Argentina Economic Crisis

gerhard dengler

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I haven't seen a thread on this topic so here goes.

Argentina's currency, the Peso, it's value has been under huge strain on foreign currency markets. The value of the Peso has
plummeted to an all time low relative to the American dollar. In order to try to support the value of the Peso, Argentina's central bank has gone to great lengths to try to keep a floor under the value of the Peso to little effect. Interest rates hit 40% a move designed to try to keep the Peso from depreciating further.

https://www.ft.com/content/161e9f40-577d-11e8-bdb7-f6677d2e1ce8

The rise in the value in the American dollar has put several emerging market currencies under severe pressure.

Argentina’s external debt was $178.9 billion (28% of GDP) in 2015 and is projected to rise to $252.9 billion (38.8% of GDP) in 2018. A combination of these factors made foreign investors jittery about the country’s ability to pay back its dollar-denominated debt with a weakening peso.

Even with relatively low debt to gdp ratios (compared to many first world countries), Argentina is suffering.

Granted it's more recent history of debt default is probably weighing heavily too.
 


Orbit v2

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Dec 8, 2010
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11,963
US interest rates starting to rise is going to turn the tide of cheap American money that flooded the developing world back towards the US. Asian economies will be affected too.
 

Ireniall

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Oct 7, 2011
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8,449
I haven't seen a thread on this topic so here goes.

Argentina's currency, the Peso, it's value has been under huge strain on foreign currency markets. The value of the Peso has
plummeted to an all time low relative to the American dollar. In order to try to support the value of the Peso, Argentina's central bank has gone to great lengths to try to keep a floor under the value of the Peso to little effect. Interest rates hit 40% a move designed to try to keep the Peso from depreciating further.

https://www.ft.com/content/161e9f40-577d-11e8-bdb7-f6677d2e1ce8

The rise in the value in the American dollar has put several emerging market currencies under severe pressure.

Argentina’s external debt was $178.9 billion (28% of GDP) in 2015 and is projected to rise to $252.9 billion (38.8% of GDP) in 2018. A combination of these factors made foreign investors jittery about the country’s ability to pay back its dollar-denominated debt with a weakening peso.

Even with relatively low debt to gdp ratios (compared to many first world countries), Argentina is suffering.

Granted it's more recent history of debt default is probably weighing heavily too.
This is the crowd whose example David McWilliams wanted us to follow. My God.
 

GabhaDubh

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2,530
Wasn’t there talk of the Pesos the Chinese Yuan and maybe India’s currency as the new anchor/reserve currency.
 

gerhard dengler

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Wasn’t there talk of the Pesos the Chinese Yuan and maybe India’s currency as the new anchor/reserve currency.
I think that there was an agreement in principle to create a BRIC currency pool a few years back involving Russia, China and India.
Brazil is also part of the BRIC group. Not sure about Argentina and whether it is interested in joining the BRIC framework.

PetroYuan was launched a couple of months ago.
 

Ireniall

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In what way ?
He wanted us to repudiate our debt in the manner in which Argentina and Iceland did and implied that it would have no long term effects. Perhaps Iceland will get away with it so long as they never, ever do anything like it again but I thought his harping on about how well serial offenders Argentina were about to do was ridiculous and I'm sure he's forgotten more than what I know about economics so what the f**k is wrong with the guy. He has wisely restricted himself to less radical pronouncements in more recent times and he's good on some topics.
 

raetsel

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Joined
Jun 5, 2017
Messages
9,083
I haven't seen a thread on this topic so here goes.

Argentina's currency, the Peso, it's value has been under huge strain on foreign currency markets. The value of the Peso has
plummeted to an all time low relative to the American dollar. In order to try to support the value of the Peso, Argentina's central bank has gone to great lengths to try to keep a floor under the value of the Peso to little effect. Interest rates hit 40% a move designed to try to keep the Peso from depreciating further.

https://www.ft.com/content/161e9f40-577d-11e8-bdb7-f6677d2e1ce8

The rise in the value in the American dollar has put several emerging market currencies under severe pressure.

Argentina’s external debt was $178.9 billion (28% of GDP) in 2015 and is projected to rise to $252.9 billion (38.8% of GDP) in 2018. A combination of these factors made foreign investors jittery about the country’s ability to pay back its dollar-denominated debt with a weakening peso.

Even with relatively low debt to gdp ratios (compared to many first world countries), Argentina is suffering.

Granted it's more recent history of debt default is probably weighing heavily too.
In other news, bears sh!t in the woods....................................
 

the secretary

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Jan 29, 2013
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6,085
Not again....
 


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