|Quoting gonzalo (Reply 14):|
honestly can not understand how an educated people like the Argeninians can be ruled by this woman, a case of sociological study without any doubt.
Given I know that you hold personal animus against Argentina, I hold your statements about my country with two "pinzas", but since you made a logical, educated, and respectul post I will answer you.
This may come as a shock, but the Kirchner government has actually convinced me that their "debt" strategy is the right one, even if it is inconvenient at times. This is why: The "capitalist" system needs checks and balances. If borrowers suffer no consequences from bad borrowing, then no one would lend, right? If lenders suffered no consquences for bad lending, they would just play with everyone's money, right? I think we can all agree on that.
Thus, I understand the purpose of "vulture" funds: in the general sense, they are a market mechanism to help insure that lenders or investors have som protection from cases like Argentina, Russia, etc. This is why in discussions with other people I explain to them why vulture funds exist.
However, in the last 6 years since the North American/European financial crisis, we've seen lenders protected at all costs, bailout after bailout, monetary easing after another. That only encourages further improper lending. Banks believe they are too big, and thus make massive risks with everyone's money knowing that if they precipitate a financial crisis, the desperation of the time will force politicians to bail them out, again.
That is just as unhealthy as borrowers being bailed out by the IMF
(as were the Asian countries in 1997, including South Korea, Indonesia, Thailand, Phillipines, etc; or Mexico in 1994, Brazil 1999, Russia 1998, Turkey 2002). That encouraged other countries to borrow without regards (Greece), and now we are seeing the results.
The difference with Argentina? It was not bailed out by the IMF
or anyone, unlike all the other countries. Thus, it has to answer to no one when it comes to the debt issue, except the creditors. Which is why this has gone on for 12 years and there is little the rest of the world can do about it.
And in fact it is GOOD. You know why? Because it balances things out a bit. It makes lenders cautious again. Something the developed world could have used during the 2000s real estate and sovereign debt bubbles.
So Argentina is a "vulture borrower" of sorts. And if you think about it in that sense, it helps keep the market lenders honest, just like vulture lenders help keep borrowes honest. The ultimate solution would be to end bailouts for borrowers and lenders, and let the chips fall where they may in each specific case.
And also break up banks into smaller units that cannot, if one fails, systemically endanger the whole.