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The economic crisis in Latin America and the role of Bitcoin

While Latin America didn’t have as many infections as other regions, The economic crisis could be fatal. It is clear that the Latin American countries have serious weaknesses in the health sector. We are obviously not ready for a pandemic. Beyond the emergency situation surrounding the corona virus, however, there is deep concern about the political and economic consequences of all of this.. The situation was unfortunate even before the virus arrived. But now we’re getting worse. You don’t have to be a genius to know that we’re going to have problems of all kinds. Here it comes, it is a storm and I hope God will take hold of us. Let’s talk about the Latin American case and the interesting role of Bitcoin in the middle of this big core.

Picturesque Latin America has certainly made many cultural contributions to humanity. We cannot say that we lack color. The human quality of its residents is always mentioned. I mean, its heat. This is in stark contrast to the “colder” inhabitants of the north. This happy and passionate temperament that characterizes us it makes us terrible in economic matters. Because our countries are always a disaster in this regard. In one way or another, we cannot fix our house. It seems that party and work don’t get along very well.

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The economic crisis in Latin America and the role of Bitcoin
The economic crisis in Latin America and the role of Bitcoin

Of course, in Latin America the United States is also held responsible for our love failures. There is a tendency to make ourselves victims. Because everything is the responsibility of the other. Rich plunder our resources. Christopher Columbus made the mistake. The gringos hit us. However, we cannot change a light bulb in our house without arguing. Our room is a mess. And everything is permanent chaos. But surprisingly, it always seems strange to us that we have to behave like First World countries to be part of the First World. In other words, celebrate less and work more. We never believe that progress requires structural and cultural changes. We want everything, but without sacrifice. Here is a big character flaw.

Despite the fact that the average Latin American does not recognize his reality and prefers to live in a state of permanent denial, my reading about Latin America is easily provable. How? Well en Latin America consumes a lot and produces little. This is the recipe for the rich boy who makes his parents responsible for everything, even though he lives on an inherited income and doesn’t really produce much. The data confirm this.

For Latin America, this crisis will be the worst since the Great Depression of 1929. Why? Now First, because of the collapse of Papa China and Papa USA. We are dependent on them and without them we are wrong because they can no longer send us money. Second, because we owe something to the underpants. Governments spend a lot and generate little tax. Then they create enormous deficits. Third, the decline in raw materials. The famous looting. That is, the minerals that happen to be in our area and that the great powers buy from us. We will survive with this money.

Read on: Argentina and Venezuela use cryptocurrencies to alleviate the economic crisis

The coronavirus crisis is a major blow to demand. This has a direct impact on the price of things, particularly the level of overproduction that existed in the world before the blessed virus arrived. Oil, for example. Before the virus, there was even oil to give away due to overproduction. Now, as demand rocketed demand, the price collapsed. And the oil price is very influential in Latin America. Venezuela, Colombia, Ecuador and Argentina suffer heavily from the drop in the price of crude oil. These countries do not produce very efficiently and are very price-dependent. That makes things difficult for the region. However, oil is not the only item affected. Chilean copper is also affected. This crisis affects raw materials in general. Something serious for Latin America that produces little and lives from what nature gives it.

Now the Latin American problem is still deeply involved in debt. In cases like the Argentine, debt reaches 90% of its GDP. Something unusual. How can such a situation be achieved? The usual excuse. “The Heavy Legacy”. In other words, it is the fault of the previous government. We go into debt to pay the old debts. And we can’t file for bankruptcy because that would prevent us from charging more debt in the future. And of course we like to blame international organizations like the International Monetary Fund and the World Bank for our difficulties, but our debts are also bonds that we issue to the private sector.

But it doesn’t end there. The problem is that this debt is mostly in dollars. This limits our governments’ ability to respond to the crisis. This leads to more poverty and inequality in the region. A decline in GDP (Latin America) of -5% is forecast for this year. I am therefore concerned that this will inevitably lead to a picture of political instability, capital flight and currency devaluations in Latin America. Wire transfers will not arrive as before, let alone tourists. So it’s deja vu. A crisis in Latin America.

What will be the topic today? Apart from the bad governments, the topic of the day will of course be the dollar. Governments that want to reassure people are starting to print money, and everyone will (as always) try to protect themselves from inflation by buying dollars. Suddenly more than one businessman decides to buy a condominium in Miami to take advantage of the fact that real estate is for sale. And at that point, the government is intervening to introduce currency controls to prevent capital flight. A measure that always fails because it creates a black market that further complicates the matter.

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In Venezuela and Argentina we can already see this scenario perfectly. Well then What does Bitcoin have to do with the dollar? Well, a lot. Websites like LocalBitcoins are revived in a currency control situation. When foreign exchange control was introduced in Argentina, the transaction volume in LocalBitcoins broke historical records. In Venezuela, when the dollar’s price skyrockets, volume in LocalBitcoins goes to the moon this week. It is no accident. It is causality. It’s not that society suddenly discovered Bitcoin amid inflation. The fact is that exchange operators use Bitcoin to get foreign currencies because they can no longer do so through official channels. It’s no coincidence that the big buyers of Bitcoin in countries with currency controls are the big buyers of dollars. And magically, in the list of countries with the most volumes in LocalBitcoins, we see those countries with serious exchange restrictions. It is the dollar bitcoin.

Cryptanalysts in the north don’t see this because their countries don’t suffer from currency controls or large capital flight. You don’t know how to beat this peanut. For them tAll of this is a strange reality that you cannot understand. So you are examining the volume of Bitcoin transactions in countries like Venezuela or Argentina and are drawing the wrong conclusions. They mistakenly believe that people buy Bitcoin to protest the dollar after an anti-system narrative takes place. However They don’t know that Latin Americans are obsessed with the dollar. And the “dollar bitcoin” is part of this frenzy. It is dollar bitcoin, which is becoming our daily bread in Latin America. A kind of dollar that will gain a lot of strength in this crisis.

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