Effects Of A Default On Expats

[French jurist]

Perhaps Argentina hired the wrong lawyers (who appear to appreciate a good payday when they see one).

Would be a profesional fault I guess, hence my doubts... (?)

 

[ajoknoblauch]

Would be a profesional fault I guess, hence my doubts... (?)

If the current lawyers had pointed that out, it might have reduced their number of billable hours (rather than the country's dollar reserves).

 

[camberiu]

Matías, your capacity for rationalizing the irrational appears limitless. If people can't save in a stable currency, they will spend it as quickly as possible because next month it will be worth a fraction of its present value. This is not a virtuous cycle.

Actually, what Matias wrote is pure Keynesian economics.

 

[asador]

Actually, what Matias wrote is pure Keynesian economics.

And do you mean that as a compliment?

 

[camberiu]

And do you mean that as a compliment?

Not at all. Just pointing out that what Matias said was actually very mainstream economics. Not that I agree with it, but it is very mainstream nevertheless.

 

[asador]

A solution to the default? If that was Argentina's plan, would be interesting to understand why the country didn't do that before

http://www.businessw...-the-fine-print

A solution to the default? If that was Argentina's plan, would be interesting to understand why the country didn't do that before

http://www.businessw...-the-fine-print

Two reasons why this wouldn't work: 1. look up the definition of Holders. I haven't, but I'm pretty sure it refers to the bond holders, not DTC (yet another intermediary). The money would not be in the Holders' hands if it's blocked in a DTC account, as it would be under Griesa's order. 2. The time to cut the checks would have been on or before the date the payments were due, i.e. June 30. Missing that deadline (plus the cure period) = default.

 

[camberiu]

For Argentina, Default Is Minor; The Real Problem Is Much Worse


"Such inflation rates represent an unmitigated economic disaster. Not only for the obvious reason that they make economic calculation practically impossible and rob savers of their hard-earned money, but because they also undermine people's productivity and their morals. Once a nation's entire population is forced to spend a lot of effort on a daily basis looking for ways to escape the ravages of inflation, its economic productivity is invariably sapped.
By robbing savers, government moreover undermines the moral fabric of society at large, while creating a new underclass – comprising all those who rely in some way on fixed incomes."

 

[asador]

For Argentina, Default Is Minor; The Real Problem Is Much Worse


"Such inflation rates represent an unmitigated economic disaster. Not only for the obvious reason that they make economic calculation practically impossible and rob savers of their hard-earned money, but because they also undermine people's productivity and their morals. Once a nation's entire population is forced to spend a lot of effort on a daily basis looking for ways to escape the ravages of inflation, its economic productivity is invariably sapped.
By robbing savers, government moreover undermines the moral fabric of society at large, while creating a new underclass – comprising all those who rely in some way on fixed incomes."

To the several posters who are quoting zerohedge here: that site is generally considered a joke in US financial circles.

 

[camberiu]

To the several posters who are quoting zerohedge here: that site is generally considered a joke in US financial circles.

They do have a good share the tinfoil hat articles and users, but they also have very useful articles. They have been writing about the "Espirito Santo" crisis long before it hit mainstream media. Same about the crisis in the Ukraine. Same with the Libor Scandal. They do have good articles in there.

 

[ajoknoblauch]

Actually, what Matias wrote is pure Keynesian economics.

Keynesian economics is not the problem. Failure to recognize the limitations of Keynesian economics is the problem.