Yesterday, I was on the bus that I normally take home from work. To go 3 miles usually takes about an hour. My Spanish flash cards help this hour pass quickly. There was an unusual amount of traffic- even for BA. When I looked out the window, I also noticed that we were not on the street we usually take home. The same bus line will often have different routes- and the only way to know is to ask the bus driver. I was worried that I hopped on one of these different routes. However, we were only a few streets away from the normal route and headed towards my home- so I just waited it out.
While looking out the window- I noticed a few hundred people sitting in the middle of the street that we usually drive down. It is a major street- and the whole thing was blocked by people- just sitting there- no signs- no tape to close it off- nothing. It was a protest.....
The government here decided to raise the energy prices 400%. This is not a typo.....The best part is that the congress here actually voted down the increase. The President decided to enact it anyway. This is completely illegal- which does not mean much here. So the people were sitting near the Casa Rosada- blocking major streets to protest. There is also some confusion now over what to pay for the gas and electric bills. Many people say to just pay the old amount- and then they will not shut it off. Others warn that they will shut your electricity off if you do not pay the entire amount.
The thing I find most interesting about all of this is the way things are handled. There are usually small protests going on somewhere in the city almost every day. But they are small and do not last very long. Then the people just let things go and attribute it to the way things are. For this reason- it is hard to blame the government for the problems in this country. I would attribute it more to the people for allowing the government to control them. The police would never stop a riot or arrest anyone- unless they were too violent. So it is the people's fault for allowing the government to walk all over them. They expect the government to steal their money, charge ridiculous tariffs on random things, and hold back the economy by making it very difficult to import items. If they truly wanted it changed- they would start a revolution- and they would win......
Friday, 11 September 2009
Sleep On It
Everywhere that credit cards are accepted, their are signs showing very large discounts for using them. The movies offer two for one tickets if you have a certain bank's visa, restaurants offer 30% discounts, clothing stores offer discounts, even grocery stores give you 20%. the card varies from place to place- but i thought it was a bit unusual. Surely in the US you are not given discounts for pulling out the plastic. So I started to try to figure out why.....
So picture this. You have your money in the bank- maybe a significant amount that you have saved up for decades. The national debt is out of control (which of course would never happen in the US) and the government decides to take over all of the banks, take the money-your money- and use it to pay off the national debt. You are given a piece of paper- an IOU essentially- that says the money might one day be paid back- without interest- hopefully within the next ten years. Then ten years go by- and you are told that you will never get all of your money back.... but you can have maybe 60% of it back at some point.
Unfortunately, this is the reality for Argentines who trusted their money to the banks. The government defaulted on 100 billion of the people's money. As a result, no one trusts the banks or wants to put money in them. So the banks- to encourage you to use them- offer large incentives. While some people will use the banks, people with money use it to invest in businesses and real estate. It is a positive if you are trying to open a business and need a loan- you can find angel investors rather easily. The rest of the Argentines hide the money under their mattresses.
But it gets better..... since no one uses the banks, this is primarily a cash transaction country. So you go to an office to pay for your electric bill. You spend a day registering your car- paying several fees at different offices throughout the city. You wait in line for hours on pay day to cash your check from your employer- which luckily only happens once a month..... but on the same day for everyone. The side effects of not having a banking system that you trust go on and on..... And of course is something you take for granted as a US citizen.
The banks also recently wisened up. They realized that most of the people using the ATM machines were foreigners. Up until a month ago- there was no fee to withdraw cash from an atm. They just recently implemented an 11.50 peso fee at all of the ATM's - which are conveniently owned by only two companies.
So picture this. You have your money in the bank- maybe a significant amount that you have saved up for decades. The national debt is out of control (which of course would never happen in the US) and the government decides to take over all of the banks, take the money-your money- and use it to pay off the national debt. You are given a piece of paper- an IOU essentially- that says the money might one day be paid back- without interest- hopefully within the next ten years. Then ten years go by- and you are told that you will never get all of your money back.... but you can have maybe 60% of it back at some point.
Unfortunately, this is the reality for Argentines who trusted their money to the banks. The government defaulted on 100 billion of the people's money. As a result, no one trusts the banks or wants to put money in them. So the banks- to encourage you to use them- offer large incentives. While some people will use the banks, people with money use it to invest in businesses and real estate. It is a positive if you are trying to open a business and need a loan- you can find angel investors rather easily. The rest of the Argentines hide the money under their mattresses.
But it gets better..... since no one uses the banks, this is primarily a cash transaction country. So you go to an office to pay for your electric bill. You spend a day registering your car- paying several fees at different offices throughout the city. You wait in line for hours on pay day to cash your check from your employer- which luckily only happens once a month..... but on the same day for everyone. The side effects of not having a banking system that you trust go on and on..... And of course is something you take for granted as a US citizen.
The banks also recently wisened up. They realized that most of the people using the ATM machines were foreigners. Up until a month ago- there was no fee to withdraw cash from an atm. They just recently implemented an 11.50 peso fee at all of the ATM's - which are conveniently owned by only two companies.
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