until 1942,Today Brazil has a currency also called the real, in between several other currencies.
One modern real is equivalent to 2.75 × 1018 (2.75 quintillion) of the old réis.
Look,
Inflation is easy to stop.
EASY.
If you know the cause.
Take the whole economy using a currency, divide by the number of currency units. That is what a unit is worth.
So how does it inflate????
One of two things happens.
Either all the stuff in the economy becomes less due to war, theft, banking, theft, taxation, theft, or wealth redistribution, and theft.
Or... the number of currency units is increased...which is always done for the same reason (theft).
So if you want to avoid depreciating currencies, STOP SUPPORTING THEFT AND STOP SUPPORTING THOSE WHO STEAL. DON'T DO BUSINESS WITH THEM. DONT TALK WITH THEM. DONT ACKNOWLEDGE THEIR DESIRES IN YOUR PLANS.
Because they have nothing to offer humanity but theft.
Let them starve.
At least we succeded in generating inflation without getting into trillions of debt... keep pushing the rope suckers!
"Cotización de referencia del Dólar Blue en la Ciudad de Buenos Aires."
https://twitter.com/DolarBlue
So the 200 Boat Anchor bill would be worth US $12.50?
Which means that a 10 Boat Anchor bill is worth about 62 cents in American money.
Yet they're putting new security features on the 10 Boat Anchor bill?
Why the fuck would they bother with that?
Counterfeiting one probably costs more in ink and fancy paper than the 62 cents it's worth.
Plus it probably cost a lot more to redesign the new 10 Boat Anchor bill than a decade worth of counterfeiting would yield on the old pattern.
I feel much better knowing that we do not have the stupidest government on the planet.
This is what a war on cash actually looks like.
There should be $1000 notes long ago, but they do not want that.
They want everyone to have a bank account, and all transactions to be made by home banking.They want total control of the economy, so they can then tax everyone.
Once again, Argentina is just an experiment lab for FMI,BIS, etc ...
PD: I live down here in Argentina.
Nothing an Argintenian soccer fan can't fix, at least in the shrot run.
http://2.bp.blogspot.com/-lHqQGJdGe7w/U76S01ezgUI/AAAAAAAAjtc/KxXsdgu4mJ...
Do you think things are all that different here in the US? It's just proceeding more slowly.
The candy bar I paid 5 cents for when a child is now well over a dollar - over a 20 fold increase in 50 years. A new car that would have cost $3,500 when I was 20 now costs ten times more forty years later. Most telling, the crap house my grandfather paid $14,000 for in 1948, which my parents bought for $29,000 in 1969, sold for well over $500,000 in 2005 and would sell for even more now. My local property taxes have tripled in 20 years ands the 'value' of my house has supposedly quadrupled.
I worked for a banknote company back in the 1980's and then for the NY Fed (one VERY screwed up place). On a practical basis - from an operating standpoint - the Fed (and most banks) would LOVE to get rid of the $1 bill and force the use of $1 and $2 coins. Every other comparable currency system has done so - the Euro and Canadian dollars come only in coins for 1 and 2 unit denominations. One dollar bills last 6 months and represent more than HALF of the printing and processing costs of currency. Coins last DECADES in comparison AND do not have to be stored in as high a security level vault (storage facilities for money are VERY expensive). Coins are EASY and cheap to process as well.
ou'd be astounded at the costs of simply maintaining a paper money system. Printing new notes, taking old worn ones out of circulation, storing and distributing cash to meet banking needs and checking fo counterfeits when processing all the currency returned to the Fed by banks. But then you're creating 'money out of - literally - thin air (paper and ink) so it's still MUCH cheaper than money that has intrinsic value (gold, silver, whatever).
But the change can not - WILL not - be made because it is a politically hot issue - making it all to visible how little our money is worth.
For the same reasons the US will not get rid of the penny - it costs more to make than it's worth. Most people dump them on a dresser when they get home - not wanting to carry them around. Thirty years ago busoinesses were having a problem getting pennies because people even then weren't carrying them or using them. They sat at home in jars. But businesses needed pennied to make change and offerred 'bonuses' if you brought in rolls of them. Today the issue remains but businesses simply don't care. They round off to a nickel - to your benefit - if there;s no 'take a penny, leave a penny' tray. NOBODY believes a penny is worth anything. Most people won't even bother to bend over to pick one up off the sidewalk.