Slightly old news, but still not good for the folks down there.  Argentina declares state of siege after riots and 20% unemployment.  State suspends constitutional rights, caps bank withdrawls to $1,000 per month, and is thinking about seizing pension funds.  

Personally, I think I'll go join the Frenti Farabundo Marti Nacional.

[):)]
NSF

The history of Socialist States and their dictators seizing wealth is long. Nationalisation of property, etc. All the while investors are told that it is a very progressive stable state in which to invest. READ A MURDERING DICTATOR RUNS A STATE WITH NO PROPERTY RIGHTS AND American INVESTMENT will stolen.

Benjamin

As of this afternoon there is no government in Argentina. Literally. They resigned this afternoon.  No one in the former government is willing to take responsiblity for this. I imagine they are all trying to liquidate their assets and get the next plane out of the country.

The German's f%^ked up another country.

There is a good article that came out today on Argentina at www.newsmax.com

This is one of my biggest fears.

We'll probably have to bail-out Citibank again for making investments down there. [:(!]

Next time someone tries to peddle you an emerging markets mutual fund, think again.

I was thinking the same thing.  Lets hope he stays out of harms way!

Hunter was ok last night when this all started.  He was in chat at about 9 pm or so.

He had his FAL mags loaded and ready to go.

When I saw the news footage today of the riot/looting I thought of Hunter and was hoping he was OK...

The US has some but not comparatively much investment to lose in Argentina. Spain will be the big loser there. The problem is, Brazil will likely be affected by all this and if THEIR economy tanks worse than it already is, US investors stand to lose a LOT of money. Brazil and Argentina have a lot of intermixxing in their economies and societies. It doesn't look good.


Edited to say: Good Luck, Hunter223.

OK, how much of our entanglement in this is Bill Clintons fault, and how much predates him?

.

... they are just the beginning. watch for many more countries nearby soon to collapse.

... lawlessness will profit all those laid off country of government workers.

... watch your shit

And what todays lesson boys and girls:

Socialism bad, mmmkay?

A lot of their debt is associated with very generous government pension programs which they can no longer afford.  We are heading the same direction, at one point in the future we will not be able to pay for social security and medicare and the SWHTF.

GunLvr

What is it?

[url]http://www.nytimes.com/2001/12/21/international/americas/21ARGE.html[/url]

Argentine Leader Quits as Economy Begins a Free Fall

December 21, 2001
Argentine Leader Quits as Economy Begins a Free Fall
By CLIFFORD KRAUSS

BUENOS AIRES, Dec. 20 — President Fernando de la Rúa resigned today,
halfway through his four-year term, swamped by violent protests and
looting that erupted when his government failed to reverse a deepening
economic crisis.
The resignation letter, which was delivered to Congress late in the day,
followed violent food riots and protests here and in several cities. At
least five demonstrators were killed today, bringing the death toll to 21
since the protests began early Wednesday.
The president had made a last- ditch effort to form a unity government
today with the leading opposition party, but when that was rejected, he
announced he would leave.
Argentina, with widening budget deficits, is heavily indebted to foreign
lenders and is battling to prevent more defaults. After a series of budget
cuts and a patchwork of economic programs, the country lacks a coherent
economic and monetary strategy, and has no consensus as to what should be
done.
Mr. de la Rúa's resignation will put the country's immediate future in the
hands of the moderate opposition party that controls Congress and had
recently begun blocking many of the former president's policies.
Ramón Puerta, the president of the Senate, is to become Argentina's
provisional president for at least 48 hours while the Congress decides how
to prepare for new elections, which are likely sometime next year. Under
the law, a new president should be installed within three months.
But Congress can change that, and how it will play its hand will be
largely left to opposition leaders, including a former president, Carlos
Saúl Menem, and Senator Eduardo Duhalde, who lost to Mr. de la Rúa in the
1999 elections.
Whoever takes power is expected to face the same tough choices that
defeated the indecisive Mr. de la Rúa. Faced with recession and declining
exports, some Wall Street analysts have predicted that Argentina will
devalue its currency by unhinging the peso from its unusual one-for- one
link to the dollar.
While such a move would lower prices and spur growth by making the
country's goods more attractive, it could also prove ruinous to millions
of borrowers and to the nation's banking system because most loans in the
country are repayable in dollars, not pesos.
Mr. de la Rúa's government collapsed with surprising rapidity, as police
fired shotguns at demonstrators in front of his palace, tear gas seeped
into presidential offices and fires filled the grand boulevards and
avenues of Buenos Aires with towers of black smoke.
Thousands of demonstrators massed and set bonfires in front of the
Congress and presidential palace throughout the day, until riot police,
including some on horseback, stormed through the crowds this afternoon
clubbing people while reinforcements fired water cannon and rubber
bullets.

Defiant crowds chanted "assassins, assassins, assassins," making the
scenes of anarchy reminiscent of the turbulent days of military rule from
1976 to 1983. With the 5 deaths today, more than 1,000 demonstrators and
looters were arrested. More than 50 police officers were reported hurt in
the disturbances in the capital alone.
The violence today followed looting and rioting in 11 of Argentina's 24
provinces on Wednesday, and much damage to private businesses, especially
food stores. Mr. de la Rúa declared a state of siege for 30 days on
Wednesday, giving him the right to suspend such Constitutional rights as
freedom of assembly and speech, and giving him free rein to arrest at
will.
But his assumption of emergency powers appeared only to incite greater
protests, beginning with an outpouring of thousands of people Wednesday
night onto the streets of Buenos Aires, banging pots and pans and
demanding Mr. de la Rúa's resignation.
In an attempt to save his government, Mr. de la Rúa, 64, went on national
television on Wednesday night and apologized to the people for their
disappointment in his administration's performance. He called on the
opposition party, known as the Justicialist party, "to participate in a
national unity government in which they can bring in their ideas and
programs."
When that call was rebuffed, Mr. de la Rúa told his closest aides that he
had no choice but to tape a televised resignation address.
As soon as Nicolás Gallo, a senior personal aide to Mr. de la Rúa, told
reporters late this afternoon that the president had decided to resign,
the streets began to calm. The text of the speech said the resignation was
to "assure the peace."
Mr. Gallo told reporters, "the president wanted to avoid more suffering."
He said "history will judge" how Mr. de la Rúa's administration would be
seen. "It's been a very sad day," he added.
Most opposition party leaders have called for the devaluation of the peso
and suspension of payment on the country's debts.
They are also suggesting that business and consumer loans that are now
valued in dollars be revalued into new peso amounts that would reduce the
overall debt. The lower loan amounts would benefit individuals whose
income is expected to decline by 30 percent to 50 percent in a peso
devaluation.
This scheme is designed to help middle-class people with home mortgages
and car loans that are currently valued in dollars.
The losers would be bank lenders because the loans would not be fully
repaid. Other losers could well be Argentine businesses that owe dollar
debts abroad but collect revenue in pesos at home. It would take a greater
number of devalued pesos to repay their dollar loans.
"I believe the economy can be stabilized and grow during a transition
government," said Governor Adolfo Rodríguez Saá of San Luis Province, an
influential member of the opposition.
Mr. de la Rúa's decline began in October 2000 with the resignation of his
vice president, Carlos Alvarez, over the government's handling of charges
that bribes were paid to opposition senators to pass a new labor law.

Mr. de la Rúa's ruling Alianza coalition of centrists and Social Democrats
fractured, and his cabinet became a revolving door of officials and
constantly changing economic policies.
Then, in October, his coalition suffered a devastating defeat in
legislative elections that gave the opposition control of both houses of
Congress.
Cabinet officials on Wednesday publicly accused the Buenos Aires governor,
Carlos Ruckauf, a former vice president and one of the most powerful
leaders of the opposition, of instigating the looting to overthrow the
government.
During an emergency meeting of the cabinet on Wednesday, ministers debated
whether to openly confront Governor Ruckauf with charges of treason. Some
aides to Mr. de la Rúa argued that the federal government should seize
Governor Ruckauf's Buenos Aires provincial police force in order to
control the rioting that surged in the working-class neighborhoods that
surround the capital city.
But Mr. de la Rúa hesitated, and instead declared a state of siege, which
failed to bring peace. Now Mr. Ruckauf is considered a major presidential
contender.

Copyright 2001 The New York Times Company

Ok, but the question remains- where did all the money go? What happened to their income and what did they do with all the loan money they borrowed?

http://www.nytimes.com/2001/12/21/international/americas/21CAVA.html

Past Economic Cures Are Now Fuel for a Crisis

December 21, 2001
Past Economic Cures Are Now Fuel for a Crisis
By CLIFFORD KRAUSS

BUENOS AIRES, Dec. 20 — In the end, the Argentine miracle worker could not
work his magic again.
Domingo F. Cavallo, who came back into the government nine months ago as
economy minister to try to rescue Argentina's reeling economy and a
flagging presidency, resigned late Wednesday night as food riots swept the
country and demonstrators gathered outside his house to protest his
policies. Hours later, the president, Fernando de la Rúa, left office as
well.
A tenure that began on a buoyant note ended this week in confusion and
violence. Argentina is heavily indebted to lenders abroad, and struggling
to ward off further defaults. After a series of budget cuts and
start-stop-restart economic policies, the country is utterly without a
coherent economic and monetary strategy, and no political consensus exists
as to what should be done or who should lead.
Now, some of the very elements that Mr. Cavallo put in place to tame
inflation and spur growth when he held the job nearly a decade ago have
become the country's undoing. By pegging the Argentine peso to the dollar
— the elixir that cured so many ills back then — he has left Argentina
saddled with an overvalued currency that makes its exports pricey and
unattractive. Bank loans inside the country are also valued in dollars and
any move to devalue the peso may only serve to make repayments impossibly
expensive for Argentine borrowers.
"He was a brave man," said Felipe Noguera, a consultant who did polling
for Mr. Cavallo when he ran a quixotic but unsuccessful presidential
campaign in 1999. "He took over when no one wanted to take over, but he
just couldn't make it happen."
At first, Mr. Cavallo was able to raise the spirits of Argentines just by
taking the job. His approval ratings were 70 percent in his first month.
But Mr. Cavallo stumbled. He raised some taxes, and lowered others. He
tinkered with currency convertibility, by proposing multiple exchange
rates that were effectively a devaluation for exporters. The proposal
alarmed the very Wall Street analysts who had supported his reappointment,
and backfired by pushing up interest rates.
Within three months, with the economy continuing to sink and national
spending still out of line, Mr. Cavallo's image began to suffer. Political
cartoonists depicted him as an emperor without clothes, and he was
humiliated by protesting workers who threw eggs at him and his family
during his daughter's wedding.
But Mr. Cavallo said he would never resign. Every three weeks or so he
offered new policies. In July he set a "zero deficit" policy that sharply
cut government salaries and pensions and withheld funding from local
governments.

The policy backfired by slowing the economy further, cutting tax revenues,
and widening the government's deficit. Interest rates continued to soar,
companies fled to Brazil or failed, and unemployment spurted to nearly 20
percent.
At work, Mr. Cavallo became increasingly erratic, perhaps because he was
working seven-day weeks and sleeping three hours a night.
"I don't do this job for enjoyment," he said in an interview this month.
"I do this to serve. It's a responsibility for me to improve the lives of
the people."
Mr. Cavallo, 55, a Harvard-trained technocrat, emerged as a pivotal figure
in the government of President Carlos Saúl Menem, as the foreign minister
who tied the political and economic fortunes of Argentina to Brazil.
With hyperinflation, Mr. Menem turned to Mr. Cavallo to take over the
Economy Ministry in 1991. He quickly decided to peg the value of the peso
to the dollar — one to one — converting an inflation rate than ran into
the thousands to single digits within months.
That stability paved the way for billions of dollars of foreign investment
and high annual growth rates in all but one year from 1991 to 1998.
But this year, he simply could not find the right formula to stop the
slide. Finally, last month, Mr. Cavallo was forced to effectively default
by saying Argentina would have to cut interest payments to domestic and
foreign lenders.
That spurred a run on banks, bringing the entire financial system and the
government to the point of collapse. Mr. Cavallo reached into his
unorthodox bag of policies by partly freezing bank accounts three weeks
ago, limiting cash withdrawals to $1,000 a month. He encouraged depositors
to switch their peso accounts to dollars, in what appeared to be a
preparation for making the dollar Argentina's currency.
That still may happen as the government attempts to avert a devaluation
that could bankrupt much of the private sector whose debts are in dollars.
But, this time, Mr. Cavallo will be watching from the sidelines.

Copyright 2001 The New York Times Company

Hurry up and happen here.

This is what happens when the government meddles in the economy, and then it poises itself as the solution, whereas the solution is implemented, only bringing more trouble in the economy. The problem: government meddling in the economy. The solution: get government out of the economy, COMPLETELY!

BTW, hope your okay HUNTER. I'll be praying for you.

Can that happens here?.....We are in a Recession at the moment, and what about if we got hit with a Depression?  Japan is in a very bad shape too and their suicide rate is sky high.  What is happening?

Here's one analysis of Argentina's economic problems:

[url]http://polyconomics.com/showarticle.asp?articleid=1713[/url]

And a quick summary of recent history:

[url]http://www.latin-focus.com/factsheets/argentina/argfact_gen_intro.htm[/url]

I think that polyconomics article explaines less about what happened to Argentina than someones interest in getting clients to his company and selling gold futures.

It's called, "Economic Cycles."  Careful now, it's hard to get used to, but the economy isn't going to stay on high forever.  It won't stay low forever either.

I know -- Wanniski (the Polyconomics guy) is a gold stand fanatic.  As far as I know, though, he doesn't have any financial interest in selling gold, gold futures or anything like that.