Argentine Default Era Chaos Relived: Blackouts & Looting

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Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Thu Jan 23, 2014 12:31 pm

Yet another "central planning" cautionary tale, as the cracks in the global financial system yawn wider.

http://www.bloomberg.com/news/2014-01-2 ... oting.html" onclick="window.open(this.href);return false;

For Dominga Kanaza, it wasn’t just the soaring inflation or the weeklong blackouts or even the looting that frayed her nerves.

It was all of them combined.

At one point last month, the 37-year-old shop owner refused to open the metal shutters protecting her corner grocery in downtown Buenos Aires more than a few inches -- just enough to sell soda to passersby on a sweltering summer day.

“It was scary,” said Kanaza as she yelled out prices to customers while sipping on mate, Argentina’s caffeine-rich herbal drink. The looting that began in neighboring Cordoba province when police officers left streets unguarded to strike for higher pay had spread to the outskirts of Buenos Aires, sparking panic in Kanaza’s neighborhood. The chaos, she said, was like nothing she had seen since the rioting that followed the South American nation’s record $95 billion default in 2001.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Thu Jan 23, 2014 1:09 pm

More on Argentine Peso plunge. Notice how inflation/debasement of the currency and social unrest go hand-in-hand.

http://www.marketwatch.com/story/argent ... atest_news" onclick="window.open(this.href);return false;

Argentina’s currency plunged more than 15% on Thursday amid growing worries about the country’s foreign-exchange reserves.

Recently, one dollar bought 8.216 Argentine pesos, according to CQG. Late Wednesday, one dollar bought 6.932 pesos.

The sharp weakening of the peso comes a day after President Cristina Kirchner made her first public comments in nearly six weeks. She sidestepped any mention of Argentina’s economy. In recent months, rising inflation and government controls have stoked social unrest in the South American country.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Thu Jan 23, 2014 1:18 pm

No wonder Argentina's president has been keeping a low profile of late.

http://www.testosteronepit.com/home/201 ... ntina.html" onclick="window.open(this.href);return false;

The last time Argentina’s President Cristina Fernández de Kirchner was seen in public, she was dancing on stage at the Plaza de Mayo, in downtown Buenos Aires. It was December 10th, and the Government was celebrating the 30th anniversary since the return of democracy with fireworks and music despite criticism from opposition leaders who said the festive environment was in poor taste, given that most provinces in the country were dealing with a wave of looting, sparked by a series of police strikes, that threatened to tear the very fabric of society. The defenseless population in Córdoba and San Miguel de Tucumán – among other cities – had no choice but to arm themselves with whatever weapon they had at hand to protect their property.

The conflict left over ten people dead, but it was not going to spoil the jubilee. Despite calls to postpone – or at least tone down – the festivities, the Government refused to back down. The result was a shocking display of disconnect, with TV screens split into two: one showing the chaos born out of the absence of law and order; the other showing the joy and fervor exhibited by Government officials dancing and mingling with celebrities on stage before a large crowd of Kirchnerite supporters who had decided to attend to so-called “party of democracy.”

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Thu Jan 23, 2014 2:21 pm

Here's a blog from a guy - Ferfal - who experienced first-hand what it was like to live through Argentina's previous economic collapse.

http://ferfal.blogspot.com/" onclick="window.open(this.href);return false;

http://ferfal.blogspot.com/2014/01/arge ... apart.html" onclick="window.open(this.href);return false;

On a visit to Buenos Aires in November I noted a sense of foreboding hanging over the city. With the economy in a stall, consumer prices rising and capital fleeing the country, porteños from every walk of life seemed to be bracing for a storm—and resigned to the hardship it would bring to this harbor city.

The city infrastructure looked defeated too: The wide boulevards and grand 19th-century buildings are now tired and grungy and the streets smelly. Angry graffiti and tattered posters deface walls, adding to the general feeling of lawless decay. It takes a long time to destroy a nation's wealth but a decade of kirchnerism o—government by President Néstor Kirchner and now his widow, Cristina —seems to be doing the job.

In recent weeks things have gotten worse. The way out also looks more difficult. Three big developments in December raised the specter of descent into full-blown chaos. The first occurred when the police in the provincial capital of Cordoba suddenly walked off the job to protest low salaries. Hooligans took the work stoppage by law enforcement as an invitation to sack the city. More than 1,000 stores were looted and two people killed.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by BigDaddyTX » Thu Jan 23, 2014 2:46 pm

If this was reddit.. paging /u/ferfal

I'm sure there are people who haven't read any of his work, and they should. The best obviously being when he was living through the crisis, but he continues to put out useful information.
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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by Mikeyboy » Thu Jan 23, 2014 2:54 pm

BigDaddyTX wrote:If this was reddit.. paging /u/ferfal

I'm sure there are people who haven't read any of his work, and they should. The best obviously being when he was living through the crisis, but he continues to put out useful information.
+1 I mentioned the same thing on another Economic Doom & Gloom thread. FerFal has been talking about blackouts and the sharp increase in crime in Argentina since 2001. Nothing new. Anyone new to prepping his initial writings on the subject and/or his book is a must read.

There are those who claim to be experts at survival, and there are those who become an expert because they have to learn to survive in a bad situation. FerFal is real world experience.

A copy of his original post (with his permission) that got his survival book and blog ball rolling. Gives you a flavor and you realize what you may think is "survival gospel" may be wrong. Its a must read.

http://www.survivalmonkey.com/threads/f ... tina.2715/" onclick="window.open(this.href);return false;

His Blog with links to buy his book. Its an interesting read.
http://ferfal.blogspot.com/" onclick="window.open(this.href);return false;

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by Murphman » Thu Jan 23, 2014 4:16 pm

Mikeyboy wrote:
BigDaddyTX wrote:If this was reddit.. paging /u/ferfal

I'm sure there are people who haven't read any of his work, and they should. The best obviously being when he was living through the crisis, but he continues to put out useful information.
+1 I mentioned the same thing on another Economic Doom & Gloom thread. FerFal has been talking about blackouts and the sharp increase in crime in Argentina since 2001. Nothing new. Anyone new to prepping his initial writings on the subject and/or his book is a must read.

There are those who claim to be experts at survival, and there are those who become an expert because they have to learn to survive in a bad situation. FerFal is real world experience.

A copy of his original post (with his permission) that got his survival book and blog ball rolling. Gives you a flavor and you realize what you may think is "survival gospel" may be wrong. Its a must read.

http://www.survivalmonkey.com/threads/f ... tina.2715/" onclick="window.open(this.href);return false;

His Blog with links to buy his book. Its an interesting read.
http://ferfal.blogspot.com/" onclick="window.open(this.href);return false;
I just wanted the link available again, since two is one and one is none. Ferfal's work is that important. :awesome:
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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by feedthedog » Thu Jan 23, 2014 6:16 pm

Not to distract from Ferfal's awesome writing, but I think we may have missed a bunch of steps in this story. Aregentina's economic woes are a whole lot more complicated than inflation went up. Inflation isn't necessarily a bad thing, so just because we see inflation go up doesn't mean that ZOMG the world is ending.

Inflation can have some pretty positive effects too, like changing the way that people invest. Most economists seem to think that low levels of inflation are a good thing.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by Mikeyboy » Fri Jan 24, 2014 8:43 am

feedthedog wrote:Not to distract from Ferfal's awesome writing, but I think we may have missed a bunch of steps in this story. Aregentina's economic woes are a whole lot more complicated than inflation went up. Inflation isn't necessarily a bad thing, so just because we see inflation go up doesn't mean that ZOMG the world is ending.

Inflation can have some pretty positive effects too, like changing the way that people invest. Most economists seem to think that low levels of inflation are a good thing.
Yea, here is the other thread about Turkey's central bank woes that morphed into talking about Argentina.

http://zombiehunters.org/forum/viewtopi ... 2&t=110994" onclick="window.open(this.href);return false;

If you read FerFal's survival blog, Argentina's economy and peso has been in the crapper since 2001 because of inflation. I think what pushed the economy over the edge was when Cristina Fernández de Kirchner became president in 2007 and started pushing the country hard into Socialism. You can't kick start a weak economy, and swoon new business and capital with Socialism. It has the opposite effect. Its a shame because while socialist Argentina and Venezuela have had economies on the edge of collapse, over the last 10 years most countries in Latin America's have had economies that are anywhere from modestly improving to downright booming. Just look at Brazil, Mexico, Costa Rica and Chile.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by feedthedog » Fri Jan 24, 2014 10:39 am

Mikeyboy wrote:
feedthedog wrote:Not to distract from Ferfal's awesome writing, but I think we may have missed a bunch of steps in this story. Aregentina's economic woes are a whole lot more complicated than inflation went up. Inflation isn't necessarily a bad thing, so just because we see inflation go up doesn't mean that ZOMG the world is ending.

Inflation can have some pretty positive effects too, like changing the way that people invest. Most economists seem to think that low levels of inflation are a good thing.
Yea, here is the other thread about Turkey's central bank woes that morphed into talking about Argentina.

http://zombiehunters.org/forum/viewtopi ... 2&t=110994" onclick="window.open(this.href);return false;

If you read FerFal's survival blog, Argentina's economy and peso has been in the crapper since 2001 because of inflation. I think what pushed the economy over the edge was when Cristina Fernández de Kirchner became president in 2007 and started pushing the country hard into Socialism. You can't kick start a weak economy, and swoon new business and capital with Socialism. It has the opposite effect. Its a shame because while socialist Argentina and Venezuela have had economies on the edge of collapse, over the last 10 years most countries in Latin America's have had economies that are anywhere from modestly improving to downright booming. Just look at Brazil, Mexico, Costa Rica and Chile.
I've read his blog, and it's a pretty realistic view of things.

I was just trying to point out that there was a whole lot more at work in Argentina than just a little inflation. Some people see what happened in Argentina, and then pick up a newspaper one day to discover that the US inflation rate is 1.5% and max out their credit cards to buy an MRAP. A lot of different stuff has to come together to create a situation like that and I don't think we need to head to the MRAP dealer yet.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by FlungPup » Fri Jan 24, 2014 11:59 am

Ferfal is a good read.

http://ferfal.blogspot.ca" onclick="window.open(this.href);return false;
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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Fri Jan 24, 2014 8:47 pm

More on how FUBAR Argentina is.

http://www.theautomaticearth.com/debt-r ... a-miseria/" onclick="window.open(this.href);return false;

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by Valarius » Sun Jan 26, 2014 9:12 pm

So, there's this guy called FerFAL that lives in Argentina and writes about his country's financial collapse. Have any of you guys heard of him? :lol:

He actually makes some pretty good recommendations that I've taken to heart. For example, learn how to fix a lot of things. A lot of people don't or won't, and if it's within your power to fix, you can charge significantly less to make their lives happier (like a pan of brownies vs. $300 upfront.)
See you around, HK. And remember folks: victory is surviving to watch another sunrise.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Sun Jan 26, 2014 11:01 pm

Bianca Fernet is also a good read (on the current crisis, not the one FerFal lived through).

http://bubblear.com/2014/01/argentina-d ... o-we-care/" onclick="window.open(this.href);return false;

I told you so.

Everyone in Argentina seems to have his or her panties in a twist over this week’s drop in the official and unofficial exchange rate. And fair enough, it was a bit of a shocker.

But this should not be surprising. Argentina is running out of money

On Wednesday, the official exchange rate slid down from 6.96 ARS/USD, hit the 8.60 mark, and closed for the day at 7.75 ARS/USD.

In the more relevant black market, the rate moved from 10 ARS/USD, hit around 13.50, and then settled back in a bit above 11 ARS/USD.

The very next day, Economy Minister Axel Kiciloff and Cabinet Chief Jorge Capitanich announced the decision to lift restrictions on access to foreign currency and lower income taxes.

And while the Argentine press is thronging about trying to figure out what may have brought on this precipitous drop, the international press is wringing its hands over devaluation.

*shakes head*

I really don’t know where to begin.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Fri Jan 31, 2014 4:44 pm

Meanwhile, Argentine bonds are plunging and capital flight appears to be underway - never a good sign.

http://www.bloomberg.com/news/2014-01-3 ... drain.html" onclick="window.open(this.href);return false;

Argentine dollar bonds tumbled the most in emerging markets on concern government measures from devaluation to rate increases aren’t enough to improve the country’s deteriorating debt payment capacity.

Argentine government dollar bonds due 2015 fell 3.88 cents on the dollar to 85.75 cents, driving yields up to 19.12 percent, the highest since June 2012. The extra yield investors demand to own Argentine bonds over U.S. Treasuries widened 75 basis points to 1,142 basis points, while the average spread on emerging-market bonds rose 11 basis points at 10:28 a.m. in New York, according to JPMorgan Chase & Co.’s EMBIG index.

Argentina is losing foreign currency reserves at the fastest pace in more than a decade as estimated 28 percent inflation and currency controls spur capital flight. The funds, which the country relies on to pay debt and finance energy imports, dropped to a seven-year low of $28.3 billion. The government devalued the peso 15 percent last week and raised benchmark interest rates as much as 6 percentage points. The moves, coupled with less risk appetite for emerging market assets, haven’t settled investor concerns.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by Zimmy » Fri Jan 31, 2014 10:57 pm

Tagged
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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Sat Feb 01, 2014 11:59 am

Argentina's president, Cristina Fernández de Kirchner, and her ministers blame foreign 'vultures' for an economic meltdown as power cuts hit Buenos Aires and goods vanish from supermarket shelves.

http://www.theguardian.com/world/2014/f ... n-cristina" onclick="window.open(this.href);return false;

And for those who don't like Zero Hedge or their "ilk" as news sources, I offer a news outlet and story line that might be more to your liking.

http://abcnews.go.com/Entertainment/jus ... d=22320856" onclick="window.open(this.href);return false;

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Fri Feb 07, 2014 9:04 pm

Argentina at the edge of the abyss.

http://www.testosteronepit.com/home/201 ... abyss.html" onclick="window.open(this.href);return false;

For a while it seemed that the Kirchners’ unique brand of mathematics had miraculously enabled Argentina to sidestep and overcome all manner of seemingly insurmountable economic challenges. However, reality, it appears, has finally caught up with the country.

A heady cocktail of dire social and economic conditions — the breakneck depletion of international reserves, devaluation, inflation, unemployment, rising poverty and crime, and a gaping fuel deficit — continue to wreak havoc on the streets and in the financial markets.

History is once again repeating itself in Argentina, albeit under slightly different political and ideological banners.

The results, however, are always the same: with each new economic collapse, the government denounces a whole new herd of scapegoats. This time around, the blame belongs to “financial conspirators”, a heterogeneous group that in the fevered, paranoid minds of the Kirchneristas includes grain exporters, China, the right-wing opposition, multinational corporations, vulture funds and even dollar vendors on Calle Florida.

According to Finance Minister Axel Kicillof and his boss, President Cristina Kirchner, everyone is responsible for preventing the Peronist progressive economic model from working — everyone, of course, except themselves.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Sun Feb 09, 2014 3:23 pm

Here's what it looks like when your country's economy collapses.

http://www.peakprosperity.com/podcast/8 ... -collapses" onclick="window.open(this.href);return false;

Argentina is a country re-entering crisis territory it knows too well. The country has defaulted on its sovereign debt three times in the past 32 years and looks poised to do so again soon.

Its currency, the peso, devalued by more than 20% in January alone. Inflation is currently running at 25%. Argentina's budget deficit is exploding, and, based on credit default swap rates, the market is placing an 85% chance of a sovereign default within the next five years.

Want to know what it's like living through a currency collapse? Argentina is providing us with a real-time window.

So, we've invited Fernando "FerFAL" Aguirre back onto the program to provide commentary on the events on the ground there. What is life like right now for the average Argentinian?

Aguirre began blogging during the hyperinflationary destruction of Argentina’s economy in 2001 and has since dedicated his professional career to educating the public about his experiences and observations of its lingering aftermath. He is the author of Surviving the Economic Collapse and sees many parallels between the path that led to Argentina's decline and the similar one most countries in the West, including the U.S., are currently on. Our 2011 interview with him "A Case Study in How An Economy Collapses" remains one of Peak Prosperity's most well-regarded.

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Re: Argentine Default Era Chaos Relived: Blackouts & Looting

Post by absinthe beginner » Sun Feb 09, 2014 3:38 pm

Argentines pulling cash out of banks and hiding it under their mattresses. This won't end well.

http://www.businessweek.com/news/2014-0 ... mattresses" onclick="window.open(this.href);return false;

Jorge Lischetti applied to purchase dollars from the government the day Argentina eased controls. He stashed the $300 he was allowed to buy in January in his Buenos Aires home and did the same on the first day of February.

Argentines like Lischetti, a 24-year-old legal adviser, are contributing to a drop in the country’s international reserves by refusing to deposit the dollars they purchase in local banks. More than 12 years after Argentina restricted withdrawals and converted dollar savings into pesos amid an economic crisis that led to a $95 billion default, 91 percent of those who qualify to buy foreign currency from the government are paying a 20 percent surcharge to keep the cash.

“History in Argentina is scary enough to make you want to keep your money out of the bank,” Lischetti said in an interview in the capital.

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