Argentina is a country with extreme swings in economic performance. Due to the many crises that have shaken the country everyone does his best to take precautions for the next crisis. The gross national savings rate in Argentina has almost doubled since the economic disaster in 2000-2001. It has reached 27% of GDP in 2008 which is one of the highest compared to many other Latin-American countries. For the USA it is 12% of GDP, just to give you a number. But how to save money when people have absolutely no trust in inland banks, nor in the government anymore? While rich people get assistance by American or Swiss bankers with bringing money abroad, the ordinary middle-class Argentinean is hoarding cash in dollar bills under his proverbial mattress. The mound of cash in Argentina is estimated to USD 50 billion, which is about 1,300 dollars per capita. This makes Argentina by far the number one in US dollar bill hoarding nations in the world. The second place goes to Russia with about USD 550 per capita.
Sunday, September 27, 2009
Argentines Keep 50 Billion US Dollars of Savings under the Mattress
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7 comments:
And now the US has had to let the dollar fall to get itself out of debt and stoke exports. It would have been wiser to have a basket of currencies under the mattress.
That is absolutely amazing, and it helps me better understand why the woman I referred to a couple of days ago had to pay cash (carried in a suitcase to closing) when she bought an apartment in BA.
While we've had some problems for sure (and they ain't over yet), I think most Americans have some trust in the banks (of course, some banks are better than others); but that may be largely due to the fact that one's funds are insured by the federal government.
I learned something today I had no idea the green paper was so famous overthere!
Considering your recent history I have to say that I'm not surprised that people don't trust banks. I think I would probably do the same.
People used to do that in Romania (keep money under the mattress) until late 90s and some still do but now is usually to cut bank fees (which are very high in Romania)
Fascinating. We will be doing that here if the dollar keeps getting weaker.
I hope these banknotes don't turn out to be worthless - American economy isn't what it used to be.
Perhaps they should hoard something other than a fiat currency. Inflation (hyper-inflation) will also rob them of their purchasing power.
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