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Author Topic: Is Argentina the cyprus of 2014?  (Read 5416 times)
polynesia
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August 04, 2014, 01:44:31 AM
 #61

This is about Argentina defaulting on its bonds.  Bonds are denominated in USD so they can't print pesos to get out of mess.   Not comparable to Cyprus situation.  Cypriots bought bitcoin because imposed bank holiday

Stop thinking everything is good for bitcoin.  LOL  Roll Eyes

If Argentinians could buy USD, they would.
Depends on whether BTC is easier to lay hands on, or USD.
In the end, it could be good for bitcoin.

Did you read the story?   Agentina is defaulting on some bonds.   What does this have to go people converting their currency

The link is Argentina defaults --> Harder to get external credit --> More printing of pesos --> High Inflation.
In the end, people will have to look after themselves, if their pesos get devalued very quickly.
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August 04, 2014, 02:32:53 AM
 #62

This is about Argentina defaulting on its bonds.  Bonds are denominated in USD so they can't print pesos to get out of mess.   Not comparable to Cyprus situation.  Cypriots bought bitcoin because imposed bank holiday

Stop thinking everything is good for bitcoin.  LOL  Roll Eyes

If Argentinians could buy USD, they would.
Depends on whether BTC is easier to lay hands on, or USD.
In the end, it could be good for bitcoin.

Did you read the story?   Agentina is defaulting on some bonds.   What does this have to go people converting their currency

The link is Argentina defaults --> Harder to get external credit --> More printing of pesos --> High Inflation.
In the end, people will have to look after themselves, if their pesos get devalued very quickly.

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   If anything they'll go back to pegging their currency or they'll go to IMF and be forced to follow whatever IMF reccomends

For regular Argentinian people I think they have already been buying USD but the govt placed  limitation in Jan.

I'm gonna ask my Argentinian friend about it.   I don't think in times of crisis most people will suddenly start speculating.   I think they seek stability

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August 04, 2014, 03:47:22 AM
 #63

This is about Argentina defaulting on its bonds.  Bonds are denominated in USD so they can't print pesos to get out of mess.   Not comparable to Cyprus situation.  Cypriots bought bitcoin because imposed bank holiday

Stop thinking everything is good for bitcoin.  LOL  Roll Eyes

If Argentinians could buy USD, they would.
Depends on whether BTC is easier to lay hands on, or USD.
In the end, it could be good for bitcoin.

Did you read the story?   Agentina is defaulting on some bonds.   What does this have to go people converting their currency

The link is Argentina defaults --> Harder to get external credit --> More printing of pesos --> High Inflation.
In the end, people will have to look after themselves, if their pesos get devalued very quickly.

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   If anything they'll go back to pegging their currency or they'll go to IMF and be forced to follow whatever IMF reccomends

For regular Argentinian people I think they have already been buying USD but the govt placed  limitation in Jan.

I'm gonna ask my Argentinian friend about it.   I don't think in times of crisis most people will suddenly start speculating.   I think they seek stability

One could argue that keeping the peso while knowing that inflation may or may not occur, is in itself speculation. Moving to USD, Gold, Bitcoin or w/e else, could be a move to improve stability. Gold and USD buying has tight restrictions, but they may be able to get Bitcoins.

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August 04, 2014, 05:22:49 AM
 #64

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   

Because they need money for government spending, and they will be covering those expenditures with printing pesos. Government employees, social programs will be funded with this devalued peso. The same amount of peso will be buying less and less goods and services with each passing day. Basically, the same thing every country is doing more or less Smiley
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August 05, 2014, 08:22:01 PM
 #65

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   

Because they need money for government spending, and they will be covering those expenditures with printing pesos. Government employees, social programs will be funded with this devalued peso. The same amount of peso will be buying less and less goods and services with each passing day. Basically, the same thing every country is doing more or less Smiley

They need to cut government expenditure and let the private industry develop the country.
polynesia
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August 06, 2014, 01:18:06 AM
 #66

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   

Because they need money for government spending, and they will be covering those expenditures with printing pesos. Government employees, social programs will be funded with this devalued peso. The same amount of peso will be buying less and less goods and services with each passing day. Basically, the same thing every country is doing more or less Smiley

They need to cut government expenditure and let the private industry develop the country.

If the politicians all over the world see the need to rein in government expenditure, half the problems in the world will be solved.  Grin
michaelwang33
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August 06, 2014, 01:55:31 AM
 #67

This is about Argentina defaulting on its bonds.  Bonds are denominated in USD so they can't print pesos to get out of mess.   Not comparable to Cyprus situation.  Cypriots bought bitcoin because imposed bank holiday

Stop thinking everything is good for bitcoin.  LOL  Roll Eyes

If Argentinians could buy USD, they would.
Depends on whether BTC is easier to lay hands on, or USD.
In the end, it could be good for bitcoin.

Did you read the story?   Agentina is defaulting on some bonds.   What does this have to go people converting their currency

The link is Argentina defaults --> Harder to get external credit --> More printing of pesos --> High Inflation.
In the end, people will have to look after themselves, if their pesos get devalued very quickly.

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   If anything they'll go back to pegging their currency or they'll go to IMF and be forced to follow whatever IMF reccomends

For regular Argentinian people I think they have already been buying USD but the govt placed  limitation in Jan.

I'm gonna ask my Argentinian friend about it.   I don't think in times of crisis most people will suddenly start speculating.   I think they seek stability
This does work somewhat however the more pesos that are printed the less effective this becomes as this would cause a sell off in pesos.

I seriously doubt that the IMF will bail out Argentina as they are really too big of a country for the IMF to lend to. The IMF usually lends to countries with very small economies that never had access to capital markets while Argentina has had access to the capital markets.

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twiifm
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August 06, 2014, 02:35:30 AM
 #68

This is about Argentina defaulting on its bonds.  Bonds are denominated in USD so they can't print pesos to get out of mess.   Not comparable to Cyprus situation.  Cypriots bought bitcoin because imposed bank holiday

Stop thinking everything is good for bitcoin.  LOL  Roll Eyes

If Argentinians could buy USD, they would.
Depends on whether BTC is easier to lay hands on, or USD.
In the end, it could be good for bitcoin.

Did you read the story?   Agentina is defaulting on some bonds.   What does this have to go people converting their currency

The link is Argentina defaults --> Harder to get external credit --> More printing of pesos --> High Inflation.
In the end, people will have to look after themselves, if their pesos get devalued very quickly.

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   If anything they'll go back to pegging their currency or they'll go to IMF and be forced to follow whatever IMF reccomends

For regular Argentinian people I think they have already been buying USD but the govt placed  limitation in Jan.

I'm gonna ask my Argentinian friend about it.   I don't think in times of crisis most people will suddenly start speculating.   I think they seek stability
This does work somewhat however the more pesos that are printed the less effective this becomes as this would cause a sell off in pesos.

I seriously doubt that the IMF will bail out Argentina as they are really too big of a country for the IMF to lend to. The IMF usually lends to countries with very small economies that never had access to capital markets while Argentina has had access to the capital markets.

Printing more ARS wont pay off USD denominated debts.   They have to acquire USD from somewhere.   Is Argentina bigger than S Korea in 1997?  IMF actually proposed a restructuring in 2003 but plan was abandoned due to pressures from USA

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August 06, 2014, 03:06:55 AM
 #69

This is about Argentina defaulting on its bonds.  Bonds are denominated in USD so they can't print pesos to get out of mess.   Not comparable to Cyprus situation.  Cypriots bought bitcoin because imposed bank holiday

Stop thinking everything is good for bitcoin.  LOL  Roll Eyes

If Argentinians could buy USD, they would.
Depends on whether BTC is easier to lay hands on, or USD.
In the end, it could be good for bitcoin.

Did you read the story?   Agentina is defaulting on some bonds.   What does this have to go people converting their currency

The link is Argentina defaults --> Harder to get external credit --> More printing of pesos --> High Inflation.
In the end, people will have to look after themselves, if their pesos get devalued very quickly.

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   If anything they'll go back to pegging their currency or they'll go to IMF and be forced to follow whatever IMF reccomends

For regular Argentinian people I think they have already been buying USD but the govt placed  limitation in Jan.

I'm gonna ask my Argentinian friend about it.   I don't think in times of crisis most people will suddenly start speculating.   I think they seek stability
This does work somewhat however the more pesos that are printed the less effective this becomes as this would cause a sell off in pesos.

I seriously doubt that the IMF will bail out Argentina as they are really too big of a country for the IMF to lend to. The IMF usually lends to countries with very small economies that never had access to capital markets while Argentina has had access to the capital markets.

Printing more ARS wont pay off USD denominated debts.   They have to acquire USD from somewhere.   Is Argentina bigger than S Korea in 1997?  IMF actually proposed a restructuring in 2003 but plan was abandoned due to pressures from USA
Argentina could print pesos to buy dollars to pay back their debts. As they sell more pesos, the value of each peso would decrease so the more they print the less dollars they can buy on a per peso basis.
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August 06, 2014, 03:45:41 AM
 #70

This is about Argentina defaulting on its bonds.  Bonds are denominated in USD so they can't print pesos to get out of mess.   Not comparable to Cyprus situation.  Cypriots bought bitcoin because imposed bank holiday

Stop thinking everything is good for bitcoin.  LOL  Roll Eyes

If Argentinians could buy USD, they would.
Depends on whether BTC is easier to lay hands on, or USD.
In the end, it could be good for bitcoin.

Did you read the story?   Agentina is defaulting on some bonds.   What does this have to go people converting their currency

The link is Argentina defaults --> Harder to get external credit --> More printing of pesos --> High Inflation.
In the end, people will have to look after themselves, if their pesos get devalued very quickly.

The bonds are denominated in USD though.   Plus they're already having inflation problems.   Why would they print more pesos?   If anything they'll go back to pegging their currency or they'll go to IMF and be forced to follow whatever IMF reccomends

For regular Argentinian people I think they have already been buying USD but the govt placed  limitation in Jan.

I'm gonna ask my Argentinian friend about it.   I don't think in times of crisis most people will suddenly start speculating.   I think they seek stability
This does work somewhat however the more pesos that are printed the less effective this becomes as this would cause a sell off in pesos.

I seriously doubt that the IMF will bail out Argentina as they are really too big of a country for the IMF to lend to. The IMF usually lends to countries with very small economies that never had access to capital markets while Argentina has had access to the capital markets.

Printing more ARS wont pay off USD denominated debts.   They have to acquire USD from somewhere.   Is Argentina bigger than S Korea in 1997?  IMF actually proposed a restructuring in 2003 but plan was abandoned due to pressures from USA
Argentina could print pesos to buy dollars to pay back their debts. As they sell more pesos, the value of each peso would decrease so the more they print the less dollars they can buy on a per peso basis.

It doesn't work like that.   

Now that I've researched the story in more detail.   Its not that Argentina can't pay,  they refused to pay some vulture funds and they got sued in US courts.   The judges ruling forced them to miss bond payment and thats why credit rating was rated as default

But their money is still a mess

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August 06, 2014, 04:17:10 PM
 #71

Argentina could print pesos to buy dollars to pay back their debts. As they sell more pesos, the value of each peso would decrease so the more they print the less dollars they can buy on a per peso basis.

No country has managed to mint its way out of a crisis.
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August 06, 2014, 04:51:27 PM
 #72

Argentina could print pesos to buy dollars to pay back their debts. As they sell more pesos, the value of each peso would decrease so the more they print the less dollars they can buy on a per peso basis.

No country has managed to mint its way out of a crisis.

I agree.  Monetary policy alone cannot solve economic problems

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August 07, 2014, 08:02:45 AM
 #73

Argentina could print pesos to buy dollars to pay back their debts. As they sell more pesos, the value of each peso would decrease so the more they print the less dollars they can buy on a per peso basis.

No country has managed to mint its way out of a crisis.

Yep minting is never the solution to a financial crisis usually its development of the countries industries and diversifying the cash flow
The other way is infrastructure spending.
Hard to do when a country is in default though.

But printing more of something worthless would just make it worth less (har har)
Think the Zimbabwae Dollar or the Weimar republic as some examples.
polynesia
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August 07, 2014, 05:19:43 PM
 #74

Argentina could print pesos to buy dollars to pay back their debts. As they sell more pesos, the value of each peso would decrease so the more they print the less dollars they can buy on a per peso basis.

No country has managed to mint its way out of a crisis.

Yep minting is never the solution to a financial crisis usually its development of the countries industries and diversifying the cash flow
The other way is infrastructure spending.
Hard to do when a country is in default though.

But printing more of something worthless would just make it worth less (har har)
Think the Zimbabwae Dollar or the Weimar republic as some examples.

Develop the country's industries, make sure the fiscal deficit is under control..... You will automatically attract capital.
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August 07, 2014, 05:23:36 PM
 #75

Argentina could print pesos to buy dollars to pay back their debts. As they sell more pesos, the value of each peso would decrease so the more they print the less dollars they can buy on a per peso basis.

No country has managed to mint its way out of a crisis.

Yep minting is never the solution to a financial crisis usually its development of the countries industries and diversifying the cash flow
The other way is infrastructure spending.
Hard to do when a country is in default though.

But printing more of something worthless would just make it worth less (har har)
Think the Zimbabwae Dollar or the Weimar republic as some examples.

Develop the country's industries, make sure the fiscal deficit is under control..... You will automatically attract capital.

Just opening up the country and border will attract foreign capital. Undeveloped land will be bought up and develop by transnational companies and local labor/population will benefit from it.



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August 07, 2014, 06:09:22 PM
 #76

everything looks  similiar .
im really curios to know and understand about that Cheesy
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August 07, 2014, 06:14:26 PM
 #77


Just opening up the country and border will attract foreign capital. Undeveloped land will be bought up and develop by transnational companies and local labor/population will benefit from it.


The only worry is the gates can't be closed after that.
If the US begins to look more attractive, capital could rush out.
And that could lead to a lot more economic devastation. Smiley
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August 08, 2014, 01:24:43 AM
 #78

everything looks  similiar .
im really curios to know and understand about that Cheesy

You don't have to wait for long. Things will play out in the next couple of months.
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August 08, 2014, 01:51:51 AM
 #79

everything looks  similiar .
im really curios to know and understand about that Cheesy

You don't have to wait for long. Things will play out in the next couple of months.
The difference is that Argentina will likely be contained just in Argentina, while the problem in cypress could have easily spread throughout europe.
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August 08, 2014, 02:22:34 PM
 #80

everything looks  similiar .
im really curios to know and understand about that Cheesy

You don't have to wait for long. Things will play out in the next couple of months.
The difference is that Argentina will likely be contained just in Argentina, while the problem in cypress could have easily spread throughout europe.

I wish we could be sure of that. Smiley
http://www.ftadviser.com/2014/08/07/funds-and-data/default-may-expose-global-vulnerability-CxMS2BGjtw5aoL2r1p1btI/article.html
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