We have been keeping a close eye on Argentina for the last few years, so this news should come as no surprise to our readers… But Argentina is officially in “Default” on its loans… Standard & Poors declared Argentina in default on its foreign-currency obligations after the government missed a deadline for paying interest on $13 billion USD worth of restructured bonds. This is the second time in 13 years that Argentina has defaulted on its debt. The default appears to be the result of a series of events, which happened last week as follows: 1) Argentina could not agree with certain hedge fund managers about how to re-structure their debt. 2) Because they could not come to an agreement, Argentina could did not pay the interest on its debt. 3) Technically, this was considered a “default.” But it could get a lot worse because… 4) A mysterious group of “big banks and funds overseen by the International Swaps and Derivatives Association” may consider this a “credit event” 5) If this is deemed a “credit event” Argentina’s bond holders are allowed to ask for their money back immediately. 6) Argentina will be very unlikely to pay for the bond holder’s demand… Which means the default will run even deeper. However, some investors think that the hedge fund managers and the Argentinian government may still be able to reach a deal, and the deadline has been pushed to August 4, 2014… This is the equivalent of buying stock in the Titanic because you found a water pale to bail some water… A bad choice if you ask me. Regardless, we have seen this situation worsening in Argentina for the past couple of years. We have even reported on it in our Member’s Area. One of our contributors was down in Argentina at a Bitcoin Meet-up where the spot price was selling at +30% over what you could buy it on an exchange. Why? Argentinians are no stranger to the collapse of their currency… something that you can protect yourself against with gold and Bitcoin. We will keep a close eye on this situation and its relation to the BTC price over the next few days. Until Next Time, Max
Posted on: Fri, 01 Aug 2014 14:35:32 +0000