Argentina Sells Bonds to Venezuela for Second Time in a Week

[Judi Lynn]

Argentina Sells Bonds to Venezuela for Second Time in a Week
Dec. 26 (Bloomberg) -- Argentina sold $270.4 million of bonds to Venezuela, the second direct sale to that country in less than a week, to help bolster its international reserves.

Venezuela bought the dollar-denominated bonds maturing in 2012, known as Boden bonds, at ``market prices,'' Argentina said in its official gazette on Dec. 23. Venezuelan President Hugo Chavez's government has used some of its windfall oil revenue to buy $1.75 billion of Argentine bonds this year, making it the biggest buyer of Argentine debt since the country's $95 billion bond default in late 2001.

Argentina needs the dollars to build up foreign reserves after President Nestor Kirchner announced on Dec. 15 he would use about a third of the central bank's reserves to pay off all the money the country owes the International Monetary Fund, said economist Martin Apaz at Deloitte & Touche LLP in Buenos Aires.

Argentina said it would make the $9.8 billion payment to the IMF on Jan. 2 and would use the money raised through bond sales to rebuild reserves. The payment to the IMF will lower reserves to about $18 billion from almost $28 billion.
(snip/)

http://quote.bloomberg.com/apps/news?pid=10000086&sid=a3CacRGtIoUw&refer=news_index



Kirchner and Chavez

[bemildred]

1. Dang, they're ganging up on us! What are we going to do? nt

[Judi Lynn]

2. They've smoked us out, and got us on the run! Man the phospherous bombs.nt

[bemildred]

3. "Brown dawn" coming soon:

http://www.imdb.com/title/tt0087985/

[GrumpyGreg]

4. Not being too clever I have no idea what this means---maybe someone

can explain it to me.

[bemildred]

5. It means that Argentina (unlike the USA) is paying off and/or

refinancing it's foreign debt on better terms. A
good thing for both individuals and for nations.

[GrumpyGreg]

6. Thanks !

[1932]

7. dupe

[1932]

8. For a colorful lesson in the consequences of WB/IMF debt, read:

Confessions of an Economic Hit Man.

According to John Perkins, defaulting on your debt gives the west a lot of leverage. It usually means giving over the collateral -- land for US military bases and natural resource mining. If the debtor doesn't let that happen, the creditor nation sends in the jackals to sabotage the debtor's economy and government and influence elections. If that doesn't work, the creditor nation sends in the military. OK, we'd never invade Argentina, I would hope, but getting rid of that debt lets Argentina control its own destiny.

And I believe, much like the credit card industry in the US, the banks make more money from indebtedness (and the consequences of default) than they make from timely payments of debt, so, by paying off those loans, a lot less wealth is going to flow to Wall Street and Washington DC (and to West Point, not coincidentally).