Is Argentina the model for what will happen in Europe and the US? Perhaps, and why not? When things get desperate there are only so many options. Here is Bill Bonner’s short summary of what occurred in Argentina:
In 2001, the country was deeply in debt. The government was out of money. And the currency was losing value fast. What did the Argentines do?
First, they broke their promise to investors and savers, cutting the peso loose from the dollar. Then, they seized control of banks and bank accounts. People had been saving money in US dollar accounts in order to avoid problems with the peso. But the Argentine feds forcibly converted their accounts to pesos, just as the peso was losing 2/3rds of its value.
The next thing was to take the reserves in the central bank and use them to pay current expenses — which caused the head of the bank to resign in protest.
And finally, a few years later, they took over private pension funds — to protect them for the pensioners, of course. What are they used for? To fund the country’s deficits!
But the Argentine feds are not just scalawags, they’re the pacesetters for the rest of the developed world.
Mr. Bonner goes on to discuss what the Financial Times believes is coming and adds more of his incisive comments. The full article can be read from the link above.
I have been studying Argentina in relation to how people survived, what day to day life was like, etc. The big difference is our pop’l is less educated, more violent, and feels more self entitled.