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Generational Dynamics World View
*** 9-Jun-18 World View -- Argentina faces major financial crisis as IMF loans it $50 billion

This morning's key headlines from GenerationalDynamics.com
  • Argentina faces major financial crisis as IMF loans it $50 billion
  • Protests grow against new IMF deal in Argentina

****
**** Argentina faces major financial crisis as IMF loans it $50 billion
****


[Image: g180608b.jpg]
Protester holds up sign saying '[President] Macri + IMF = Poverty' (AFP)

International Monetary Fund (IMF) has agreed to lend Argentina's
government up to $50 billion over a three year period to help the
country stanch a monetary crisis that could end in default. President
Mauricio Macri felt he was forced to get help from the IMF, even
though most Argentinian people are bitterly angry at the IMF for
pulling the plug on a previous bailout. Anti-IMF protests have
already begun, demanding that Macri back out of the agreement.

The current crisis was triggered earlier this year, when an interest
rate increase by the American Federal Reserve caused the yield
(interest rate) on American 10-year Treasury bonds to rise to 3% for
the first time since January 2014. This action by the American
central bank had a domino effect on the currencies of other countries.
Investors that had purchased bonds issued by other countries suddenly
had the choice of purchasing American 10-year bonds, normally
considered one of the least risky investments in the world, at a
higher interest rate than before.

The currencies of so-called "emerging market" countries were the
hardest hit, including Turkey, Russia, Brazil and Mexico. But
Argentina, with an inflation rate of 21% and a rapidly growing pile of
foreign-currency debt, was hit especially hard, with the result that
the peso lost 20% of its value against the dollar.

Argentina's economy had been improving since president Mauricio Macri
took office in 2015. But in retrospect, Macri made some serious error
by going too deeply into debt denominated in dollars. When the Fed
raised its interest rates to 3%, it raised the interest due on the
money that Argentina had borrowed, and now the country far into debt
that it cannot repay, and facing the possible disaster of a default.
BBC and
International Monetary Fund (IMF) and Bloomberg and Guardian (London)

****
**** Protests grow against new IMF deal in Argentina
****


The people of Argentina do not loath the IMF because the IMF is
lending them $50 billion. The people of Argentina loath the IMF
because the IMF imposes austerity commitment whenever it loans money,
and the mention of austerity brings back bitter memories.

In the 1990s, Argentina's peso was pegged to the dollar. In 1998, the
country faced a financial crisis, but was unable to devalue the
currency without abandoning its peg to the dollar. In 2000, the IMF
loaned Argentina billions of dollars, and imposed austerity
requirements. When Argentina failed to meet its commitment, the IMF
pulled the plug, sending Argentina into a $100 billion default.

The default was a major crisis for Argentina, which most people there
blame on the IMF. However, the economy began to stabilize president
Néstor Kirchner, who governed from 2003 to 2007. When Kirchner
declined to run for another term, his wife Cristina Fernández de
Kirchner ran for president and won. The radical far left Cristina was
president from 2007-2015, and undid all the good that her husband had
accomplished, by raising public spending, nationalizing companies, and
heavily subsidizing everything from utilities to football
transmissions on television. (Cristina, by the way, in December 2017
was arrested for allegedly covering up Iranian involvement in a 1994
bombing that killed 85 people at a Jewish community center, in order
to get favorable terms on Iranian oil.)

President Mauricio Macri is considered to have been fiscally
responsible since taking office in 2015, especially after years of
unbridled spending. However, he had no choice but to go to the IMF
for help, which many Argentinians consider to be loathsome, and that
may doom him in next year's elections. Buenos Aires Times and Economist and al-Jazeera (7-Dec-2017) and BBC (15-May)

Related Articles:



KEYS: Generational Dynamics, Argentina, International Monetary Fund, IMF,
Mauricio Macri, Néstor Kirchner, Cristina Fernández de Kirchner,
Turkey, Russia, Brazil, Mexico

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RE: Generational Dynamics World View - by radind - 05-14-2016, 03:21 PM
RE: Generational Dynamics World View - by radind - 05-23-2016, 10:31 PM
RE: Generational Dynamics World View - by radind - 08-11-2016, 08:59 PM
RE: Generational Dynamics World View - by SomeGuy - 01-18-2017, 09:23 PM
RE: Generational Dynamics World View - by tg63 - 02-04-2017, 10:08 AM
RE: Generational Dynamics World View - by Galen - 03-13-2017, 03:33 PM
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RE: Generational Dynamics World View - by Galen - 05-30-2017, 01:04 AM
RE: Generational Dynamics World View - by Galen - 07-08-2017, 01:34 AM
RE: Generational Dynamics World View - by tg63 - 08-09-2017, 11:07 AM
RE: Generational Dynamics World View - by tg63 - 08-10-2017, 02:38 PM
RE: Generational Dynamics World View - by Galen - 10-25-2017, 03:07 PM
RE: Generational Dynamics World View - by rds - 10-31-2017, 03:35 PM
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RE: Generational Dynamics World View - by noway2 - 11-20-2017, 04:31 PM
RE: Generational Dynamics World View - by Galen - 12-28-2017, 11:00 PM
RE: Generational Dynamics World View - by Galen - 12-31-2017, 11:14 PM
9-Jun-18 World View -- Argentina faces major financial crisis as IMF loans it $50 bil - by John J. Xenakis - 06-08-2018, 09:39 PM
RE: Generational Dynamics World View - by JDG 66 - 06-22-2018, 02:54 PM
RE: Generational Dynamics World View - by JDG 66 - 07-11-2018, 01:42 PM
RE: Generational Dynamics World View - by JDG 66 - 07-11-2018, 01:54 PM
RE: Generational Dynamics World View - by JDG 66 - 07-19-2018, 12:43 PM
RE: Generational Dynamics World View - by JDG 66 - 07-25-2018, 02:18 PM
RE: Generational Dynamics World View - by JDG 66 - 07-11-2018, 01:58 PM
RE: Generational Dynamics World View - by Galen - 08-18-2018, 03:42 AM
RE: Generational Dynamics World View - by Galen - 08-19-2018, 04:39 AM
RE: Generational Dynamics World View - by tg63 - 09-25-2019, 11:12 AM
RE: Generational Dynamics World View - by JDG 66 - 03-09-2020, 02:11 PM
RE: Generational Dynamics World View - by Camz - 03-10-2020, 10:10 AM
RE: Generational Dynamics World View - by tg63 - 03-12-2020, 11:11 AM
RE: Generational Dynamics World View - by JDG 66 - 03-16-2020, 03:21 PM
RE: 58 year rule - by Tim Randal Walker - 04-01-2020, 11:17 AM
RE: 58 year rule - by John J. Xenakis - 04-02-2020, 12:25 PM
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