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Buenos Aires - Monetary Devaluation

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Imagine your mortgage and all of your loans quadrupled, your salary decreased in real terms by over 30%, the government prevented you from withdrawing any of your savings and the situation looking like it can only get worse. It would be intolerable, but this is exactly what has happened to millions of Argentineans as their nation’s currency collapsed to just 35% of its former worth. Many would say it was time for change … or even revolution.

Argentina’s heyday was the 1930s when it became a world economic power on the back of beef exports. The country’s economy went through a slow decline from the 1940s but it wasn’t until the 1980s when the country entered real economic crisis. Inflation ran at 200% a month and shoppers made sure to purchase early to avoid the afternoon price rises. In a desperate move to stop hyperinflation, the national currency, the Peso, was pegged to the dollar on a one to one basis. The strategy was a success and inflation fell to normal rates … but at what cost?

By effectively adopting the dollar Argentina’s government ceded major economic decisions to the U.S., in particular interest rate control. While in stable economic circumstances this may have not have proved to be problematic, South America has never been the most stable of environments. First Mexico’s currency collapsed, then the Brazilian real, and Argentina simply didn’t have the flexibility to adapt. Its exports were grossly overpriced and its economy suffered terribly. Devaluation was the only option.

Buenos Aires doesn’t immediately seem like a city in crisis. Well heeled and larded business people tread the streets, heads hunched as they talk into mobile phones. Cafes dot the streets and old men and fashionable couples take their time over an espresso and a pastry. Bakeries exude the most fantastic of smells and proudly display a range that would have a French boulangerie green with envy. But all isn’t well.

As we sat eating a particularly tasty dinner in what had looked like a very ordinary café, we looked out onto a bizarre street scene. On both sides of the road men scoured the rubbish bags left out for the morning collection for paper and cardboard. What was strange about the scene was not that they had been driven by poverty to search though other people’s waste, but rather that they were being so professional and responsible in their efforts to eke a living.

The man on our side of the street was obviously experienced and with skilled hands he quickly kneaded each bag, searching for recyclables. If his expert touch revealed anything of worth he’d have the bag open, the goods out and into his trolley bag. The remaining trash was carefully repackaged into a new bag and tied closed. The two men on the other side of the road had neither the skill nor the speed but were equally conscientious. When they were finished the road was cleaner than before and the bags of rubbish were all collected into a few locations, making the job of the bin man easier.

Curious, in our appalling Spanish we asked our waitress about the men. “There has always been poverty in Buenos Aires. There have always been people doing that job, but now there are many many more of them. Things are very difficult for most people now, except the very rich and the politicians; they all have their money in dollars. It would not be too bad if we suffered so that things will better, but the government is useless – they are all corrupt. They have stolen the wealth of the common Argentinean.”

This air of quiet, responsible desperation seemed to run deep. Everywhere you looked someone was trying to make a living doing anything that paid, but most did it without stooping. Hawkers on the trains wouldn’t badger you, rather they simply placed their merchandise on your knee and proceeded to the next person. A couple of minutes later they would return and wordlessly collect their goods. Occasionally someone would give them a peso and keep the book or pen.

However, people can only suffer in silence so long. Parades, demonstrations, strikes and occasional violence in the name of political reform are now a regular part of Buenos Aires life. Travelling through town our train stopped before we had reached our destination. The subway was being shut down as a series of demonstrations was converging on the area. As we made our way out on the street we were struck by it emptiness, like East Berlin a decade ago. In the distance we could hear the drumming of a crowd. We didn’t know what to expect and were keen to get out of the way of any trouble.

By some miracle we found a taxi, but escape seemed impossible. No matter what street he tried, we were blocked by yet another seemingly angry mob. This time it was the CNC, then it was the communist party, then another political group, each a separate demonstration without an obvious common purpose. It was like the entire city centre was an anarchy of political groups each vying to have its voice heard. At last one group parted to let us pass and we sped into the outskirts relived to be out of trouble’s way. Later we were to learn that the day had passed peacefully and the city gone back to it quiet, respectful suffering.

Pictures - click to enlarge
Picture of a political mural in Buenos Aires - Argentina travelogues
Photograph of Barbara at Plaza Dorrego Buenos Aires - Argentina travelogues
A mural show political feeling runs deep

Barbara browsing painting

Picture of a decrepit building Buenos Aires - Argentina travelogues
Photograph of Barbara Buenos Aires - Argentina travelogues
Typical uncared for architecture
A nice place to have lunch

Picture of a all you can eat restaurant Buenos Aires - Argentina travelogues
Photograph of Buenos Aires - Argentina travelogues
An all you can eat restaurant for $2
Buenos Aires street scene