Watch Out for Sovereign Debt Risk [Argentina]

The Wall Street Journal ^ | 2008-06-24 | Carmen M. Reinhart & Kenneth Rogoff

[rabscuttle385]

Optimists say that emerging-market defaults are a thing of the past. Emerging markets today, the argument goes, are relying more on domestically issued local currency debt, both inflation-indexed and non-indexed. This means their debts are far more stable and reliable than in the recent past, when a much larger share of government debt was issued externally and denominated in hard currency.

This argument is wrong. In the past, the combination of high levels of domestic debt and inflation surges has often proven deadly for both foreign and domestic investors. Just look at Argentina today, a country not nearly as prosperous as its abundant natural resources would warrant.

[rabscuttle385]

What else do you call it when a government that owes over $30 billion in inflation-indexed debt manipulates its consumer-price statistics? Through a variety of crude measures (such as firing its top statisticians), the government is publishing an understated inflation rate that is used for calculating indexation payments.

I like to call it the U.S. Government.

From Breadbasket to Basket Case

Argentine alert as inflation spectre stalks half the world

[grey_whiskers]

Like, *PING*, dudes.

[rabscuttle385]

FYI

[grey_whiskers]

Hmm, any applicability to the US Congress' C.O.L.A. calculations, or just for the masses?

Cheers!

[TigerLikesRooster]

It seems Argentina never gets out of it.

I read from an article not long ago that those running Argentina are the ones who used to worship urban guerrillas(left-wing terrorists) during their youth in 70's. I can certainly see what kind of economic policy can come out of their heads.

They have a female president whose husband was also a president. A kind of Bill & Hitlery team in real action. Screwing their country amid historical commodity(grain) boom.

[Godwin1]

Argentina is a deadbeat country.Every 10 years or so,to popular acclaim, they simply disavow their debts. I don't know why any international bank or development authority would ever lend them money. I don't understand why anyone would invest there.Under no circumstances should banks or other institutions that lose money due to Argentinna’s adolescent irresponsibility be bailed out.

[GeneralisimoFranciscoFranco]

Hehe. Hugo bought a bunch of their debt. Hehe.

[agere_contra]

Argentina put huge tariffs on soybean exports and now wonders why its farmers are no longer producing soybeans. It’s the damndest thing.

[redgolum]

My company has a plant down there. It is a beautiful country with bad government.

A friend who went down there said everyone he met told him not to vote for Hillary or Obama, as they were living in the world the leftists want for the US.

[redgolum]

It is more than that.

Truckers are blocking the roads, so you can’t get anything shipped. Cities are running short of fuel and food.

Last week, there was talk that the government was going to put in martial law to force the farmers to give their food away. Which is something I have seen a few posters on FR suggest from time to time..

[Toddsterpatriot]

Last week, there was talk that the government was going to put in martial law to force the farmers to give their food away. Which is something I have seen a few posters on FR suggest from time to time..

Freepers want Argentine farmers to give their food away?

Or Freepers want U.S. farmers to stop picking our pockets via U.S. government mandates and subsidies?

[redgolum]

No, there was a few guys saying that farmers should sell their crops for less than what they cost. And if they won’t, force them to.

[Toddsterpatriot]

No, there was a few guys saying that farmers should sell their crops for less than what they cost.

Who said that? I'd like to make fun of their economic ignorance. Thanks.

[redgolum]

It was a month ago, and I think you already did.

I know that I called the gentleman a few names also. (I am in a bind right now and don’t have the time to search for the comment).