Posted on 01/13/2006 12:08:14 AM PST by A Balrog of Morgoth
BUENOS AIRES -- Oil-rich Venezuela, having recently helped Argentina to pay off its debt to the International Monetary Fund, is floating the idea of a new "Bank of the South" that would offer no-strings loans in competition to the U.S.-backed IMF.
The scheme would be the latest in a series of moves in which Venezuelan President Hugo Chavez has used his country's oil revenues to expand his influence and leftist philosophy through South America.
Argentina last week repaid $9.6 billion to the IMF -- a 184-nation institution with its headquarters in Washington -- clearing away the staggering debt it incurred with a spectacular default and currency devaluation in 2001 and 2002.
The premature payoff was made possible in part by rising commodities prices and a strong international economy. But a key factor was Venezuela's purchase last year of about $1.5 billion in Argentine bonds, which made Mr. Chavez's government the largest holder of Argentine debt.
(Excerpt) Read more at washingtontimes.com ...
"But a key factor was Venezuela's purchase last year of about $1.5 billion in Argentine bonds, which made Mr. Chavez's government the largest holder of Argentine debt."
Argentine bonds.....that's some expensive wallpaper. Too bad Global Crossing's execs are history, they would have bought the bonds to use as toilet paper.
Hugo needs to go the way of Allende.
"This is the first step in the destruction of the Venezuelan economy."
Ha! More like one step halfway through a marathon.
By the time China gets involved it will be too late.
I agree with beaverfeaver.
We underestimate Chavez at our own peril. He's a much smarter, younger Castro with a ton of oil cash.
When someone buys out your debt, you become their b##ch. Argentina now owes Venezuela big time. Now extrapolate that for the entire South American continent.
Couple this with a very populist message that resonates with the illiterate poor and you now have a man who now wields a lot of influence.
I don't see ChiCom expansion in SA, because Castro's Communism isn't China's Communism. The communism that is on this side of the planet has an additional cultural component that doesn't 'fit' with the Chinese version.
Personally, I see this as being much worse. We're not currently being overrun by hoards of Chinese crossing the border. We are, however, with aliens from SA. How long do you think it will take before Chavez's message resonates with them??
China is already involved.
They own both ports at either end of the Panama Canal, they signed oil agreements that give them oil in exchange for infrastrure and cash in Venezuela, they signed a $300 Million dollar copper deal with Codelco in Chile and they are building ports in the Caribean through Hutchison Whampoa.
The Chinese are heavily involve in the Western Hemisphere without firing a shot.
Money talks BS walks.
I agree with you in your assessment of Chavez, at least as far as his determination and the danger he presents.
However, his grand gestures are not going to be able to go on forever; he's giving away his country's cash and assets in order to buy friends, and it is going to have an impact on the VZ economy, which is far from strong. Poverty has actually risen in VZ and shortages are beginning to be felt because of his bizarre managed economy policies. Don't forget: of the 9.1 billion, only 1.5 came from VZ, and the rest from a good international economy (and the fact that Argentina is at least trying to correct some of its problems, although it is also a left-wing state and has been threatening foreign investors).
Over the long haul, I don't think his policies are going to be sustainable as is. Castro only survived thanks to Russia. My biggest concern, from what I have read, is not the involvement of China, but that of Iran, with which Chavez has strong ties. And of course, he is busy forging ties with other leftist governments throughout the world, including some unexpected ones, such as the Socialist government of Spain (Zapatero worships Chavez).
So yes, I agree with you, one way or another, Chavez is a real threat to stability and progress on this continent - and to our security.
Further to my argument.
Argentinian debt was the result of their loss of the Falkland Islands war. They were on their backs thier treasury was empty and they went to to the IMF for a bailout.
Unfortunately they lost the war so the WTO, said you lose buckwheat and put conditions on the loan that impoverished the country including the ruling middle class.
The hyperinflation caused by the IMF brought a socialist into power who repudiated that debt and Chavec picked up the cheque.
Who does Argentina owe it's loyalty now? To Chavez not the IMF.
Chavez has snookered the IMF. A stupid man could have not done that.
Castro could do the same if he had such a huge stash of petro dollars.
Alas, all he has is sugar which is a depressed commodity and has been for years
But I agree with you. China-Venezuela alliance is bad news for us. Will force us to squander more money in Latin America to curry favor. Will force us to accommodate Mexico/Central America and their Chinese style hordes of illegal immigrants.
Yep have to give Hugo Chavez credit. Very clever in a feral way
I disagree that the IMF conditions caused Argentinian hyperinflation. IMF, to a fault, tends to be somewhat generous to its debtors in terms of repayment conditions.
What caused Argentinian hyperinflation was simple economic mismanagment. A government, who owes a lot of money, can't simply print more cash in order to pay off its loans.
This was no "post-Versailles" because the loan conditions were not punitive. It was the simple, backward Socialist economic policies that were started under Raul Alfonsin.
Cuba also has the largest producing nickel deposit in the world. I'm from Canada where nickel is king and I find that quite surprising. Cuba has more than sugar.
This sounds great. They will be stealing their own money instead of ours.
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