tag:blogger.com,1999:blog-2761684730989137546.post2900614168644793256..comments2024-03-28T04:13:36.779-04:00Comments on Mike Norman Economics: Riots in Iceland as economy darkensmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2761684730989137546.post-15324381116994220692008-11-25T10:44:00.000-05:002008-11-25T10:44:00.000-05:00One word for today : ARGENTINAThe bank failure of ...One word for today : ARGENTINA<BR/><BR/>The bank failure of Argentina in November 2001 is a working example.<BR/><BR/>They artificially pegged the peso to the U$ dollar 1 to 1 during the 1990's.<BR/><BR/>Menem, president in the 1990's, followed the Bush / Schultz / Neocon algorithm of privatization.<BR/><BR/>Result : Argentina was burdened by debt, leverage, supposed capital flight, etc<BR/><BR/>Globalized by Spanish, French and Italian multinationals, Argentina of coursed blamed USA and EU.<BR/><BR/>They had to float their currency and it devalued to 1 U$D = 4 Pesos.<BR/>No much compared to Turkey, Russia, Mexico, and Asian melts.<BR/><BR/>However, it illustrates the point of the magnitude what is happened here :<BR/><BR/>Argentina population : 30 million<BR/><BR/>US Pop : 300 million<BR/><BR/>Argentina default : 250 billion<BR/><BR/>Estimated ( by me ) US Default is a factor of 10 as per population differential, so US Default is actually 2.5 trillion.<BR/><BR/>However, US currency is strengthening and all currencies which are artificially pegged to dollar :<BR/><BR/>El Salvador pegged 1 to 1 with USD.<BR/>Will this help or hurt ?<BR/><BR/>China artifically low.<BR/>Will this help or hurt ?<BR/><BR/>When does floating help and when does pegging help ?<BR/><BR/>If we would have SPIKED the U$D more, then we would have broke up the Chinese <BR/>and the Russian analyst can now eat his tofu.googleheimhttps://www.blogger.com/profile/14459089745473598235noreply@blogger.com