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The Illustrated Guide To 20 Years Of Latin American Debt Crises

Tyler Durden's picture




 

As the Argentina farce rolls on, it is worth noting that this is nothing new. As Bloomberg Briefs shows below, Latin American nations have been serial defaulters for the last 20 years.

Click image for large legible version

 

Source: Bloomberg Briefs

 

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Fri, 08/01/2014 - 20:21 | 5035904 Sudden Debt
Sudden Debt's picture

Live rich and die poor

Fri, 08/01/2014 - 20:28 | 5035929 zaphod
zaphod's picture

So what, the US has been in default on it's dollar/gold convertibility obligations for almost 100 years.

Fri, 08/01/2014 - 20:32 | 5035948 AchtungAffen
AchtungAffen's picture

Well, get Griesa to rule on that then.

Fri, 08/01/2014 - 20:57 | 5036033 Deathrips
Deathrips's picture

Cliff Notes.

 

Fiat and Socalism...blah blah blah...Kill People.

 

Then End.

 

RIPS

Fri, 08/01/2014 - 20:42 | 5035991 doctor10
doctor10's picture

It's a chronicle of Viagra driven bank rape's what it really is

Fri, 08/01/2014 - 21:17 | 5036108 TideFighter
TideFighter's picture

Latin American Countries? Me thinks the other needs a map.

Fri, 08/01/2014 - 21:38 | 5036177 nmewn
nmewn's picture

"Live rich and die poor"

The key to making that work is, letting "them" know what you spent, not what you left ;-)

Sat, 08/02/2014 - 09:36 | 5037215 junction
junction's picture

In an article on the Argentina debt default, a Buenos Aires newspaper included a photo of Judge Griesa.  He looks like a cadaver, his expression that of a really strange dude.  How this arrogant psychopath got on the bench is anyone's guess.  His demand that Argentina stop blasting his decision in the press shows how insane he is.  A court jester pretending to be a latter day Emperor Nero in robes. 

Argentina looks now to be ready to cancel its payment plan to the other major debtors, to call Griesa's bluff.  So far, Griesa has said nothing about how much Singer's vulture fund paid for his Argentinian bonds.  The silence from the Obummer White House and Treasury Secretary/Former Union Buster Jack Lew on this deranged court decisionr is typical.  Their Mafia-style mantra: Protect Wall Street looters at all costs.

--- 

Buenos Aires Herald article: US District Judge Thomas Griesa, in a stern tone, today criticized Argentina's decision to default on $29 billion in debt earlier in the week rather than pay holdout investors as ordered.

In a court hearing, Griesa told lawyers for Cleary Gottlieb, which represents Argentina, to "take steps to stop the misleading information being released by the Republic" regarding the battle between investors and the country. Elected officials in the South American nation have repeatedly stated that they had met their debt obligations, which Griesa said was a "half truth."

"The republic has issued public statements that have been highly misleading, and that has to be stopped," he said.

Griesa had ordered the nation to pay $1.33 billion plus interest to NML Capital, a unit of Elliott Management Corp, and Aurelius Capital Management, the two leading US hedge funds who were not among those who agreed to accept new bonds after the nation defaulted in 2002.

The government argues that by depositing $539 million for a scheduled June 30 coupon payment at the Central Bank of Argentina in the account of Bank of New York Mellon, the trustee, that it had satisfied its obligation to pay its debts. Griesa had ordered BNY Mellon not to transfer that money to bondholders that exchanged debt in 2005 and 2010.

"Half-truths are not the same as the truth," he said in court today.

The hearing was called to "clarify where we go from here," Griesa said, saying that "what occurred this week did not extinguish or reduce the obligations of the Republic of Argentina."

Fri, 08/01/2014 - 20:25 | 5035920 blindman
blindman's picture

the bucket shop of nationhood facilitated by
the ponzi, "first world", crime syndicate bankers
fiat system.
.
perkins said it.
.

Fri, 08/01/2014 - 20:32 | 5035944 The_Prisoner
The_Prisoner's picture

Proximity to the Imperial homeland and its debt-peddlers.

It would be a spectacle to behold if the South American block defaulted en masse. They have enough resources to be able to pull it off If Russia provides a nuclear umbrella, it is goodnight For the empire.

I guess that's why the US planted a military base in Paraguay.

Fri, 08/01/2014 - 20:56 | 5036036 Karaio
Karaio's picture

If I'm not mistaken Bush has a farm in northern Paraguay, is what they say.

Fri, 08/01/2014 - 21:19 | 5036103 Escrava Isaura
Escrava Isaura's picture

Guys, I would strongly recommend that you both stop saying the word Paraguay here. Every time I say Paraguay, I get scalded.

Consider yourselves warned!

Fri, 08/01/2014 - 21:32 | 5036159 DoChenRollingBearing
DoChenRollingBearing's picture

No, you should get a "plus one" as I have been reading good things lately about Paraguay.

Fri, 08/01/2014 - 22:08 | 5036253 Escrava Isaura
Escrava Isaura's picture

DoChen,

When I say Paraguay, it is not because of growth or get rich “Ponzi schemes’. NO no no!

It’s because we are entering the collapse of the Industrial Age, Oil, and Electricity.

By new Cloud9.5 [link here]

There is no political solution to diminishing resources and exploding populations.  We have been in contraction since the 1970’s.  Brilliant control freaks papered over our collapse by debasing our currency in a grand game of bluster and deceit.   A series of resulting bubbles gave us the illusion of growth while the torrent of free money gave us access to the world’s cheap labor and oil. Unable to compete with the world’s slave labor our manufacturing sector was wiped out and replaced by legions of money changers.

The blue collar workers fell out of the system joining the ranks of the lower paying service sector and going on the dole.  The bread and circuses created to placate the dependent class exploded their numbers.  As a consequence anyone not aligned to benefit from the state’s largess is swimming upstream and will in exhaustion surrender to the prevalent trend of dependency. Now what remains of the middle class works for government. 

We are in the final stages of this cycle. 

Key Point

You need to get yourself and your family ready for the next 'ugly' cycle, NOW.

Fri, 08/01/2014 - 22:09 | 5036272 DoChenRollingBearing
DoChenRollingBearing's picture

Guarani Aquifer (largest in the world).  Plenty of sunshine (for solar power and ag).  Paraguay may be a great place to hide from the possible coming global storm.

Fri, 08/01/2014 - 22:11 | 5036283 Escrava Isaura
Escrava Isaura's picture

Repostering

Again, let me summarize. Please click the bold areas:

The reasons of ‘getting curious’ about Paraguay are very simple: 1) External debt: #105  2) 100% hydroelectricity. Paraguay is the worlds’ largest exporter of electricity—even when its electricity distribution is the worse in South America. 3) Largest fresh water reservoir in the world. 4) Tropical weather—plenty of food and animals 5). More than half of its exports are food. 6] One of the least urbanized nation in the world—which will come handy during the coming [oil] humanity crisis.

Sat, 08/02/2014 - 01:50 | 5036763 DoChenRollingBearing
DoChenRollingBearing's picture

We agree.

Fri, 08/01/2014 - 23:25 | 5036501 Cornfedbloodstool
Cornfedbloodstool's picture

I hate you go away, Ugly cubajn or some shit, get out of here!

Sat, 08/02/2014 - 07:48 | 5037059 Escrava Isaura
Escrava Isaura's picture

Corn Fed,

You are what you eat.

Fri, 08/01/2014 - 20:40 | 5035980 BovespaBroker
BovespaBroker's picture

Argentina default because they cant print money like US can.

Argentina needs to get dolar from a thirthy party, by exporting or increase interest rates.

 

 

 

Fri, 08/01/2014 - 21:47 | 5036208 The_Prisoner
The_Prisoner's picture

That's my point. A coodinated default, coupled with a comodities backed currency.

South American bloc has real resources, contrary to the US and Europe which only have broken promises.

For much longer will the world follow the West? History has show they do not know where they're going. And every couple of decades they throw a new war to try and scare people in line again.

Think about it:

Brasil, Paraguay, Argentina, Uruguay: farmland, water, hydro power

Chile: Minerals

Bolivia: natural gas

Venezuela: Oil

Peru: Minerals

If there is a block that can throw away the western model of financial capitalism, is the one above.

The socialism wave currently reocurring through South America is a reaction to years of oligarchy. It stands to reason the pendullum would swing to the left, it is just a matter of returning it to the centre. It can be done by de-dollarization.

One of my last points. Advertising professionals in Brazil and Argentina are among the best paid in the world even in Dollar standards...reason being corporations want to draw people away from the family-centered model of South American life into the western consumerist model.

 

 

 

 

Fri, 08/01/2014 - 20:40 | 5035981 BovespaBroker
BovespaBroker's picture

Argentina default because they cant print money like US can.

Argentina needs to get dolar from a thirthy party, by exporting or increase interest rates.

 

 

 

Fri, 08/01/2014 - 21:02 | 5036043 Escrava Isaura
Escrava Isaura's picture

Ladies and Gentlemen, REN, at Real Currencies.com:

Nature of debt money [dollar], specifically that created by hypothecation.

The hypothecation mechanism takes the borrower’s credit and assigns it to the banker. The banker then creates bank money, even though the debtor provided his asset or future labor. Banker’s risk is also low, as the debtor’s assets can be foreclosed.

This banker money splits into two parts at birth: A debt instrument is created i.e. loan documents, mortgage or some sort of debt claim. Simultaneously, the banker creates ‘his new’ money as an output of the loan. This money is called banker.

However, the instrument may travel a path different [where this fraud/loot gets in high gear]… The two entities may be disallowed from returning to each other, and hence they cannot cancel out. This is a clear danger…These two paths, and disallowing is not comprehended well by economists.

In the case of Germany circa Versailles treaty, a three way triangular flow was created. The allies had to pay back dollar denominated debts to America for war material borrowed. Germany in turn was put on the debt hook to pay dollars, gold, pounds or Francs to the Allies.

The U.S. didn’t allow much in the way of German goods importation, so Germany could not acquire dollars in trade to pay allies, who wanted dollars to pay their debts. Ultimately, Germany borrowed (more debt) from wall street to pay into the triangular flow. This triangular flow led to the hyperinflation, and ultimately a populist (Hitler) being elected.

Germany issued bonds to create credit money in Wall Street. Credit dollars found their way from Germany and ultimately to the U.S. treasury, as if they were going from one U.S. pocket to the other. However, Germany, England and France all had dollar debts that were outside of their legal system. They had difficulty acquiring the dollars to satisfy the debt instrument outside their country. This ultimately led to WW2.

It should be a cardinal rule in economics; never let your debts point outside of your legal system. How many need to die before this rule is learned? Debt money, even without usury is dangerous if not kept under control.

Lately, the U.S. has used debt instruments to create empire. A foreign country. lets say Bolivia, is hooked on dollar loans. The dollar denominated debt instruments are attached to the whole country and population. The BM [Bank Money] soon leaves the economy as much of it becomes bribe money for leaders, and the rest goes overseas to buy the power plant, or road construction machinery, etc.

The rosy economic picture of the World Bank projections never materializes, hence no dollars are available in local economy to cancel the debt instruments. Bolivia does not have enough dollars and the Bolivian currency comes under pressure.

At that time bear raiders [speculators] borrow BM money into existence and attack, causing the local money to collapse. Predators [US banks] can then enter with dollars and buy up the country, leading to Oligarchy. Or, dollar zone countries (U.S. with its military) may go in and demand their pound of flesh, i.e. resources such as oil extraction, in exchange for the debt relief.

So, usury turbocharges the debt problem, as there is not enough money to pay off the instruments. But, also there is a big problem of path, where the BM [Bank Money] is not available… it has disappeared.

Fri, 08/01/2014 - 21:02 | 5036055 Playtime's Over
Playtime's Over's picture

The big boys can string it out cuz we da reserb. Still no sympathy from this dude.  I love seeing consequences......for shitbags.

Sat, 08/02/2014 - 22:43 | 5036133 Snake
Snake's picture

Argentina is in great economic shape.  The country has, above all, great dignity, plus lots and lots of resources, used to help - not banks, usurers and gamblers but - its people.  Argentina's position facing Griesa and the US Judicial system is a turning point in world financial history.  Keep this words and get back to me in ten years.  

 

 

Fri, 08/01/2014 - 21:38 | 5036179 alexcojones
alexcojones's picture

25 years ago I lived in Rio de Janeiro, Brazil. I spent a year there trying to be Paul Gauguin but found instead that I was a lesser artist: myself. At that time--1989/1990--few tourists traveled to Brazil. Rio was considered the most dangerous city in the world, with around 2,000-3,000 murders annually. If that weren't enough, inflation for 1989 was about 1,200% annually, as I recall. Each day you would see the value of the currency plummet in myriad ways. The daily newspapers (there were six) carried headline announcements, of course. Items in stores were often marked with three or four different prices and often whole shelves were emptied of a single item because smart shoppers knew the price would soon double.

I would walk or bus wherever I went. At the bus stop, I'd see money--coins & currency--scattered in the gutter. For the first couple of days, I'd pick up large and shiny coins and stare at their dates. A former coin collector, I'd wonder why a coin minted only a year ago now lay in the gutter. Valueless, my Brazilian friends would tell me, like the government. They had a few wonderful words--"safados"--scoundrels or "ladrones," which meant thieves, to classify their political leaders.

At the time I arrived, you received three Cruzados Novo for each American dollar. This new "novo" cruzado was stamped (see photo) with a triangle designating its new value--or devaluation--over the old 1,000 cruzado note . In 1989, the Brazilian government decided to drop three zeros and change the name of the currency henceforth to Cruzado Novo. Since then the currency has been changed yet again to the Real.

It seems Brazil was busted from too much spending, All that borrowed money by Brazil, and the massive debt incurred, landed squarely on the shoulders of the average citizen when payment came due. To the average citizen, these were scary, stressful times. Paper money became a roller coaster ride; vendors, landlords and even prostitutes preferred US dollars. Wages were adjusted constantly to keep up with the inflation rate.

Frequently, on my walks, I would see large paper bills, 50,000 or 100,000 "old" Cruzeiros, in the gutter, but after awhile I never picked up any more money. I found it wasn't even worth a fraction of a cent. Likewise, at the beach you could see shiny coins roiling in the surf but no Brazilian bothered to retrieve them.

Fri, 08/01/2014 - 21:40 | 5036184 alexcojones
alexcojones's picture

And also, 25 years ago...in Brazil.

One of the most peculiar sights I saw in Rio during those crazy times involved a card table and a vendor. Piled atop the card table were stacks of crisp currency from years past. I never saw so much paper money! For pennies on the dollar you could purchase a thick wad of worthless money. For a few dollars I could have purchased a veritable fortune in yesterday's legal tender--now worthless. As America goes reeling towards bankruptcy, not just in the eyes of the world but financially, I wonder whether some future vendor might following this same example to survive.

Fri, 08/01/2014 - 21:48 | 5036214 Escrava Isaura
Escrava Isaura's picture

Alex,

Check the link below. Found its clarity priceless.

By the way, I sent that link to all my friends/colleagues/contacts. They all look at me differently. Anyway, hope you, and many Hedgers, will appreciate.

http://howtosavetheworld.ca/2013/07/05/will-the-collapse-of-civilization-begin-with-global-corporatist-totalitarianism/

Sat, 08/02/2014 - 07:52 | 5037062 wintermute
wintermute's picture

Get with the program: http://www.reddit.com/r/Bitcoin/

Sat, 08/02/2014 - 13:42 | 5037918 Escrava Isaura
Escrava Isaura's picture

Don't know much, if anything, about Bitcoin.

Sorry!

Anyway, check this post by Dubaibanker. Looks like something similar… I think.

Sat, 08/02/2014 - 03:16 | 5036855 Ariadne
Ariadne's picture

Can't you see the apparent hostile foreign manipulation in this rorschach? You're all under it. Then there's the drift...

Sat, 08/02/2014 - 07:46 | 5037058 Escrava Isaura
Escrava Isaura's picture

Hello cute face!

Sat, 08/02/2014 - 09:26 | 5037196 Salzburg1756
Salzburg1756's picture

The US will double (de)fault: it will lose not only the value of its dollar but also its way of life and form of government. Game, set, match!

Sat, 08/02/2014 - 11:45 | 5037507 SMC
SMC's picture

Remember when this trash was being peddled, things were going to be DIFFERENT this time...

No sympathy for the bag holders on this one.

Sat, 08/02/2014 - 14:00 | 5037978 Spine01
Spine01's picture

All of these have been highway robberies by the Bankster mafia. Where the indigenous populations have paid the price for generations.

But if you want to understand the latest "legal" robbery that used an honest to God USA judge, Griesa as an unwilling tool, read this article from the Argentinean minister of Economy (a PhD in Economics), denouncing Griesa and NML Elliot funds.

https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&...

Original in Spanish here: http://tn.com.ar/politica/griesa-sigue-sin-resolver-nada-acusaron-desde-...

CNV refers to their local SEC. Since for them is a case of clear insider trading. Basically NML Elliot or Societies that directly or indirectly belong to them bought a huge amount of current Argentinean bonds (bonds from the (94% that agreed to the exchange in 2004-5) and insured them with the ISDA. So by forcing Argentina to default, since they had no option, now NML is going to benefit from 1 billion USD in gains from the ISDA insurance. That is why JPM and other big banks were attempting to intervene, but they didn't see it coming until it was too late. All perfectly legal and with a judge in the middle. If it wasn't the there is a Country with a very shroud Economy Minister on the other side of the equation, nothing would be made public and Griesa wouldn't even know that he could have just been a tool in NML's hands. Now the pot is uncovered and the Argentina SEC is requesting the USA SEC to investigate, and the big banks that have to pay the insurance will be only too happy to help.
I can't wait for the next chapter to be written, this is like a fiction novel on the media. Thanks Internet!

And Tyler is rightfully so missing it, given its complexity, but they will catch up in a few weeks. There is no way they will be able to shut Argentina up.

Do NOT follow this link or you will be banned from the site!