Argentine Economy

There is a lot of truth in what Black Shirt posted. The economic mess that is California is a precursor to the economic mess that will be the United States.

Governments are assuming sovereign debt they cannot service. For example, United States sovereign debt is projected to reach $15 trillion dollars in a few years. The United States can service this debt with 1% interest rates but not with 5% to 10% interest rates.

The core issue, as Black Shirt pointed out, is that this calamity in the natural evolution of governments promising too much to too many. This coupled with a complete lack of fiscal responsibility is a recipe for disaster.

How to prepare for the day when the sky falls. Who knows? Gold, commodities, property or move to a cabin in the mountains with canned goods, bottled water, cases of Jack Daniels and ammunition.

She wants the country's reserves. So much for returning to World credit markets.

Argentina's President Cristina Fernandez de Kirchner fired the central bank president after he failed to back the government's economic policies.

[url]http://www.businessweek.com/news/2010-01-06/argentina-fires-central-bank-head-over-debt-plan-update2-.html[/url]

[QUOTE=Damman]She wants the country's reserves. So much for returning to World credit markets.

Argentina's President Cristina Fernandez de Kirchner fired the central bank president after he failed to back the government's economic policies.

[url]http://www.businessweek.com/news/2010-01-06/argentina-fires-central-bank-head-over-debt-plan-update2-.html[/url][/QUOTE]It is crazy - he refuses to resign and apparently the new guy doesnt want the job.

Could only happen here.

Cristina may have got her old tit in the ringer by trying to get her hands on the Central Bank's reserves: opened the door for creditors.

[QUOTE] Normally, central-bank reserves are exempt from claims by sovereign bondholders, who technically contract debt with a nation's treasury department. But by unveiling the plan in December to use Argentine bank reserves to pay the treasury's debt, Kirchner unwittingly left the reserves vulnerable to attachment by creditors, analysts say.[/QUOTE]WSJ:

[QUOTE]BUENOS AIRES (Dow Jones)--A U.S. judge froze some Argentine central-bank assets in New York, throwing a new hurdle in the government's plan to use reserves to pay debt and contributing to the biggest selloff in weeks on Argentine bond markets.

The central bank will appeal the decision, a bank official said. Central Bank Governor Martin Redrado has instructed its lawyers to present the appeal Wednesday, the official said.

U.S. District Judge Thomas Griesa, ruling on behalf of creditors seeking relief from Argentina's massive 2002 default, embargoed $1.7 million in Argentine bank reserves deposited in New York. While the amount of money covered by the ruling is small, the ruling spooked investors and sparked new concerns about Argentina's prospects to return to financial markets after being frozen out for years.

(This story and related background material will be available on The Wall Street Journal Web site, WSJ.com.)

The embargo was an unintended consequence of a proposal by President Cristina Kirchner in December to place $6.57 billion of reserves in a "Bicentennial Fund" to service the national debt.

Normally, central-bank reserves are exempt from claims by sovereign bondholders, who technically contract debt with a nation's treasury department. But by unveiling the plan in December to use Argentine bank reserves to pay the treasury's debt, Kirchner unwittingly left the reserves vulnerable to attachment by creditors, analysts say.

Markets swooned at the latest blow to the Bicentennial Fund, which has run into resistance in Argentina from courts, the legislature and the central-bank president. The Argentine sovereign Discount bond due 2033, denominated in pesos, closed down 4.1%, while the stock market index was off 2%.

"This ruling signals that the scope of the conflict has now extended beyond Argentine borders," said Casey Reckman, sovereign-wealth analyst at Fitch Ratings. "Investors who perceived the establishment of the fund as a positive sign of Argentina's willingness to pay could be getting scared off."

Ever since Argentina declared the largest sovereign default in history eight years ago, Argentine creditors and the government have played a game of cat-and-mouse, with creditors trying to seize any assets they could. In 2002, German creditors even tried seizing an Argentine naval training vessel that was due to dock at the port of Bremerhaven.

Argentina's central bank has sought to protect its foreign-currency reserves by depositing about 80% of them in the Bank for International Settlements in Basel, Switzerland, says Robert Shapiro, co-chairman of American Task Force Argentina, a group representing creditors from the default.

In an angry news conference following the ruling, Argentine Economy Minister Amado Boudou said the embargo could affect up to $15 million in reserves deposited in the U.S. Argentina's reserves total $48 billion. The minister said previous embargoes have been overturned on appeal.

Boudou said "it seems there's a conspiracy," to scuttle the Bicentennial Fund and prevent Argentina from returning to markets. But he insisted Argentina intended to go ahead with the plan.

But the ruling could strengthen the hand of domestic critics of the Bicentennial Fund. Bank President Redrado had raised concerns about a potential embargo in opposing the Bicentennial Fund, according to local press reports, but Kirchner had disregarded his warnings and fired him last week. A judge subsequently reinstated Redrado.

Goldman Sachs economist Alberto Ramos wrote that the injunction is "likely to empower the central bank and Congress, likely pushing them into taking an even more assertive view on this issue."[/QUOTE]

It seems that the world is going to freeze a few more of the Argentine assets. Do you think that they have decided to make it look a little uglier for Argentina?

This way Iceland and the rest of the non pay countries will comply with what the IMF wants.

This could actually cause some of us ex-pats a problem - I just don't know how big it could get.

There is already a "commonly known fact" here in South America that the US and the other first and second world countries of the West are directly responsible for sucking every bit of wealth out of South America, and here in Argentina specifically to the Argentinos.

Right or wrong on that, add to it the wordings of the "angry" finance minister talking about a conspiracy and the world (the US and its "allies") trying to "scuttle the Bicentenial Fund".

People at times here can have quite a bad opinion of foreigners to begin with, and US citizens can be a prime target here as things are. I've posted before about an incident that a few of us expats experienced one night at Iberia - not a great big deal but a local telling us to go home and get out of their country.

I've not run into a lot of sentiment that stong here and certainly the above is the worst encounter I've had in my three years of living here. Not bad so far, but if Argentina starts going downhill faster toward (maybe not as bad as? Another crash like 2002 because of actions like those taken (again, rightly or wrongly, I'm not arguing that) by the court - well, perceptions of culpability here are seen through SA's and Argentina's own version of rose-colored glasses.

Perma-tourists from the States might have a lot more problems staying here over more than a couple of expirations / trips to Colonia for example. Some hassle from migraciones on entry possibly.

Who knows. Could it get worse in more social situations if things get really ugly?

I actually think that the "world" just wants to see Argentina take responsiblity for its debt, cut the huge problem of graft, cut spending it can't maintain and then turn into a strong trading partner. I think everyone would think that is really cool.

Great idea, but IMHO it is right up there with "if frogs had wings they wouldn't bump their butts" so long as self serving politicians keep getting elected both here and in the US.

Got drilled today about how "Obama" froze the Argentine funds. Gave it my best shot trying too explain that Obama really did not have anything to do with the judgment. Do not think I got my point across. Gringos will probably be vilified and become Cristina's scapegoat. Know 20 billion is not chump change, but paying the bond holders off would probably be a more cost effective route than the one they are taking now: higher interest rates. Would 20 billion really break the bank? As long as this dark cloud hangs over their head, Argentina will continue to pay high interest rates and probably end up costing them more than the 20 billion that has not been settled. "As the World Turns" in Argentina.

I have heard from a couple clients of mine and a couple friends of a rumor that started in December. Well people are saying that the government might close the doors to the banks again in within the next month or 2. That means if you got cash in the banks you will NOT be able to get any of it.

The money grab from banks seems to recycle here roughly every ten years. I've been here twice when it happened (wouldn't put a nickle in anything here). They've reached the end of their rope and must now hang. Begged, borrowed and stolen everything available. The confiscation of private pension funds got them through last year. This "borrowing" (of course never to be paid back) of reserves was a sign of despiration.

My guess is the banks will be closed before another default, money seized, and replaced with more future worthless bonds. It's also time to issue a new currency. It will be called the Austral and will be exchaged at a rate of one Austral for every 100 pesos. For the purpose of paying foreign creditors it will be pegged to the dollar one for one.

Another sign of a desperate nation looking to divert the proletariate's attention from the forthcoming money grab, Argentina is again rattling sabers in Queen Elizabeth's court [url]http://www.dailymail.co.uk/news/article-1244325/Britain-hits-Argentina-launching-fresh-claim-Falkland-Islands.html?ITO=1490[/url]

This could be the last hurrah. My friends at the Circulo Militaire have been patiently waiting for their opportunity.

It sure does seem something is going on. See where Congress is going to evaluate the legitimacy of the country's debt / bonds.

WSJ:

[quote]Such an investigation would be reminiscent of a study carried out in Ecuador, which determined much of the country's debt was illegitimate and was used by President Rafael Correa as the evidence to default on much of the country's debts in late 2008.[/QUOTE][url]http://online.wsj.com/article/BT-CO-20100120-706381.html?mod=rss_Bonds[/url]

There's something very serious going on behind the scene or Christina would not have canceled her trip to China.

The Chinese are very important to the Argies. The Argies have resources the Chinese want and they have money, something the Argies don't.

Exon

[QUOTE=Exon123]There's something very serious going on behind the scene or Christina would not have canceled her trip to China.

The Chinese are very important to the Argies. The Argies have resources the Chinese want and they have money, something the Argies don't.

Exon[/QUOTE]Canceling the China trip was indeed a surprise. She is afraid to leave the country. Also cancelled trip to Uruguay for the inauguration of their new President. Sounds like the old girl is afraid of a Honduran coup.

[QUOTE=Damman]Canceling the China trip was indeed a surprise. She is afraid to leave the country. Also cancelled trip to Uruguay for the inauguration of their new President. Sounds like the old girl is afraid of a Honduran coup.[/QUOTE]New day, same old s--t.

Hard to imagine that the democratically elected president (regardless of one's like or dislike for her) of a nation of 40 million being afraid to leave the country for fear of being kicked out of office. However, considering the theft and subsequent spending of the citizens' retirement funds, she might be safer out of the country. A change in the front office to a more free market based philosophy would be a good thing.

Concerns over closing banks, restricting the movement of capital and devaluing the currency create further risk for investors. Add perpetual uncertainty and instability to anti-foreigner and anti-private enterprise biases and you can understand why foreign investors don't want to invest here and why Argentinians with any modicum of wealth keep it off shore.

That said, if this scenario unfolds in typical Argentine fashion, goods and services should be cheaper for dollar and euro denominated investors. That said, I suspect that chica prices will initially go up.

[QUOTE=BA Herald ]And what were the presidential reasons for shirking her place in the sun? No outburst of lofty patriotism in the bicentenary year or even a more narrow-minded nationalism but an explicit fear of leaving Vice-President Julio Cobos in charge, which is nothing more than a supreme confession of weakness.[/QUOTE]This quote form the BA Harold implies that the Vice President assumes temporary power, while the President is out of the country. Is this true? Why? In the USA the VP does not assume any power when the President is out of the country. With Modern communication there is no need.

[url]http://www.buenosairesherald.com/BreakingNews/View/23039[/url]

It is in the Articles of the Constitution I believe: absence VP assumes powers. Think she is afraid VP will call an emergency session of Congress.

[quote]Executive.

The Executive Branch is formed by the President (Art. 87) The Vice-president replaces the President in case of illness, absence from the capital, death, resignation, or removal.

The Vice-President doesn't belong to the executive branch. Curiously, it belongs to the legislative branch since he is also the president of the senate. (Art. 57)

The President promulgates the laws sanctioned by Congrees, and has veto power over them. The President directs international relations and is the Commander in Chief of the Army. In some cases, the President can issue emergency decrees.[/quote]

The Argentine Ambassador is lobbying the US Congress about the "Vulture Funds." The Vultures are not going to settle at the 2005 rate. The Vultures hold the keys to the kingdom for Argentina. They are pissed.

[url]http://www.diarioactualidad.com/noticias/14/61/articulo/32817/2010-01-20_denuncia_la_argentina_fondos_buitres_al_congreso_norteamericano.html[/url]

Google Translation:

[quote]The Argentine government has sent a letter to all U. S. Congressmen to raise the position of Argentina and denouncing the "vulture funds" that supposedly "boycotting" the solution to the problem of debt in Argentina.

Here are some key paragraphs of the text signed by the ambassador in Washington:

"Once again I turn to you (the Congress) to inform you about the status of negotiations to resolve the situation of the small group of investors in Argentine bonds that decided to reject the Argentine government's offer made in 2005. As you know, the 81% of all holders of bonds issued under U. S. Law their status resolved in agreement with our government. "

? Vulture funds conducted an intense lobbying in the U. S. Congress to pressure Argentina to pay off bonds that entered the Exchange 2005 and have been buying them for pennies after the default. Nevertheless, few hours after the Argentine government announced in December its intention to reopen negotiations with creditors who did not accept the swap, 2005, vulture funds did not agree. ".

Follow the letter: "After the Argentine Congress recently decided overwhelmingly to authorize the Executive to negotiate a new exchange with those who accepted the offer in 2005, the Economy Ministry presented all the documents immediately to the Security and Exchange Commission estimated to reach a final agreement in the coming weeks. With this important step, the Argentine people will have completed the sad story of a debt dating back to the dictatorial regime that hit Argentina between 1976 and 1983? "

"• One of the main arguments of vulture funds is to reject the acceptance rate of offers of 2005, but it reached three of every four bondholders, they consider inadequate. They know that the reopening of negotiations can give place at a rate of accessions nearly 90% of total debt that went into default in 2001, this level of agreement pulverize the argument that Argentina's offer is unacceptable? " continues the text.

Then the ambassador denounced the alleged practice of vulture funds "? Specialize in the use of aggressive tactics and harmful to good relations between our countries. These vulture funds have done so much damage in different countries in Africa, Latin America and Asia has led to a group of his colleagues to introduce the bill STOP THE VULTURES FUND ACT.

He concludes: "Mr. Representative, is my purpose in this letter to reiterate the firm intention of my government to move forward with policies to overcome the partial default state which is Argentina, which naturally includes complete negotiations with holdouts not benefited from the exchange in 2005. I also emphasized that the only way is to repeat the sustainability criteria that governed the supply of 2005 and enabled the payment of debt holders who trusted and contributed to Argentina's recovery. In light of this unheard of wanting to prevent a final solution to the question I ask is that you reject any attempt by vulture funds and their lobbyists to achieve their evil goal. "

In this way, Argentina rejects certain lobbies pressure, letter in which even referred to Senator Kennedy, and which provides a listing of vulture funds in question and which also speaks of the relationship bilateral between Argentina and the United States:

"With regard to our present and immediate future, our two countries are working together in Haiti and the G20. The President has invited Barack Obama President Cristina Fernandez de Kirchner a summit on nuclear security, while our labor minister Carlos Tomada will meet with Secretary of Labor, Hilda Solis to coordinate efforts in the fight against slave labor and advance the creation of decent work for our peoples, "finally closes Hector Timerman Ambassador his letter, dated today.[/quote]

[QUOTE=Damman]It is in the Articles of the Constitution I believe: absence VP assumes powers. Think she is afraid VP will call an emergency session of Congress.[/QUOTE]I believe that her major concerns are his ability to enact things (that she specifically opposes) in her absence. They both have different benefactors and she has certainly been punch a few well known benefactors in the nose. Perhaps, she is concerned that the VP would seek to right some of those perceived wrongs if she was out of the country.

[QUOTE=Wild Walleye]I believe that her major concerns are his ability to enact things (that she specifically opposes) in her absence.[/QUOTE]Yeah like, say, an order withdrawing the police from in front of the Central Bank so Redrado can get back to work. What a pathetic tactic. I read an article about this in today's paper, but is she really stooping to this level?

Nothing like bringing to bear your police power to effectively permit you to steal $6.5 billion from the Central Bank. I guess Chavez is tired of loaning them money, too. With inflation in Argentina being so low, the poor guy can't get a decent return on his investment.

[url]http://www.cnbc.com/id/35148562/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo[/url]

Exon

How much longer before we hear a giant POP - or will it be a slow whistle like the air coming out of the balloon?

With the current news, how can the exchange rate be slow stable?

Is there any likelihood that a repeat of 2001 is possible?

Exon,

I read that article as well and I think that it speaks volumes about Ms. Kirchner. I don't know about you, but 50 mg of Viagra works better for me than a couple of pork chops!

[QUOTE=Iamzonzon]How much longer before we hear a giant POP - or will it be a slow whistle like the air coming out of the balloon?

With the current news, how can the exchange rate be slow stable?

Is there any likelihood that a repeat of 2001 is possible?[/QUOTE]I have been reading 'pop and whistle' predictions for the past 3 years and posting that the liklihood was slight. US nationals have to realize that the Arg peso is to all intensive purposes, a U$ currency and although it has inflated / devalued against the U$ by about 5% p.a. since 2002, the difference since the corralito is an exchange of 3 to 1 to a current 3.8 to 1. About the same rate the U$ has devalued against the Euro. The real issue of course is the internal inflation. More than 30% per annum which is why prices for consumer goods such as apartments, food, chicas, taxis etc impacts so directly on costs to a monger. Eventually it will collapse but I think it will not be this year or perhaps even in 2011. It is a remarkable system that defies logic. But it will collapse. The question is always, 'when?'

Argento

[QUOTE=Iamzonzon]How much longer before we hear a giant POP - or will it be a slow whistle like the air coming out of the balloon?

With the current news, how can the exchange rate be slow stable?

Is there any likelihood that a repeat of 2001 is possible?[/QUOTE]Although some of us might be licking our chops in anticipation of the fall of this government and the Argentine economy, I believe, like Argento, the fall will not occur before 2012. I believe the script is already written on how Cristina will not only survive, but also assure the election in 2011 of her husband.

The Executive branch of the government has effectively and in a Machiavellian manner taken over the Central Bank. Not only does it have the keys to the bank, it now has its own man, Pesce, as the Director of The Central Bank. Pesce is a long time supporter of Kirchner and has already stated the money in the Central Bank should be used not only to pay down debt, but also be spent on national programs.

Congress in the end will give approval to spend the reserves because the governors and mayors of the big cities are already pressuring the national government to use the money to cover some of the expenses (deficits) of the provinces. Also, big cities like Capital Federal, Mendoza, Cordoba, etc. Would like to get there financial dog and pony shows on the road to raise anywhere from 400 to 100 million dollars (Macri needs to borrow 400 million dollars and other cities need less for their city projects) They can't go to the United States and other countries and make their presentations until the crisis of how the Central Bank reserves can be used to pay the international debt. These governors and mayors will pressure their supporters in congress to settle quickly the spending of the Central Bank reserves.

Cristina will not only take the 6.7 billion over the next few weeks to pay the international debt, but she will take an additional 13.3 billion to pay the rest of the debt sometime in September of this year. Also, as part of her survival strategy and to keep her supporters (voters) on her side she will probably take 5 billion dollars to continue her excessive spending.

We will probably see, as already predicted by the Minister of the Economy, a devaluing of the peso over the next six weeks. The exchange rate will probably settle at an exchange rate of AR$4.05 to US$1. In March and April the peso will be supported by the influx of dollars from the harvesting and sale of the agricultural produce.

After all of these shenanigans the Central Bank at the end of the year will be left with about 23 billion dollars. Of course it could be a lot less if, the 17 billion dollars in CDs the Central Bank holds haven't been pulled and sent outside the country or stashed under the mattress.

Also, during this year, Cristina might get back to the plan of buying YPF, and of course there's always Telecom to nationalize. Also, typical of Peronistas, they'll start pursuing other international companies like IBM and hit them up for unpaid taxes via AFIP. If they can squeeze 100 to 200 million from each international company in the end it will add up to some real money to continue her spending.

During this year the National Government will try to neuter the Supreme Court. It's already mercilessly attacking the Supreme Court. These attacks will continue and by the end of the year the National Government will probably have complete control.

In 2011 we will see the National Government take or get approval to take an additional 10 billion dollars for national programs. This money will be spent on programs in an attempt to assure the election of her husband. If this were to occur, this will leave about 7 billion dollars in the Central Bank to defend the peso.

Also, I believe, Cristina has a plan to capture a larger voting block in the city of Buenos Aires (they usually lose the city to the opposition) How will they try to win the city of BA?

Argentina is the only Mercosur country that has opened its doors fully to citizens of Mercosur countries. Over the past 4 years, Argentina has aggressively and efficiently processed and given residency to about 1 million citizens from various Mercosur countries. Probably half of these immigrants are voting adults. I believe, given the whispers out there, the National Government will at the beginning of 2011 offer citizenship to these people.

Over the past 3 months I've been asking myself why has the National Government restructured and streamlined the two agencies that deal with immigration, the Department of Immigration and the Registry of Persons. As I've mentioned before, I've never seen such a yeomen effort in making these two agencies work smoothly and process people rapidly such that they will have their residency and DNI in record time. The only answer I have is; the National Government will offer citizenship to them and since most of them reside in Buenos Aires they will end up voting for he Government that has given them not only citizenship but also survival monies and food (there are numerous benefits that immigrants receive with only temporary residency. They receive a lot more with residency and the DNI) It's a cynical observation, but this government will do whatever to win.

[QUOTE=Facundo]Also, I believe, Cristina has a plan to capture a larger voting block in the city of Buenos Aires (they usually lose the city to the opposition) How will they try to win the city of BA?

Argentina is the only Mercosur country that has opened its doors fully to citizens of Mercosur countries. Over the past 4 years, Argentina has aggressively and efficiently processed and given residency to about 1 million citizens from various Mercosur countries. Probably half of these immigrants are voting adults. I believe, given the whispers out there, the National Government will at the beginning of 2011 offer citizenship to these people.

Over the past 3 months I've been asking myself why has the National Government restructured and streamlined the two agencies that deal with immigration, the Department of Immigration and the Registry of Persons. As I've mentioned before, I've never seen such a yeomen effort in making these two agencies work smoothly and process people rapidly such that they will have their residency and DNI in record time. The only answer I have is; the National Government will offer citizenship to them and since most of them reside in Buenos Aires they will end up voting for he Government that has given them not only citizenship but also survival monies and food (there are numerous benefits that immigrants receive with only temporary residency. They receive a lot more with residency and the DNI) It's a cynical observation, but this government will do whatever to win.[/QUOTE]This isn't a new concept, and in fact it is essentially the same strategy the Democrats will employ via "Immigration Reform" to win the 2012 elections in the USA.

Thanks,

Jackson

You paint a very similar picture of what Obama is trying to do. Robbing Peter to pay Paul, neutralize the judiciary, entrench incumbents and create new partisan voters.

I must add that the hairs on the back of my neck stood up when you mentioned attacking and neutering the Supreme Court. That is exactly what Obama is doing. His lies and misrepresentations about the supreme court featured in his state of the union address were part of an orchestrated attack on the judiciary by leftists (with Obama at the helm).

[QUOTE=bloomberg]Argentina May Seek Changes to Central Bank Charter, Nacion Says.

Share Business ExchangeTwitterFacebook| Email | Print | A A A By Bill Faries.

Feb. 1 (Bloomberg) -- Argentine President Cristina Fernandez de Kirchner may seek changes to the central bank's charter to allow the government to tap the institution's reserves, La Nacion said.

Fernandez and her husband, lawmaker Nestor Kirchner, want to be able to use the reserves to help create jobs or finance infrastructure projects, the Buenos Aires-based newspaper said, without saying where it obtained the information.

The proposal, which may be sent to congress next month, was discussed in a meeting with lawmakers at the presidential residence yesterday, La Nacion said.

To contact the reporter on this story: Bill Faries in Buenos Aires at [email]wfaries@bloomberg. Net[/email]

Last Updated: February 1, 2010 06:36 EST [/QUOTE]If they can take the central banks reserves, CFK should not run out of money for a few more years. Although when the reserves get low enough, the peso can get hit. Of course she can always lie, as they do about inflation, and say they have more then they do. Not sure if there are any checks and balances to prevent that. I notice they can say whatever they want about inflation. They fired a bunch of people who calculate inflation, and all of a sudden, inflation was down. Maybe they can do the same with the central bank? Don’t know.

[QUOTE=Tessan]If they can take the central banks reserves, CFK should not run out of money for a few more years. Although when the reserves get low enough, the peso can get hit. Of course she can always lie, as they do about inflation, and say they have more then they do. Not sure if there are any checks and balances to prevent that. I notice they can say whatever they want about inflation. They fired a bunch of people who calculate inflation, and all of a sudden, inflation was down. Maybe they can do the same with the central bank? Don't know.[/QUOTE]However, the global market has an idea of exactly what reserves, resources and income the country currently has and will calculate what 'subsidies' appear out of thin air (reserves) and will therefore mark down the reserves. As reserves dwindle, risk increases. Therefore, interest rates across the board will rise in order to compensate lenders for risk and the cost of capital will rise therefore constraining economic activity and fostering a cyclical tailspin that will auger into the earth.

Foreign exchange valuation differentials are driven largely (but not entirely) by interest rate differentials.

The 103 room 4 star hotel purchased with the legally questionable US$ 2 million by the Kirchners in Alto Calafate, is, without any marketing effort, 30% (30 rooms) filled by Aerolíneas flight attendants and pilots every night of the year at a cost of AR$ 519 per night. There are other hotels in the area whose nightly lodging is 20 to 50% less. Aerolíneas is the airline nationalized by the Kircheners about a year ago.

Since coming into power the wealth of these two corrupt politicians has gone from about a million dollars to about 22 million dollars (I suspect this is the tip of the financial iceberg that is known) According to them their wealth is due to savvy investing.

The full story can be read in today's edition of La Nación:

[url]http://www.lanacion.com.ar/nota.asp?nota_id=1229248&pid=8244249&toi=6479[/url]