Argentina has constantly been trapped over two centuries in unpayable external debt owed to foreign imperial powers. This affects the everyday life of everyone: inflation, salaries, employment, public services, elections. Here is a brief history of the deuda.
  • Water Bowl Slime
    7•1 year ago

    In 2010, under CFK, Argentina completed a second bond exchange under less favorable conditions for the creditors, which led to a total of 91.3% of the defaulted debt being restructured.

    … Tens of billions were saved, and Argentina was on its way to finally normalize its status vis-à-vis the international credit markets, while all economic indicators were showing strong signs of recovery.

    But the remaining defaulted debt, which represented just about 8% of the total from 2001, was now owned by holdouts that had refused the offers of 2005 and 2010, and decided to turn to the US judicial system to help them litigate.

    Most of these creditors were known as “vulture funds” – firms that are illegal in many countries, but not the United States. …

    These particular kinds of hedge funds profit by buying defaulted debts at a much lower price than their nominal value, and then use aggressive strategies, most notably lawsuits, to extort the debtor, in an attempt to get the full value plus penalties.

    It really boils my piss how often media here in the US fearmongers about “Chinese debt-trap diplomacy” when we literally have hedge funds whose sole purpose is to do exactly that. Well, not the diplomacy part, the debt-trap part. Straight up profiting off catastrophes by taking entire countries to court… American court. Yet we’re always touting about respecting democracy and sovereignty and rules-based order.

    Singer, Dart, Brodsky, and their super-rich colleagues belong to a generation of speculators who learned to take advantage of the 1976 Foreign Sovereign Immunities Act, a law that provides the legal basis to sue a foreign country in a US court.

    Before that law, vulture funds could not engage in distressed-debt litigation against sovereign countries. But in 1992, Dart opened Pandora’s box by suing Brazil, right in the middle of its debt crisis, and getting a favorable settlement.

    After a long legal battle between the vulture funds and the Kirchners’ governments in several US courts, New York judge Thomas Griesa ruled in 2012 that Argentina had to pay the vulture funds at full value.

    Paul Singer’s NML Capital alone made $2.28 billion on an original investment of just $177 million, for a total return of 1180% – while also forcing Argentina to pay the legal fees.

    This is the first time I’ve heard of the Foreign Sovereign Immunities Act. It’s utter bullshit that the US can indebt a country, privatize their industries, steal their resources, and then force them to pay off the loan that didn’t even buy anything besides some capitalist’s 7th yacht.