Argentina’s President Mauricio Macri asked the IMF to speed up $50 billion bailout, spooking investors. The Peso Fell to a Record Low.
Argentina hiked its interest rate to 45% earlier this month but it did not stop the damage.
Ouch! #Argentina’s central bank raised its benchmark interest rate to 60% from 45% on Thursday after the peso plummeted to a new record low. pic.twitter.com/km4M0vDp0p
— Holger Zschaepitz (@Schuldensuehner) August 30, 2018
Argentina’s 100Y bonds hit 70 cents on the dollar
— zerohedge (@zerohedge) August 30, 2018
Some Observations On Argentina’s IMF-Sponsored Collapse https://t.co/cRGkzpCejG
— zerohedge (@zerohedge) August 30, 2018
Ouch!
Mike “Mish” Shedlock
I used to work with an Argentine who avoided the 2001 bank freeze (prior to his US emigration) by keeping his money in Montevideo. It was a pain for him to go to his bank, but at least he could access his money, unlike most of the people around him.
He was a cool guy, hopefully his remaining family in Buenos Aires are still hedging themselves as best they can. They sure seem to get a lot of practice with economic crises.
Argentina means “land of silver”, so all these currency crises could be avoided if they just backed their currency with it. However, such a practice is so mid-twentieth century…
It’s sooooo much harder for the connected to rob the productive, if the debasement mechanism for doing so is taken away. And, since this is the sole and only purpose of any government ever, past current and future, larger and more intrusive than Jefferson’s….. It really does take an at least moderately awake and non-retarded population to impose such stricture on their so called “servants.”
Every time the USD rallies, third world countries with debt denominated in USD get screwed. If you use the IMF, you have no choice but to borrow in USD.
Actually, it is SDRs but those are convertible to any currency.
SDR basket now consists of the following five currencies: U.S. dollar 41.73%, Euro 30.93%, Renminbi (Chinese yuan) 10.92%, Japanese yen 8.33%, British pound 8.09%.
SDRs must be exchanged into a currency before use.
They always have the option of having a balanced budget, and not borrowing at all.
Starts at periphery, works it’s way to the centre. One domino after another.
Merkel considering Turkish bailout to stem contagion to Euro banks. If fire breaks put in place it can be handled but at the cost of increased systemic complexity and someone, not directly involved, having their money on the line – EU/German tax payers for Turkey as example.
Argentina, only IMF to step in as last resort.
Brazil, Turkey, Venezuela, Argentina, and S. Africa all experiencing currency collapse simultaeously, in the midst of a so-called “Global Synchronized Boom”.
Hilarious.
IMF. “The lender of last resort.” Tremendous conditionality with these “loans.” Begin loss of sovereignty in 3…2…1…