Argentina is once again running out of money. Although analysts have tried to pin different estimates on reserves and obligations, the Central Bank of Argentina has obfuscated just how much of a money pit they are in..The country is now on its third economic minister in a month, Sergio Massa. He will head a new, expanded economic ministry in charge of agriculture, production and economic activity. After a sudden resignation in early July, and a three-week stint by another minister, Massa finds himself in the midst of political turmoil on top of the severe inflation problem. Minister Massa has been ascribed as a capitalist by economists, and it remains to be seen if the left-leaning coalition ruling government, will be able to harmonize their policy approach with their voters..Conditions are looking no better abroad. The likelihood of receiving financial assistance from an outside source is slim. Argentina's overseas bonds are currently trading at approximately 20 cents on the dollar due to the fear of foreign bond investors. The long history of past defaults has amplified the unease of giving Argentina even more resources. This includes one of the largest creditors, the I.M.F. The International Monetary Fund has already committed $44 billion USD in loans back in March of this year and shows no signs of wanting to commit more capital..With chances of default rising, the already sky-high inflation (approaching 100%) is creating an environment ripe for chaos. This chaos is exacerbated by the calls for increases in welfare spending as cash reserves are dwindling at a rapid pace. If Sergio Massa is not able to address the imminent and serious issues of the present and future, full-scale civil unrest will certainly be possible.
Argentina is once again running out of money. Although analysts have tried to pin different estimates on reserves and obligations, the Central Bank of Argentina has obfuscated just how much of a money pit they are in..The country is now on its third economic minister in a month, Sergio Massa. He will head a new, expanded economic ministry in charge of agriculture, production and economic activity. After a sudden resignation in early July, and a three-week stint by another minister, Massa finds himself in the midst of political turmoil on top of the severe inflation problem. Minister Massa has been ascribed as a capitalist by economists, and it remains to be seen if the left-leaning coalition ruling government, will be able to harmonize their policy approach with their voters..Conditions are looking no better abroad. The likelihood of receiving financial assistance from an outside source is slim. Argentina's overseas bonds are currently trading at approximately 20 cents on the dollar due to the fear of foreign bond investors. The long history of past defaults has amplified the unease of giving Argentina even more resources. This includes one of the largest creditors, the I.M.F. The International Monetary Fund has already committed $44 billion USD in loans back in March of this year and shows no signs of wanting to commit more capital..With chances of default rising, the already sky-high inflation (approaching 100%) is creating an environment ripe for chaos. This chaos is exacerbated by the calls for increases in welfare spending as cash reserves are dwindling at a rapid pace. If Sergio Massa is not able to address the imminent and serious issues of the present and future, full-scale civil unrest will certainly be possible.
