19-02-2005 04:26									#31
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Diss, and US blames everyone else for their problems. Nothing new. Whereas FInland blames no one, and no one blames Finland that's right, because we are better than the rest of you and that is the reason why we are located at the top position in organisational chart of the world map, just take a look at the map. We are at the top in the center. That's where the boss is. By the grace of God, you think it's coincidence? No it's not. Here's a cookie, go play outside

	19-02-2005 06:33									#32
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quote: In a way. Part of the deal getting the loan is requiring high intrest rates in the receiving nation's banks. Initially this wouold mean a large inflow of capital, which would be available to loan in country, but when those loans fail to be repaid, the system collapses quickly and depositers pull their money out overnight.

no no no no no no. the IMF rates the country's credit, and depending on what they get, international banks give them the appropriate rate. some countries get higher rates than others. most of the loans taken by LDCs arnt from imf/world bank. the loans they get from those guys are for speciifiic projects (bundled with certain structural changes.) furthermore, you can only get IMF loans if you cannot cover your balance of payments, or to ease structural changes in the economy. the interest rate charged by the IMF at this point is around 2% i think (2.3 or so?) and is based on the market SDR rate

you can find the specifics of the SDR rate here
http://www.imf.org/external/np/fin/rates/sdr_ir.cfm

also note for the world bank: some loans given are interest free, and they also have their own way of calculating interest rates, and of rating country's solvency. also, a lot of the world banks money comes from them raising money on the open market (bonds, etc.) they get low rates (AAA rating) and can then give poor countries low rates too. (when merited)

	19-02-2005 06:36									#33
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If she is hot looking, apologize and tell her you were mistaken. Then ask her to teach you what she knows over coffee and that you feel inspired to more deeply research the question. Unfortunately, you need someone with deeper knowledge of Argentine culture and history to put the data into the proper context. Perhaps she could help you....

If she is not hot looking, tell her she is an ignorant *****.

	19-02-2005 06:41									#34
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LoA is right. My sister agrees with him, and she is an economist, and she worked at the US Embassy in Buenos Aires on an economics internship. She has genuinely studied the issues.

Judging from most people's ignorance on economic issues, it doesn't surprise me that some people have it wrong.

	19-02-2005 06:41									#35
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quote: Originally posted by pchang If she is hot looking, apologize and tell her you were mistaken. Then ask her to teach you what she knows over coffee and that you feel inspired to more deeply research the question. Unfortunately, you need someone with deeper knowledge of Argentine culture and history to put the data into the proper context. Perhaps she could help you.... If she is not hot looking, tell her she is an ignorant *****.

Pragmatism

	19-02-2005 06:52									#36
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quote: If she is hot looking, apologize and tell her you were mistaken. Then ask her to teach you what she knows over coffee and that you feel inspired to more deeply research the question. Unfortunately, you need someone with deeper knowledge of Argentine culture and history to put the data into the proper context. Perhaps she could help you.... If she is not hot looking, tell her she is an ignorant *****.

(yeah, thats what i did.)



edit: she was the latter

edit2: my big mouth always gets me in trouble

	19-02-2005 07:12									#37
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quote: They have basically been ****ing up their economy for the last 35 years, and the combined efforts of all the world's economists could not have saved them.

This is actually quite off the mark. During the late 60s, after President Illia was deposed, the economy was flourishing. The CEPAL was quite active in helping develop a plan, and in the late 50s the Desarrollista doctrine had established new industry. It was the arrival of Milton Friedman monetarist doctrine in the 70s that destroyed the Cono Sur.

quote: so are you saying argentina would be better off without multinational corporations brining in capital and employing people?

Yes. A strong economy is built on small and medium scale industry. Multinationals build one large factory, sell cheap ass goods, pay cheapass wages, and sell you cheapass rubbish.

quote: 3. Does IMF set interest rates? They lend at market interest rates (correct me here, LOA) If no IMF, states would have to borrow directly from banks, or default - a strategy some advocate, but not the path taken by the asian tigers.

Actually, the US does, and quite unilaterally. The biggest debt problem came in the early '80s when the US government decided to increase interest rates, which set off in motion a series of increases. Interest on public debt in LDCs in Latin America went from one digit to two digits overnight. That almost broke our backs.

quote: The IMF most certainly did not cause Argentina's problems. Argentina's problem was that they borrowed far more then they could repay. The IMF is simply the lender of last resort who loans money to countries who's credit is so screwed up that private investors won't loan to them. Naturally, the IMF doesn't want to throw good money after bad so they insist budgets be cut so that income and expenses are balanced. Other wise another debt crisis will occur.

This all sounds very nice, but each government austerity plan only screwed the economy further. Austerity plans were needed to get money to pay for DEBT INTEREST. Money was obtained from the IMF. IMF demanded austerity.

Austerity meant slashing public sector salaries, rise in unemployment, slashing pensions (a 30% decline in purchase power between 1995 and 2001 at least) with prices rising, and an exchange rate that destroyed industry. And all the time, the IMF was praising Menem as the Economic Messiah of LDCdom.

quote: And this proves what, beyond the economic incompetence of the average Caudillo? The IMF certainly didn't force them to take those loans.

The bulk of loans was taken in the late 1970s when the petrodollars meant a huge cash surplus and low interest rates. The economy was flaky, trade balance was deficitiary, debt had to be acquired... at very low interest rates that were payable. In the early 1980s, interest rates rose exponentially practically overnight and the debt was essentially rendered unpayable. Money had to be borrowed to pay back the debt.

The interest rates rose because the US government rose their own interest, so the real price of the dollar changed. We've been paying interests since then.

	19-02-2005 07:43									#38
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So was she hot or not????

	19-02-2005 07:47									#39
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If she wasn't hot, then she isn't Argentine either.

	19-02-2005 07:53									#40
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quote: Originally posted by El Awrence Yes. A strong economy is built on small and medium scale industry. Multinationals build one large factory, sell cheap ass goods, pay cheapass wages, and sell you cheapass rubbish.

Ussually if those small or medium sized companies have to compete head to head with big companies then they lose. BTW I don't know which companies you've been buying from but most of the big names I know put out quality products and that's how they came to be successful to begin with.

quote: Actually, the US does, and quite unilaterally. The biggest debt problem came in the early '80s when the US government decided to increase interest rates, which set off in motion a series of increases. Interest on public debt in LDCs in Latin America went from one digit to two digits overnight. That almost broke our backs.

The US had an inflation problem in the late 70's to early 80's so Reagan raised interest rates to kill inflation. This caused a serious recession in the US and two of the last three independent automakers in the US (International & Chekcer) went out of business along with several other large companies. Because latin American borrows money in dollar denominations and because several currencies were tied to the dollar this did hurt them as well as the US.

quote: This all sounds very nice, but each government austerity plan only screwed the economy further. Austerity plans were needed to get money to pay for DEBT INTEREST. Money was obtained from the IMF. IMF demanded austerity. Austerity meant slashing public sector salaries, rise in unemployment, slashing pensions (a 30% decline in purchase power between 1995 and 2001 at least) with prices rising, and an exchange rate that destroyed industry. And all the time, the IMF was praising Menem as the Economic Messiah of LDCdom.

Yep, cutting government spending usually does remove the stimulating effects all that extra money was causing so you get a down turn. It sucks but the alternative is a complete melt down of the banking industry followed by most of the economy imploding. You have to choose your poison I'm afraid. The moral is to keep debt low and don't borrow more then you can repay (and don't forget that interest rates fluctuate.).

	19-02-2005 08:04									#41
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quote: Ussually if those small or medium sized companies have to compete head to head with big companies then they lose. BTW I don't know which companies you've been buying from but most of the big names I know put out quality products and that's how they came to be successful to begin with.

Big companies foster effective monopolies in the form of cartels and oligopolies. And don't come out and say that the government should enact anti trust laws, because these oligopolies are the ones that give the politicians money for their campaigns, et cetera et cetera.

quote: Yep, cutting government spending usually does remove the stimulating effects all that extra money was causing so you get a down turn. It sucks but the alternative is a complete melt down of the banking industry followed by most of the economy imploding. You have to choose your poison I'm afraid. The moral is to keep debt low and don't borrow more then you can repay (and don't forget that interest rates fluctuate.).

No shyte. But you completely missed my point: the first debts were low and payable. Interest went to hell thanks to the US and to hell went the economies. The IMF then spent the better part of the 90s praising the Menem administration while the country went to hell in a handbasket. And you know who controls the IMF? The G7. And you know who benefited from the corruption of the privatisations? Companies that are part of the G7 lobbies. The IMF ran into a country that was doing badly, pulled out it's quack recommended "neoliberal cureall", forced it down the country's throat like cod liver oil, and sent the country to hell in a handbasket. Privatisation money evaporated into the pockets of creditors, the debt is UNPAYABLE. And after all these years of creditors getting their pockets lined on what is essentially blood-money they insist on killing the goose of the golden eggs. I'm not saying that the IMF is all to blame, or that the US is all to blame, but that the IMF, World Bank and Government policies were all so reciprocally interrelated that it's impossible to separate one from the other. People who say "It's all the IMF's fault" "It's all the World Banks fault" or "It was the government's fault" are just deluding themselves with strawmen arguments without knowing any side to the story except for the snippets they got off the CNN and Economics for Dummies.

	19-02-2005 08:16									#42
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Your telling me the basic problem is still the same namely Argentina borrowed to much. Sure at artificially low interest rates you could make the minimum payment but most smart people knew low interest rates wouldn't last and so wouldn't have borrowed the money.

Before you continue your anti-IMF fest my I remind you that the IMF also got around 70% of the principle and 100% of the interest. Not bad. Sure, since the government was spending so above it's means it had to cut just about every program but in the long run that will help the economy recover.

Now about most of the interet going to G7 countries... Of course. Interest goes to the people granting loans and they're all in the first world. Don't like it? Don't borrow money; several Asian countries have opted for that choice. Lastly, the US, Japan, the EU, Russia, China and most Asian countries survive just fine with large corporations allowed to invest. It hasn't really resulted in monopolies except for in a few rare cases so can you please cite and example of this occuring in Latin America?

	19-02-2005 08:17									#43
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http://www.kensingtonreview.com/200...RGdebtoffer.htm

That link is about the Argintine debt write down at 70% of principle and forgiveness of all interest.

	19-02-2005 08:19									#44
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quote: Originally posted by El Awrence If she wasn't hot, then she isn't Argentine either.

I agree.

	19-02-2005 09:25									#45
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quote: Originally posted by Last Conformist quote: As for Argentina, one also needs to remember that the country is being forced to pay back loans that were taken out by the dictators, and not a democratic government. That's pretty much the case of most of Latin America. And this proves what, beyond the economic incompetence of the average Caudillo? The IMF certainly didn't force them to take those loans.

The people shouldn't be responsible for the debts of dictators.

	19-02-2005 09:26									#46
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quote: So was she hot or not????

yeah, she wasnt.

quote: If she wasn't hot, then she isn't Argentine either

i think 1/2 argentine, and 1/2 british (had the accent)

	19-02-2005 09:29									#47
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quote: Originally posted by Lawrence of Arabia no no no no no no. the IMF rates the country's credit,

And that's NOT what I'm talking about. I'm talking about the austerity plans that IMF forces countries to take in return for refinancing their dictators' debts. In return for new loans, they are forced to jack their own rates up, ostensibly as an inflation fighting measure. What it means, though, is that the country is more easily looted.

	19-02-2005 09:29									#48
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I have no idea, but I must say

Argentina has a sheity inflation/depreciation rate... meaning it had been generally stagnant. You need an active economy, a fluctuating one, and to do so you need to rate your currencies off of foreign markets in order to better gauge yourself... i.e float.

Arg. had been such a non-entity in the 80s and 90s as far as the world market was concerned, and they don't need to be.

You want to argue why that country is having problems? THe answer is that they poise no competition in any market of any worth.

	19-02-2005 09:32									#49
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quote: Originally posted by chegitz guevara The people shouldn't be responsible for the debts of dictators.

Simply cancelling debts would mean the bankruptcy of most major banks in the 1st world and a world wide depression due to lack of credit. In 1982 (there about) Mexico defaulted on its debts and Bank of America only survived because the government bailed them out. a way must be found to restructure debtts without crashing the 1st world.

	19-02-2005 09:36									#50
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quote: Originally posted by chegitz guevara And that's NOT what I'm talking about. I'm talking about the austerity plans that IMF forces countries to take in return for refinancing their dictators' debts. In return for new loans, they are forced to jack their own rates up, ostensibly as an inflation fighting measure. What it means, though, is that the country is more easily looted.

If a country imports most of it's goodies (like most developing countries) then a fall in the currency will lead to crippling inflation. That inflation must be dealt with or else economic recovery simply won't be possible. It's strong medicine but at this point a country's economy is so screwed up anything positive will be difficult to achieve.

I really don't see how you can claim a country is being looted when most IMF deals also include debt write downs or out right cancellations. The bankers are getting hosed they are not making the killing you claim.

	19-02-2005 09:37									#51
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quote: Originally posted by Oerdin Simply cancelling debts would mean the bankruptcy of most major banks in the 1st world and a world wide depression due to lack of credit.

Then they shouldn't go around giving money to gangsters and thugs. It's completely immoral to force the victims of a dictator to keep paying that dictator's debts once they've finally gotten rid of him.

	19-02-2005 09:40									#52
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quote: Originally posted by Oerdin I really don't see how you can claim a country is being looted when most IMF deals also include debt write downs or out right cancellations.

Because they don't. They get their debts refinanced, not forgiven. All that means is they get stretched out so the country can make lower payments. It's only very recently that some loans have started to be forgiven.

	19-02-2005 09:48									#53
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quote: I'm talking about the austerity plans that IMF forces countries to take in return for refinancing their dictators' debts. In return for new loans, they are forced to jack their own rates up, ostensibly as an inflation fighting measure. What it means, though, is that the country is more easily looted.

look, I dont know where you are getting this from - they are only forced to jack up their rates if they have hyperinflation. Sometimes, the IMF gets carried away and instead of asking them to reduce it to say 20%, they force them to get it under 10%. regardless, the idea of bundling the money with restructuring plans (austerity) is in general a good one. the country is in the shitter because of the way it has been run, so you gotta change things up because obviously what you are doing now is a problem.

frankly, im trying to figure out what youre saying but im a little lost.

then theres this bit

quote: In a way. Part of the deal getting the loan is requiring high intrest rates in the receiving nation's banks. Initially this wouold mean a large inflow of capital, which would be available to loan in country, but when those loans fail to be repaid, the system collapses quickly and depositers pull their money out overnight.

you talk about loans as if they all fail. The lendors want the loan to succeed, i dont see why they would all fail. Its bad for both sides if the country defaults, so they wont spend usually out of their league, or borrow out of their league, and will usually invest smartly.

again dealing with this 'lootin' while totally ignoring the flip side of the issue: the LDC gains from these increases in capital inflows. now look, its pointless to talk about hypothetical situations. maybe you have an example where the world bank/imf lent money to a dictator, and then that directly led to the looting and fall of the country.

(also note: the 1st world investor has no reaseon to want to see their investment fail. since the amount they can get from the interest rates are pocket change compared to if their projects turn out, i cannot see why they would want the countries financies to crash and burn. futhermore, they arnt investing there to put money in the bank - its too risky. they invest to make returns from their investment greater than those available in the 1st world)

	19-02-2005 09:54									#54
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quote: Then they shouldn't go around giving money to gangsters and thugs. It's completely immoral to force the victims of a dictator to keep paying that dictator's debts once they've finally gotten rid of him.

oh ok, because the people living under gangstas and thugs arnt starving right?

	19-02-2005 09:57									#55
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quote: Originally posted by Lawrence of Arabia oh ok, because the people living under gangstas and thugs arnt starving right?

The loans aren't going to them.

	19-02-2005 09:59									#56
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quote: The loans aren't going to them.

yeah,not directly, but they go to stabilise the govt, and improve their credit. (if not all, then a portion of it, the part that doesnt get hijacked by the dictators family.) and those 'austerity' plans? well they go to weakening the dictatorship, and try tot make sure the money helps the people.

sure its not perfect, and many times it fails, but these people need help even more then people living in democratic LDCs.

	19-02-2005 11:48									#57
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quote: Originally posted by Lawrence of Arabia yeah, she wasnt. i think 1/2 argentine, and 1/2 british (had the accent)

Ah, the British explains it. Argentines are always hot.


Here is the future Duchess of Cornwall.

	19-02-2005 16:14									#58
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quote: i think 1/2 argentine, and 1/2 british (had the accent)

No wonder, the british genes must have ruined her.

quote: you talk about loans as if they all fail. The lendors want the loan to succeed, i dont see why they would all fail. Its bad for both sides if the country defaults, so they wont spend usually out of their league, or borrow out of their league, and will usually invest smartly.

This is actually quite interesting, and I think it's wrong to assume that creditors always want the loan to survive. The country was so indebted that by the late 90s the bonds it issued paid ludicrously huge interest rates. A lot of banks bought them, got rich on interest payments on those bonds, and then when it was obvious that it was all going down the crapper they quite literally tricked thousands of small investors to become creditors by buying up these bonds. See Italy, Germany and Japan, where the banks got rid of the bonds, took the money of small investors and now the small investors are screwed, and not the banks, which actually made a lot of money while the interest payments took place.

So no, the creditors that initially buy up the bonds aren't necessarily interested in seeing the bonds mature, they can always crash and burn provided they make money between buying the bond and reselling it.

quote: and those 'austerity' plans? well they go to weakening the dictatorship, and try tot make sure the money helps the people.

Austerity plans began with democracy, another reason why everybody is still so bloody disillusioned with the democratic system of government.

	19-02-2005 23:07									#59
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quote: The country was so indebted that by the late 90s the bonds it issued paid ludicrously huge interest rates.

actually i think what happened was that the IMF gave argentina good credit rating in the late 90s, so they were able to get cheap loans, and then all of a sudden, the creditors turned around and raised the rates tremendously beause things werent as good as the IMF said they were.

look, if you owe a bank $1000 thats your problem. if you owe them $140 millon, thats the banks problem. bank of america almost failed when the mexican peso dropped in 1995.

	20-02-2005 03:25									#60
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quote: Originally posted by Oerdin Simply cancelling debts would mean the bankruptcy of most major banks in the 1st world and a world wide depression due to lack of credit.

I'm sufficiently much of a rightwinger to feel this is what should happen. Banks that lend money to 3rd world dictators that spend them on guns deserve to go bankrupt, and countries that make their economies dependent on such banks deserve depression.