Argentina seizes pension funds to pay debts. Who's next?

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DrKrbyLuv's picture
DrKrbyLuv
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Joined: Aug 10 2008
Posts: 1995
Argentina seizes pension funds to pay debts. Who's next?

Here is a warning to us all. The Argentine state is taking control of the country’s privately-managed pension funds in a drastic move to raise cash.  - complete article link

It is a foretaste of what may happen across the world as governments discover that tax revenue, and discover that the bond markets are unwilling to plug the gap. The G7 states are already acquiring an unhealthy taste for the arbitrary seizure of private property, I notice.

So, over $29bn of Argentine civic savings are to be used as a funding kitty for the populist antics of President Cristina Kirchner. This has been dressed up as an anti-corruption and efficiency move. Aren’t they always?

Argentine sovereign debt was trading at 29 cents on the dollar today, pushing the yield to 25pc. Tempted?

Credit Default Swaps on Argentine bonds reached 2,900. Do we have a Latin Iceland on our hands, but with 100 times the population? Or several, Pakistan, Ukraine, Hungary? …… Switzerland? Australia? Britain?

The funds being targeted are known as AFJPs or retirement accounts, but how long will it now be before Mrs Kirchner cracks down on the entire $97bn pool of private pensions? There are a lot of much-needed hard currency assets in those portfolios.

“A state takeover of pensions creates all kinds of doubts and throws into relief the extreme financing needs of the government next year,” said Jorge Alberti, from ElAccionista.com

All because we rent our currency from private banks instead of issuing our own.  And, in order to pay the rental fees, we have to rent more - a perpetual loop that is insatiable.  It really is that simple and the solution should be obvious - we need to issue our own debt free money!.

Larry

Subprime JD's picture
Subprime JD
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Posts: 562
Re: Argentina seizes pension funds to pay debts. Who's ...

Pretty soon 401ks will be forced into treasurys.

msdavi's picture
msdavi
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Re: Argentina seizes pension funds to pay debts. Who's ...

> Pretty soon 401ks will be forced into treasurys

This reminded me of a question that's been nagging me. I've read lots of articles suggesting that 401Ks might be nationalized, but don't recall hearing IRAs referred to in this way. Is there a distinction? I mean I can see why 401Ks might be nationalized, but why not IRAs also? Or am I just not paying attention?

thanks - Mike

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