S.&P. Says Argentina Has Defaulted • Hacker News Board

Re: S.&P. Says Argentina Has Defaulted

#191

Post by twoodfin » Sat, Aug 02, 2014, 1:20 AM UTC

TheOtherHobbes wrote: post #190

twoodfin wrote: post #49

Earlier quoted context omitted.

They're contributing nothing of value to anyone... Except if they didn't exist, then bonds like those sold by the Argentine government would require higher interest rates, because the original buyer would have to assume the entire risk of default, rather than having the option to transfer part of that risk in the future. That'd be bad for national governments trying to raise funds at low cost.

Minor flaw in your point - it's even harder for governments to budget rationally when some shark buys up all their old debt on the cheap and tries to bankrupt them, because money.

I'm not sure what you're suggesting. I pointed out the problems with making debt non-transferrable. If it is transferrable, it can be transferred to "sharks". What would you suggest instead?

Re: S.&P. Says Argentina Has Defaulted

#192

Post by TheOtherHobbes » Sat, Aug 02, 2014, 2:15 AM UTC

twoodfin wrote: post #191

TheOtherHobbes wrote: post #190

Earlier quoted context omitted.

Minor flaw in your point - it's even harder for governments to budget rationally when some shark buys up all their old debt on the cheap and tries to bankrupt them, because money.

I'm not sure what you're suggesting. I pointed out the problems with making debt non-transferrable. If it is transferrable, it can be transferred to "sharks". What would you suggest instead?

I'd suggest you become acquainted a few heterodox economists - Keynes, Steve Keene, and some of the other names who haven't been corrupted by Chicagoism - and then perhaps you'll see why transferability is not the problem.

The point remains - giving vulture speculators the ability to hold entire populations hostage is political special pleading, not sound growth-based economics.

Re: S.&P. Says Argentina Has Defaulted

#193

Post by speeder » Sat, Aug 02, 2014, 2:37 AM UTC

epx wrote: post #44

scardine wrote: post #27

Brazil and Argentina had very similar economic plans to get out of hyperinflation from the 80's - both created a new currency whose value was attached to the USD. There was a subtle difference: Brazil forbade domestic contracts in dollar (with a few exceptions, mainly leasing contracts for imported vehicles). So when the market forces kicked in and Brazil was forced to devalue its artificially priced new currency, th…

Also, Brazilian Real was born to be around 1:1 with USD, but the exchange rate was never fixed, it floated from day one. Argentinian coin (don't remember the name) was 1:1 by force, which made the delay even more catastrophic.

It was fixed from 1994 to 1998 if I remember correctly, it became floating after the Asiatic crisis.

Re: S.&P. Says Argentina Has Defaulted

#194

Post by scardine » Sat, Aug 02, 2014, 2:52 AM UTC

fiatjaf wrote: post #182

scardine wrote: post #27

Brazil and Argentina had very similar economic plans to get out of hyperinflation from the 80's - both created a new currency whose value was attached to the USD. There was a subtle difference: Brazil forbade domestic contracts in dollar (with a few exceptions, mainly leasing contracts for imported vehicles). So when the market forces kicked in and Brazil was forced to devalue its artificially priced new currency, th…

This is badly wrong. Brazil's plan wasn't to create "a currency with value attached to dollar", nor it was Argentina's plan. Argentina made a currency board, a regime in which the central bank could only emit 1 peso more if 1 dollar more entered the country (and reached the central bank's vault). In Brazil, Argentina's plan was called "dolarization" and was dropped by André Lara Resende, Persio Arida and Edmar Bacha…

It was way oversimplified, but I was not trying to write a PHD dissertation on economics. :-)

Both plans were perceived by the laymen as a new currency worth 1 dollar and that helped stopping the inertial indexation of their economies (there! somebody from a stable economy will hardly understand what indexation was like).

Re: S.&P. Says Argentina Has Defaulted

#195

Post by twoodfin » Sat, Aug 02, 2014, 5:06 PM UTC

TheOtherHobbes wrote: post #192

twoodfin wrote: post #191

Earlier quoted context omitted.

I'm not sure what you're suggesting. I pointed out the problems with making debt non-transferrable. If it is transferrable, it can be transferred to "sharks". What would you suggest instead?

I'd suggest you become acquainted a few heterodox economists - Keynes, Steve Keene, and some of the other names who haven't been corrupted by Chicagoism - and then perhaps you'll see why transferability is not the problem. The point remains - giving vulture speculators the ability to hold entire populations hostage is political special pleading, not sound growth-based economics.

If you're not interested in actually making an argument rather than disparagingly hand-waving, I suggest you find another forum.