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Argentina Central Bank Mutiny Costs Local Bernanke Equivalent His Job, Criminal Charges
A surreal harbinger of what may well transpire in the US some day was today's firing of the president of Argentina's Central Bank Martin Redrado by president Cristina Fernandez de Kirchner. The action followed his refusal to release reserves to the government to be used for debt service payments, as well as his refusal to resign. At least in Argentina the Central Bank is answerable to the president, instead of the other way around. The odd development follows Kirchner's enactment of a "Bicentennial Fund" which was to be funded with $6.6 billion of the $17 billion reserves, in order to make debt payments this year: the Argentine government has $13 billion in debt service payments due in 2010. One can imagine their jealously of the US, where such a situation would be met with merely a little more cash printing and a few more $40 billion 3 year auctions.
Market News also reports:
Fernandez de Kirchner called on Redrado to resign, but when he refused she called an emergency cabinet meeting to sign a decree removing him from his post "for misconduct and failure to execute the responsibilities of a public functionary, according to press reports.
And the La Nacion daily reported that the president also ordered Attorney General Esteban Righi to file criminal charges against the Harvard-educated economist.
Ah, to see the day when various other Central Bankers see criminal charges filed against them for insubordination.
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whoa.
I like the little zinger in there about Harvard.
What is it about Massachusetts? It's like a spawning ground for nefariosity.
Nefariosity = Word of the Day.
Massholes
I hope she hangs him.
He's probably the fall guy. Cristina Fernandez de Kirchner stole billions from her own country and act more like a two bit dictator then an elected president.
Argentina has been a very irresponsible country for generations. They had their best shot about 100 years ago, when their GDP / capita was on the level of much of Europe. Since then, it has been all downhill. Too bad, there are lots of talented people there.
Any investor would be foolish to EVER invest in or loan money to Argentina.
http://onemansthoughts.wordpress.com/2009/12/06/cry-for-me-argentina/
-At least in Argentina the Central Bank is answerable to the president
It isn't, without a recommendation from a Congressional Committee, but the President just up and issued a decree that said since Congress is on recess, she's firing him and there's nothing that can be done about it when Congress comes back. That committee had his back...
(but the jab about vice-versa here is appropriate)
Hey, where's the US Congress now?
My guess would be la presidenta de Botox isn't as charismatic as Timmay, possibly?
While the banker may have or may not have deserved the firing is debatable. The Kirchners are running their country into the ground, confiscating pensions and constantly at odds with the agriculture community over increased taxes on goods. When everything crashed in Argentina several years ago, it robbed the people blind. Basically, people had no access to their money or if they did it was in small increments. Many people lost their entire life savings over that period of time. Argentina is desperate for access to the international debt markets so they too can play the game of extend and pretend.
-While the banker may have or may not have deserved the firing is debatable
That's a good issue. Is the Central Bank Governor, which is an Independent Institution, supposed to obey the President of the Country's order to spend the money that was confiscated from the people? Or is he supposed to act independently?
I should read up on his arguments.
The US gov will soon be at odds with its farmers also once the dollar collapses. The farmers will be able to get so much more money for their crops selling them outside of the US than if they sold them locally to the poverty stricken Americans who will have a useless currency. Why do you think Argentina has such high export taxes on agricultural product? Answer, to try and keep the food local so not as many starve to death as they would have otherwise.
I think the US even has an executive order that allows them to take control of all forms in the event of an emergency. I would double check that though.
Executive Order 10998?
http://www.disastercenter.com/laworder/10998.htm
Wow I mean what a remix you make here. Lets analyze it point by point:
"Kirchners are running their country into the ground"
they received a country on the ground.
" confiscating pensions"
they sent a law to congress and reinstated the government based pension system. The previous system will favor only administrators as we all very well know. That was a slap on the face of big interests
"constantly at odds with the agriculture"
they just oppose being taxed. If so they can form a party and believe me they do have the resources to do so, people's support? We will see... but that is what democracy is all about. No?
Agricultural forces are the ones who have been an opposing force for generations to Argentinian industrial developments and an often support of military cups in Argentina.
And it is not the small guy who holds the lands in Argentina, of course.
" When everything crashed in Argentina several years ago, it robbed the people blind. Basically, people had no access to their money or if they did it was in small increments. Many people lost their entire life savings over that period of time."
Menem lead the way (was was a pure neocon applauded by the IMF and the establishment) and de la Rua was in power. Enough said!
"Argentina is desperate for access to the international debt markets so they too can play the game of extend and pretend."
Argentina is in a fair better shape than many other countries with fiscal surpluses a debt that has been successfully negotiated and quite high bank reserves. This considering the current international context of course.
Anonymous I will not argue your opinions what your state is full of crappy information.
At some moment if the American elected (elected to serve the people) will really attempt to serve them they will be called populists and face the same kind of opposition the Kirchners are facing ... there are a lot more parallels between the US and Argentina that you might want to believe:
A dismemberment of the industry and middle classes, a financial cauntry, an indebted country, a corrupt political class covering all up until it is too late and finally ... if somebody appears to try to address the problem (and Obama is not that person) being called a populist contrarian to the "consensus"
Kirchner has confiscated pensions, and used the money to pay another things, not to pay bertter to the pensionated persons. I wanted to stay in a private system. Why can not I?
Agricultural forces do not say not to pay taxes. They do not want to pay excesive taxes (they reach a total of 50% of the they benefit). It is a thievery!
Farmes are working people, respected by people. Many of them are now in insolvence because Kirchner´s politic
They do not want the Congress to work: is it Democracy? They use decrees to do what they want to do.
"What is it about Massachusetts? It's like a spawning ground for nefariosity."
I guess even Harvard isn't saving the day for Mass anymore. Where you couldn't find a shamble sub 100k in the eighties,nowyou find homes between 50-100 k in the general areas around Boston....
The proper question to ask is if their central bank is public or private.
The international conquest of the bankers is to control through debt, repayment of debt is not allowed, only increasing debt which increases control. Debt and interest must rise with payouts to cronies and this will be funded through taxes which act as a control and are enforced with the guns of the state - a more expedient business model does not exist.
This is a brave woman, and I applaud her.
I have to disagree here, Col Kurtz. He was blocking the use of funds confiscated from the pensions of citizens by the Gov't. The She-Devil that is President there is completely out of control. He wasn't standing up for a crony bankster network. But, naturally, the new guy (installed illegally, basically) is already pushing full bore ahead to access those funds.
Sorry Apoc Now, this woman is far from brave and certainly not deserving of your or anyone else's applause. This central banker is actually trying to preserve the people's money at this juncture, not the other way around. The botox queen is the one trying to confiscate money that by the Argy constitution is supposed to be off limits.
The Kirchners (first her husband Nestor and now the eyeliner queen) are gutting Argentina to the core. Rising commodity prices are the only thing saving the country from complete and utter ruin. MSCI recently downgraded Argy to a frontier market. While their northern neighbor Brazil is becoming a world powerhouse, the K's continue to tear Argentina apart. It's a bad time for Argys and Redrado is no saint but believe me, the botox queen does not deserve anyone's applause excepting perhaps, Hugo Chavez. He agrees with her policies 100% and finances her election campaigns with secret suitcases of cash. Google her and get the facts.
agree. It is a repudiation.
No, AN, no. Kirchner is not brave, she is another blow-hard Latin lefty who cares squat for her people. She only cares about herself and her equally nasty husband (recent ex-President Nestor Kirchner).
The Kirchners merit no applause. She can get her applause in Caracas, Managua and Havana.
All right folks, I will admit that I used my knowledge of international banking and the original article posted here to form my judgment of the situation.
But this is a very interesting story, as I tried to research additional information on the spat between the central bank president and the political president I COULD NOT BELIEVE THAT EVERY STORY IN THE WESTERN PRESS ABOUT IT PROVIDED NO INFORMATION ON THE 5 W's - Who, What, When, Where, and Why. I looked at numerous business publications on this to get both perspectives.
But then I found an article in the Buenos Aires Herald that shed more light on this issue:
The government has made official the creation of the Bicentennial Fund that reaches to US$6,5 billion of its foreign currency reserves to ensure the country meets its 2010 debt payments in a move aimed at lowering its costs of issuing new debt, the resolution was published at the Official Gazette.
The resolution published (number 2010) is signed by President Cristina Fernández de Kirchner as well the entire Cabinet. It mentions that "it is necessary to deepen the politics initiated in 2003 tended to free Argentina from its debt with international lending organizations that will allow a better access to credit options by both public and private sectors."
Many presidents of countries that desire self rule are derided in the western press, you know the countries that don't want to turn over all their natural resources to foreign corporations? At the same time, if this individual authorized the theft of public pensions she should not be trusted, but the central bank president didn't seem to have any problem with that. Could she be conspiring to create a fund in her control that she and her cronies can pilfer? Yes. But we don't know, do you trust a political president or a central bank president more with this honey pot of money (it appears they were fighting over control of it).
The political president stated she wanted $6.5 billion of the countries surplus to pay down foreign debt that was at a high interest rate - if that is the purpose than it is to be applauded, you should watch the movie the International to understand why bankers push for wars, to increase debt and interest payments. Pay off the debts, be free.
George Soros has been buying up farmland in Argentina, he is well connected and was probably looking for a country turnaround (surplus increasing) in a controlled country - at least the central fed president is most likely controlled by the west.
This would be a good case study for C.D.
Export taxes on agricultural goods are so destructive that the country is close to being a net importer of beef! This is ridiculous -- Argentina is like the Saudi Arabia of beef.
Super-low world prices for beef and grains don't help either.
As a result, good farmland and grazing land is going cheap in Argentina.
This isn't actually a good thing. Kirchner is another one of these hybrid social/fascist types, somewhere between our right's view of Obama and the reality of Hugo Chavez. This simply marks another banana in Argentina's republic status.
She sure throws a good parade though, was down there during one of her political rallies before the election, and and while I had ice cream and water thrown at me by some not-so-friendly Argentines who apparently didn't like Americans, she sure was popular at the time.
Okay I may dislike the central bankers as much as any other honest citizen, but can't get behind Kirchner. She is pure scum, the epitome of corruption and a blight on Argentina.
Though it does make me wonder what would happen if Zimbabwe Ben refused to buy bonds to fuel the spending orgy? I wonder if he would be booted out or just get a visit from some friendly gentlemen who work in our black sites worldwide? Idle ponderings since he will print, but an interesting question.
Yeah, you gotta wonder if Ben hears this news and adds another Tylenol PM to his nightly cocktail.
And wonder what would happen if the bastard would refuse to resign as the harvard economist did ? Naa, impossible since he is the best helicopter pilot worldwide and the fastest ink purchaser also worldwide !
-At least in Argentina the Central Bank is answerable to the president
That's quite an assumption. Just because she fired him doesn't mean he won't show up for work tomorrow. It is Argentina, after all. By the way, Ms. Kirchner is pure evil.
OT,
Cristina Fernandez de Kirchner may be a fascist type, but I would love to get fired by her Woo Hoo.
She's not bad looking considering how old she it. Bet she was quite the looker 30 years ago :) If if I had to do the deed with an old thief I would definitely pick her over Mrs. Pelosi!
I live in Argentina. The central bank is public, not private. The government here just raised taxes on the self-employed lower-middle class slave to the populist hordes by 85%!! The people here are sheep, save for the swine in government and their thugs. We're due for another collapse, and Madame Waxworks and Pinocchio will be the proximate cause. Their financier backers, however, must await word from the big boys in the Big Apple and points east.
Mene, mene, tekel upharsin. Tick, tick, tick.
Crack addicts can fire their dealers you know.
Ok, i give up.
http://www.bloomberg.com/apps/news?pid=20601086&sid=a3buPPeuKHmw
Let me get this straight:
- Argentina defaulted on debt
- Argentina now wants to NOT default on debt due, by paying it
- public-servant bank-fella refuses to pay down national debt with reserves, gets fired.
The debt due is in USD, so he figures it makes sense to wait before paying, as it'll fall?
ROTFLMFAO...well said Tyler...just brilliant!
A hurdle has been cleared to the emasculation of Argentina in preparations for a South American economic and political zone patterned after the EU. Look for a "rescue" of Argentina led by Brazil and China later this year.
That's an interesting possibilty. Would serve Argentina right to have their old rival Brazil come in and boss 'em around. China could buy their corn, wheat and soybeans as well.
Not so good for the USA though.
You think Argentina is envious? Can you imagine poor Gideon Gono? Bernanke's hero is disgraced for doing exactly as his mentor does.
Ah, the advantages of having a reserve currency.
double post.
"I live in Argentina....The people here are sheep, save for the swine in government and their thugs."
people are sheep everywhere....look at this country!
I believe Argentina used to 'deport' its political criminals. Put them in a C-130 and dumped them in the Atlantic. Something to think about when it comes to Central Bankers.
I believe Argentina used to 'deport' its political criminals. Put them in a C-130 and dumped them in the Atlantic. Something to think about when it comes to Central Bankers.
Can't blame you for the sentiment, but in the bygone days the U.S. central banker most likely to have been fired would have been Paul Volcker.
I don't think many people here know how hated he was in 1982.
Cristina Fernandez de Kirchner is already up for embezzlement charges...
"Following charges of embezzlement filed by the attorney Enrique Piragini, on 29 October 2009 Federal Judge Norberto Oyarbide ordered an accounting expert to investigate the origin of the Kirchners’ wealth. Public records show that since their arrival to power in 2003, the declared assets of Mrs. and Mr. Kirchner have increased by 572%. A preliminary report on the investigation by the Argentine Anti Corruption Office (OA) established that the official figures provided by the Kirchners "don't stack up"."
Good reporting Anon 186369.
Why am I not surprised that the Kirchners are (likely) corrupt?
The cycle is starting again. The IMF will get their foot in the door then the international banks will follow.
" At least in Argentina the Central Bank is answerable to the president, instead of the other way around. "
Hysterical.
2010 is 3 dozen years from 1974...you remember '74, the year Nixon resigned...well, 36 years is a nasty political cycle so I'll make my 2010 predictions by harking back to 1974:
Like Agnew, Biden is indicted for a criminal act.
Like Nixon, Obama resigns just before being impeached.
Can't believe its Pelosi, so I'll go with Hillary as the next Jerry Ford.
Interesting. I thought Chris Dodd's unexpected resignation announcement made last week might signal something very much along lines you suggest.
I look forward to watching Ben Bernanke "fire" Barack Obama.
Surviving In Argentina
http://ferfal.blogspot.com/
This guy gives a pretty good picture of what its like to live in a country after economic collapse. Offers pragmatic advice on how to cope once the SHTF. He does not have any kind words for Kirchner.
when you start looking for salvation through argentina's judicial system, things are amiss.
The central banker is right and Argentine President Kirchner is the abuser and who violates the law.
According to the law of Argentina central banker is appointed and responds only to the representatives of the people in the parliament.
Central bank reserves and currency are the property of the Argentine people not the government.
What President Kirchner had demanded him is a crime. Using funds from the reserve central bank requires the express mandate of the parliament.
- reserves to keep the monetary base are near 50B, what shedevil is using is 33% of the excedent reserves (about 17B)
- Central bank is autonomous public institution, Redrado can only be outed by congress
- shedevil, like a magician, in one sweep: 1)changed the central bank statutes 2)fired the chairman 3)filled criminal charges against him (this was needed to fire the guy) 4)named the next sheepable guy in line as interim president 5)took the money shedevil wanted
Months ago she also dipped (hoarded) in the pension funds, left there a lot of worthless debt papers.
Judicial system is a joke here...
With all this corruption we still (somewhat) function and manage to pay debt, imagine for a sec what this country would be if we had competent people running it (instead of ruining it)
sob
The president of the cenral bank shoud never be populair.
His job is to maintane the value of the currency and not
give in to spendsick polititians.Cheers for this man!!!
Argentina hizo las cosas tan MAL durante 90 años que si cualquier otro pais del mundo llamese China, Rusia, Francia, Inglaterra o Mexico, las hubiesen hecho, ya habrian Desaparecido del Mapa...
Por primera vez, un presidente del Banco Central quiere defender la moneda y entonces lo amenazan a el con hacerle JUICIOS POR MAL DESEMPEÑO.
First of all, I want to say that I really like this blog. I read it everyday.
But please limit your "special news coverage" to places where you can actually provide some informed insight. You obviously don't have a clue of what it's like to live in Argentina, or have any idea of what its politicians are like (just get the US politicians' level of corruption and elevate that to the 100th power).
What the Argentinean Gov't is trying to do is the same thing the US Gov't is doing: Keeping the Ponzi scheme rolling. I thought this blog was against that...