argentinian peso currency money banknotes

Economics

解码货币危机

Sep 3, 2018 Andrés Velasco

圣地亚哥—想象两个国家。国家A存在略高于5%的GDP的财政赤字，国家B的缺口接近9%。此外，直到最近，国家A的公共债务极少超过GDP的50%，而国家B的公共债务一直在膨胀，很快就将接近国内产出的90%。

在这两个国家中，国家B更有可能遭遇货币危机，对吗？

未必。A是阿根廷。B是巴西。2018年以来，阿根廷比索跌去了一半价值。阿根廷外汇已基本耗尽，必须采取紧缩措施来确保国际货币基金组织（IMF）的500亿美元救助——即便如此也没能安抚投资者。与此同时，巴西里亚尔也有所贬值，主要是因为10月份总统选举结果不确定，并没有明显的金融风险。

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0 Comments on this paragraph, 9 Comments on this article

camilla alves Sep 5, 2018

I'm afraid the author is missing a very important point: Argentinean politics and institutions are way more instable and not committed to macroeconomic stability than their Brazilian counterparts. Throughout the last century there were several coups and contra-coups in the country, deindustrialization, poor economic policies, a deep populist inheritance that has Perón as its champion until nowadays, as a result, two first ladies became president as heiress of their late husbands, and they even started a war against Britain(!). Although this may not be explicitly priced, it cannot be ignored, and is clear that this sentiment exists when you confront the lack of credibility of the country. Although Macri is serious and very well intentioned, Argentina is much more likely to be trapped in caudillo’s populist politics.
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Turgay Sanac Sep 4, 2018

Additionally, a rightful key-question nowadays: How big is the (deliberately negative; sometimes/somewhat manipulative) impact of "The pretty honoured/privileged international credit rating agencies", i.e. so-called "Big Tree Trustees, exclusively from USA", on the currencies/economics of the emerging/poor countries (and especially in crisis situations) actually?
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Robin Yoshimura Sep 4, 2018

I think the author misses a big difference between A and B. According to Reuters, nearly 70 percent of Argentina's debt is in foreign currency vs. Brazil just 5 percent of debt is foreign denominated.
- Peter Schaeffer Sep 4, 2018
  
  Robin Yoshimura, Good comment. Good observation. Borrowing in a foreign currency is dangerous. This point has been recognized for a long time. There is actually a term for this, "original sin". There is also a substantial literature on the subject (of "original sin").
  
  The dire problems of Southern Europe are a direct consequence of borrowing in a foreign currency (the Euro). The situation in Southern Europe is actually worse because the countries in question don't even have a domestic currency to devalue.
  
  I would add that history (in this context) favors Brazil over Argentina. Argentina is a well known, serial defaulter. Loaning money to Argentina has been a disaster for a long, long time. As a consequence, markets don't trust Argentina (for good reason). Brazil doesn't have the same (bad) reputation.
  
  Of course, the author (Andrés Velasco) knows all of this far better than I do. His failure to mention these salient points is both surprising and revealing.
  - Peter Schaeffer Sep 4, 2018
    
    I would add one more point. If Brazil is really running a deficit of 9% of GDP, then Brazil is in trouble. Not immediately to be sure. However, no country can sustain deficits of that magnitude. Of course, Brazil is not at war with anyone these days and the global economic environment is moderate (not great, not terrible). Brazil should be much closer to fiscal balance, but is not.
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Jose Antonio Vanderhorst Silverio Sep 3, 2018

When I read that "... given well-functioning financial markets and a strong legal system, the dairy plant could also be quickly mortgaged and turned into cash," and thought something else was coming for a moment. Are those markets really well-functioning?

I say no. They are what I suggest is the Dark Globalization where regulations are unsustainable (or legalized corruption), when we need the Bright Globalization, where regulations are sustainable. Having said that, as country A has less judicial capacity to deal with corruption than country B, the market risk is a lot larger in country A than in country B.

All the EcoNoMic analysis is done without mentioning that the market is globalized. So it is very difficult to understand what's happening without introducing the EcoIsOurs profession that has the necessary heuristic and learning power needed. I would love that the analysts consider country DR - the Dominican Republic - which recently is loved by investors as it is a good payer, but with very little judicial capacity to deal with corruption. Public debt has been increasing non linearly, for example, from US$6,587 in 2004 to US$30,585 in 2018.
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Nicolas Cornejo Sep 3, 2018

I was hoping Velasco would apologize for his previous comments on Argentina. But some people never learn.
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jrstevens90 Sep 3, 2018

It feels like this article is basically making excuses for why Argentina is having this crisis when it's been enacting exactly the neoliberal policy platform the author advocates.
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