Do you fear a crash similar to 2001?

Why should you fear something that is built into the system? These things work in cycles and Argentina has a long long history of this. The actions of the central bank and foreign investors will determine how bad the downturn is and for how long - it is possible to manage it well and avoid Venezuela MK11 if they can spread out the debt on a long enough horizon and maintain confidence in the market. The worst thing they can do is more austerity which will kill spending. Like all events there is good opportunity for savy investors - when there is blood on the streets etc... All I will say is those who are keeping a large amount of pesos that isn't earning at least 40% TNA are doing themselves a big disservice. Banks are offering 45-50% to clients while receiving 60-80% from the Government and interbank loans. Talk about easy money. If its managed badly they will bail the banks out anyway and it will be the customers that lose.
 
There will be no crash like there was in 2001. That's not to say there will not be a default, but no crash like 2001. The reason is, at the time of the 2001 event, the people in the street had personal debts in dollars too - lots of it. Hence the reason many had to sell the 1st or second property to get out from under the dollar debt they were in. That is not the case these days. Compared to that time, there is very little private dollar debt here.
 
More austerity is coming and not because there is support for it but because those are the conditions dictated by IMF, Argentina cornered itself and people can rebel and protest all they want but meanwhile the real wages have to continue dropping and the peso has to continue printing in order to tax the population to the maximum, especially the exporters. the objective is to balance the budget and restart the economy, not that it's going to happen in a planned efficient way but it's a test nevertheless, to see how much belt-tightening Argentines are willing to endure before they start burning cars and smashing store-fronts. if the newly elected government decides not to abide by IMF's plan of action and refuses to take on more austerity then we can expect a technical default in early 2020 and brief panic in the exchange market, hence anticipate a fantastic buying opportunity for dollar holders, either way, all debts will be paid at the end anyways and at a higher rate, talk about waste...
 
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