Buenos Aires, Jan. 4 (Bloomberg)

--" Argentina will convert dollar-denominated bank loans, mortgages and credit card debt to pesos before devaluing the currency, a government official said.

The plan, which President Eduardo Duhalde is scheduled to disclose today, is aimed at easing the effects of a devaluation, which would drive up the cost of financing dollar debts. About 90 percent of Argentina's $245 billion of sovereign, corporate and provincial debt is denominated in dollars. The economic team is going to apply all of the tools that it can, because the policy of Duhalde is going to be to protect Argentines,'' Cabinet Chief Jorge Capitanich said at a press conference.

The peso may depreciate by as much as 40 percent once the government abandons a decade-old exchange rate that fixes the currency at par with the dollar, analysts said. Government officials say devaluation will help revive the $280 billion economy by making domestic manufacturers more competitive. Since Brazil devalued its currency in 1999, Argentine companies have been unable to compete with a flood of cheaper imports from its neighbor and chief trading partner.

Official Rate

Duhalde plans to convert dollar loans of as much as $100,000 into pesos at the one-to-one rate for individuals and small and medium-sized businesses, the El Cronista newspaper reported, citing unnamed government officials. Capitanich said that light, gas and water utilities will be restricted from raising prices. He also urged shopkeepers and other companies not to raise prices in advance of a currency devaluation in a bid to avoid soaring inflation. Companies such as the nation's biggest office products distributer OfficeNet SA already have marked up price lists by at least 10 percent to offset devaluation.

``We cannot enter into a phase of marking up prices,'' Capitanich said. ``We need comprehension from all sectors.'' Argentina tied its peso to the dollar in 1991 to tame inflation that peaked at nearly 5,000 percent. The fixed exchange rate ushered in four years of growth of more than 8 percent a year and attracted $32 billion of foreign investment. Critics of the peg say that it locked in high labor and production costs. Argentina's former President Fernando de la Rua, who was forced from office two weeks ago following food riots, froze deposits in early December to prevent a run on the banks that threatened to break the dollar peg." --


So schnell geht es vom Deflationären Kollaps in die Hyperinflation: Volkes Stimme und Fäuste erzwingen es. Welcher Machtverliebte West-Politiker will das riskieren? Nur damit dottore Recht bekommt und wir eine echte"full-blown" Defla erleben mit Gläubigerstärkung und Auspressen der (arbeitenden) Schuldner? Das glaube ich nicht - bei der nächstbesten Krise wird inflationiert was das Zeug hält - Herr Zwickel läßt grüßen.
Gruß auch von mir, F.

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>Buenos Aires, Jan. 4 (Bloomberg)
>--" Argentina will convert dollar-denominated bank loans, mortgages and credit card debt to pesos before devaluing the currency, a government official said.
>The plan, which President Eduardo Duhalde is scheduled to disclose today, is aimed at easing the effects of a devaluation, which would drive up the cost of financing dollar debts. About 90 percent of Argentina's $245 billion of sovereign, corporate and provincial debt is denominated in dollars. The economic team is going to apply all of the tools that it can, because the policy of Duhalde is going to be to protect Argentines,'' Cabinet Chief Jorge Capitanich said at a press conference.
>The peso may depreciate by as much as 40 percent once the government abandons a decade-old exchange rate that fixes the currency at par with the dollar, analysts said. Government officials say devaluation will help revive the $280 billion economy by making domestic manufacturers more competitive. Since Brazil devalued its currency in 1999, Argentine companies have been unable to compete with a flood of cheaper imports from its neighbor and chief trading partner.
>Official Rate
>Duhalde plans to convert dollar loans of as much as $100,000 into pesos at the one-to-one rate for individuals and small and medium-sized businesses, the El Cronista newspaper reported, citing unnamed government officials. Capitanich said that light, gas and water utilities will be restricted from raising prices. He also urged shopkeepers and other companies not to raise prices in advance of a currency devaluation in a bid to avoid soaring inflation. Companies such as the nation's biggest office products distributer OfficeNet SA already have marked up price lists by at least 10 percent to offset devaluation.
>``We cannot enter into a phase of marking up prices,'' Capitanich said. ``We need comprehension from all sectors.'' Argentina tied its peso to the dollar in 1991 to tame inflation that peaked at nearly 5,000 percent. The fixed exchange rate ushered in four years of growth of more than 8 percent a year and attracted $32 billion of foreign investment. Critics of the peg say that it locked in high labor and production costs. Argentina's former President Fernando de la Rua, who was forced from office two weeks ago following food riots, froze deposits in early December to prevent a run on the banks that threatened to break the dollar peg." --
>
>So schnell geht es vom Deflationären Kollaps in die Hyperinflation: Volkes Stimme und Fäuste erzwingen es. Welcher Machtverliebte West-Politiker will das riskieren? Nur damit dottore Recht bekommt und wir eine echte"full-blown" Defla erleben mit Gläubigerstärkung und Auspressen der (arbeitenden) Schuldner? Das glaube ich nicht - bei der nächstbesten Krise wird inflationiert was das Zeug hält - Herr Zwickel läßt grüßen.
>Gruß auch von mir, F.

$$$ Gut gesehen F.
Lange Defla ist nicht mehr in. Die Infla hat ja Greenspan schon lange gemacht, die hat sich nur noch nicht herumgesprochen. Es müssen außerdem noch die allerletzten Bagholders in die Börsen gelockt werden. Vielleicht solltet ihr Chartfreaks noch einmal JüKüs 1929 Vergleich anschauen. Da gab es doch auch noch so einen letzten Zacken nach oben. Die Frage ist nur, ob es ohne Goldstandard diesmal auch genau so ablaufen wird.


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>$$$ Gut gesehen F.
>Lange Defla ist nicht mehr in. Die Infla hat ja Greenspan schon lange gemacht, die hat sich nur noch nicht herumgesprochen. Es müssen außerdem noch die allerletzten Bagholders in die Börsen gelockt werden. Vielleicht solltet ihr Chartfreaks noch einmal JüKüs 1929 Vergleich anschauen. Da gab es doch auch noch so einen letzten Zacken nach oben. Die Frage ist nur, ob es ohne Goldstandard diesmal auch genau so ablaufen wird.

Hi Oldy,

So"glimpflich" wie 29ff wird es diesmal nicht ablaufen, es wird weit übler werden. Damals hatten wir Gold und ein ordendliches Stück weniger Schulden.

Heute lebt das"Geld" nur vom Vertrauen. Geht das Vertrauen verloren haben wir ruckzuck Hyperinfla/Repudiation. Bleibt das Vertrauen erhalten stürzen wir in der Defla ins Abgrundlose, es gibt keinen Boden in Form von Gold mehr.

In beiden Fällen stürzt das Finanzsystem in sich zusammen, was 29ff nicht der Fall war. Es sei denn, ja es sei denn....: man zieht bei Zeiten wieder einen goldenen Boden ein!

Meine Schätzung: zuerst kurz Defla, dann ab in den Hyperdrive. Für alles andere sind unsere Politiker zu langsam und/oder zu feige.
Gruß
Diogenes

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