*** From [EMAIL PROTECTED] (Tomasz Iwanowski)
--- [EMAIL PROTECTED] wrote: > Date: Tue, 1 Jan 2002 00:45:17 -0500 > From: [EMAIL PROTECTED] > Subject: How the IMF Messed Up Argentina > Reply-to: [EMAIL PROTECTED] > > This is being sent on behalf of [EMAIL PROTECTED] > as part of the mailing list that you joined. > List: emperorsclothes > URL: http://www.emperors-clothes.com > ------------------------------------------------------------ > > > HAPPY NEW YEAR FROM EMPEROR'S CLOTHES WWW.TENC.NET > > URL for this article: http://emperors-clothes.com/news/argen.htm > > Join our email list at http://emperors-clothes.com/f.htm. Receive > about one article/day. > > We encourage readers to reprint and re-post any Emperor's Clothes > article. Please include the article's Web address and author(s). > > www.tenc.net * [Emperor's Clothes] > > ============================================= > How the IMF Messed Up Argentina > by Mark Weisbrot, co-director of the Center for Economic and Policy > Research. > Reprinted from the 'International Herald Tribune,' December 26, 2001 > [Posted 31 December 2001] > ============================================= > > [NOTE FROM EMPEROR'S CLOTHES: Our gratitude to N.stor Miguel > Gorojovsky in Argentina who found this article by Mark Weisbrot. It > explains in easily understandable language why pegging the > Argentinean peso to the U.S. dollar has wrecked Argentina's economy. > > Check out Further Reading (at the end) for other articles documenting > the nation-destroying policies of the International Monetary Fund > (IMF). > > We hope to post an analysis of the Argentinean rebellion against the > New World Order. - Emperor's Clothes.] > > WASHINGTON - > > Argentina's implosion has the fingerprints of the International > Monetary Fund all over it. > > The first and overwhelmingly most important cause of the country's > economic troubles was the government's decision to maintain its fixed > rate of exchange: one peso for one U.S. dollar. Adopted in 1991, this > policy worked for a while. But during the past few years the dollar > has been overvalued, which made the peso overvalued as well. > > Contrary to popular belief, a "strong" currency is not like a strong > body. It is very easy to have too much of a good thing. An overvalued > currency makes exports too expensive and imports artificially cheap. > Just look at the United States, where a "strong" dollar has brought a > record $400 billion trade deficit. > > But it gets catastrophically worse for a country that has committed > itself to a fixed exchange rate. When investors start to believe that > the peso is going to fall, they demand ever higher interest rates. > These exorbitant interest rates are crippling to the economy. That is > the main reason why Argentina has not been able to recover from four > years of recession. > > To maintain an overvalued currency, a country needs large reserves of > dollars; the government has to guarantee that everyone who wants to > exchange a peso for a dollar can get one. The IMF's role here was > crucial. It arranged large loans, including $40 billion a year ago, > to support the peso. This was the IMF's second fatal error. To > appreciate its severity, imagine Washington borrowing $1.4 trillion - > 70 percent of the federal budget - just to prop up an overvalued > dollar. It didn't take long for Argentina to pile up a foreign debt > that was impossible to pay back. > > As if all that were not enough, the IMF made its loans conditional on > a "zero-deficit" policy in Buenos Aires. But it is neither necessary > nor desirable for a government to balance its budget during a > recession, when tax revenues typically fall and social spending > rises. The zero-deficit target may make little economic sense, but it > has great public relations value. By focusing on government spending, > the IMF has managed to convince most of the press that Argentina's > "profligate" spending habits are the source of its troubles. But > Argentina has run only modest budget deficits, much smaller than U.S. > deficits during recessions. > > The IMF now claims that it was against the fixed exchange rate, and > the large loans to support it, all along. Officials say they went > along with these policies to please the Argentine government. So now > Argentina tells the U.S. government what to do! > > This is not a very credible story, but of course verifying who made > what decision is a little like tracking Qaida's chain of command. IMF > board meetings, consultations with government ministers and other > deliberations are secret. > > But they do have a track record. In 1998 the IMF supported overvalued > currencies in Russia and Brazil, with large loans and sky-high > interest rates. In both cases the currencies collapsed anyway, and > both countries were better off for the devaluation. Russia's growth > in 2000 was its highest in two decades. > > Argentina will undoubtedly recover, too, after it devalues its > currency and defaults on its unpayable foreign debt. But the people > will need a government that is willing to break with the IMF and > pursue policies which put their own national interests first. > > Washington has other ideas. "It's important for Argentina to continue > to work through the International Monetary Fund on sound policies," > said White House spokesman Ari Fleischer on Friday. For the IMF, > failure is impossible. > > The writer is co-director of the Center for Economic and Policy > Research. He contributed this comment to The Washington Post. > > Copyright (c) 2001 The International Herald Tribune | www.iht.com > Posted for Fair Use Only > > *** > > Emperor's Clothes Urgently Needs Your Help! > > ************************************* > Footnotes and Further Reading: > ************************************* > > 1) It is amazing that, although the IMF has had the same effect on > every economy it has 'helped' for more than a decade (that is, the > economies have been severely hurt) nevertheless these guys are still > in business. If they were doctors, they would have been jailed for > deliberately injuring their patients. > > Doesn't this suggest that the giant U.S. and European financial > interests behind the IMF want to destroy these economies? > > 1) To find out more about the International Monetary Fund, see the > award winning article,' The International Monetary Fund and The > Yugoslav Elections,' by Michel Chossudovsky and Jared Israel. It > explains how IMF policies destroy national economies, including > discussion of Yugoslavia, Russia, Ukraine, Bulgaria and Peru. Can be > read at http://emperors-clothes.com/analysis/1.htm > > 2) IMF policies destroy because they are calculated to destroy. This > emerges clearly from the sharp debate between Chossudovsky and > Israel, on the one hand, and Prof. Kjell Magnusson from Sweden. Prof. > Magnusson sharply criticized the article, The International Monetary > Fund And The Yugoslav Elections,' after it was published by the > leading Swedish newspaper. > > * 'Chossudovsky and Israel are Inaccurate and Misleading' By Kjell > Magnusson, Balkan expert, Uppsala University. Can be read at > http://emperors-clothes.com/debates/magnus.htm > > * 'Everything We Wrote Comes from Official Sources' by Michel > Chossudovsky and Jared Israel Can be read at > http://emperors-clothes.com/debates/data.htm > > 3) "Give Us Milosevic or We Won't Destroy Your Country!" is a > statement by the SPS, which is now apparently the leading party in > Serbia (it came in first in recent district elections.) The statement > rejects the notion that the IMF and associated institutions aim to > help poorer countries. > > Join our email list at http://emperors-clothes.com/f.htm. Receive > about one article/day. > > Click here to email the link to this article to a friend. We > encourage readers to reprint and re-post any Emperor's Clothes > article. Please include the article's Web address and author(s). > > ======================================= > Emperor's Clothes Urgently Needs Your Help! > ======================================= > > In order for Emperor's Clothes to continue publishing after January > 15th, the deadline for catching up with our rent, we urgently need > your help. > > Since September 11 our readership has increased more than 600%. We > now transfer over 1 gigabyte of data a day. But our income has not > kept up with increasing expenses. > > We do not charge for articles, and we do not accept advertising. But > we do pay bills. > > We are not exaggerating to say: in order to continue publishing, we > urgently need the help of all our friends. > > Please send whatever contributions you can! $20, $50, $100, $500, > $1000 or more. 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