News In The Usa Is Argentina Might Default Again

[ajoknoblauch]

You've confused a movie with a typical Alex Jones broadcast. Not that anyone can fault you. It's impossible to tell the difference.

I didn't know zombies had names.

 

[Bajo_cero2]

I don t see a default comming. Devaluación not necesary is bad for Macro economy. The peso was overvaluated, a correction is going to make the economy more competitive. If the correction is in stallments there is not going to be riots.

In 2001 they ran out if usd and they used to take loans to give people usd and for paying the debt.

The parity pesos/ usd gives a price of 13 pesos for 1 dollar. This is what the official exchange rate should be. The illegal market is always going to be higher because it is illegal and, when it is possible to buy the legally, who goes yo the black market already "saved" 55% in the tax he evaded.

Even 29 billion doesn t pay the whole debt, that approach is a mistake, it is all about to pay what it has to be paid this year, the whole debt doesn t have to be cancel today.

 

[Joe]

Argentina has about one tenth the public debt per capita as the USA. Because Argentina hasn't been able to borrow in the international markets it has kept the debt level low. One could say why not just default, nothing to lose, but maybe the status quo is good because it prevents the politicians from borrowing easily.

 

[cbonanni]

Who would they default to if they have no international credit ?

The balance of reserves is not all in cask. Many are those highly appreciating bonds !!

That will never get paid back.......

 

[camberiu]

I don t see a default comming. Devaluación not necesary is bad for Macro economy. The peso was overvaluated, a correction is going to make the economy more competitive.

That is correct, but it is only half of the equation. Cristina is printing money like crazy, and was using the cerpo as a way of keeping inflation in check. But that game is up now that the reserves are running very low. Now, as the currency devaluates, she will have to either stop printing pesos (and cut expenses) or go into hyper-inflation.

 

[Bajo_cero2]

That is correct, but it is only half of the equation. Cristina is printing money like crazy, and was using the cerpo as a way of keeping inflation in check. But that game is up now that the reserves are running very low. Now, as the currency devaluates, she will have to either stop printing pesos (and cut expenses) or go into hyper-inflation.

During the convertibilidad, there were only 20 billion usd at the CB. Now there are 29 billions.

There were hiperinflacion on 1975, 1982 and 1989 when there were. Zero usd on the CB.

 

[Reneige]

A devaluation is good for a country that has many Exports. Argentina does not. It imports a tremendous amount of goods, especially (ironically) energy. As I said in this post : http://baexpats.org/topic/28906-whats-next-with-the-peso-devaluation/#entry240457 the devaluation has the potential to import a massive amount of inflation into this country.

 

[EdRooney]

A devaluation is good for a country that has many Exports. Argentina does not. It imports a tremendous amount of goods, especially (ironically) energy. As I said in this post : http://baexpats.org/...on/#entry240457 the devaluation has the potential to import a massive amount of inflation into this country.

That's a lovely theory, but unfortunately has nothing to do with the facts. Argentina closed 2013 with a USD 9b trade surplus, and is one of the world's leading commodity exporters: number 1 in soy, 2nd in corn...

If you want to look at an area for improvement, it would be in exports of finished products (maybe what you were referring to?), but its finished goods exports have increased steadily over the last decade, even though there is a deficit in that item.

Insofar as energy goes, the nationalisation of YPF was a huge step forward in that regard, since Repsol was vastly underinvesting (in default of its contractual obligations, thus the nationalisation).

 

[nicoenarg]

Insofar as energy goes, the nationalisation of YPF was a huge step forward in that regard, since Repsol was vastly underinvesting (in default of its contractual obligations, thus the nationalisation).

I think Kicillof hacked Ed's account...somebody get the admin, QUICK!

 

[Bajo_cero2]

A devaluation is good for a country that has many Exports. Argentina does not. It imports a tremendous amount of goods, especially (ironically) energy. As I said in this post : http://baexpats.org/topic/28906-whats-next-with-the-peso-devaluation/#entry240457 the devaluation has the potential to import a massive amount of inflation into this country.

http://www.pagina12.com.ar/diario/economia/2-238389-2014-01-24.html

The exports are 83 billions usd.

They were reduced this year because the country lost competitivity as a consequence of the rate exchange where the peso was overvaluated.

However, there is a plan to increase exports of pruducts with extra valué (not raw materials) (soy oil instead of soy bean for example).

http://www.telam.com.ar/movil/notas/201401/47168-kiciloff-presenta-en-casa-de-gobierno-el-programa-agroexportador-2014.html

The big problem are the imports of energy. But the goverment is subsidying it and, being YPF nationalized, sonner or later the country is going to export energy instead of importing it.