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July 03, 2013


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"So ... if the Argentine government were succeeding in combating the illegal dollar market, shouldn’t the price of illegal dollars be going up rather than down?" I can't see any flaw in your logic. Could there be some kind of differential enforcement going on, where the government puts more pressure on "blue market" dealers that are closer to a true market value? Though I don't see too much gain in it....

beyondbrics is an insanely neoliberal blog. It's weird it's as blatant as it is, compared how good Alphaville is. I read it carefully, and mostly as a news aggregator. It's just not a surprise beyondbrics would say what you're saying it did, despite not quite making sense.

Given the emerging market's general loss of currency value, exemplified by the Brasil Real losses, I also think it's a really good thing to think about why the Argentine peso is strengthening. My bet is that it's a sign of weakening in the consumer markets...i.e., people have less pesos in general and must spend on daily things in the local retail sector, while larger durable goods/high value items that can be imported so much cheaper with dollars have to be delayed to some later point.

On the crackdown question, could the reasoning be that the potential of getting caught is now really deterring a lot more people, leading to less demand for illegal dollars?

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