The BCRA has not given us the option of saving in the Argentine Gold, being that from that same time the public entity its listing. Without looking for the reasons, today Argentines have many facilities, despite the restrictions, to save in dollars but none to save in the currency created in 1881.
He Argentine Gold Due to its intrinsic value tied by law to mineral gold, it is a very competitive option against the dollar, which will prevent Argentine savers from losing the value of their efforts in the face of a crisis in their legal tender. The majority of citizens do not opt for foreign currency by calculating profitability but, as we said, as a store of value, a function that, as we see, in the following table, the Argentine Gold fully complies.
The idea is not to mint (print) the Argentine Gold, which would imply having two national currencies in circulation, but rather that the BCRA issue a certificate of possession guaranteed with a gold reserve, and that it be expressed in new savings accounts that can be opened in all entities of the financial system. Therefore, the objective would not be to remove the Argentine Gold and save it outside the system, but when we decide to get out of said investment we are paid the value in PESOSwhich would be guaranteed by the BCRA.
The price must continue to be official as it is now, but no longer quarterly but in real time and with a transparent mechanism in relation to the price of gold and other variables such as the exchange rate.
The role of the BCRA
The BCRA currently has 61.74 tons of gold reserves, which would imply that there is the possibility of selling some A$O 7,655,775.31 so that citizens can save in a national currency that is useful as a store of value. Saying that it is a store of value does not mean that its price will always improve against the dollar, but that in the face of a devaluation of the peso, the saver would not suffer large losses.
If the BCRA gave this possibility to citizens to save on Argentine Gold, not only would the pressure of demand with the dollar decrease, but any flow towards this currency would imply in the first instance monetizing the current gold reserves, which with an ounce at more than US$1,600 are more than 3,500 million dollars with bullish projections. But also, if this flow is managed by strengthening (buying) the mineral reserves, it could double them in the term of a year.
Argentine Gold.jpg
It is essential that as a community we find the way in which our individual savings effort results in a virtuous process to strengthen the financial, economic-productive and social system, which does not imply the risk of losing in a devaluation of the PESO, the accumulated personal and family efforts.
Certainly, the financial system has instruments so that the citizen does not lose against inflation or others to avoid the impact of a devaluation, but these, due to their complexity, are for a very small sector of our society and not for the bulk of the population that uses foreign currency as personal savings because it is easy to understand and simple to exchange. Hence, the solution to dollarization is not the instruments that the National Securities Commission can generate, but involves generating a simple mechanism such as the Argentine Gold.
Consider that in recent years, there were months where an average of more than ten people per second bought dollars in the Single and Free Exchange Market (MULC), which yields some 600 savers per minute, and close to 4 million people who made dollar purchases. In this sense, monetary policy has restricted this social impulse to save in a strong foreign currency without positively channeling said momentum, which is much stronger today.
For this reason the accessibility to the purchase of the Argentine Gold It must be as wide as possible in terms of hours (24 hours) and days (7 days), and on all digital platforms of the financial system, with a negligible (buy-sell) spread, or less than 0.10%.
Due to administrative prudence, the purchase of the Argentine Gold with PESOS should have a limit scheme, although more flexible than the purchase of foreign currency, since in a growing demand it can force the BCRA at some point to use its dollars (liquid reserves) to hoard gold reserves, different from the case of the purchase made in foreign currency, which does not make sense to have limits. Even for this option one could think of a future of micro-laundering or of a simile “soybean dollar” for small savers.
If 50% of what citizens save in dollars were captured with the Argentine Gold, the BCRA could double its gold reserves in the term of a year, with no other effort than to channel the drive to have a strong currency towards the national one and release foreign currency to be used in imports that the productive system needs.
This without any type of risk for the monetary authority, which also, once the new savings instrument has been regulated, will be able to give it other functions in operations within the financial system and the CNV.
Lawyer. Founding Partner of Fundación Pro.YECTAr. (Programs and Strategies to transform Argentina).
Source: Ambito
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