Should Argentina Default On Its Debt?

[Rich One]

Does anyone of you guys know an important part of the problem began in the dictatorship? And Im not talking of taking illegitimate private debt (9 billion dollars without interests). Im talking of the clause of being dependent of the US justice.

Yes, as you read, an anti-democratical and unconstitutional government, elected by noone, of course friend of the US, decided that the debts problems of Argentina will be decided in New York.

I dont believe in independent justice -here or anywhere. Of course in no way when we are talking of billion dollars decision. Judges are totally functional to these capitals, as I said it is the hard core of the financial capital, the most important people of the world, the most powerful. This is the way industrial countries has to control third world countries, the default or not of a country, the future of millions of people, depends on the decision of this bussiness people and what they wanna do.

I think is important when it comes to analyse this debt, that in its origins was totally illegitimate, transfered from Argentine companies, and the same people that statized this debt said, while torturing and dissapearing the people who were agianst these decisions, that from that moment on the legal part of the debt will be decided in the same country of the creditors.

Just a little detail.

Altamira and other local politicians form the Partido Obrero (Troskistas) believe that the debt should be audited and determine what is legitimate to pay... However Nestor and Cristina in 2005 and 2010 agreed to renegotiate the debt and accepted New York as the venue, and the NY law as the legislation.
Peru and Ecuador audited the debt and agreed on what to pay.

 

[Matiasba]

Altamira and other local politicians form the Partido Obrero (Troskistas) believe that the debt should be audited and determine what is legitimate to pay... However Nestor and Cristina in 2005 and 2010 agreed to renegotiate the debt and accepted New York as the venue, and the NY law as the legislation.
Peru and Ecuador audited the debt and agreed on what to pay.

Nestor and Cristina always decided to avoid talking of legitimate or illegitimate debt. Maybe to create a friendly environment for the negotiation (and for bringing investment, etc, only a left extremist talks in todays politics of not recognising the debt from the dictatorship). Thats how the Ks always behaved with the right. Since last year, they are like going back on lots of postures they had, or at least on speeches they made, and for the negotiation with the right, its like they are now doing things tidily, with the CIADI, Club de Paris, YPF, etc, etc.

Edit: Anyway, Im not quite sure that that venue could have been changed. I think that what made the bonds attractive was the power they had over the US justice -of course more accesible than argentine justice.

 

[camberiu]

Yes, as you read, an anti-democratical and unconstitutional government, elected by noone, of course friend of the US, decided that the debts problems of Argentina will be decided in New York.

I love it Matias!
Let's just forget that no military dictatorship can come to power without popular support, and oh boy, didn't they have support at the time of the coup. People were tired of the guerrilla and tired of Isabellita and the chaos of her government. So when the military took over, most Argentines welcomed the change, glad that some "strong hand" was ready to put the country back in order and offer quick and easy solutions to all the problems facing the nation. Sounds familiar?
It was not the first coup in the history of Argentina. Argentines have a very hierarchical society and they love the concept of the "salvador", the messiah who will arrive and put the country back in order.

Just love how you exempt the nation of any and all responsibility for the mess. As always, you are all just victims.

 

[ajoknoblauch]

Indeed, Griesa is a Republican... And Singer finances A LOT Goppers through offshore places (He himself his one).

Not the first time too Griesa settles in favor of private interests (big corps) against the public interest (we, you, I), even in the US I believe?

Argentina has honored all the payments since the debt restructuration. It is also said that Griesa got mad because his vacations were interrupted by this? WTF???

Judgeships are non-partisan (even when they are elective, at the state and local level) and federal appointments must be approved by the US Senate. Griesa was nominated by a Republican (Nixon), but approved by an overwhelmingly Democratic Senate in 1972.

 

[dennisr]

If interested
Debtocracydious debt

http://www.youtube.com/watch?v=qKpxPo-lInk

And guess who invented Odious Debt?

 

[Matiasba]

I love it Matias!
Let's just forget that no military dictatorship can come to power without popular support, and oh boy, didn't they have support at the time of the coup. People were tired of the guerrilla and tired of Isabellita and the chaos of her government. So when the military took over, most Argentines welcomed the change, glad that some "strong hand" was ready to put the country back in order and offer quick and easy solutions to all the problems facing the nation. Sounds familiar?
It was not the first coup in the history of Argentina. Argentines have a very hierarchical society and they love the concept of the "salvador", the messiah who will arrive and put the country back in order.

Just love how you exempt the nation of any and all responsibility for the mess. As always, you are all just victims.

First of all, to be clear, the last dictatorship did not had any support from the people, remember the 73 ellections were Peron won with the 62%? with 85% of participation? The great majority of argentines at the time were peronistas, and did not support any dictatorship. At that time you had Peronismo and Radicales, both wide middle class parties, and a very tiny minority, the richest people, for whom the militars governed. The UCD, these people democratic representation, had 2% of the votes. Google Alvaro Alsogaray.

But for one moment lets pretend that yes, there was a big part of society that indeed supported the militars. Lets think for a while that the main reason why they were unconstitutional and antidemocartical was not the lack of votes. Do you not notice differences with the last dictatorship and the others? do you know their economic plans? Do you know the difference between Krieger Vasena and Martinez de Hoz? the oil crisis and the petro dollars from the 70s? do you think the new paradigma -neoliberalismo- that has arisen in the 70s has nothing to do with the change from one dictatorship and another? do you know why the dictatorships before are called DICTABLANDAS? please, think with me, what could have happened that made all dictatorships in Latin America be more repressive, and start to dissappear people?

People in the seventies wast anti democratical or pro dictatorships, that does not mean that they didnt want a change. Everybody knew the militars were coming, but noone expected that, so if there was some people that wanted the militars, those were expecting something similar to the earlier experiences. Noone can support torture, kidnapping, disappearence, and noone could support their economic plans, multiplying the external debt for six, and putting these kind of clauses. Only a tiny minority supported that, SO THESE ECONOMIC DECISIONS IT COULD ONLY HAPPEN BY USING THE FORCE. Democraticaly they had no chance.

So no, no one supported the last dicctatorship, no one except 2% wanted what they finally did. Everybody knew the militars were coming, nobody knew there was going to be that huge change, huge difference with the dictatorships before.

 

[Joe]

The principle of Odious Debt is a good one because it discourages banks from lending to dictators and tyrants.

 

[Matiasba]

The principle of Odious Debt is good one because it discourages banks from lending to dictators and tyrants.

The oil crisis of 1970 provocated to west a big problem -liquidity. Suddenly, lots of important banks of Europe and US had lots of money, they had a big mountain of money resulting from oil producers countries (opec).

What they had to do to make more money in that money, was to invest it in some way that could make money easily. That is financial capitalism, to make money outside of production, is money from the money without investing in some industry or something productive. Money multiplying its value like in a game, thats wall street. Like in the casino.

So, they had these big money and an out of time societies world wide.They had Walfare state in Japan, Europe, Latin America, the States.... those were industrial societies, you had full employment level anywhere, you had the belle epocque of capitalism, baby boom, etc (50s, 60s)

so what on earth they did with the money to make it profitable? easy, they had dictators friends all along Latin America so they could take debt, of course putting the rules, and making that a political and economic problem for the next decades.

Yes, we have all along latin America, that the exit from several dictatorships, all had attached the debt problem. Google Mexico 1982, the creditors of all those debts rose the interest rate as they wanted, in fact they provocated the hyperinflation of Argentina in 1989! Im not saying it was the ONLY cause, but they played big role on that one!!

and from that moment on, all latin American countries had, as never before, "the debt problem".... think of it.... we are now with the 2001 bonds that comes from the seventies debt, because the original debt and its interests are a big part of it, and if they want they can make Argentina default.... its not that they lent money and they want it back, its more complex than that... the debt is a big way of making money due interests, its political domination. The worst scenario for the people who lends money is cancelling the debt... there are very few people that can lend money to a country, and all of them have a lot of political power. So the thing is having you owing me money till you die. Thats the bottom line. They do not want to be paid, except you have made a gain, of, lets, say, 3000%.

 

[sleazemerchant]

Does anyone of you guys know an important part of the problem began in the dictatorship? And Im not talking of taking illegitimate private debt (9 billion dollars without interests). Im talking of the clause of being dependent of the US justice.

Yes, as you read, an anti-democratical and unconstitutional government, elected by noone, of course friend of the US, decided that the debts problems of Argentina will be decided in New York.

I dont believe in independent justice -here or anywhere. Of course in no way when we are talking of billion dollars decisions. Judges are totally functional to these capitals, as I said it is the hard core of the financial capital, the most important people of the world, the most powerful. This is the way industrial countries have to control third world countries, the default or not of a country, the future of millions of people, depends on the decision of this bussiness people and what they wanna do.

I think is important when it comes to analyse this debt, that in its origins was totally illegitimate, transferred from Argentine companies, and the same people that statized this debt said, while torturing and dissapearing the people who were agianst these decisions, that from that moment on, the legal part of the debt will be decided in the same country of the creditors.

Just a little detail.

You have a fair point in arguing that debt accumulated under the dictatorship could reasonably be repudiated by later elected democratic governments; any investor willing to lend money to a unelected dictatorship in a country with a democratic constitution and a long history of democracy (as opposed to hereditary monarchies, communist dictatorships, etc) should understand and be held accountable for the "caveat emptor" of such a financial transaction.

That being said, the debt in question held by the so-called "vulture funds" was transacted in 1994 and contracted by a twice-elected democratic administration; as such, the Argentine state is unquestionably on the hook for payment.

 

[Matiasba]

You have a fair point in arguing that debt accumulated under the dictatorship could reasonably be repudiated by later elected democratic governments; any investor willing to lend money to a unelected dictatorship in a country with a democratic constitution and a long history of democracy (as opposed to hereditary monarchies, communist dictatorships, etc) should understand and be held accountable for the "caveat emptor" of such a financial transaction.

That being said, the debt in question held by the so-called "vulture funds" was transacted in 1994 and contracted by a twice-elected democratic administration; as such, the Argentine state is unquestionably on the hook for payment.

1994 bond was in part a negotiation of the already existing debt.

And the trick here is that the lenders were friends with the militars.... they made them take debt...