214 Years Of Sovereign Defaults In One Chart

Tyler Durden's picture

From 1800 to 1950, Argentina had been a relatively low frequency 'defaulter', but as the following chart from The Economist shows, since then (as we noted here) they have made up for it.

 

Argentina has defaulted on its external debt seven times and on its domestic debt five times since independence almost 200 years ago, putting it somewhere in the middle of the historical ranks of the world’s serial defaulters.

However, as WSJ notes, a long history of economic booms and busts have scarred the national psyche and left external creditors wary as the country hovers on the edge of  its second default of the 21st century.

Argentina first defaulted on its sovereign debt in 1827, just 11 years after declaring independence from Spain.

 

 

As The Economist adds,

Ecuador and Venezuela have both reneged on their debts ten times; four other countries have defaulted nine times in total, according to data from Carmen Reinhart and Kenneth Rogoff, two experts on sovereign debt.

 

Nine of the top ten defaulters are from Latin America, although many have shown no trace of the debt-default disease for decades. That, alas, is plainly not the case for Argentina.

h/t @palmerandrew via The Economist

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PlusTic's picture

US will be on that list soon...

SHEEPFUKKER's picture

Should already be on there. 

Vampyroteuthis infernalis's picture

I thought the US was already on the list?

eclectic syncretist's picture

The Fed/TBTF banksters plan to raise interest rates and blame the ensuing economic catastrophe and inevitable dollar crash and US debt defaults on the politicians, freeing up the banksters from being appropriately blamed as they should be, and then they will be free to fuck your children and your children's children even more dramatically in the future.  The US dollar/FRN means nothing to them, as any other comparable eidolon will suit their purposes just as well.

Murf_DaSurf's picture

 

 

Whelp, that sums it up better than any FED Minutes Release ever could

Ariadne's picture

The High Ground Maneuver that we've been paying for ever since

Juno Rock's picture

Kinda of weird that of the top 10, 9 are South American? wtfiuwt? 

nopalito's picture

Proxies for the US perhaps? It's a clear signal when this happens so often in the US's own backyard.

A Nanny Moose's picture

At least 3 times. Lincoln, FDR, and Nixon come to mind. Currency debasement is an admission of default, by its very nature.

So we've defaulted nearly every day since the Fed.

oudinot's picture

The US technically defaulted twice:  1.  1933 when the Roosevelt administration forced all American to redeem their gold for $20 per ounce.

                                                    2.   1971 when Nixon closed the gold window.

 

The Confederacy defaulted outright in 1864.

                                                

 

Winston Churchill's picture

1971 was the last US default.

It was not the first, nor will it be the last.

Tick tock.

CPL's picture

It's a good way to tell who's causing the problems though isn't it? 

As the weathly herd thins out, their numbers dwindle, finally a few stand.  How they got 'to the top' is only reflected in how poorly this world is doing under their stewardship.  Every where around those people is ground zero for a growing list of problems.  Those last few greedy monkey's have their hands in the honey pot, all trapped by their own stupidity.  They only had to let go. 

But what are you going to do?  Nothing, today or in the past history the process and motivations of thieves never change.

In past history the best remedy for thieves was pretty brutal.  The thief caught had BOTH hands removed at the wrist, then those hands would be nailed to the town square platform usually next to the stocks where the thieves were typically pegged (wood dildo strapped in their ass) and in stocks with their knee's hobbled (broken side ways, then set sideways).  Usually there would be the equivalent of a 'watcher' waiting to see who assisted the thief to take notes and gather intelligence, then perform the historical equivalent of a sting operation to burn out any problematic 'guilds', or silently remove them.  Usually after a couple of polite notices are given first.  Otherwise thank goodness it's not then.  Most cities would stink of rotten body parts if that's how Justice worked today.

Now don't get me wrong, being the last person standing works well in academics and sports and clubs, it illustrates merit and a spirit of competition anyone should strive for. 

In poorly managed situations, you don't want to be the last man or woman standing.  Tend to stick out like a nail, and there's nothing more annoying than catching a toe on an errant nail.  Usually means that nail needs to be pounded back into it's place, hard and without mercy or replaced.

 

Herd Redirection Committee's picture

Theft is bad.  Robbery is good.

See, you are missing the part where you threaten the person you are stealing from, with violence.

bardot63's picture

Planned inflation is technically a default.  So the last time the USA defaulted was today.

Big Brother's picture

I would also throw in 1933.  So two times since 1800.

taoJones's picture

Didn't the US experience a bankruptcy in 1930?

sleigher's picture

Haven't we been operating in bankruptcy ever since?  Or is that around the time our labor was pledged as surety against the debt via birth certificates?  

smlbizman's picture

http://www.barefootsworld.net/admiralty.html

"My investigation convinced me that during the last quarter of a century the average production of gold has been falling off considerably. The gold mines of the world are practically exhausted. There is only about $11,000,000,000 in gold in the world, with the United States owning a little more than four billions. We have more than $100,000,000,000 in debts payable in gold of the present weight and fineness. . . As a practical proposition these contracts cannot be collected in gold for the obvious reason that the gold supply of the entire world is not sufficient to make payment." -- Congressional Record, Congressman Dies, March 15, 1933

Before 1933 all contracts with the government were payable in gold. Now I ask you? Who in their right mind would enter into contracts totaling One Hundred billion dollars in gold, when there was only eleven billion in gold in the whole world, and we had about four billion. To keep from being hung by the American public they obeyed the banksters demands and turned over our country to them. They never came out and said we were in bankruptcy but, the fact remains, we are. In 1933 the gold of the whole country had to be turned in to the banksters, and all government contracts in gold were canceled. This is bankruptcy.

"Mr. Speaker, we are here now in chapter 11. Members of Congress are official trustees presiding over the greatest reorganization of any bankrupt entity in world history, the U.S. government." -- Congressman Traficant on the House floor, March 17, 1933

The wealth of the nation including our land was turned over to the banksters. In return, the nations 100 billion dollar debt was forgiven. I have two papers that have circulated the country on this subject. Remember Jesus said "money is the root of all evil" The Congress of 1933 sold every American into slavery to protect their asses. Read the following Congressional quotes:

"I want to show you where the people are being imposed upon by reason of the delegation of this tremendous power. I invite your attention to the fact that section 16 of the Federal Reserve Act provides that whenever the Government of the United States issues and delivers money, Federal Reserve notes, which are based on the credit of the Nation--they represent a mortgage upon your home and my home, and upon all the property of all the people of the Nation--to the Federal Reserve agent, an interest charge shall be collected for the Government." -- Congressional Record, Congressman Patman, March 13, 1933

 

"That is the equity of what we are about to do. Yes; you are going to close us down. Yes; you have already closed us down, and have been doing it long before this year. Our President says that for 3 years we have been on the way to bankruptcy. We have been on the way to bankruptcy longer than 3 years. We have been on the way to bankruptcy ever since we began to allow the financial mastery of this country gradually to get into the hands of a little clique that has held it right up until they would send us to the grave." -- Congressional Record, Congressman Long, March 11, 1933

zaphod's picture

Thank you, wish I could upvote more.

It is amazing the white washing of history, no one understands this history of money and no one cares. The next generation of kids only sees global warming, arctic seals and more government help as the issues of importance. 

Tom Servo's picture

The James Traficant quote was from 1993, not 1933- i wish people would stop misquoting that.  It is also interesting to note that 9 years later he got nailed for improper use of campaign funds and got sent to PMITA prison for it... coincidence?

 

 

smlbizman's picture

not the same traficant...this guy had better hair...

Dr. Engali's picture

Uhmmmm.... The U.S defauled several times and they are currently defaulting via the printing press.

orez65's picture

"US will be on that list soon..."

No, the US was left off that list:

Circa: The "Continental" 1781, the "Confederate Dollar 1865, the "Greenback" 1868, US dollar 1932 FDR devalues from $20 per ounce to $35 per ounce, 1971 Nixon devalues from $35 per ounce to "no gold per dollar". 

piceridu's picture

It already happened: 1933 and 1971

Max Damage's picture

When does the USA's default get recorded on there? Already defaulting via the printing press

Ah it says External. The USA has a sheet all for itself with several entries including 2012 - 2014

slotmouth's picture

I've got my money on the Ruskies for the next one.  

potato's picture

with enough sanctions, the opportunity cost of defaulting becomes lower than the opportinity cost of servicing debt.

malek's picture

That's seems like a clueless statement to me.

Russia already defaulted in 1998, leaving them with very little debt. Please show me how much new debt they amassed since then, as I would assume it is low compared to all other major countries in the world.

slotmouth's picture

Argentina defaulted in 2001.  Lightning tends to strike the same place over and over.  Russia has a major demographics problem and their economy is totally dependent on selling oil and gas. Russian banks have a lot of fx debt that will get harder to payback as the Rouble weakens.  If the banks go the govt will probably have to bail them out, collapse or both.  I'm not saying this is a definite scenario, but sometimes predicting defaults is more complicated than just looking at debt to gdp.

malek's picture

 Russia has a major demographics problem
as have Japan, Germany, Italy...

and their economy is totally dependent on selling oil and gas
I'm sure other countries would love to have that problem.

Russian banks have a lot of fx debt
source?

q99x2's picture

Hehe. Greece defaulted. I knew they would.

dontgoforit's picture

The world is defaulting.  Reset button just waiting for a meaty hand to go push.

FieldingMellish's picture

South America is default. Maybe drop the "South" part one day too. 

Duffy's picture

heh. cool chart, man!

buzzsaw99's picture

spain is long overdue for a default

AurorusBorealus's picture

You might want to phone the CIA to ask why Argentina´s government became so unstable after 1952... seems to be a common occurence in Latin America during that era.

DIgnified's picture

Look at all that socialism success. FORWARD!

/s

what's that smell's picture

PORTIA: A pound of this merchant’s flesh is yours. The court awards it and the law authorizes it.

 

SHYLOCK: Most rightful judge!

 

PORTIA: And you must cut this flesh from off his breast. The law allows it, and the court awards it.

Dr. Engali's picture

Funny, why isn't the U.S listed in there for 1933 and 1971 when they defaulted on gold? Nor is there mention of their various other defaults prior to 1933.

Winston Churchill's picture

Depends on who rewrites the history, Winston.

How many fingers again ?

Atomizer's picture

I read the newspaper the other day.. It's, it's 4% GDP.

George Orwell

bardot63's picture

Starting with the Continental Dollar before the USA was out of diapers.  And, planned inflation is technically a default, so the last time the USA defaulted was today.

Cthonic's picture

Right, don't forget Treasury Secretary Chase's inability to redeem Demand Notes for specie, 1862 ...

q99x2's picture

Germany defaulted in 1945. When the new world order fails and the smoke of the earth is filling the solar system the microbes on Mars are going to say, "Looks like the NWO defaulted."

Glass Seagull's picture

 

 

1825

1925

2025

Yen Cross's picture

  By the looks of things 2025 if not sooner should be a mirror image of the 1925 area. They didn't have wide spread TV, Interwebs, or Tweaker back then, so It could happen sooner.

Mercury's picture

A lot of socialist paradises on that list!

...and pretty much every country that speaks Spanish or Portuguese.

Also, I'd score Germany as '1' (socialist) since it wasn't a unified country until 1871. 

Austria's fat 7 is somewhat surprising however.

It's easy to forget that the USA is actually one of the oldest governments in the world and has the oldest written constitution still (nominally anyway) in service. That helps quite a bit in this regard.

On the other hand France has had at least a dozen different governments over the same period (and Italy!...fuggetaboutit!) and I don't see them on the list - but I'm pretty sure they defaulted circa Napoleon.

 

dynamictrader's picture

Interestingly, No Asian Names in there.