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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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Thu, 07/31/2014 - 11:24 | 5027384 PlusTic
PlusTic's picture

US will be on that list soon...

Thu, 07/31/2014 - 11:28 | 5027411 SHEEPFUKKER
SHEEPFUKKER's picture

Should already be on there. 

Thu, 07/31/2014 - 11:43 | 5027484 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I thought the US was already on the list?

Thu, 07/31/2014 - 12:01 | 5027557 eclectic syncretist
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.

Thu, 07/31/2014 - 12:02 | 5027586 gafgroocK
gafgroocK's picture

 

 

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

Thu, 07/31/2014 - 13:04 | 5027897 Ariadne
Ariadne's picture

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

Thu, 07/31/2014 - 13:29 | 5028011 Juno Rock
Juno Rock's picture

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

Thu, 07/31/2014 - 15:15 | 5028646 nopalito
nopalito's picture

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

Thu, 07/31/2014 - 12:40 | 5027742 A Nanny Moose
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.

Thu, 07/31/2014 - 13:51 | 5028138 oudinot
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.

                                                

 

Thu, 07/31/2014 - 11:29 | 5027419 Winston Churchill
Winston Churchill's picture

1971 was the last US default.

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

Tick tock.

Thu, 07/31/2014 - 11:57 | 5027532 CPL
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.

 

Thu, 07/31/2014 - 13:44 | 5028096 Herd Redirectio...
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.

Thu, 07/31/2014 - 12:06 | 5027606 bardot63
bardot63's picture

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

Thu, 07/31/2014 - 12:31 | 5027722 Big Brother
Big Brother's picture

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

Thu, 07/31/2014 - 11:31 | 5027425 taoJones
taoJones's picture

Didn't the US experience a bankruptcy in 1930?

Thu, 07/31/2014 - 11:37 | 5027460 sleigher
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?  

Thu, 07/31/2014 - 12:00 | 5027465 smlbizman
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

Thu, 07/31/2014 - 13:04 | 5027899 zaphod
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. 

Thu, 07/31/2014 - 15:23 | 5028712 Tom Servo
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?

 

 

Thu, 07/31/2014 - 18:59 | 5029932 smlbizman
smlbizman's picture

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

Thu, 07/31/2014 - 11:43 | 5027488 Dr. Engali
Dr. Engali's picture

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

Thu, 07/31/2014 - 12:28 | 5027708 orez65
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". 

Thu, 07/31/2014 - 13:34 | 5028038 piceridu
piceridu's picture

It already happened: 1933 and 1971

Thu, 07/31/2014 - 11:45 | 5027391 Max Damage
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

Thu, 07/31/2014 - 11:25 | 5027398 slotmouth
slotmouth's picture

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

Thu, 07/31/2014 - 11:31 | 5027426 potato
potato's picture

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

Thu, 07/31/2014 - 11:54 | 5027538 malek
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.

Thu, 07/31/2014 - 14:26 | 5028337 slotmouth
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.

Fri, 08/01/2014 - 00:16 | 5031257 malek
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?

Thu, 07/31/2014 - 11:26 | 5027401 q99x2
q99x2's picture

Hehe. Greece defaulted. I knew they would.

Thu, 07/31/2014 - 11:38 | 5027469 dontgoforit
dontgoforit's picture

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

Thu, 07/31/2014 - 11:27 | 5027402 FieldingMellish
FieldingMellish's picture

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

Thu, 07/31/2014 - 11:26 | 5027405 Duffy
Duffy's picture

heh. cool chart, man!

Thu, 07/31/2014 - 11:26 | 5027406 buzzsaw99
buzzsaw99's picture

spain is long overdue for a default

Thu, 07/31/2014 - 11:27 | 5027407 AurorusBorealus
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.

Thu, 07/31/2014 - 11:29 | 5027413 DIgnified
DIgnified's picture

Look at all that socialism success. FORWARD!

/s

Thu, 07/31/2014 - 11:32 | 5027433 what's that smell
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.

Thu, 07/31/2014 - 11:34 | 5027436 Dr. Engali
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.

Thu, 07/31/2014 - 11:37 | 5027463 Winston Churchill
Winston Churchill's picture

Depends on who rewrites the history, Winston.

How many fingers again ?

Thu, 07/31/2014 - 12:23 | 5027687 Atomizer
Atomizer's picture

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

George Orwell

Thu, 07/31/2014 - 12:07 | 5027598 bardot63
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.

Thu, 07/31/2014 - 12:36 | 5027738 Cthonic
Cthonic's picture

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

Thu, 07/31/2014 - 11:35 | 5027437 q99x2
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."

Thu, 07/31/2014 - 11:35 | 5027449 Glass Seagull
Glass Seagull's picture

 

 

1825

1925

2025

Thu, 07/31/2014 - 11:40 | 5027478 dontgoforit
dontgoforit's picture

Purpose Driven Strife

Thu, 07/31/2014 - 11:39 | 5027470 Yen Cross
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.

Thu, 07/31/2014 - 12:02 | 5027473 Mercury
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.

 

Thu, 07/31/2014 - 11:42 | 5027486 dynamictrader
dynamictrader's picture

Interestingly, No Asian Names in there.

Thu, 07/31/2014 - 12:07 | 5027617 Mercury
Mercury's picture

Just not included here although their history with sovereign debt probably doesn't go back as far as Western countries either.

http://en.wikipedia.org/wiki/Sovereign_default

 

Thu, 07/31/2014 - 13:31 | 5028023 besnook
besnook's picture

china was the first country to try fiat, therefore the first nation to default. asian economies and cultures are much older than western economies, but, until modern monetary policy, always relied upon gold and silver and valuable commodities(rice) as the foundation of their economies. i don't know of any sovereign defaults off the top of my head pre western colonization.

Thu, 07/31/2014 - 11:44 | 5027493 Hubbs
Hubbs's picture

Sovereign Defaulter or Serial Defaulter?

Thu, 07/31/2014 - 11:45 | 5027495 hibou-Owl
hibou-Owl's picture

What is it about the equator, all the problems tend to concentrate in the warmer countries?

Anyone got any theories?

Thu, 07/31/2014 - 11:53 | 5027527 Clycntct
Clycntct's picture

The north south poles cant reverse at 0.

Thu, 07/31/2014 - 12:03 | 5027593 Canuckistan Al
Canuckistan Al's picture

Read Naomi Klein's book "Shock Doctrine"

Thu, 07/31/2014 - 11:53 | 5027525 FoolsAdvice
FoolsAdvice's picture

Iceland?

Thu, 07/31/2014 - 13:39 | 5028073 Schmuck Raker
Schmuck Raker's picture

I don't think so.

Their banks? Sure.

Thu, 07/31/2014 - 12:02 | 5027591 venturen
venturen's picture

I LOVE THE SMELL OF FRESHLY PRINTED MONEY IN THE MORNING!

Obama...."We will not cross the red line of default!(We will print our way out of this mess)"

Thu, 07/31/2014 - 12:04 | 5027597 SharkBit
SharkBit's picture

Looks like a World Cup league table.  US to win their first tournament soon.  Interesting how the usual suspects keep popping up as well.

Thu, 07/31/2014 - 12:13 | 5027646 Atomizer
Atomizer's picture

Prop me up and fuck me up the ass.

Thu, 07/31/2014 - 12:20 | 5027666 John Law Lives
John Law Lives's picture

"Nine of the top ten defaulters are from Latin America,..."

That's okay.  Obumble will welcome all their children to come to the USA.  Unlimited growth potential.  Free Pampers and Similac for everyone...

FUBAR.

Thu, 07/31/2014 - 12:24 | 5027691 _ConanTheLibert...
_ConanTheLibertarian_'s picture

This decade all will default simultaneously. That should be fun.

Thu, 07/31/2014 - 12:26 | 5027702 observiate
observiate's picture

i feel the more important question here is why the heck won't/can't banks/bankers/humans ever learn to quit extending credit to these countries

maybe a more diabolical historical interpretation is that they always get rights to commodities and/or real estate for collateral?  therefore, the bankers pretty much know the silly countries are going to default again, but if they get rights to highly undervalued, yet highly valuable collateral (commodities/real estate) they have no issue continueing to extend predatory credit to greedy dictators who have no true regard for their fellow countrymen.

Thu, 07/31/2014 - 12:48 | 5027764 Cthonic
Cthonic's picture

Bruce Krasting had a nice post describing the banker incentives for sovereign lending.  Up front fees, and someone else's mess when the bills come due.  Another take on the Mexican peso crisis in the nineties:

https://www.imf.org/external/pubs/ft/history/2012/pdf/c10.pdf

Thu, 07/31/2014 - 13:06 | 5027877 Ariadne
Ariadne's picture

The Great Satan haz bailouts for my poor poor tribe?

Thu, 07/31/2014 - 13:25 | 5027931 TNTARG
TNTARG's picture

I advise you to check who owns "The Economist".

 

How can it be considered a "default" if Argentina has made the deposit to pay bonholders of the reestructured debt severals days ago?

It's not Argentina who didn't pay the bonholders. In fact, Argentina has de receipt for the deposit. LOL

Bank of New York Mellon says Griesa don't allow them to pay. Guess bonholders are going to go after the Bank. We'll see... I have the feeling "they" are gonna fix this before that happens.

 

Thu, 07/31/2014 - 13:36 | 5028057 asiafinancenews
asiafinancenews's picture

I expected better from Kenneth Rogoff and The Economist. No mention of the People's Republic of China's selective default on China's external sovereign debt and subsequent repudiation:

http://www.scribd.com/doc/210715422/Summary-Brief-of-the-Known-Actions-o...

and

http://www.globalsecuritieswatch.org/DOJ_Antitrust_Complaint

Thu, 07/31/2014 - 14:26 | 5028338 bluskyes
bluskyes's picture

What about

US default on Gold Certificates upon closure of the gold window

US default on Silver Certificates after JFK's assassination

 

Thu, 07/31/2014 - 15:29 | 5028758 Ruger556
Ruger556's picture

I mean seriously, if the country speaks a version of Spanish, stay away!!!

Thu, 07/31/2014 - 18:49 | 5029880 honestann
honestann's picture

BEST:  Zero Debt.
NEXT:  Default.
NEXT:  Pay.

Anyone who loans to governments is corrupt, and deserves to lose.

Sat, 08/02/2014 - 08:19 | 5037093 Blast_Bug
Blast_Bug's picture

This is not fair!  Re-rank the list starting in 1960!  Gotta give Nigeria their recognition!

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