"The problem is the current government has made it impossible to buy Dollars legally since late 2011," Marco writes at OfWealth.com."With price inflation running at around 25% a year, a large black market economy and Peso savings accounts that pay 10-15% less than inflation, there is plenty of demand for Dollars."
"Enter the so-called 'dolar blue'," Marco writes. "This is the parallel exchange rate that Argentines must pay in shady backrooms if they want to convert their Pesos into Dollars."
"The last meltdown was in 2002," Marco writes. "The currency collapsed, Dollar bank deposits were 'Peso-fied' and rioters were burning tires in the streets and shooting at the shuttered entrances of the banks."
"The average taxi driver in Buenos Aires understands more about financial mismanagement than the crowd at a conference of Nobel Prize-winning economics professors and central bankers," Marco says.
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
"Debt per capita is about $4,900 in Argentina and $53,000 in the US," Marco begins. "That compares with GDP per capita of about $11,600 in Argentina and $50,000 in the USA."Individual Americans owe almost 11 times as much government debt per capita as individual Argentines. But US GDP per capita is only 4.3 times as much. Now whose government looks irresponsible?"
"That's not to say that the USA is likely to have an Argentine financial crisis anytime soon. But it pays to remind ourselves that it's not just down on the pampas that public finances are being mismanaged. After all, Argentina was one of the richest countries in the world 100 years ago."