2023-08-21 21:31:00
The call bancarization of the economy (it really is not) decreed by the Castro leadership it brings to the hand old memories of the currency exchange carried out in August 1961, the biggest money robbery ever occurred in America, and of which I was a direct witness as a bank employee.
In both cases it is the withdrawal of all possible cash from circulation and increased political control on private economic actors and the entire population. That is, although the circumstances and certain purposes are now different, we are talking regarding two big cousins.
A few days ago, the president of the Central Bank, Joaquín Alonso, “missed” on TV the real reason for the supposed bankarization when he said: “The currency used in the manufacture of physical currency can be used for other priorities in the country “.
And a few days later Orlando López Garcés, president of Banco Metropolitano (it has 520 ATMs in Havana) completed the idea. He stated that the limits on cash withdrawals “are due to a logistics issue (…) The bank asks the client when it exceeds a certain limit: please, give me the opportunity to create that logistics.”
The word logistics basically means making it possible for a product to properly reach the consumer from the place where it was produced. I mean, ATMs and bank agencies don’t have cash because there isn’t any, period.
The question is: why isn’t there? Everything indicates that The Díaz-Canel government no longer has money or to print money, and worth the Kafkaesque pleonasm. And he wants to get the money he needs from the population, but he doesn’t have the funds to send it to print.
This suggests two things: either the regime has not paid what it owes to the printing company, or it owes nothing, but has no cash to place new orders. Oh, and if, as is suspected, the banknotes are printed in China, we already know that for cultural reasons the Chinese do not give anything away: “either money, or no money”.
The last straw is that The banknotes that deteriorate daily and go out of circulation are not even being replaced. Bank tellers and other institutions in each country are required to withdraw damaged banknotes on a daily basis. I know because that was how it was done in the Havana bank office where he worked (1960-1962). For something in the US, 500 million dollars are printed daily, according to official sources.
If the withdrawn bills are not replaced, the mass of essential money collapses, which is the blood that circulates through the body of all economy. This is possibly the worst thing that has happened financially to the dictatorship since 1959. And I don’t remember that happening to another country in Latin America
To that add that printing money is expensive. In Peru printing 2,000 million soles bills costs 270 million dollars. In Colombia in 2017, the printing of 723 million bills (pesos) of different denominations cost 18,000 million Colombian pesos. Printing a Mexican bill costs 1.30 pesos, and a 10-cent coin costs 14.52 cents.
Politically and financially control private businesses
Another thing, with banking use he travels as a stowaway, well masked, the objective of financially and politically controlling the self-employed and independent private businesses. So that they do not grow and “behave” politically, while favoring MSMEs and private businesses plugged into the dictatorship. That is to say, the “safe” Big Brother will know how much money each person has, how he obtains it, if he is politically “responsive” or a defender of human rights, etc.
And there is a clear parallelism with what happened 62 years ago. That currency exchange was the final blow to the remains of the national bourgeoisie, including the owners of land up to 30 caballerias (402 hectares) allowed by the first Agrarian Reform Law of 1959 (the second law, in 1963, reduced the maximum to five caballerias or 67.1 hectares) and also to control politically and put a roof on small businesses so that they do not grow more and at the same time control them politically. Businessmen, large and medium-sized, had already lost all their businesses and assets on October 13, 1960 when they were nationalized,
For months before the swap, Fidel Castro insisted almost daily that the money be deposited in the bank. But, nothing, there was much more money at home than on the street. He did not trust a bank that he constantly confiscated, he froze bank accounts for political reasons. And no one expected the currency exchange. Even the bankers who participated in the exchange found out from the press, on Saturday August 5, that the exchange would begin the following day (later it was extended until Monday the 7th).
When we opened the boxes with new banknotes, we were surprised that they were signed by Che Guevara, who had left the Banco Nacional de Cuba since February 1961 (he had been its president since November 1959) and was Minister of Industry. Later, through bank friends of mine, I learned that the idea of the exchange was the Argentine’s, who personally arranged all the details in Prague in October 1960. By the way, Guevara was so ignorant of financial matters that the vice president of the National Bank, Salvador Vilaseca, told him He gave private lessons so that he would learn at least the basics.
Exchange: Castro I confiscated 9.254 million Cubans today
The 3,500 exchange centers set up throughout the Island in 1961 were attended by 1.7 million people (representing some five million citizens). Each one was given a maximum of only 200 pesos in cash in new bills. Those who had more than 200 pesos were opened a “special account” up to a limit of 10,000 pesos, but they might only withdraw a maximum of 100 pesos per month. Those who carried more than 10,000 pesos instantly lost what exceeded that sum.
The small merchants lost all the money not deposited in the bank. And they mightn’t progress any further. Finally, in March 1968, the 57,280 small businesses that still existed were nationalized or closed.
In summary, Fidel Castro confiscated 895 million pesos from the Cubans, the difference between the 1,187 million pesos that were in circulation before the exchange, according to official data, and the 292 million pesos in new cash bills that were delivered at the exchange centers. 75% of the country’s money supply was withdrawn from circulation. And the theft was actually 9.254 million dollars, since a 1960 dollar is worth 10.34 dollars today, according to experts.
And now that same communist regime wants to do something similar, but equally Cubans today distrust the same bank and prefer to keep money in a locked drawer.
If the blow were successful, there would be a humanitarian crisis in Cuba
Therefore, most likely the refusal to place the money in the bank will prevail, or very little will be deposited. It is logical, the clandestine, urban and rural market that feeds, clothes and shoes Cubans, works with physical pesos. In addition, the peso loses value daily, and a dollar bought “by the left” costs 250 pesos. People need them to survive, and protect themselves (with real money) from the ever-approaching economic collapse.
In the hypothetical (very unlikely) case that the regime managed to withdraw a large part of the physical monetary mass from circulation, a humanitarian crisis would be unleashed in Cuba.
But Cuba does not have adequate technological infrastructure, nor does it have sufficient and trained personnel to bank to the personal economy of each citizen. In addition, a good part of the population does not have a cell phone, nor does it know how they work.
What Raúl “El Cruel” would have to do, now!, is free the productive forces and restore the market economy, the one that existed when Cubans had one of the highest personal incomes in Latin America. With Cuba’s economy fumigated and disinfected by Castroism-communism, Cubans will have bank accounts, debit and credit cards, and real money.
1692654584
#Cuba #money #print #money
