Here we go again: The culture that is Argentina

So far this week, Christina Kirchner has (a) insinuated that the US may be plotting to kill her and (b) run off the head of “her” central bank after less than a year on the job.

She complained that the central bank was not doing enough to control the “blue market” exchange rate, which sits at around 16 pesos to the dollar, or about 90% above the regulated, & rationed official rate of 8.5.

According to Kirchner, the central bank is supposed to keep a lid on the exchange rate AND build up its stock of reserves. When inflation is running at 40% or so, that is a pretty tall order.

The peso was devalued 20% in January, but the blue market rate shows that it still has a long way to go.

People, I am not a big fan of how the Argentine debt case has evolved in the New York courts, but Kirchner is far from an innocent victim in this economic debacle.

Argentina is a beautiful, complicated country and its repeated cycles of inflation and crisis are nothing short of tragic.

 

Darn it. My ATM has a measly $500 / day withdrawal limit

Ah Somalia. The UN has issued a report saying that  “Despite the change in leadership in Mogadishu, the misappropriation of public resources continues in line with past practices.” (I know, I know. Please insert your favorite pot-kettle joke here)

In other words, the new government is stealing everything that’s not nailed down, starting with the money in the Central Bank.

“On average, about 80 percent of the withdrawals from the country’s Central Bank (CB) are made—not to run the government—but for private purposes.  The CB has become, in a way, an ATM for certain public officials, or as the report calls it a “slush fund.” A case in point, of $16.9 million transferred to the CB for government use, $12 million cannot be accounted for.”

And the head of this ATM / Central Bank? It’s none other than Abdusalam Omer, back in the saddle again after his days in the Washington DC City Government.

Phone call for Pete Leeson.