Can Argentina Survive the Kirchner Curse?

Economist

The sudden death of former Argentinian president and key power-broker Nestor Kirchner has triggered a surge in stocks and bonds trading within the Latin American nation. Kirchner is considered largely responsible for the anti-business policies of Argentina which helped depress the business climate there in recent years. But is it realistic to assume that Kirchner's death will change anything?

Argentine bonds posted big gains and stocks hit a new record high Thursday as markets anticipated a more business-friendly environment following the death of former president Nestor Kirchner.

While presidents from across the region and supporters filed past Kirchner's coffin to pay their last respects, Argentina's Merval Index of leading shares topped a new record, rising 1.17% to 2954.86 points.

The gains were led by power and gas providers amid speculation that the government of President Cristina Fernandez, Kirchner's wife, may consider easing rate controls following his death...

...Kirchner, who was president from May 2003 to December 2007, died of a heart attack at the age of 60 in his home province of Santa Cruz early Wednesday. His wife succeeded him in the presidency. However, Kirchner was thought to play an active role in crafting economic policies in his wife's government that were characterized by heavy state intervention in the economy and hostility toward the private sector.

Many political analysts had expected Kirchner to run in the October 2011 presidential election as a way for the husband-and-wife team to alternate in power and avoid constitutional restrictions on term limits.

Besides stocks, investors also snapped up Argentina's sovereign debt amid the positive sentiment. _WSJ

Leftist leaders such as Obama and Raul Castro have expressed their deepest condolences at the death of Kirchner, while businessmen and economic traders of Argentina secretly celebrate and not so secretly begin buying assets and making hopeful plans for the future.

The future of Argentina depends upon whether Kirchner's widow, President Cristina Fernandez, is able to change course from the suicidal anti-economic policies influenced by her husband. Cristina's plan to steal private pensions for use by the federal government is typical of the stupidity of the Kirchner - Fernandez coalition -- but even if Cristina cannot learn, perhaps the people of Argentina can outgrow their Cinderella fixations.

The video below suggests that the inconsistencies of the Argentinian populists may come back to bite them. (via Cato, in Spanish)...

in a 1973 speech, none other than Juan Perón emphatically condemns the nationalization of private pensions, calling it “theft” and referring to public pension systems as generally “inefficient” and “unsafe.” He describes a previous episode in Argentina when a government in need of money nationalized private pensions and depleted workers’ retirement funds, using them for other purposes. It was an “assault.” _Cato

If the uber-populist Peron condemned the federal theft of private pensions, Cristina (without Kirchner's backing) may find it difficult to push through such oppressive, fascist, anti-private sector policies. But her inner core -- such as it is -- is not likely to improve or grow wiser.

Don't Cry for Me, Obamanistas, Zombies, Slaves

An Argentinian Photo Album

When the leader of the world's superpower consciously embarks on a mission to destroy the integrity of his nation's economic and political infrastructure, one should understand the perversely tragic aspects of the situation. Mr. Obama's dreams of conquest over the evils of the colonial western world are near their climax. It is unfortunate that he lacks the insight into his own motivations, and that he fails to see the parallels between his own suicidally quixotic quest, and the many similar futile quests of leftist justice over the past century and more.

20 years after the collapse of Soviet Eastern Europe, and as Chavez' Venezuela falters and Castro is acknowledging the failure of his own revolution, Mr. Obama has just begun to institute his own revolution of destruction against the Great Satan of the Islamists, and the bane of leftists around the world.

Although it is still the world's superpower military hegemon and the economic anchor of the world's economy, the steep upward trajectory of the US government's debt was already a cause of concern even before Mr. Obama was elected. But Obama has increased the acceleration of economic doom by an order of magnitude -- and in so many ways that it is impossible not to suspect that it is an intentional agenda of destruction. The Obama Pelosi regime has made sure that there is no political way out of the quagmire, despite the worst the Tea Party may try to achieve to restore constitutional government.

Obama's plan does amount to an elaborate revolution and bloodless coup against the constitutional political and economic protections put in place over 2 centuries ago. The energy starvation aspects of the Obama Pelosi regime alone are enough to destroy the private sector eventually, but the hidden malignant aspects of Obamacare and the Dodd-Frank act -- among many other new regulations, provisions, and laws -- will accelerate the destruction beyond the comprehension of those who think in simple political and economic terms. And so it goes without end -- an ambitious coup against the "negative aspects" of the US Constitution. Because Mr. Obama's genius cannot be constrained by such an ancient document of restraint.

And so it comes down to insurrection. But a bloodless coup does not require a bloody insurrection to counter it. In fact, Americans should not even want the America that existed before Obama's election -- although Obama Pelosi has made many Americans look back with nostalgia to pre-OP times.

What kind of insurrection will it take to bring about a constitutional government with equal protections under the law and abundant opportunities for expanding the economy?

A comment on a previous article -- which mentioned voluntary alteration of tax compliance by citizens -- contains the beginning of an idea which needs to be expanded and transformed. But governments cannot go on indefinitely spending more than they receive. The government printing press contains the ink of its own destruction, as the Perons of Argentina and other tyrannical populists throughout history have learned to their regret.

More on the peaceful insurrection later. Assuming the Obama zombies allow that option.

Is Argentina the Best Place in the World?

Anyway, I asked myself, “Where is the best place to live, in order to enjoy life to the max, be freest, and enjoy the highest standard of living with the least amount of aggravation?” I looked at all the countries around the world, their pluses and minuses, and came to the conclusion that Argentina offers the best risk/reward and cost/benefit ratios of any country on the planet at this time...at this point, Argentina is more European than Europe is. You know what they say: an Argentine is an Italian who speaks Spanish, thinks he’s British, and lives in a French house. _DougCasey

The most recent conversation with Doug Casey -- international investor and advisor -- discusses Casey's favourite place in the world: Argentina. Casey and his interviewer rove the entire world, discussing the pros and cons of various locations from the standpoint of a free marketeer. Casey has finally settled -- for now -- on Argentina as the best place in the world to spend his free time.

Doug: Well, I’ve been to 175 countries, most of them several times. I’ve lived in 12, defined as having spent enough time in the country to have rented a place to live or bought real estate and set up housekeeping. The thing is, technology has now progressed to the point at which any sufficiently motivated person can pretty much live wherever he or she wants. But most people still have a medieval serf mentality in this area, and tend to live in or near the place where they were born and grew up. And they tend to think that the country they were born in is the best country in the world…I guess because they were born there.

...I like its wide-open spaces. It’s like the western U.S. Argentina is the size of the eastern U.S., but it has only 40 million people, and about 40% of those are centered around Buenos Aires. So, once you get out of BA – which is one of the great cities of the world: sophisticated, marvelous, you can get everything and anything you want there, just one of my favorites – you really are in the countryside. In most places, you can drive for hours through incredible scenery, and not see another car. I like that.

Sometimes people, who haven’t been there, look at me in a questioning way when I mention Argentina, because they’ve heard of the government. But it’s not evil, or dangerous, like many. It’s just corrupt, incompetent, and inefficient – which is actually much better than the alternatives, when we’re talking about governments. But there are disadvantages, too. Through one of the most impressive acts of government stupidity I’ve ever seen, Argentina, a country world-renown for its beef, might actually end up having to import beef this year. It’s insane. Like Saudi Arabia importing oil. But, that’s what governments do. _ConversationwithCasey

Okay, he has looked at both the strengths and weaknesses of Argentina. But is he looking at the country through rose coloured glasses, just a bit? Is he overestimating the chances that the government of Argentina will someday become sane?

I think there’s a chance that the place will reform for the better, much the way New Zealand did in the mid-1980s. In other words, you can be so stupid, for so long, that eventually you have to throw in the towel and try being less stupid. There are several candidates running in the next presidential election, which will take place in 2011, who are reasonably market-oriented. If the same thing happens in Argentina as happened in New Zealand in the 1980s, it will boom.

Ah. Comparing Argentina to New Zealand. This betrays an ignorance of history and culture -- something a financial advisor cannot afford. Argentina, as a Catholic culture of Spanish and Italian origin, has very little in common culture-wise with New Zealand, a protestant culture of British and Scottish origins.

Up until that point in the dialogue, Casey was making a great deal of sense. Argentina sounds very attractive on almost all points -- except for its insane government. But Argentina's government has been insane for many decades. What chance is there for a sudden awakening into sanity? Virtually none, all wishful thinking aside.

Revolution in Argentina makes little sense. There is always the aftermath, when a worse government than the one before is invariably formed. Regime change would only lead to further turmoil. No, if you want to create a free environment in the southern part of South America, you will need to populate and secede from the central government -- which is concentrated within a single city -- Buenos Aires. Yes, I agree that Buenos Aires is the only place in Argentina with enough culture to provide an enjoyable lifestyle, but it is the people of Buenos Aires who continue to allow all of those idiotic governments. Something is wrong with them, and it is unrealistic to expect them to wake up -- so long after the closure of their critical developmental windows.

Casey bought a large parcel of land in Cafayate (in the wine country near Salta), moved some friends down, and is building a luxury resort. Casey is also encouraging wealthy Europeans and North Americans to move to Argentina -- perhaps hoping to influence the political culture in a more rational direction. Not exactly the same thing as populating and seceding from a corrupt country, but perhaps a step in the right direction. The government of Argentina is unpredictable, but a smart person might find some locations and loopholes that allow him to live relatively free from interference.

But clearly the answer to the question "Is Argentina the best place in the world?" for most people would have to be no. Not unless you could get enough people together to buy and populate a large section of the country, to create the kind of government that would allow you to live and trade freely. Not a good prospect, unless you have some extremely sophisticated weapons of defense that could neutralise the Argentinian military.

I suppose it is back to the seastead idea. And if you live in the US, you had best start rooting for the Tea Partyers, if you enjoy the ever-dwindling freedoms you have left. The Obama - Pelosi reich does not intend to leave you very much at all.