WHAT AN ECONOMIC MELTDOWN LOOKS LIKE: In Argentina, PayPal Users Can No Longer Make Domestic Transactions. “Last year the Argentine government announced restrictions on the purchase of U.S. dollars. It has led to an increase in currency sales on the black market — but Paypal’s exchange rates are better. Locals were setting up two accounts under different email addresses and transferring money between the two, exchanging local currency pesos for dollars in the process.” Currency controls are pretty much always stupid, but government caught in the web of their own stupidity can’t seem to resist them.
IMF to Put Argentina on Path to Censure Over Inflation Data (h/t Clark)
Argentina is on track to be the first country ever censured by the International Monetary Fund for not sharing accurate data about inflation and the economy.
The IMF’s board of directors, meeting yesterday in Washington, gave the country until Dec. 17 to respond to concerns about the quality of its official data, it said today in an e-mailed statement. If the deadline is missed, the board can issue a declaration of censure, a warning that has never been used and which means sanctions may be applied if the concerns aren’t addressed.
Late Monday, Moody’s lowered its outlook on Argentina to negative from stable, citing a continued haphazard policy environment, concerns about the country’s official-data reporting and the lack of resolution of debt arrears.
Moody’s rates Argentina at B3, six levels into junk territory.
Moody’s once again focused on Argentina’s highly-suspect official statistics. The firm said Argentina’s continued underreporting of inflation leads to underpayment on more than 20% of the country’s government debt that is indexed to inflation.
The government has been persecuting economists for quite a while, which obviously didn’t work.