Argentine Peso Crashing, Provinces Pay in 'Patacon'
August 27, 2001 9:41 AM Subscribe
Argentine Peso Crashing, Provinces Pay in 'Patacon'
The new scrip will be accepted, officials hope, until the recent US bailout makes it possible to print pesos. The IMF posted 8B dollars last week, at which time 'patacon' was being used in ATMs (Surprise!) I like the above articles noting that it "fits into a wallet like money" --- was there ever a case of design problems in emergency paper currency?
The new scrip will be accepted, officials hope, until the recent US bailout makes it possible to print pesos. The IMF posted 8B dollars last week, at which time 'patacon' was being used in ATMs (Surprise!) I like the above articles noting that it "fits into a wallet like money" --- was there ever a case of design problems in emergency paper currency?
Issued in denominations from one to 100 and officially valued at par with the dollar, the scrip was quickly renamed with a slang term, meaning something like wampum, used by a character in a comic book popular with generations of Argentines (???)
posted by rschram at 10:28 AM on August 27, 2001
posted by rschram at 10:28 AM on August 27, 2001
For another take on this, read the all-too-brief Dean Baker @ Tom Paine:
The article begins by asserting that Argentina is at the "brink of a ruinous default." It is not obvious that default would be ruinous to Argentina at this point in time.
In other words, Argentina could say screw the IMF and act to rescue its own economy. Russia acted as unilaterally two years ago, and the G7 gasped but accepted it. The charge that an Argentine plan to repay on its own terms would lead to a "domino default" of other nations, beginning with Brazil, is a self-serving view held by the banking establishment based in New York. If you listen to them, of course, it's like listening to your car loan people saying "You'll ruin your credit! Don't you dare go Chapter 11 on us!"
posted by dhartung at 11:38 AM on August 27, 2001
The article begins by asserting that Argentina is at the "brink of a ruinous default." It is not obvious that default would be ruinous to Argentina at this point in time.
In other words, Argentina could say screw the IMF and act to rescue its own economy. Russia acted as unilaterally two years ago, and the G7 gasped but accepted it. The charge that an Argentine plan to repay on its own terms would lead to a "domino default" of other nations, beginning with Brazil, is a self-serving view held by the banking establishment based in New York. If you listen to them, of course, it's like listening to your car loan people saying "You'll ruin your credit! Don't you dare go Chapter 11 on us!"
posted by dhartung at 11:38 AM on August 27, 2001
Silly rabbitt: The Patacons were those little slug-like things that crawled in Chekov's ear in Wrath of Khan.
posted by jpoulos at 12:30 PM on August 27, 2001
posted by jpoulos at 12:30 PM on August 27, 2001
For those interested, the name patacon refers to a popular dish of smashed fried and salted plaintains here in Costa Rica. A very popular snack.
Funny huh?
posted by betobeto at 1:17 PM on August 27, 2001
Funny huh?
posted by betobeto at 1:17 PM on August 27, 2001
Yes, I think the term originated in our popular comic strip/book Patoruzu.
And no, we can't say screw you to the IMF. That would cause all holders of debt bonds to flee them, all investors in local banks and business to take away their funding. As the country is already totally messed up (no industrial production worth that name, only cheap basic agrobusiness exports, incompetent political system, authoritarian security forces, generalized corruption of business and government practices, lack of education and excessive love for welfare dependency), it is impossible to get a short term wealth-creation process to start. Without that, any repayment, rescue or even saving of the economy is plain babble.
Also, a collapse of Argentine economy would most probably affect Brazil, given the huge degree of interdependencies our two countries have in exports, imports, and capital services. It is probable for Chile to be affected too. More importantly, the psychological effect would be very bad, and emergent country debt holders will flee to secure investments like T-bonds. In short, another global financial crisis like the one that started with Thailand some years back. Considering the way global economy is in a dangerous undecissive point between recession and recovery, it's no wonder that the IMF and the US Treasury are willing to waste several extra billion dollars on nothing, just to buy time and try to isolate the (IMHO) inevitable sinking of our country and the Mercosur system.
posted by Iosephus at 1:48 PM on August 27, 2001
And no, we can't say screw you to the IMF. That would cause all holders of debt bonds to flee them, all investors in local banks and business to take away their funding. As the country is already totally messed up (no industrial production worth that name, only cheap basic agrobusiness exports, incompetent political system, authoritarian security forces, generalized corruption of business and government practices, lack of education and excessive love for welfare dependency), it is impossible to get a short term wealth-creation process to start. Without that, any repayment, rescue or even saving of the economy is plain babble.
Also, a collapse of Argentine economy would most probably affect Brazil, given the huge degree of interdependencies our two countries have in exports, imports, and capital services. It is probable for Chile to be affected too. More importantly, the psychological effect would be very bad, and emergent country debt holders will flee to secure investments like T-bonds. In short, another global financial crisis like the one that started with Thailand some years back. Considering the way global economy is in a dangerous undecissive point between recession and recovery, it's no wonder that the IMF and the US Treasury are willing to waste several extra billion dollars on nothing, just to buy time and try to isolate the (IMHO) inevitable sinking of our country and the Mercosur system.
posted by Iosephus at 1:48 PM on August 27, 2001
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posted by rschram at 9:45 AM on August 27, 2001