It is said that 34% of the income made is going unreported to the governmentbecause the fact is that the people are scared of the government and do not want to be cleaned out through taxes and confiscation. For this, the government is putting even more restrictions and tightening the belt on its own citizens. Right now the concern is regarding major inflation that their peso is facing and how it’s losing major purchasing power when priced against the dollar and other fiat currencies. Their government is doing everything possible to trap their people in pesos and not allowing them to exchange pesos for foreign currency without heavy scrutiny and background checking.
In an attempt to collect more of the undeclared tax revenue, officials are requiring individuals to prove where the money is coming from that they are trying to exchange for another currency. Because of this new rule, literally 70% of the people that are trying to exchange their pesos for foreign currencies are currently being denied because of the new laws being implemented. As a result, the masses are turning to black markets to exchange their currencies but only at a price. The standard market exchange rate is currently 4.26 pesos for 1 U.S. dollar. However, on the black market because of demand, the exchange is 5 to 1. Capital outflow out of the country is already estimated at $3 billion a month as more people are moving to the black market. Fernandez (their president) announced that insurance companies now need to make all of their investments within the borders of Argentina. The effect of all of this is supposed to reinforce stability and trust in the government, but what is happening instead is that panic is being unleashed and people are even more scared of holding on to their pesos.
Private estimates are showing that citizens are experiencing 25% inflation currently. The latest rumor that is going about is that officials of Argentina might do a 10 to 1 devaluation of the peso. Of course what this does is allow the government to easily fulfill its debt obligations by screwing the purchasing power of their people.
Argentina is desperate for dollars at this point because they have gotten in over their head and cannot float on their own. This truly is an example of worst case scenario in our present day world. CrushTheStreet.com cannot emphasize enough the importance of questioning the government and to be personally responsible for the financial future of you and your household because if it’s happening elsewhere, it can eventually happen here in your reality.
Updates in the Market!
We really do look forward to the day where we can start getting optimistic about the U.S. economy and really dive into a prosperous time period. Unfortunately, we aren’t there yet.
Yesterday in the market, the announcement for Greek referendum triggered a global sell off in stocks. S&P was off by 2.8% and NASDAQ was down 2.9% here in the states. Italian shares lost 6.8% and German shares were off by 5%. Between hyperinflation of the dollar, sharp unemployment, violent swings in stocks, European crisis, so many things are threatening the future growth and prosperity of the world.
It’s no wonder that some of the world’s most respected gold forecasters are predicting that commodities will be surpassing their highs by as early of March of next year. “There is a loss
of trust in the entire financial system and urgent need for safe-haven investment,” said Ronald Stoeferle at Erste Group Bank AG in Vienna, the second most-accurate forecaster in the past three months. “The environment for gold is just perfect.”
Student loans are going to be one of the next bubbles to pop…Shouldn’t be too surprised considering the government had their hands all over that one. The Federal Reserve Bank of New York estimates that outstanding U.S. student-loan debt is at least $550 billion. “The size of the loan pool expands to enable students to pay even higher fees to schools whose costs expand because money is coming their way,” according to The Economist. It’s hardly a sustainable system in prosperous times and heavily destructive during bad. The college tuition and return on investment for the majority of scholars in today’s times are detrimental… Another topic for another day for sure though!!!
In the game of Chicken, the account holders of Bank of America checking accounts didn’t blink and BOA withdrew their plans of charging an additional $5 a month for those to use their ATM cards. Many spoke out and began instantly withdrawing funds from their account. It was BOA’s fault for issuing bad debt in the first place and then swallowing the Countrywide death pill. But it’s a free country and they can charge outrageous fees if they’d like, but they must also deal with the consequences.
The October ADP Private Payroll’s report showed employment in the private, goods-producing sector declined 4,000 in October, while manufacturing employment declined by 8,000.
For CrushTheStreet.com, there’s just an overwhelming house of cards feeling on the street that cannot be avoided and overlooked. As you can see, so many instabilities exist within our own borders and we’re headed down the same path of other 3rd world countries and even first world entitlement infested countries that are acting out of selfishness and greed. Some say it’s important to learn from history and others ignore and allow history to repeat itself.
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“A third force, developing itself more slowly, becomes even more potent than the rest: the power of gold.” John Lothrop Motley
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