Let me present you with an all-too-familiar
situation: you’re on Amazon, shopping for wall decals of two friendly-looking seniors
in a golf cart for your dorm room and/or nursery. But this thing is gonna set you back 16 bones;
you don’t have that kind of dough. What do you do? Well I know what you’re probably saying
right now: “Sam, I’ve been in this situation more times than I can count, but there’s
nothing you can do. That’s just life. Not everyone can afford that wall decal of
two old people in a golf cart.” But what if I told you that due to hyperinflation
measures taken by Argentina’s Central Bank and a bizarre loophole in German VISA cards,
you could get this sticker for like nine dollars by paying for it in Argentine Pesos? Well now we’re talking. And it’s not just this sticker; for the
first few months of 2023, almost everything on the internet—no matter where you were
shopping—was 40% off if you paid for it in Argentine Pesos, and the loophole still
doesn’t seem to be entirely closed. But I’m not here to get you sweet sweet
deals on old people stickers, I’m here to answer a question: how did this happen? Well, the short answer is that the Argentine
Peso doesn’t really work the way that money is supposed to work. The long answer is, well… the rest of this
video. First, let’s talk about what’s up with
the Argentine Peso, because this is a wiley little guy. They introduced it in 1826, but by 1881 it
had lost all of its value, so they replaced it with a new peso. This one lasted until 1970 before it lost
all of its value and had to be replaced by yet another peso, which then lost all of its
value and got replaced by this peso, which lost all of its value and got replaced by
a new currency called the Austral. Then, if you can believe it, the Austral lost
all of its value and had to get replaced by the peso again, but not that peso or this
peso, a new peso that had a dirty little secret, and that was that it wasn’t a peso at all:
it was the US dollar. Since Argentina’s central bank was sick
of coming up with new currencies that inflated faster than my lower intestine on Chili Dog
Airlines, they just said, “hey, Argentina, here’s a peso, but since you seem to hate
those and keep doing riots about it, we promise to buy it back from you for exactly one US
dollar at any time.” That way, as long as the central bank kept
as many US dollars in its wallet as there were pesos in circulation, they could guarantee
that every peso would be worth exactly one dollar. Now, this isn’t that uncommon—a lot of
foreign regimes like the UAE, Qatar, and Disney World peg their currencies to the dollar to
prevent economic collapse—but it doesn’t always work. And in case you didn’t see where I was going
with that, this, uh… didn’t work. By 2001, the country was bankrupt, and everyone
in Argentina went to the bank and said “hey, this country doesn’t work anymore, I would
like my US dollars now.” And the bank said, “hmm, well, we’d love
to buy all your pesos because they’re totally still worth the same amount as before, but
what if instead of everyone converting all of their pesos into dollars, we made that
illegal, and instead, everyone kept their pesos and could only exchange 250 of them
per month? That’s kind of a fun idea, right?” And this is where things get a little weird,
because if you can only legally exchange a few hundred pesos for the official rate per
month, your currency now effectively has two exchange rates: there’s the legal rate at
which the bank will sell you dollars, but there’s now also the illegal rate at which
a scary guy in a trench coat will sell you dollars. Because if you want to buy more than 250 US
dollars per month, which you probably do because your country’s economy is on a slip n’
slide, you have to buy them from that guy. And that guy’s not going to give you as
good of a deal as the bank, because he’s not interested in making Argentina’s economy
not look like a total trash fire by artificially propping up the value of the Argentine Peso,
he’s interested in buying a jet ski. So, for the last 20 years, no one has really
known how much the Argentine Peso is really worth—right now, Argentina’s Central Bank
says the exchange rate is this: 255 pesos to the dollar. But if you wanted to trade a dollar to someone
in Argentina who wasn’t the bank, they’d probably give you close to double that; right
now, the black market rate is about 490 pesos to the dollar—but that rate will change
depending on all sorts of other factors, like who you’re buying from, what part of the
country you’re in, the physical condition of your cash, and generally how stupid you
look. So this is obviously a headache for Argentina’s
citizens—most of whom want to put their savings in a currency that’s not literally
halving every single year—but it’s also a headache for an even more important group
of people: lazy American tourists. For years, using an American credit card in
Argentina meant you were being forced to use the official exchange rate, so instead, Americans
were starting their vacations off with a visit to some underground black market to illegally
sell all of their cash for a useless garbage currency that they didn’t even want, which
is a horrible feeling that you might be familiar with if you’ve ever been to a Dave & Buster’s. So, last fall, Argentina’s Central Bank
had an idea: what if they made the illegal exchange rate legal, but only for tourists? Basically, the bank would let VISA and Mastercard
make purchases at the unofficial rate, as long as the card being used was foreign. And this totally sounds like a good idea,
as long as you don’t think about it too hard. Because it turns out you could use this system
outside of Argentina, and what actually happened was that online storefronts in a whole bunch
of countries—at the very least, Germany, Spain, and Indonesia—weren’t really prepared. Amazon.de, for example, didn’t get the memo,
so if you said, “hey, Amazon, I’d like to buy this 10 euro item with Argentine pesos,”
Amazon would say, “Okay, ich werde den offiziellen Wechselkurs verwenden, der besagt, dass dieser
Artikel 2,796 Pesos kostet.” But then those 2,796 pesos would be charged
to your credit card, which would use the tourist exchange rate, meaning you’d only be charged
a little over five euros. Whether or not this still works on some websites
is none of my business, and all of the videos breaking down whether or not this is actually
even legal are all in German, so I kind of have no idea what you’re supposed to do
with this information. Happy shopping! So, if you’re the kind of person who watches
videos about things like the time that Argentina gave Germany 40% off everything, you probably
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