Buenos Aires

It is sobering to witness one of the greatest cities in the world slip, despite its deceptively placid surface, into a state of premodernity. Traffic lights in this metropolis of 12 million people still turn from red to green, newspapers in the kiosks report the latest bad news and Argentines occupy cafe tables, smoke a lot and shake their heads in disgust as they have for centuries. But money has ceased to exist. Oh, there are coins and bills, and cash still manages to facilitate exchange--except when the peso's value oscillates by 40 percent in three days, as it did in March. But money as the basis of a modern, capitalist economy, money that can be lent and borrowed, created or liquidated by central banks, money as the lubricating oil of investment and production--that has disappeared.

In normal times, María Esperanza Alvarez, 63, could be fairly considered a bit eccentric, if not a nut case. Standing outside the Spanish consulate where her niece is trying to get papers in order to abandon the country, she confides that for the past thirty years she has kept her savings in a box--thousands of dollars (which were always available) accumulated from her clothing business, which once employed twenty-three seamstresses. Having defied all common and expert sense for three decades, María Esperanza now deserves an Einstein award: She never for a moment believed the banks' basic pledge that they would give her back her money when they promised to do so. And she was right.

Lisandro Orlov, by contrast, was more trusting, perhaps in keeping with his professional outlook as a Lutheran pastor. Engaged for years in projects aimed at reintegrating social outcasts--street dwellers, drug users, people facing AIDS-related discrimination--the 59-year-old Orlov lost his pension fund in the December bank freeze-up. Like many Argentines, Orlov assumed that the austere entities in cavernous downtown palaces like HSBC, Citibank and BankBoston would honor their commitments. Now he's fighting in court to regain access to his dollars, already forcibly converted to 1.4 pesos each, or less than half the 3-to-1 rate the greenback now commands on the street.

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