In the heart of downtown Buenos Aires, it is hard to walk more than 20 paces without being accosted by hawkers buying and selling dollars. Interested customers will be led into an inconspicuous office in a nearby building.“They’re called ‘caves’, because they’re supposed to be secret. Of course everyone knows they’re there,” said a hawker who called himself Raul. “Illegal? Of course they are! But don’t worry, the police are paid off, nothing will happen to you.”
All signs point to Argentina’s spin-cycle of failure continuing:
That problem will only deepen if Argentina slips into a technical default, which some observers believe is all but inevitable after a US appeals court last month ruled in favour of the holdouts demanding that Ms Fernández’s government pay the $1.3bn it owes them in full, in the latest chapter in a long-running saga that began when Argentina defaulted on almost $100bn in debt in 2001.
Already shut out of international credit markets and sapped completely of investment, a second default in ten years might inaugurate Argentina into the unenviable club of global pariah states. A government that believes honest economic reporting is a crime and having to repay its debts is an injustice is about as attractive to outside investors as Venezuela, Cuba, or Iran.The only good news is that trade unions and low-wage workers are turning against Kirchner’s Peronist party, which tanked in primary elections this summer, depriving Kirchner of the legislative majority she needed to change the constitutional limit on her two consecutive terms. Not much in Argentina’s history suggests that the next government will be much better, but for now, it’s hard to imagine how things could be going much worse.[Image of Cristina de Kirchner courtesy of Wikimedia]