“For three months, anyone sitting on a pile of undeclared dollars will be able to contribute to Argentina’s already astronomical debt by depositing them at the central bank in exchange for a 4% annual return through 2017. But why would anyone buy Argentine bonds right now with American dollars? People aren’t sitting on dollars in Argentina because they make comfortable cushions; they’re hoarding them because it’s the safest investment in Argentina right now. Argentines are now willing to pay more than twice the open market exchange rate formerly http://www.reuters.com/article/2013/05/08/argentina-peso-idUSL2N0DP2PX20130508. The country’s crippling default in 2001 and the ensuing flash devaluation of the Argentine peso are fresh on everyone’s mind.”
