Default- Consequences

[estebandepraga]

I second MDZ!Cheers!

I lived through the corralito
a f....mess!
but I learned after the hyperinflation and so many "feriados bancarios " during the dictadura time(1976-1983) to never trust banks here( or almost anywhere really!) and never ever trust the promsise of any politican IN ANY MATTER but especially when it comes to your savings and buying power being SEGURO! and that is why after over 50years on the montana rusa argentina(argentine roller coaster) I have never lost one cent!
tune up your bartering skills and buy another mattress and only stuff it with verdes!

 

[Bajo_cero2]

For the economy a default with 30 billion usd at the central bank is going to be good.

 

[ajoknoblauch]

I always maintain a month's supply of malbec ... you never know

In the meltdown comes in summer, Torrontés...

 

[wild_horses]

Hi,

If there is a Technical Default, the peso will go up to 12x1 USD in the next few months, maybe a couple of 100's thousands jobs will be lost but it is only until Decembre, then the governament will be in a really good position to negotiate as the RUFO clause will expire, also change the the BONY for a local Bank and transfer the payments, and they can even audit the debt and take it to international Court.
IMO they should default and audit everything since 1976 to 2001.

Cheers!

 

[estebandepraga]

as noesdeayer better times are coming! i love optimists! i really do and I TRULY HOPE HES RIGHT!
its just hard after being beaten down so many times to have such hopes
it like a holocaust survivor fleeing to shanghai until 1949 then to cuba till 1959 to iran till 1979 finally settling in bosnia in the 1990s with last last move to venezuela!
and now in ba! sure syria , burundi and iraq were skipped but............ but how much faith can he have in humanity? i know a bit extreme but often these tags are!
so now its my turn!

 

[mariano-BCN]

I wonder if there's a devaluation of those of us earning in dollars or euros will be grateful, 'cause if the inflation keeps as high as it is, more pesos for our money doesn't make a difference. Or am I missing something?

 

[thorsten]

Inflation eats the effect of a devaluation a little bit, but typically you still come out ahead when earning in US$ while it gets significantly worse if you earn in AR$.

 

[ajoknoblauch]

I wonder if there's a devaluation of those of us earning in dollars or euros will be grateful, 'cause if the inflation keeps as high as it is, more pesos for our money doesn't make a difference. Or am I missing something?

It's going to depend on the specific numbers but, in general, there's a huge initial advantage in having foreign currency.

 

[sleazemerchant]

For the economy a default with 30 billion usd at the central bank is going to be good.

This is a misnomer. If Argentina were to default (not going to happen, but hypothetically) there will be zero foreign direct investment entering the country and no (affordable) way to tender new bond offerings in the international market. Without foreign direct investment and a new bond offering there is simply no way to exploit the Vaca Muerta shale formation which is key to reversing the $1 Billion USD + monthly energy deficit. In addition, $6 Billion USD of the claimed BCRA reserves are privately owned deposit in Argentine banks; a default will do nothing to keep those deposits in the banks. In the (extremely) unlikely event of a default, those claimed BCRA reserves will wither away and right quick.

 

[ARbound]

Like I said in the other thread, if I could sell Argentine stocks (since you can't do it with a country really) short I would right now.
My money is on things slowly slipping towards chaos again. Argentina is surviving on borrowed time and borrowed money.