Argentines Sidestep Cash With E-Banking

A guy named Doug writes: "It sounds like Argentina has found a way to avoid economic collapse. People are not allowed to take too much cash out of their bank account during a specified period of time. But more important, they are still able to carry on important transactions using electronic funds transfers. Argentines can spend as much money as they want through electronic transactions, but are unable to strip their banks of cash as happened after the 1929 stock market crash. Sure, this won't stop an economic depression from occuring but it is certainly one way of slowing the process and allowing for some stability to catch hold before a panic ensues."

Comments

Great for the wealthy I suppose

[itwerx]

But what about the other 90-some-odd percent of the population which doesn't have a computer?!?
Sounds like some politicos felt the pinch and decided that was a good way to exempt themselves from the problem.
Wonder how much cash is headed for the Bahamas/Belize/Luxembour through those "electronic transactions" right now?

Re:Great for the wealthy I suppose

[sigwinch]

*Exactly*. Permitting EFTs while prohibiting cash transactions serves to selectively devalue the accounts of those who do not own computers.

Now keeping commerce going might indeed be the best thing for the economy, but it sure looks corrupt at first glance.

Re:Great for the wealthy I suppose

[imrdkl]

The article mentions that a debit card can also be used. Presumably, one could stand in line with one's card to pay bills, instead of a wheelbarrow...

The real conspiracy lies in the fact that all must have a bank account now, to live and work.

Re:Great for the wealthy I suppose

[MattXonn]

Who needs a computer to do electronic funds transfer? If Argentinia is anything like Australia, all you need to do is use your bank account card in virtually any store. You swipe it through the machine and enter your PIN. The money is transferred from your account to the merchant's.

How wonderful

[Linux_ho]

...for those Argentinians who have computers and/or nearby merchants capable of electronic funds transfers.

And Cheques?

[nadie]

The article mentions that the object is to keep people from using cash, and one to do that is Internet banking, to be sure. an older, more traditional way is to write a cheque to pay your bills. No cash, just a note telling the bank to transfer some numbers from your account to someone elses.

I don't know about your country, but here in Canada, only about 5% of the money supply is cash, the rest is deposits at banks.

In other words, if all Canadians wanted all their "money" turned into cash, there is not enough. We would get 5 cents on the dollar (or only the first 5% of the people would get any money) Modern economies do not run on cash, and have not in my lifetime, nor, I suspect, in the lifetime of anyone reading this.

Of course, this only affects the middle class on up. I don't know what percent of the population in Argentina does not use banks.

Re:And Cheques?

[mindstrm]

What you say is true. It's the same in the US, and most other countries. (Though I think we use debit more in Canada, but that's another issue)

It's even worse than what you say.. it's not even about cash reserves. Even the numbers don't work out.

Money in the country has not been equal to cash in a long, long time.

Just look how banks work. It's a shame how it's not explained fundamentally in school.

Banks are NOT big vaults that store your money.. they are far, far more involved in the economy than that.

Say you need cash to start a business. You get a loan. The bank borrows this money from the Bank of Canada at the prime interest rate. Then they lend it to you, at their rate.
Then, of course, you buy something with that cash (Say you were loaned $10,000).
Now.. all those whom you paid with that money deposit THEIR money in the bank. Now... you need another $5000. The bank loans you this as well, out of the money that is on deposit from the other people.

So now, you have $5000 in your account (they just gave you a loan)
Collectively, the others have $10000.

So now, there is $15000 in circulation.. but only $10000 was put in in the first place. This happens over and over again.

So the ponit is.. if everyone took their money out, even if it was to transfer it to some kind of 'holding' bank that doens't lend out your money (such banks do exist, by the way), there simply would not be enough money out there. It's just not there.

Cash is a convenience.. and useful.. but we would be kidding ourselves if we thought our society worked on cash.
Even when everyone DID pay with cash.. the economy still does NOT run on cash.

I don't understand...

[rakslice]

Why would you need a computer? You can do it at your bank.

I'm from Argertina

[TulioSerpio]

I'm not happy with the current situation.

Most people don't have mony for food and a lot are going down in the life status.

The only that are getting richer are the bankers.

There are 20% of not emploiment at this time, and is getting worse as pass the days.

All of my friend are considering an exodus to europe (many grandparents came from europe in the WWII), or the USA or any First World country.

Save the whales!

Save the Argentinos!

:-)

Big Brother

[phiz187]

The praising tome of this article seem to ignore the fact that the government is denying people access to THEIR money, from a PRIVATE institution. And if you DO want to spend over XXX amount, you will be scrutinized. Would this go unchallenged in the US?

Re:Big Brother

[gte910h]

Money is a fiction backed by the force of the government and the will of others to accept it. By allowing bank runs, the government would be acting neglegently, by destroying the economy and lowering the worth of each dollar.

Computers are plentiful

[bobobobo]

Actually I was just down in Argentina this past summer, and it, like many other Latin American countries have Internet Cafes all over the place. They mostly cater to young people lots of email, web surfing, chat, online games, starcraft etc; generally pretty cheap too.