Argentines are betting on the dollar to travel, buy a house and protect their savings. But when exactly did this greed begin? This note reveals it
It is common to say that the Argentina has a bi-monetary economy since we use the national currency as the current currency, but for long-term operations we choose the US dollar. We keep the weight, but “green” is a constant issue of national relevance.
“Argentines are betting on the dollar to travel, buy a house and save savings,” says José Alfredo Nogueira, who was a currency trader for many years and today works as a broker. He has four decades of experience in the market and ensures that forever was notorious the attraction of Argentines for the dollar.
For his part, Ariel Wilkis, doctor in Sociology and Anthropology of money and finance, points out that “the dollar is not Argentine, but we appropriate it and it became a family currency, despite being foreign. ”
To which Julián Zicari, a doctor in Social Sciences and a graduate in History, Economics and Psychology, points out that, “according to a study by the United States Federal Reserve, five years ago we were the country (outside the US) with the most foreign exchange Americans had per capita at the rate of u $ s2.000 per inhabitant “, while in Brazil the proportion is u $ s6 / h and in Panama – after us and with the dollar as the official currency – there is u $ s600 / h.
“The dollar is not Argentine, but we appropriate it,” says Ariel Wilkis
How did the love for the dollar start?
From his experience in the foreign exchange market, Nogueira says that “in the decades of 1930 and 1940 people I saved in pesosbut then it started going towards the dollar because stopped believing in governments “.
And your intuition is not wrong. Zicari details that the dollar began to be considered an important currency in the 1930s, given the splendor of the United States as a world power. This trend grew over the years and there was a key phenomenon that helped to consolidate it: the “Rodrigazo“, which -in 1975- liquefied people’s lifelong savings.
“There began the distrust absolute to the coin Argentina“he points out.
Then in 1977 the reform financial, which enabled the accounts in Dollars, and in July of that year the first notice of a property was published with a price in green tickets (until that time they were in pesos).
The transformation of the real estate market, which today is an example of dollarization par excellence, was rapid and did not take place uniformly. “When the military dictatorship ended (in 1983), 75% of the properties in Barrio Norte and Recoleta were dollarized, in Caballito it reached 40% and in Barracas, 15%. The sectors with the highest incomes were the first to give the step “, Zicari details.
Dollar: not everything happened in the ’70s
Although it coincides that in the ’70s the popularization of the dollar in ArgentinaWilkis points out that “they were preceded by a stage in which it was already a public reference currency for wealthy middle sectors” (not just for the elites). Already by the middle of the century (the 1950s) it was no longer exclusively accessible to the foreign trade and financial sectors, as it was in the 1930s and 1940s.
Then, in the following 20 years the tourist market was included and, in the ’80s, they dollarized he real estate completely the art partially that of the cars imported and the players of soccer. Wilkis says that the hyperinflation of 1989 caused even daily services to be paid in dollars, making it a currency used by large sectors.
The CONICET researcher tells that “the dollar as a public currency was installed in politics, in the press, in the cinema, in humor programs, in literature and in Argentine advertising in a way that became a cultural artifact of interpretation of reality. ” It became an everyday subject, as it is today.
Four keys to understanding the love for the dollar
Zicari contributes that, although everyone talks about the dollar and most know how much it is worth, only 10% of the adult population buys them every month in Argentina. This reveals that “it matters to a greater number of people than consumes it” and that “the centrality of the American currency has a great cultural componentThus, the economist lists some theories about dollarization:
1. The first is not exclusive to Argentina, but responds to a world phenomenon. It happens that, from the beginning of the 20th century, the United States consolidated itself as a world economic power and its economic, political and military hegemony consolidated its currency as a reference for world exchanges (which changed from the gold standard to the dollar).
It should be noted that, although the supremacy of the northern country is not at its best, somewhat overshadowed by China, according to Nogueira, at present, the dollar represents 80% of the exchange market operations in the world and moves $ 6 trillion per day.
2. Another explanation is that the American currency It is an instrument of protection against collapses of the economy Argentina, instability and high inflation. At this point, Zicari describes a vicious circle difficult to cut. He details that a central element of the Argentine crisis is the imbalances in the external sector, which means that there is a lack of foreign exchange. “Our country cannot grow in a sustained way because it requires dollars that it cannot generate.
This leads us to permanent crisis situations that bring devaluations and jumps in the exchange rate that translate into inflation, “he details.
So, the demand for dollars grows along with the propensity for economic crisis. Individuals buy them from the State, which is in short supply, and “this is how the population, in some way, generates the crisis and the conditions for the next devaluation,” says Zicari. However, he points out that this somewhat individualistic attitude is justified in how difficult it is to build political consensus and find a path of stability in Argentina.
3. Once again, highlights that the topic cultural It is key to understand why although the dollar is losing value in the world, in Argentina we are still attached to it. It happens that, according to Wilkis, “a large part of Argentine society used it first as an interpretation currency and then as savings, since it was installed as an artifact of public culture that is easily accessible and interpretable. “
According to experts, in the ’70s the passion for the dollar in Argentina deepened
4. Finally, Zicari highlights that there is a relationship very strong between politics and economy. “Knowing what happens in the foreign exchange market allows deciding and evaluating what happens in the public sphere because the dollar has become a political institution,” says Wilkis.
He explains that in most elections since 1983 the dollar had a key impact and recalls that in 1989 President Raúl Alfonsín’s fate was very tied to the exchange market because the failure of the Primavera Plan placed him in a weak position to control the devaluation and its impact on prices. “It is one of the most graphic historical examples of the exchange system as a political institution,” emphasizes Wilkis.
Thus, it is logical that one of the political utopias of Argentina is to de-dollarize the economy. However, Wilkis warns that this task is usually loaded on the Central Bank when in reality “not all responsibility for what happens to the dollar lies with the monetary and financial regulator” given that It is a problem that affects many spheres of life, economic, cultural and social.
The truth is that we Argentines continue to bet on green by tradition and as an institution that we trust and that we appropriate. Perhaps worrying about that currency consumes us a lot of time and we miss some trends that are happening around us, such as the growth of the yuan, the revival of the euro, the current good offer of fixed terms in pesos (which in fact are growing a lot ) and some other savings offers more related to the so-called “new normal”, such as cryptocurrencies.
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