South America Trembles Before Argentine Devaluation
A.M. Freyed
Infowars.com
April 25, 2012
Argentina to Devalue as President Slams Free Market … Argentina’s new President Eduardo Duhalde, blaming free market policies of the last decade for creating social chaos, asked Congress on Friday to rescue the economy by allowing a traumatic currency devaluation … Congress, controlled by Duhalde’s Peronist party, will almost certainly pass the bill, which also gives the president powers to reform the foreign exchange and banking systems, regulate prices of goods and services, safeguard the value of savers’ bank deposits and ensure debtors do not go bankrupt. While Congress prepared to act this weekend, Argentines huddled in pouring rain outside banks wondering if they would ever recover their deposits. Drug stores ran out of medicines like insulin, and shops raised prices to hedge against a devaluation that will be an effective income cut for millions. – Reuters (2002)
It hasn’t reached the Western media yet, but all hell may break out in the Southern half of South America as people brace for an Argentine devaluation. A realistic possibility? It’s not as if it hasn’t happened before.
Last time it took place was more than ten years ago, around the turn of the century. It wasn’t pretty then and it won’t be pretty now. It could cause significant political as well as monetary damage.
And it well may take place. The confiscation of Repsol’s YPF was much more than just a populist action by a politically savvy president. It was a calculated economic action. And that’s what a devaluation will be as well.
But this how one deals with monetary mismanagement (if one is not trapped in the EU). One declares that one’s currency is worth less today than it was yesterday. If you lost money, well … too bad. In devaluations, everyone basically takes it on the chin.
So, if you hold Argentine pesos, watch out. Argentina is no small country and, in fact, once it was one of the richest around. But that was then. For the past decade it’s staggered from one political and economic crisis to the next.
“First comes inflation – which Argentina already has,” one source explains, “and then comes devaluation, which will be terrible for Argentina and surrounding countries. It’s going to be a big mess but it’s not being mentioned abroad. So far it’s just for the newspapers, magazines and commentators down here.”
The Rest…HERE
