Chris Martin of Coldplay performs in Rio de Janeiro (Photo by MAURO PIMENTEL/AFP via Getty Images)

Argentina and the Coldplay dollar

Financial chaos in South America

Artillery Row

People living in Britain think they are witnessing chaos when it comes to economics? The crazy policies that dictate costs on the high street and mortgage repayments? Think again, because on the other side of the world, in the land that was once the “other America”, the land of such opportunity, they are writing the book on economic madness. 

Welcome to Argentina. Wanna go see Chris Martin and ColdPlay this week at the magnificent Monumental stadium — the aptly-named home of River Plate football club? Why, you have to pay for a ticket with the “Coldplay dollar”. Yes, that’s what this new currency is called, an extraordinary invention of a country with 100 per cent inflation, record foreign debt and 40 per cent poverty. This country also boasts just about every resource imaginable, from oil, to minerals, to some of the best farmland on the planet — hence fine wine, too. 

Yes, what the rest of us would call a black market

If you think the United Kingdom is squandering its inheritance and shredding its economic credibility, not to mention mortgaging its future, ponder poor Argentina.

Explaining the Coldplay dollar is a challenge. I notice that Reuters news agency, where I started life in journalism after university, had a go the other day, under the heading that made the currency official in the eyes of the world at large. Just seeing the headline made me chuckle, when I recalled the way Reuters would avoid such instant coinage in my day. 

“Argentines have long mistrusted their own currency,” the report observed:

 … often choosing to save in dollars to protect against inflation — heading towards 100 per cent this year — and devaluation. Previous tough and sudden capital controls have also made savers wary.

Then came a little history. Back in 2019 Argentina’s leftist Peronist government imposed strict controls to protect, supposedly, its currency — limiting folks to obtaining 200 dollars a month. The result was the resurgence of the “informal” market for dollars, a so-called “blue” market which flourishes on the street in Buenos Aires, where you can exchange a dollar for almost twice the official bank rate, with the morning newspaper telling you the “blue” rate. Yes, what the rest of us would call a black market. It generates headlines every day so customers know what they should be getting out on the street. Whatever else Argentina lacks — and here’s a thought for Britain’s leadership — it’s not transparency about its crisis.

To combat that, the government introduced special levies for any transaction involving foreign currency, the theory being you dampen down the appetite for dollars and protect central bank reserves. This led to the explosion of special rates for the likes of Chris Martin and those Coldplay concerts, which are virtual sell-outs over the next 10 days.

Like the Coldplay concerts, get-away tickets are already sold out

The agents representing the band need to be paid in hard, foreign currency, right? Not worth their while coming south if not, ? A ticket to the football stadium, to see Chris Martin and the band live, must then be fixed at the official dollar rate for pesos (plus a 35 per cent special levy).

“It’s a way of punishing bad people, in the eyes of this government, who have resources, and want to go see a concert, take a trip abroad, enjoy a staple of new-age life like Netflix,” says one friend, Hernan, noting that his family farm is obliged to sell its soya abroad under a “soya dolar” that gives them less, not more, than the official bank rate. “The difference is that we have it in our DNA to work around their madness.”

That psyche is a striking difference. On a recent visit to Britain, I was struck by the way so many people are struggling to adapt to the cost of living crisis, and the uncertainty of what tomorrow brings — particularly the younger generation. In Argentina, you see one generation after another accustomed to walking very fine lines to survive, imbued with the capacity to work around the crisis of the day. Aguantar is the Spanish word, to endure. “We know how to endure the crazy-making from government,” to quote Hernan.

And so on we go. Reuters lists 17 different “dollars” in Argentina, promising to keep a weekly eye on the table of such government-issued currencies. There’s now the “Netflix” dollar (additional levy 50 per cent) designed to cover punters paying for streaming services from abroad. In this land of such crazy football fans, there’s the “Qatar” dollar for the thousands of Argentines who will make the journey to the World Cup in November, to cheer on Leo Messi and the lads, favoured after all to go a long way this year. Going to the World Cup currently costs 317 pesos to the dollar — twice the official bank rate.

One friend, a well-known economist, does not chuckle at the madness. He sees disaster in the making. “Those who forget their history are condemned to repeat it,” he warns. “This is a desperate attempt not to devalue your currency, as you must, and it always ends in a much deeper crisis.” 

Want to buy a plane ticket for the World Cup, or the United States, or book that get-away abroad for Christmas or the New year? Rather like the Coldplay concerts, they are already sold out. Part of the culture hereabouts is now that you use money when it has value, knowing that mañana it may be worth little or nothing.

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