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The barter system in Argentina

By CrazyJub in News
Wed Feb 06, 2002 at 08:19:15 PM EST
Tags: News (all tags)
News

Time is running a story on the economic situation in Argentina, and how the crash of the peso has lead to the use of the barter system across the country.


From the article:

Creditos are not money, but they have purchasing power. And in a country running out of real cash, the credito may be a currency whose time has come. In the conventional economy, a government decree allows depositors only to withdraw their salaries or pensions from banks. Their savings remain untouchable for now, and if they were in dollars, have been converted to pesos. Public employees are being paid partly or fully in unbacked bonds; and unemployment is near 20 percent. Street protests have toppled four presidents in two weeks, but Argentina's 21st-century Great Depression is deepening. And it's driving tens of thousands of people to the "National Barter Network," centered at Bernalesa.

The Christian Science Monitor ran a similar story last year.

While this idea is not going to topple the existing financial structure currently in use across the world, it may be a glimse into the future, if the world economy takes a complete nose dive.

If this system continues to operate, how will the Argentine economy come back into the fold with the rest of the world? Will thier currency suddenly recover it's value? Based on what? Most good and services are being traded for other goods and services, money (as we all know it) doesn't even come into the equation.

Are there any Argentine Kuro5hin readers that can comment on this phenomenon? How wide spread is this system?

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The barter system in Argentina | 46 comments (37 topical, 9 editorial, 0 hidden)
Gee, imagine that (4.50 / 4) (#5)
by trhurler on Wed Feb 06, 2002 at 12:48:14 PM EST

A privately managed currency with a carefully crafted brand image as a "barter system" designed to prevent government interference outperforms a central bank. Why am I not surprised?

Folks, central banks are highly fallible central points of failure. They depend on having an image of solidity to preserve the value of their currencies; there's nothing but public opinion holding them up. However, usually a small group of people who have nothing but statistics compiled by other people have to make every decision that impacts that credibility. It is a miracle if they manage to keep things afloat for a few years at a time; the only reason it works in the US is that our economy is so ridiculously strong that we can weather some mistakes, and even then each mistake is measured in billions or trillions of dollars value lost forever. It is beginning to appear that every move to "control" the economy has a corresponding cost that at least matches the gain. Think about that.

--
'God dammit, your posts make me hard.' --LilDebbie

errrmmm .... (4.00 / 5) (#9)
by streetlawyer on Wed Feb 06, 2002 at 01:48:06 PM EST

They depend on having an image of solidity to preserve the value of their currencies; there's nothing but public opinion holding them up.

And what's holding up the value of these "creditos", mate?

Unfortunately, it is typically the experience of emerging market economies that these "barter networks" are either designed as, or end up as, pyramid-like con games, whereby the scheme operator inflates the currency by printing notes, exchanges them for goods, and then scarpers. I'm not saying that this scheme is yet another one ... I'm just sayin'

Private currencies do have a history (mainly in Scotland in the 18th century), and it is interesting as a question of monetary history. But you have to remember that the Scottish experience (and the limited free banking experience of the USA) took place during a period in which bank notes were really quite large denominations relative to the everyday transactions, which were carried out in coins which were minted by the government. There really isn't any history of a successful private currencies for retail transactions. However, there is a genuine debate to be had on this issue.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Heh (5.00 / 3) (#14)
by trhurler on Wed Feb 06, 2002 at 04:12:12 PM EST

And what's holding up the value of these "creditos", mate?
The same thing in part. However, at least there's some publicly held notion of what one is worth(which would be the tie to a "barter" system that they're claiming, I suppose.)
Unfortunately, it is typically the experience of emerging market economies that these "barter networks" are either designed as, or end up as, pyramid-like con games, whereby the scheme operator inflates the currency by printing notes, exchanges them for goods, and then scarpers. I'm not saying that this scheme is yet another one ... I'm just sayin'
This can be done, but that's the same problem as cutting illegal drugs; you get away with it because what you're doing is at best quasilegal, and so you're one of few or possibly the only source. You wouldn't see a legitimate business behaving like that very often, because there's more wealth to be had by dealing honestly. Of course, this presumes reasonably low barriers to entry, which our governments have been working hard to eliminate in many fields. Let's just say that Inoshiro starts a dishonest currency company. You come along and start "streetlawyer's proper fucking currency incorporated." You're honest and manage your company properly. Over the long haul, what do you think is going to happen? (You could leave out the fucking, but I think it'd be good marketing.)
Private currencies do have a history (mainly in Scotland in the 18th century), and it is interesting as a question of monetary history. But you have to remember that the Scottish experience (and the limited free banking experience of the USA) took place during a period in which bank notes were really quite large denominations relative to the everyday transactions, which were carried out in coins which were minted by the government. There really isn't any history of a successful private currencies for retail transactions. However, there is a genuine debate to be had on this issue.
I would argue that in no case could private currencies as a whole have it worse than the current central banking systems of the world. Face it; these people, regardless of what manner of theoretical economics you happen to prefer, perform pretty abysmally in practice.

--
'God dammit, your posts make me hard.' --LilDebbie

[ Parent ]
there is a debate here (none / 0) (#34)
by streetlawyer on Thu Feb 07, 2002 at 07:07:24 AM EST

I am personally of the opinion that private currencies are impractical (that there are economies of scale in money production which naturally favour a monopoly), but there is an intellectually respectable case for them.

Let's just say that Inoshiro starts a dishonest currency company. You come along and start "streetlawyer's proper fucking currency incorporated." You're honest and manage your company properly. Over the long haul, what do you think is going to happen?

Gresham's Law would operate ("bad money drives out good"); people would attempt to try to spend Inoshiro's money and hoard mine. In the end, Inoshiro's money would be worthless hyperinflated scrip that nobody wanted to touch, and I'd be the de facto central bank. Until someone else came along who was regarded as even more trustworthy than me ...

So far so good. But this system, like the gold standard, has a deflationary bias. If there's a one-off shock to production, then the population will want to save more and spend less because they're worried about their future consumption. But if everybody does this, the money supply shrinks and we're into a deflation. The orthodox theory of private currencies suggests that at this point, people would revive my and inoshiro's currencies and start to circulate them again. But I don't see how this could be organised as a matter of practical logistics. Anyway, it's an interesting debate.

I would argue that in no case could private currencies as a whole have it worse than the current central banking systems of the world. Face it; these people, regardless of what manner of theoretical economics you happen to prefer, perform pretty abysmally in practice.No they don't; in all G7 countries, recessions have been smaller and shorter since we came off the gold standard.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Hmm... (none / 0) (#36)
by trhurler on Thu Feb 07, 2002 at 01:02:53 PM EST

I am personally of the opinion that private currencies are impractical (that there are economies of scale in money production which naturally favour a monopoly), but there is an intellectually respectable case for them.
I don't disagree, but remember that compared to a lot of things that just spring up out of nowhere(ie, out of the capital markets and a few bright people with too much free time,) being a "money company" would be cheap. I don't see any significant barrier to entry(you can make your coins fit the existing vending machines and so on,) and customer preference should strongly favor sound corporate policy in this case, so the problem of a misbehaving monopoly should be very minor at best, even without any real regulation.
But this system, like the gold standard, has a deflationary bias. If there's a one-off shock to production, then the population will want to save more and spend less because they're worried about their future consumption.
Certainly, but in case you haven't noticed, the present system has an inflationary bias. Money is today worth a fraction of what it was worth 30 years ago. My dad bought one of the fastest cars on the road in the late 60s for just a hair over $5000. I can't say I see deflation as worse than inflation; at least it rewards people who behave sanely instead of going into huge amounts of debt.

In any case, barring manipulation by the currency producer, deflation will occur given time regardless. After all, if the amount, number of types, and quality of goods increase(and we know they do, over time,) and the money supply remains constant, then the value of each unit of money has to rise. You can introduce smaller and smaller fractional units(a decent solution, I'd say,) or you can engage in central bank style money printing(I like this a lot less, as there is a tendency to overreact. "I'm Alan Fucking Greenspan!")
No they don't; in all G7 countries, recessions have been smaller and shorter since we came off the gold standard.
Yes, but what people don't mention is that lots of OTHER things have changed besides the gold standard. Also, remember that doing better than abysmal does not mean you're "doing well."

--
'God dammit, your posts make me hard.' --LilDebbie

[ Parent ]
heh, g7 (none / 0) (#46)
by concept on Sun Feb 24, 2002 at 02:57:43 AM EST

what about outside g7? africa's screwed. south america's screwed. that's a lot of people to consider (even by earth-population-percentage), and there's no internet porn to console most of them in their time of need. people seem to forget, particularly those that have never 'confronted' 2nd/3rd world countries, that most people alive have never even used a telephone. (no i dont know where i read that, but it's damnwell true)

[ Parent ]
Paper as Notes (4.00 / 2) (#16)
by Sawzall on Wed Feb 06, 2002 at 04:26:16 PM EST

Given that all currency in use today is fiat money, most people have lost the understanding of what "money" actually does - it is the promise of some value attached to the paper.

In the US prior to a central bank, there were "private" notes. In reality, these were promissary notes for exchange of something of value such as gold or silver. Thus the widespead use of coins from many countries, and even private mints.

Currently, "commercial paper" is a widespread currency that trades in the trillions each day. The computer age has made this a very efficent system, with low transaction cost and reasonable security.

Now to get to your point, assuming a central government bank would ever allow such a system to actually grow (The Fed is ran for the benefit of the banks, not the citizens), its success would depend on those two issues - transaction cost and security. Barter has historically been expensive - I wonder if the computer age has really lowered the cost?

[ Parent ]
Who is Upholding value? (4.00 / 2) (#23)
by snowlion on Wed Feb 06, 2002 at 05:46:34 PM EST

And what's holding up the value of these "creditos", mate?

The people who have decided to use them.

Like the fine folk of Ithaca, NY.

I have found plenty of support for the idea of local currencies, as well as many examples of successful ones.


--
Map Your Thoughts
[ Parent ]
yeah yeah (2.50 / 2) (#33)
by streetlawyer on Thu Feb 07, 2002 at 06:59:35 AM EST

A co-operative in a middle class university town. That's a good model for the international trade of a developing nation, isn't it?

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]
As a side note (3.50 / 2) (#24)
by Sheepdot on Wed Feb 06, 2002 at 06:35:30 PM EST

I know a handful of people making a killing using money backed by silver. I'm sure you've heard of it, but I have no idea how they are doing it or what it entails. Maybe they made money after the WTC and Pentagon attacks, I don't know. It sounds like Greek to me, but they seem to know what they are doing.

http://www.norfed.org/

I thought it sounded like a scam but the value on the dollars never changes so I'm confused as to how anyone could make or lose money doing this.

I guess I'm newbie when it comes to this.

[ Parent ]
heh (5.00 / 1) (#32)
by streetlawyer on Thu Feb 07, 2002 at 06:58:41 AM EST

I thought it sounded like a scam but the value on the dollars never changes so I'm confused as to how anyone could make or lose money doing this.

By striking what are effectively silver medallions and selling them to the public for twice their bullion value. Although they call themselves "redemption centres", it's a strictly one-way transaction; you can't tender your Liberty Dollar to Norfed and get back the amount of nasty old Federal Reserve dollars you paid for it.

HTH

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Where can I find that information (none / 0) (#40)
by Sheepdot on Thu Feb 07, 2002 at 02:40:15 PM EST

you can't tender your Liberty Dollar to Norfed and get back the amount of nasty old Federal Reserve dollars you paid for it.

I would appreciate knowing how you came across this. I've looked all over their site and haven't found anything that signifies one way or another.

I'd like to believe it is a scam, and for now do, but I honestly can't tell either way.

[ Parent ]

Um? (none / 0) (#38)
by Your Drawing Still Suck on Thu Feb 07, 2002 at 02:02:13 PM EST

How exactly are people making a killing on this?

[ Parent ]
That's what I don't understand (none / 0) (#39)
by Sheepdot on Thu Feb 07, 2002 at 02:37:19 PM EST

I'd be interested in finding out. They won't tell me, and another thing that tips me off to it not being a scam is that they haven't bugged me to join in like the Amway folks do.

I don't get it.

[ Parent ]
Easy. (3.50 / 4) (#6)
by quartz on Wed Feb 06, 2002 at 01:30:43 PM EST

If this system continues to operate, how will the Argentine economy come back into the fold with the rest of the world?

Like the Bulgarian economy did after the crash in 1996: government turns over control of monetary operations to IMF currency board, national money supply is "frozen" by said board and backed up with international reserves, local currency is tied to your foreign "stable" currency of choice (US dollar, Euro) by a fixed exchange rate and you're back in business. Government no longer has control over economy, but that's OK. The IMF people are much better at this kind of stuff anyway. They're professionals.



--
Fuck 'em if they can't take a joke, and fuck 'em even if they can.
easy except .... (5.00 / 4) (#8)
by streetlawyer on Wed Feb 06, 2002 at 01:43:28 PM EST

that the Argentines already did that, in 1992, and the currency board is actually responsible for the current crisis.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]
Err... (3.00 / 1) (#10)
by quartz on Wed Feb 06, 2002 at 01:55:16 PM EST

Lather, rinse, repeat?



--
Fuck 'em if they can't take a joke, and fuck 'em even if they can.
[ Parent ]
what he was saying... (none / 0) (#45)
by concept on Sun Feb 24, 2002 at 02:49:18 AM EST

was that the IMF's involvement in argentina created the existing situation, and hence IMF involvement is not a solution.

[ Parent ]
This has to be a joke (none / 0) (#30)
by Juan Rojo on Thu Feb 07, 2002 at 04:49:09 AM EST

because thanks to that we are like we are.

[ Parent ]
Local Currencies are GREAT (4.00 / 3) (#13)
by snowlion on Wed Feb 06, 2002 at 03:49:55 PM EST

Every community should have one. Argentina will benefit from a local currency NOW if they implement one.

People aren't "lazy" in Argentina, they just don't have enough money. They just need money. So they should go print some. Imagine if there were only 100 $1 bills in the entire US. It'd be terrible, right? Because only 100 people in the US could have a dollar, at best. Dollars would have no value. They'd be worthless. We'd do best to print up and distribute some money.

Many communities have printed up their own money. Here are some links to explore:

  1. Read the comic describing Ithaca HOURS. That should get you in the mood for the other links.
  2. Look at Transaction.Net. Learn about what they basically are.
  3. Read about Barter. Companies barter all the time.
  4. Read about Ithaca HOURS. Ithaca, NY has their own currency system. People pay rent, buy groceries, and work within their own system. They even have a health care system. You read the comic, now look a little deeper.
  5. Read about Ithaca Hours from their own web page.
  6. Read about how local and national currencies can cooperate.

After reading these, you will also have a much better understanding with which to think about Argentina, and your own local community.

Some day I ought'a write a K5 story on local currencies.


--
Map Your Thoughts
Not really (none / 0) (#37)
by Your Drawing Still Suck on Thu Feb 07, 2002 at 01:58:14 PM EST

On the other hand, what's to prevent a local organization from creating massive amounts of bills for their own use? Who's to say these Ithaca people aren't lining their own pockets?

Without a good government oversight system, a cash economy can get really fucked up.

[ Parent ]
Will a real Argentinian please stand up? (5.00 / 2) (#17)
by Yanna on Wed Feb 06, 2002 at 04:31:15 PM EST

Are there any Argentine Kuro5hin readers that can comment on this phenomenon?

Guess that leaves me as the one to report about this phenomenon. Although, before I proceed, I have to say that I moved away from Argentina years ago. I currently live in Europe but follow the news and events from Argentina on a daily basis.

The bartering economy in the country is a pretty new phenomenon. Last time I was in Argentina (end of 2,000), it was just starting to get organized. The first "bartering club" (as they are called) was created in a suburb of Buenos Aires on the 1st of May 1995. It was started by a small group of ecology militants who were worried about the alarming growth of unemployment rates. Very slowly at first, the "nodes" (as they call every town who runs their own version of the club) expanded to the extent that nowadays they represent a parallel economy system. Parallel in the sense that they have their own money (the credits), which are traded both for commodities and services. There are reported cases of people paying rent, dentists, private education and medical services with said credits.

At the moment, the system is so well developed that they have a website to gather information about all the nodes and the meeting's schedules all over the country.

I hope that freezes your'(sic) and Yanna's smiles into grinning super power morons for eternity. mami

I'm no economist, but... (4.00 / 5) (#19)
by Anoymous 22666 on Wed Feb 06, 2002 at 05:03:24 PM EST

Okay, I am not an economist. Let's make that clear. I could be entirely whacked.

Isn't the construction of this parallel currency system (it's not a barter, it's a currency) part of Argentina's problem? The value of the base unit (eg: dollar) is based on public perception of the value. If the public perceives the value of the dollar to be high, they are worth more. You can do more with a dollar. The opposite is also true. This is the suppy and demand curve of fiat money.

So, if everyone in Argentina is jumping ship on the official currency and moving to this credito, of course the national currency is going to fail. Of course the credito will succeed. It's all about suppy and demand. The same would happen anywhere, and it's not an inherent problem in the Argentina currency system. (Though there may be other problems, of course.)

The big problem is convincing Argentinians (?) and the rest of the world of the same - abandon the credito for the peso and things will "get better." (Possibly not right away.) Economists may understand this, and average people may even understand it, but who wants to be the first to "throw away" their valuable creditos for crappy money? I wouldn't.

I just farted... And I blame the fiction section. - Psycho Les


[ Parent ]
Another Note. (4.50 / 2) (#20)
by Anoymous 22666 on Wed Feb 06, 2002 at 05:09:54 PM EST

Just another quick comment on the above:

It's the symbol that holds the value. The paper of the credito or the peso itself is worthless, it's the symbol. They could make the symbol goat cheese or something, and it would be just as valuable.

The symbol of Argentina's currency of value is changing to the credito instead of the peso.

I just farted... And I blame the fiction section. - Psycho Les


[ Parent ]
Pesos vs Creditos (5.00 / 4) (#21)
by Yanna on Wed Feb 06, 2002 at 05:11:37 PM EST

You are absolutly right about the weakening of the economy due to people "preferring" the creditos. However, reality is a lot more complex. People didn't start with this system due to lack of faith in official money. It all started because of completely lack of money. If you read the stories of people taking part in this system, you would see that they all started because they had no money and no chance to get any. They looked around in their homes, found a few items they could barter (in some cases the items being bartered are a very sad picture of the country's reality: teenagers attempting to trade their old toys, people exhibiting old clothes, etc.). They value of the commodities is not really determined by the value of the same commodities in the "legal" economy, but by the demand for them. A good example of this is the fact that those who have food to barter (mainly raw products like flour, vegetables, etc.), make more credits than those who are trading items which in the formal economy are of more value.

I hope that freezes your'(sic) and Yanna's smiles into grinning super power morons for eternity. mami
[ Parent ]

Hm, Okay. (3.00 / 1) (#25)
by Anoymous 22666 on Wed Feb 06, 2002 at 06:51:08 PM EST

Okay, I didn't know that it started as a result of there being a lack of money. (In fact, I didn't claim to know how it started at all, but it's good to know.) Thanks.

I just farted... And I blame the fiction section. - Psycho Les


[ Parent ]
Imagine... (4.50 / 2) (#22)
by snowlion on Wed Feb 06, 2002 at 05:30:08 PM EST

...if there were only $1000 in all of the usa.

There wouldn't be enough money to trade.

Communities and states that made their own money would fare much better.

As I understand it, that's the situation in Argentina.

Read my other post on local currencies here to learn more.


--
Map Your Thoughts
[ Parent ]
Deflation (none / 0) (#28)
by Weezul on Thu Feb 07, 2002 at 12:35:55 AM EST

The dollar was experencing rampant deflation, but the U.S. economy did not care one bit for a variety of reasons (size, imports, etc.). The Argentinian currency was tied to the dollar and the Argentinian economy was not immune to the effects of deflation. The Credito may cause confusion by having two currencies, but it can only help the underling problem (deflation) by making more effective money enter the system.

Argentina would never have had this problem if they had looked at their own CPI and created some inflation to counter the deflation.

"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power." - Benito Mussolini
[ Parent ]
Shades... (3.00 / 1) (#18)
by Zeram on Wed Feb 06, 2002 at 04:52:50 PM EST

of Emporer Norton... Hail Eris!
<----^---->
Like Anime? In the Philly metro area? Welcome to the machine...
money for everyone (4.50 / 2) (#26)
by fhotg on Wed Feb 06, 2002 at 07:03:38 PM EST

This is good news. As I understand, the Argentine "barter"-system (it's not barter, else you wouldn't need notes, that's the point) started out like an idealistic "we do without the government fake-money" operation just like the "Talent Taschringe" (Talent-Barternetworks) you have in every village in the German speaking countries. It's a buch of idealists exchanging haircut for fixing bikes etc. A big succes was, when one community could get a bakery and a sawmill to accept their talents, but usually they're no good for anything essential.

Now it seems that a bunch of idealists got more trust than the national bank. So, since the value of money is a pure psychological result of "trust", their money outdos the official version.

Now image a society where different currencies compete against each other. I would use the one who's issuer I believe the most that I can exchange it against whatever I whish in the future. And the one that doesn't make people accumulate it (no interest). Generally the money that's designed to do what money should be for: exchange stuff, not twist and wobble a country's economy into place or other unrelated functions.

Good chances currently have e-gold and e-dinar.
~~~
Gitarren für die Mädchen -- Champagner für die Jungs

here's your argentinian. (5.00 / 8) (#29)
by Juan Rojo on Thu Feb 07, 2002 at 04:45:22 AM EST

> Are there any Argentine Kuro5hin readers that
> can comment on this phenomenon? How wide
> spread is this system?


Me, Ok.. i'm going to explain yet again what's happening over here. The opposite economical/political interests here are so enormous that things change from night to day .. so whathever you read/hear is probably outdated. Also most of what international media says about us is bullshit or wrong intepretations of the situation.

-What's happening in argentina?
I said in previous posts how 1 peso == 1 dollar (convertibility) killed us. Basically, Argentina was an experiment of free trade and liberalism, deregulation of statal companies, etc. Something that a lot of economists say it's going to be th miracle cure of the world. (globalization i suppose). Well, after living 10 years in it, I can basically say.. it didnt work. Unemployment raised to alarming numbers, local industry dead, statal companies which went to the hands of the private sector were basically looted/emptied, banks giving credits with iterests up to 20%, etc.

Well, the system slowly collapsed, until mid 2001, where the end was near. International banks ralized this, and made all their customers here purposedly take their money out of the country. And also, banks took the money of normal people, with savings... not all of it, they left enough to cover up what they were doing. The government, trying to protect the finiancial system and the banks from going bankrup, they decided to AVOID THE PEOPLE FROM TAKING _THEIR MONEY_ OUT OF THE BANK. Only a $250/week. Just be frank, what would any of you kuroshin readers do if suddendly all your money is no more your money, you theorically have it, but you cant touch it. The money you saved for your whole life, or the money you were going to use to buy a house,etc. They tried to force bankarization of the economical system.. that means, trying to avoid people from using paper money.. only credit and debit card. Obviously, this cant be done, since not everyone can use those.. specially the people from the lower social classes, which alarmingly ran out of the few money they had. The results? The riots you saw on the newspaper, which are also rumored to have been promoted by the opposite politician party (lots of rat stuff about that, but i'm not going to mention it). Suddendly, all social classes were being so affected that decided to go and do a massive protest against the goverment. the result was the president quitting (he was weak already).

I have to mention, that the goverment could have let the banks go bankrupt, incautate their money and give it back to the people, but due to many reasons (politician interests, economical interests, and the whole image of the sacred bank-system which would lose a lot of credibility around the world if the world really finds out what happened here, or how the imf is playing "i had nothing to do with this" when it was clearly its globalization politics what turned us into this).

Thing is.. new government self-imposed itself almost as a dictatorship instead of calling elections (you know how politicians are.. they would do anything to remain in the power.. besides, with the main two politician parties dead on the eyes of the people, next goverment would be a bit more "left-ist"). It's a weak goverment, i cant say for sure how much is going to last. After so much saying that they would respect people's accounts in dollars, and that they were going to open that financial restrictions and let the banks go broke.. that never happened. They're basically in the same position as the previous government. People is extremely mad abot this. companies dont store their money in the banks, they rent those shielded vans to store the money inside of their buildings. The government is TRYING TO HELP THE BANKS to regain their money.. this is a stupid move, because now, no one trusts the banks anymore.

Things you wont hear from the media:

-How curious is that nobody talks about how banks who took the money from the people out of the country will never be forced to bring it back. That was blatant thievery, but.. who's gonna blame them?

-When international banks came to the country, a decade ago. IMF said "Let the banks come! you know that since they're international banks, if something happens they'll never run out of funds".

-The government was also paying a lot of money to the banks as insurance in case of something like what happened.

-Now the government suddendly say that the banks here were not "real banks" (citibank, hsbc, scotia, galicia,etc), but some sort of "franchasing" of them (this is too odd to me), so none of the previous things I mentioned above apply!!

-All in all... 1-Banks wont bring the money back, and nobody will request them to do it 2-Banks cant go bankrupt, that would damage their international image 3-Banks cant give the people their money back.. that would damage them too... then, how is this ting solved? Easy! take it on the people.. who cares about a bunch of insolvents. just take their money!! avoid them to get their money out of the bank, and convert their accounts in dollars to pesos while doing a devaluation.

Another important factor about why they are not letting the people take their money back is inflation. Dollar is free right now, but there wasnt any inflation basically because people couldnt afford it at all. If people gets their money back... prices would start rising. Government is pushed from all the fronts. US wants this government to fall since the IMF (now acting al serious) asks them for ridiculous things in exchange of help. People is constantly protesting in the streets. If the government has to call election, new govermnet would be a left-ish one.. the first in our history... and a new politician party would raise (you know how much that scares politicians).. so, in the latest weeks, we've been playing the game of.. well, i dont know how is it called in english. They basically act as if they were working a lot, changing a lot of things, reorganizing everything... when they basically do nothing and things remain the same. People here is alarmed, a LOT are leaving the country, since politicians dont represent us anymore, we gather in communities per neighbourhood to organize what to do and how to move.

Basically, this is a mess. I dont think the new government will last much. Our president is some dreamy guy who tried to kill himself three times after he lost for national elections some years ago, and now he talks as if he lives in some other galaxy.

Well, i think I described a bit what is going on here, it's a BIG mess.

Re: here's your argentinian (1.00 / 3) (#31)
by zephc on Thu Feb 07, 2002 at 05:43:25 AM EST

Frankly I have this general image of most south american counties as being run by completely immature people, totally out of their league, just 'faking it' (like most people I have encountered in the business world), and a people who LOVE to riot and burn and cause unnecessary chaos. Is there something in the air? Or is it just the culture(s) that lead to corrupt politicians, revolution, new government, new politicians to corrupt, ad infinitum. (I blame Catholicism... petty fucking religions... argument for another time) The USA may suck to a certain degree, but somehow the US and Canada have remained fairly stable lately. There may be a recession of sorts, but theres no mass riots and burnings and so forth. I know its probably just my perception of S. America, but I just wish all the corrupt politicians and bankers, and riot-happy citizens would GROW THE FUCK UP.

#pragma RANT_OVER

*sigh*

[ Parent ]
Actually no. (5.00 / 1) (#35)
by Juan Rojo on Thu Feb 07, 2002 at 12:20:56 PM EST

Do you live in a bubble or something? You seriously dont know the politician class. First, the "riot" stuff was mostly an international media thing, where the low social classes started looting SUPERMARKETS in search of FOOD (not TVs, computers, etc, FOOD). The rest of the social classes did and continue doing PACIFIST PROTEST. where we go and bang pans and other metallic objects in front of someplace. The government has an aliance with the media to discourage those protests, they send people to make mess in those huge protests, so it gives reason to the police to use gas and rubber bullets, and the next day the media can say "Again, violence in the protest!! people was hurt!". You also mention new politicians.. well, let me tell you.. we dont really have those since probably 30 years ago or more. They dont stand a chance since the two biggest politician parties are big monopolies. (Like it happens everywhere I suppose). Blaming a religion (catholic in the case) is no good, it's been being done for milleniums, from the egyptians to the greeks to the romans, to the muslims, to all the countries in medieval eurupe, to asian countries, to missioners in america, to modern times, to 20th century (dreyfus), to nazis, etc, and I find it pitiful that you adhere to that kind of mentality that seems to, sadly, never die. US and Canada remained stable because they have money poping out of their ears and enough military to have allways advantage in negotiations.

[ Parent ]
Ignorance (none / 0) (#42)
by Khedak on Sat Feb 16, 2002 at 12:17:55 AM EST

You have a lot of it. That's about all I have to say.

[ Parent ]
Yeah, well... (none / 0) (#43)
by ksandstr on Sat Feb 16, 2002 at 09:34:23 PM EST

Anyone who lets the IMF (in-)directly run their country's economic side is pretty much implicitly immature.

(then again, what does that say about the IMF? Evil or merely "misguided", "foolish", "following a different agenda"?)



Fin.
[ Parent ]
Bartering With Warrior's Insurance Coupons (3.66 / 3) (#41)
by Baldrson on Sat Feb 09, 2002 at 08:16:36 AM EST

While this idea is not going to topple the existing financial structure currently in use across the world

It could if it incorporated Warriors Insurance.

Depressions occur because the wealthy people, via their bought politicians, tax the productive people for the support of the government -- the existence of which protects the asset value of the wealthy people from loss due to force and fraud.

The result is a few people have all the assets but nothing in which to invest them because they've taxed their economic base into oblivion.

Warrior's Insurance resolves that by making the barter economy include certificates that can be redemed with warrior insurers to pay insurance premiums for indemnification against force and fraud. Since the warriors used by the insurance businesses are drawn from the population at large, there is an inherent and natural wealth redistribution mechanism put in place that even Lysander Spooner would find acceptable. Since, unlike normal government, reinsurance networks would actually indemnify owners of assets if they lost value due to force and fraud -- asset value would skyrocket along with trickle-up (Keynesian) economic activity from the average citizens who are normally told they must sacrifice their lives "for the country" when, in fact, they are risking their lives for the protection of the assets of the wealthy. Under Warriors Insurance that fraud ends. Warriors become mercenaries protecting the assets of those who pay them. Not very "Christian" of those Warriors to do that, is it? Then again, it isn't very "Christian" of the wealthy to corrupt the government and monetary system for their benefit at the expense of those who sacrificed sons in wars and in fighting crime and in even such basic services as fire fighting on their behalf either. Since politicians are guaranteed to be bought, all's fair so far as I see it.

Here's in general how it might work in practice if similar circumstances arose in the United States:

First you have to recognize that the thing that creates demand for Federal Reserve paper is the threat of punishment if you do not acquire said paper for payment of taxes -- and that punishment now includes threats of Hepatitis-C (40% of prisoners in California prisons are infected) and HIV-infected prisoner gang-rape. So these pieces of otherwise worthless paper can be made quite valuable by simply not attending to this serious human rights violation that has rendered governmental authority illegitimate at its foundation -- selling its legitimacy out and allowing it to be usurped by foreign powers.

Reinstating legitimate government could theoretically rely on an "independent judiciary" but the judiciary is no more independent of the penal system than are the executive and legislative branches -- so the theoretic "independence" of the judiciary is a red-herring in this instance.

The situation is similar in Argentina, but in Argentina there isn't the intense interracial strife fueled by the presence of a highly biased system of punishment in which whites are not parts of gangs and are therefore raped at a frequency that is 10 times that of blacks. (It is no coincidence that whites pay more taxes per capita than blacks and than it is that the government uses black gangs to do its dirty work against citizens in prisons.)

Under these circumstances it is difficult to mount a legitimate defense. Recapturing the legitimacy of the government is virtually impossible without some sort of mobilization.

This mobilization must first involve replacement of the payments of punishment protection money to the usurpers with payments of localized mutual insurance money to the various, now organizing, local militias. This mutual insurance money would need to be issued by local organizations and could be simply in the form of an accounting book kept locally -- recording who deactivated how much of their mutual insurance money issued by that locale so that inflation could be controlled and coverage. The introduction of this money would, of course, have to be under cover as barter organizations that report their transactions to the extorters to pay punishment protection. The function of the barter organization would, in fact, be the indemnification of families that suffered _local_ losses due to acts of war against them. Fair competition between local mutual insurance companies would be encouraged so that people had local choice, but the insurance function would have to remain under cover to prevent this knowledge from leaking out lest the state authorities governing insurance attempt to stop the relationships from forming.

With localized transactions occuring with localized money and localized indemnification in the event of localize losses due to force or fraud (aka acts of war), the next, natural, step would be the exchange, between militias, of mutual insurance money and corresponding guarantees between local militias. This would form a de facto reinsurance network forming the backbone of mutual defense treaties. With the mutual reinsurance network alliances there would be a decreasing ability to maintain, as well as decreasing need for secrecy regarding the indemnification function of the local militias - - and a broader range of economic interests could start receiving coverage as it became apparent that the militias had the resources with which to destroy the collection powers of the Internal Revenue Service-Federal Reserve's punishment protection money extortion racket.

Then it would become a simple matter of economics:

Let's say you are annually paying the equivalent of 100% of your net assets in to various governments for protection from HIV-HepC- infected-ethnic-prisoner-gang-rape-infested imprisonment. This is actually a not atypical load of punishment protection money to be paid by a young man who may decide to join a local militia. It is even typical of small businessmen who may _not_ join a local militia. You can stop making those payments and pay either _nothing_ (if you are a member under orders of a participating militia's mutual insurance company) or some fraction of your net assets that you want protected from losses (varying depending on how confident the market is in the militia's ability to protect the assets and the militia's reinsurance network to indemnify in the event a local militia's mutual insurance fails). Presumably also included in the protection premium would be imprisonment insurance in the event that the extortion racket does actually confiscate your belongings for failing to pay them their punishment protection, and then punishes you -- for all intents and purposes making good on their continued threats of HIV-HepC-infected-ethnic-prisoner-gang-raping imprisonment -- a situation in which there may be need to pay the Black Muslims and/or the Aryan Brotherhood to provide the protection against the dungeon sadists housed by the insurrection's authorities, or to otherwise neutralize the ururpers' ability to subject you to such situations.

Once the stark reality of the economics were laid out for all too see in this manner, I think it would be a matter of letting nature take its course in the new warrior's marketplace. It would evolve into a condition where the insurrection posing as the government would no longer weild effective authority. That is the point when it would make sense to reinstate the legitimate government -- but then a question -- a serious question -- is begging for an answer:

Why make basically the same mistake made by the founders, when you have a superior system already operating?

PS: The centralized nature of some internet systems make them vulnerable to attack by hostile interests. A few years ago the guy who is now the main programmer of the new server for Napster wrote up a distributed barter system called "dbarter". "dbarter" was voted best work in progress by the 1999 Hackers Conference held annually by Silicon Valley founders in Santa Rosa, CA. Let me know if you want a copy and I'll send it to you in email. It's just over 650K in tar.gz form and runs on Linux in its beta form.

-------- Empty the Cities --------


Who rules barter town? (1.00 / 1) (#44)
by etherdeath on Mon Feb 18, 2002 at 02:34:11 PM EST

My problem with barter is that it invariably causes a power struggle to form between a pop diva and a big guy giving a little guy a piggyback.

The barter system in Argentina | 46 comments (37 topical, 9 editorial, 0 hidden)
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