You kinda get what you ask for …

Bank robbery is a part of Americana … murderers get the end of a noose, the gas chamber, lethal injection … bank robbers are the subject of films where they are anti heroes … but there is a thing about bank robbers:  typically, they rob banks, not bank customers.

Consider Argentina.  In the last six months, there have been nearly 5,000 robberies of bank patrons withdrawing cash from the bank.  The highest profile case involves a woman who was attacked and robbed while 8 months pregnant … she’s in a coma, and if she wakes up, will learn that her unborn child is dead.  For the record, she had just left the bank with enough cash to put a down payment on a house.

So, the question is:  why are a lot of Argentinians walking around with the equivalent of tens of thousands of American dollars in cash? (in the case of this comatose woman, it was over $13,000 in cash … so much that when she had tried to withdraw the money, the bank asked her to come back the next day, because they didn’t have enough cash to give her.

The answer:  Argentina does not use a lot of electronic transfers or credit.  The reason:  tax evasion in Argentina is remarkably high … running about 50% by some estimates.  To evade taxes, people deal in cash a lot.  There are some estimates that the 5,000 robberies may in fact be only the tip of an iceberg, as some robberies may not be reported out of fear that it would involve admitting that these people had money that should have been taxed, and wasn’t.

Considre this quote:

“Of every 100 pesos you make, 65 you owe to the state through various taxes. That is why there is so much of this underground economy,” said Ponciano Vivanco, a veteran notary in Buenos Aires who estimates that 90 percent of Buenos Aires’ real estate is purchased in cash.

So here you have a socialist society where the people simply do not support it.  OK, that’s a bit oversimplified.

Back in 2001, there was an economic crisis in Argentina that caused a sharp devaluation of the Argentine peso.  Those who had made deposits in American dollars suddenly saw huge losses as the government forced withdrawals to be done in the new peso.  Hence, a lot of people stopped making deposits into accounts, and started using safe deposit boxes.

Sounds like Argentina needs to crack down on tax evasion, and the people need to start getting out of the cash-and-carry business.


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