Default- Consequences

[Bajo_cero2]

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.

Those rules does not apply to Russia or China.

 

[dennisr]

Those rules does not apply to Russia or China.

Just a reminder:
China, Russia do not loan a hard liquid currency (US dollars, Euros) to any foreign country. China will gladly loan you all the yuan you need, however, will only be able to purchase goods and services from China. Can cramp one's style. Pick your poison? Rules or no rules, nothing in life comes without strings.