What the Heck Just Happened in Argentina?

The price of cheap dollar-debt.

Just when you think Argentina’s financial crisis can’t get worse, it gets a whole lot worse. In order to halt the peso from collapsing further, the IMF, after some serious begging from the government, had agreed to a $50-billion bailout package in June, to be disbursed in increments. In addition, the central bank raised its policy rate in big jumps, reaching 45% on August 13. And in an emergency meeting today, it goosed the rate to a blistering 60%!!

And this is what followed: Yesterday the peso plunged 7%; and today as of midday in Buenos Aires, it has plunged over 17%. That brings the total plunge for the two days to 24%. It now takes 41.3 pesos to buy a dollar. Seen the other way around, a peso is now worth 2.4 cents (down from $1 in early 2002):

WTF happened? As soon as those IMF dollars started flowing a couple of months ago, the government – the central bank is under the Ministry of Finance and thus integral part of the government – started selling those dollars and buying pesos. But it was the only entity buying pesos, and those dollars were handed to the pesos sellers and thus wasted instead of being invested in the economy.

Now the government is running again low on dollars to sell, and yesterday, it came out that it has asked the IMF for quicker disbursement of bailout dollars so that it could hand them more quickly to the pesos sellers. It was supposed to be a confidence-building measure:

“We have agreed with the International Monetary Fund to advance all the necessary funds to guarantee compliance with the financial program next year,” President Mauricio Macri said on TV yesterday. “This decision aims to eliminate any uncertainty.”

“Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019,” he said.

This is what a currency-and-debt crisis looks like: Argentina has $120 billion in dollar-denominated debt, a chunk of which comes due next year and needs to be paid off, and in order to pay off this debt, Argentina needs to be able to borrow more dollars. This was no problem last year, when it was even able to issue 100-year dollar bonds, but sheer insanity has left the building, and investors have opened their eyes.

This goes back to my old dictum: No one should ever lend dollars to Argentina, not even the IMF. This always ends the same way: in a default.

Financial crises are routine in Argentina. The destruction of its currency is a cost of doing politics, and not an accident.

IMF Managing Director Christine Lagarde replied yesterday that the IMF would “reexamine the phasing of the financial program” as the “more adverse international market conditions” had not been “fully anticipated.”

“Authorities will be working to revise the government’s economic plan with a focus on better insulating Argentina from the recent shifts in global financial markets, including through stronger monetary and fiscal policies,” she said.

Well, good luck. Instead of calming jittery currency traders, those announcements made the “adverse international market conditions” much more adverse – see the peso plunge yesterday and today.

But don’t blame currency traders, and the Argentinians that have zero confidence in their misbegotten currency and its historically reckless management. They have reasons to shed those pesos as fast as they get them, including run-away consumer price inflation which in July reached 31.2% for the 12-month period.

And Argentina has a large trade deficit (via Trading Economics):

The thing is, a collapsing peso makes imports more expensive in peso terms, which pushes up inflation, which in turn helps crush the peso…. You get the idea.

This is how Argentina has always done it. In early 2002, the peso was pegged to the dollar one-to-one, so a peso could be exchanged for $1. Then the peg was lifted, dollar bank accounts were converted to pesos over the weekend, the peso was devalued, and the government defaulted on its dollar debts.

Since those days of mayhem, the peso continued to plunge. By the time the Macri government took over at the end of 2015, a peso was worth about 10 cents. But it was a pegged currency. Right up front, he lifted the peg and let the peso float, which instantly plunged to prevailing black-market rates – below 8 cents.

Now his government gets to drive the peso down further as Argentina steers toward its next default. This is not new for Argentina. It’s how it does business and politics, and lending Argentina even more dollars to make even more promises it cannot pay for and to import even more stuff and to waste even more dollars on propping up the peso and to bail out existing dollar bondholders is just going to keep the party going a little longer.

Turkey has not followed Argentina’s path of jacking up interest rates and asking for an IMF bailout. But the lira is plunging, and now the economy faces a “substantial increase in the risk of a downside scenario.” Read…  Turkey’s Debt & Currency Crisis Morphs into Financial Crisis as Banks Face Funding Squeeze  

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  66 comments for “What the Heck Just Happened in Argentina?

  1. Ambrose Bierce says:

    Why doesn’t the IMF buy the pesos, and cut out the middle man, (easy if you have the right keyboard) or exchange them for SDR? Is Soros or his kin on the other side of the trade? I have to think that all this was anticipated, and we should pay no attention to the man behind the curtain. At what price do you suppose those 100 year bonds are attractive?

    • Petunia says:

      At the price of lotto ticket and instead of a lotto ticket, I’m a buyer.

      • Tom kauser says:

        Adventure capital with a possible do over? A 100 years of deferred income and hedge funds getting 100% on a dollar? Fashion risk or wallpaper yawn!

    • Wolf Richter says:

      NO ONE should buy pesos. Pesos are for selling :-]

      • Sadie says:

        They could trade their soybeans for Yuan.

      • MOOMOO6576 says:

        “This goes back to my old dictum: No one should ever lend dollars to Argentina, not even the IMF. This always ends the same way: in a default.”

        ..or Turkey… or Greece.. or Venezuela… or … who’s next (say Italy)

        This what GLOBAL contagion looks like. The ECB has bought all EU debt across the board. It is toast. BOJ ditto. This doesn;t stop at the periphery. It’s working its way toward the center. Last man standing will be US $$$. And then…. the reset.

    • Wisdom Seeker says:

      Re “Why doesn’t the IMF buy the pesos, and cut out the middle man”

      Because the whole point of the exercise is to take care of the middle man. The rest is just window dressing to make it politically palatable to the IMF donor populations?

      Cui Bono?

    • Buckaroo Banzai says:

      “At what price do you suppose those 100 year bonds are attractive?”

      Unless you have major international political and financial connections, and use those connections to ensure the bonds will be made good, there is no price that makes the bonds attractive.

      In case you haven’t figured out the game yet, let me clue you in: (1) bribe or otherwise induce corrupt politicians to issue bonds that they know can’t be paid back, (2) watch their value fall to pennies on the dollar when the politicians threaten to default, (3) buy the bonds at pennies on the dollar, and (4) marshall your connections to ensure those bonds get paid off at par, or something like it, with IMF bailout dollars.

      Wash, rinse, repeat. Argentina is ostensibly a country rich in natural and human resources, and yet somehow it has a financial crisis every five or ten years, like clockwork, for the last fifty years. It wouldn’t keep happening over and over and over if some people weren’t getting extremely rich, every single time.

      Pro Tip: it’s extremely instructive to look at who is getting rich off this scam, and what they have in common.

      • alex in san jose AKA digital Detroit says:

        For the longest time I thought the IMF was hidden off somewhere, maybe in a hollowed-out mountain in Switzerland. But they’re right here in the US.

        And we wonder why the world hates us…

        • Thomas Simpson says:

          The IMF floating exchange rate system is the source of the problem in Argentina and most other countries that have been emasculated by IFM triage. The whole damn system is bankrupt yet London/Wall St. presses on, asset stripping nations, while imposing bone crushing austerity. The carry trade reversal that triggered this crisis among so called emerging mkt countries, bodes ill will for the US and Europe. The solution for Argentina and every other nation caught in this debt trap, is right in front of us. Remove the IMF straight jacket, join the Belt and Road world landbridge infrastructure development paradigm. Lending in this system is not based on austerity but on investment in economic infrastructure. China’s AIIB tops the list of institutions that are involved in this alternative to IMF hatchet jobs. There are no SAPS in this system (Structural Adjustment Programs) Only state to state negotiations between China and participants in the BRI, involving new terms of lending and trade that raise the per capita standard of living, not crush it!! And what’s more, there isn’t a damn thing London and Wall St. can do about it. Colonialism is dead!! The body of the IMF system lays there waiting to be buried. Good riddance.

      • Sneaky Pete says:

        Yeah it’s a good scam. As they say, privatize gains and socialize losses. People are ingenious and diabolical!

        After a long life, I’ve come to conclude that I should be satisfied if the few square feet around me are in order.

    • RT Rider says:

      It’s a round-about way to funnel dollars back to the US to fund their deficits – IMF provides dollars to Argentina, they sell to buy pesos, dollars end up in US Treasuries.

      My suggestion is for the Argentine CB to convert their peso counterfeiting press to dollars. I’m sure no one will notice.

    • Ngallendou Dièye says:

      Argentina stands in need of a coup d’état, with the arrest of scores of rich men who have been stealing state wealth for decades. It should not shoot them, but seize their estates, their foreign and domestic accounts and investments, and their ships and vehicles. These should all be liquidated and applied to dissolving state debt. Coup leaders should cancel all financial dealings with the IMF and with all lenders. Finally, every one of those rascals should be tried and punished. All who killed should be killed. Lastly, a constitutional amendment should forbid all state borrowing and state debt. Let the state print money at a rate that its booming economy can absorb without loss to working folk.

  2. ACO says:

    This song and dance is part and parcel of the inherent corruption and deceit that is the central bank, IMF, world Bank, etc etc.

    Outlined flawlessly in “the creature from Jekyll island”, this is simply a wealth transfusion from a healthy patient aka USA to a dying patient aka everyone else.

    People are bribed with their own money.

    • Justme says:

      You got it wrong. It is a wealth transfusion from the second world to the US banks, on the backs mostly of Argentinian working class, but also the US working class to some extent.

    • Frederick says:

      ACO The IMF is one criminal monkey that nobody wants on their back No doubt about that END THE FED

  3. Old dog says:

    The name of the Argentinian currency, Peso, means Weight in Spanish. A better name would be Pozo, which means Well. Except that most wells have a bottom. The correct name would be crater but the pun wouldn’t work.

    • MC01 says:

      Perhaps Argentina should follow in Venezuela’s footsteps and add a meaningful adjective to the name of the currency: Chavez renamed the then rapidly depreciating bolivar “bolivar fuerte” (strong bolivar) while Maduro’s economic advisors renamed the then worthless bolivar fuerte “bolivar soberano” (sovereign bolivar). Worked wonders in both cases.

      Or perhaps they should just hire the “economic experts” who a fortnight ago declared the Turkish lira would shoot into the stratosphere due to some hazy “investment plan” from Gulf countries and… they weren’t very clear, but their advice was to buy the dip, and buy it hand over fist. A once in a lifetime opportunity. Two weeks later and… how is the lira doing guys?

      Finally there’s always the possibility the Argentinian government is engaged in a long-running experiment to put I.C.Douglas’ and Ezra Pound’s economic theories to test in the real world. These theories seem to be very popular once again in the post-Lehman world but as Douglas himself recommended they need a test run in a controlled environment to fine-tune them.
      So far the inflation part is working like a charm, but we need to make some small adjustments to the “money based on potatoes” concept.

  4. Midas says:

    It would be interesting to see how locals are coping because Argentina today reflects how it will be for us in the future. Are people moving pesos into real estate. Are local stocks keeping up? Any blogs that are reporting the local experience?

    • rj says:

      In 2006 when I was in Argentina, the exchange rate was 3 to 1. Staples were super cheap then, and locals liked usd. I can’t imagine how they’e coping now.


    • raxadian says:

      Locals are buying dollars (and Euros) like crazy. Some store them in bank accounts, others in safety boxes. And there is a huge fear of a “corralito” for deposits made in foreign currency.

      No one sane is buying real state at these prices. Even car sales have gone down.

  5. Juanfo says:

    Politicians getting paid fat commissions from those international loans. Politicians and bankers cashing out taxpayer money.

  6. IdahoPotato says:

    A good perspective on the Argentinian crisis from a British expat who lives in Argentina.


    • Dave Tango says:

      Mr/Mrs Potato thanks for posting that link to the Argentina article. I worked in Argentina when the peso was 1-1 with the USD and kept think that the Peso was a fraud. Everything there was over priced and then the collapse came.

      I think Ill visit there again real soon with those low prices.

  7. Gershon says:

    A silver lining in the global financial carnage that lies ahead is that we might finally have post-collapse tribunals with honest judges who will sentence all of the Keynesian fraudsters at the central banks and their corrupt and complicit accomplices and enablers on Wall Street and our captured regulatory and enforcement agencies to life sentences at hard labor for their frauds and swindles committed against the 99%.

  8. OutLookingIn says:

    Argentina is not unique. Its a symptom.
    The world monetary base is shrinking.
    World trade has continually declined since early 2017.
    The Fed continues to tighten and raise rates, which is now severely impacting emerging market currencies and stands in danger of collapsing fixed rate exchange systems.
    The financial markets are the foundation of fantasy for the supposedly healthy economy. Price discovery is virtually non-existent. The reported earnings per share since 2009 have soared over 336% yet sales per share has only increased by a marginal 49% during the same period.
    The other side of the balance sheet from a debt liability, is a holder of the IOU note. As the debtor goes down in flaming bankruptcy, the note holder is left holding a worthless bag of nothing.
    It would be okay if it ended there, but these “worthless bags of nothing” have gone on to be included in other financial products. Derivatives.
    This is why the global financial elites are wetting their beds at night, in fear that an Argentine financial crisis, will implode the entire global financial house of cards, by way of collapsing the derivative sector.

    • HBGuy says:


      I respectfully disagree: Argentina most definitely IS unique. At the turn of the 20th century, it was wealthier on a per capita basis than Australia, Canada, IOUSA and Europe. Its wealth was derived from agriculture, which surged during World War I, and is probably the only Latin country that can claim to have been in the same economic league as the Gringos.

      All went well for Argentina until the rise of Juan Domingo Peron in the 1940s. Over the next 30 years he and his union cronies systematically the Argentine economy, and with it, Argentina’s standard of living. Its military, and the disastrous Falklands war in the 1980s, dug an even deeper hole. Subsequent bankruptcies didn’t help, either.

      I recite this history lesson because unlike the rest of Latin America, Argentina had, and still has, the potential to be as well off as North America. Its problems are political, not economic, and not the fault – for once – of the Federal Reserve.

      Blame its problems on typical Latin incompetence in financial matters, and don’t cry for me, Argentina.

      • nick kelly says:

        Argentina has 6000 percent more psychoanalysts than the US.
        (190 per 100K as against 30)

        Related is an obsession with plastic surgery, so common that banks routinely offer a monthly deduction savings plan.

        The land line telephone service in BA was prone to connect with the wrong party or allow one to listen in on a conversation. Chatting with a wrong number was not unusual. Having a new line installed used to be a serious job.
        Cell phones have been a huge savior.

        Argentines can be quite open about how dis-functional they are.
        Although intensely social, they are distrustful and prone to imagine plots of all kinds.

        The President Macri, a rare non-Peronist, is also in therapy.
        He describes Argentina as having ‘a Ph.D in volatility but should aim for one in normality’

        Not long ago a survey revealed that in Buenos Aires province, half the work force was employed by the government.

      • OutLookingIn says:

        Your overview of Argentina is far too simplistic.
        For one thing, all did not “go well” for the country.
        eg: Suffering over 60 years of civil wars. In a row! Defeating not one, but two unsuccessful invasions by the British Empire in the early 19th century.
        In more modern times, a CIA supported military coup in 1976 brought to power J.R. Videla and the beginning of the ‘Dirty War’. Where tens of thousands of citizens were tortured and secretly murdered by the military Junta.
        Since the opening of classified files by way of freedom of information writs, This “Dirty War” is now known by its true name, “Operation Condor” planned by the CIA and supported by American technical support and supplied military aid through five administrations, Johnson, Nixon, Ford, Carter, and Reagan.
        A goodly portion of the Argentine financial quagmire can be laid at the feet of the American controlled IMF. This highly controversial global financial edifice, is nothing more than a wealth extraction device, operating for the benefit of a few at the expense of the many. Sorry, but your view of Argentina is too simplistic.

        • nick kelly says:

          An earlier military coup in Argentina was staged by General Juan Peron. Unlike most military takeovers, Peron allied the military with the left.

          Argentina’s serious problems begin from this era, with the idea that the government can distribute wealth without creating it.

          With little manufacturing, this left agriculture supporting a growing public sector and entitlements.

          Incredibly, to this day there is a tariff on EXPORTS.

          With an average 27 % ANNUAL decline in the peso since 1914.
          (over a trillion fold) Argentina’s problems predate the existence of the IMF.

          The UK is usually numbered among the ‘haves’ who supposedly run the IMF, but in the 70’s, when the UK needed a loan, (then the largest in IMF history) it too had to make some spending cuts.
          The IMF is the lender of last resort. The UK had been turned down by West Germany, although the IMF itself had to borrow from West Germany and the US to fund the loan.

  9. Maximus Minimus says:

    This might be how Argentina has always done business, but there is an important new element: globalisation. This enables the populace to temporary buy cheap goods in return for wiping out crucial domestic industries. Now when the currency plunges, misery follows. My bet is that the contagion will spread to Brazil or Turkey, before it comes home to roost.

  10. Lion says:

    What if Argentina pegged their currency to the dollar like Ecuador. Maybe confidence would return.

    • Flip says:

      Ecuador actually uses the dollar rather than their own currency with a peg. Argentina should do the same.

    • Maximus Minimus says:

      Argentina already pegged the currency to the dollar, which led to a spectacular default. Check it out. If it was such a good idea, everybody would do it.

    • QQQBall says:

      That would be called Corralito… been there, done that, failed

    • Wolf Richter says:

      Been there, done that. The peso was pegged to the dollar 1-t0-1 until early 2002. This gave a wrong sense of wealth to the country because the government was printing pesos which were valued at par with the USD. Then the peg could no longer be maintained and was lifted in early 2002. Since then, the peso has plunged 97.5% against the dollar.

      • HBGuy says:

        The problem isn’t a peg to the dollar or globalization. Argentina is paid in USD for its bountiful agricultural production – think soybeans, beef, wine, wheat – but it’s Gubment squanders it potential. Who’d have thought Kirchner would place an export tax on soybeans a few years ago?

        No, Argentina’s problem is cultural and shared with all other LATAM countries, especially MX. They’re all inefficient cleptocracies seemingly forever doomed to keep repeating the same mistakes.

        • Wolf Richter says:

          Argentina has to pay for its imports in hard currency. Since it has a trade deficit (more imports than exports) — see the second chart — it needs more dollars to fund this trade deficit. That’s part of the problem. If Argentina had a trade surplus, and a budget surplus, it would not have these problems with its currency and debt.

        • But doesn’t FDI balance a trade deficit? Is Arg problem lack of FDI for whatever reason? Same with South Africa or other EMs?

  11. Alex says:

    Powell should not care about these countries that borrowed in $’s because there own money unit had no confidence. The blow ups were as predictable as the Sun rising.

  12. cdr says:

    This or that:

    1) Let’s buy dollars and then some crap investment that looks great because the Fed has ZIRP. It’s a race to the bottom with the Fed. All the central banks are in on it. They’ll print money until the lights go out. That’s how they pay bills. We can’t lose. They’re worse than us but they have the muscle to make everyone say it’s respectable. Even if we lose, we can sell to someone else and get out of Dodge long before it hits home for me. Not my problem after that.

    2) Let’s live responsibly. The Fed and the other central banks are printing to scam everyone to support their nationalistic agendas. They have the muscle to make everyone say it’s respectable. We will be poor but have self respect and live well, just not with ostentatious affluence. We will win as a nation.

    The Fed blew up the game by raising rates. Oops.

  13. Rates says:

    Probability of a divorce after a marriage of x years: less than 100%
    Probability of Argentina defaulting after a certain number of years: 100%

    Now it’s ok to go bankrupt or devaluate if at least you’ve achieved a marked improvement in some areas of life, but it’s never clear what the Latin Americans have ever achieved.

    And they say stereotyping is laughable. When it comes to South American countries, it’s always a good bet.

    • HBGuy says:

      Amen. Gdod gave Argentina a wonderful climate, incredibly fertile land, beautiful scenery, and then populated it with the Argentines.

  14. QQQBall says:

    I doubt all the debt is in USD.

    Argentina, Brazil,….

    Greece, Italy….

    India, Pakistan…

    South Africa and …., and ….?

    Turkey and ???
    I wonder who is holding the debt in local currencies? IIn EuroLand they hold each others’ debt w/o reserves, but the Currency is the same… This has the looks of a Kontagian Kurrency Kocktail.

  15. Wolf Richter says:

    In an emergency meeting today, the central bank raised its policy rate from 45% to 60%. I have now updated this article and the annotations in the chart to reflect that move.

    • Mean Chicken says:

      The bottom cannot occur until after ratings agencies arrive to count the dead and wounded.

    • HBGuy says:

      All they have to do to return to a semblance of normalcy is to drop a zero off the number – tried and true Latin financial procedure.

      Think AR, BR, MX, VZ…

  16. a reader says:

    Interesting chart. Each interest rate hike announcement by their CB had the opposite effect on the currency from the desired one.

    It’s as if they were announcing instead “We are screwed”… “Yep, really-really screwed now”.

    • Wisdom Seeker says:

      “Each interest rate hike announcement by their CB had the opposite effect on the currency from the STATED one.”

      Don’t believe what they say, and you’ll no longer be so surprised!

      Is anyone aware of a coherent argument for why the currencies of Venezuela, Turkey and Argentina aren’t doomed to worthlessness?

      Seems like even though these countries have many decent and hardworking people who deserve better, the political leadership in all 3 has destroyed the public confidence required for a healthy economy.

      • Argus says:

        Their currencies are indeed doomed whereas the purchasing power of physical gold in those countries has held strong or even substantially increased.

  17. timbers says:

    The solution is simple: Argentina should completely de-dollarize and reclaim its sovergnty. And an Inernational Monetary Fraud “bailout” force to adopt ecominy-destroying austerity that will make matter infinity worse.

  18. Mean Chicken says:

    At what point do global corporations swoop in and buy up the flotsam?

  19. Tom Stone says:

    A fly fishing trip to Argentina just got more affordable!

  20. Laughing Eagle says:

    All these Central Banks either print or create stories to prevent the economic collapse happening on their present watch. It is a game in which “tales” are told to investors so currency values can be fantizied. And the Wall Street rating agencies can downgrade currencies at will with other “tales” to make believe one fiat currency is better than another, built on some stock or economic valuations of a country. What a charade they can create. Imagine, you have to believe one paper fiat currency, which takes nothing to create, to be better than another fiat, all built on “fictional stories” as to which economy is better than another. One paper currency better than another is all based on who can tell the best story and for me I think some of these central bankers and Wall Street need to hire Steven King because his stories are more believable because many sovereign countries are over extended with debt.
    If you compare fiat currency prices to oil prices, one can see how the fiat is devalued over time. If you look at an ounce of gold to a barrel of oil, gold mantains its value unless speculators (Wall Street Players) manipulate oil prices thru the futures market (Comex) like they did in 2008. No fiat can match gold in maintaining value if one compares the oil prices to the gold prices. Because gold requires energy (oil prices) to be mined, so the gold price must reflect the price of oil. One ounce of gold over the decades continues to buy the same amount of barrels of oil.
    The US government issued santions based on fictional stories by the intellengence agencies of atomic bomb building by Iran, to boost the dollar value. This is just like the intelligence agencies have done for decades, we had to worry about the USSR in the 60’s and 70’s, and Cuba, then Iraq in early 2000’s, and now Iran. With the sanctions on Iran the price of oil will rise and the dollar will rise in value since oil is priced in dollars and with the Fed trying to increase interest rates, it is double trouble for emerging markets trying to pay off debt dominated in US dollars as that too will increase the value of the dollar.
    Wall Street, the IMF, the Fed, and the rating agenicies still have some control over the value of the dollar, but it is a matter of time before these institutions lose control and all fiat paper currency is no longer a race to the top or bottom.

  21. sierra7 says:

    “McDonald’s (the dollar) is backed by the mailed fist”……..

  22. de Beer says:

    Is Argentina now a mad max style society? From a global perspective the population has no money, and therefore can’t buy computers, phones, car parts, etc. Not to mention medications.

    It would seem nothing can be replaced, cars that break can’t be fixed and medical equipment that breaks can’t be fixed. Revolution or collapse seems here or near?

    Or am I taking too dim a view of things?

    • Wolf Richter says:

      Last year, Argentina was able to borrow a large amount of dollars. This year, the IMF gave it $50 billion. The government is creating ever more worthless pesos to be spent by the government. So far, so good. When all funding sources dry up, and Argentina is not able to fix its economy, your scenario is not unlikely. Venezuela has entered this phase a couple of years ago.

  23. Escierto says:

    I wonder how many of the people making comments have actually been to Argentina. Of course since we are talking about Americans traveling to foreign countries, probably very few. The Argentines are old hands at dealing with this sort of thing and probably get through it a lot better than Americans will when the US dollar becomes toilet paper. Can’t happen here? Just watch. We are already headed down that path with Donald J. Peron leading us.

    • EcuadorExpat says:

      The USA started down that path 20 years ago. The person in charge today really has nothing to do with what happens in the USA. Just like a navy captain being assigned to a ship that has never been maintained. Best hope is to be close to shore and save as many crew as possible.

  24. Dr. Fernando Arzola says:

    This was done by design. Macri should be in jail. Under Cristina K, the country was doing well. I visit Argentina frequently so I can talk, not many of you who never been there. My friends own business and were doing well. Cristina said to B.S. outside ” investors “, who always bring devastation to the country just like now. In 2 years Macri borrowed 50 billions from ” investors ” and where did this money go to ??? Where is It? Investors??? Lol…yeah right…thieves…
    Nobody can tell me it went to make roads infrastructure, etc…they stole it and ket to themselves…only in 2 years!!!
    What an unethical fraud international finance is…

    • Wolf Richter says:

      Under the Kirchners, the peso lost 90% of its value against the dollar. The country screwed its creditors. Inflation got so big that Cristina made it illegal to publish inflation data. If you don’t have accurate inflation data, you don’t have accurate inflation-adjusted GDP data, and measuring the economy became a joke. The corruption of her and her regime is now wending its way through the court system in Argentina as ever more lurid details come to light.

      Close to 15 years of their regime of mismanagement, corruption, fake promises, and vote-buying with pesos that the central bank (part of the Ministry of Finance) provided as needed made clear: the next guy would be faced with a terrible mess.

      That said, I’m not sure the new regime is any better. They’re still doing zero to get Argentines to have confidence in their own currency – same as the Kirchners. An economy where the people have no confidence in the currency is going to have trouble. And the new regime has fallen into the same trap of the old regime: just creating pesos to pay for stuff. At least they’re honest about inflation and some other things, so now economic facts actually show up in the data, where before they didn’t.

  25. Paul says:

    So reading these comments, indicate that its totally cultural. When a population lacks honesty and integrity, when its media lack journalistic courage to “out” the corruption and nepotism, and when its economy is weighed down with an excessive and wasteful public sector and stifling taxation, then that society will never recover.

Comments are closed.