After weeks of trying, Argentine president Kirchner succeeded in sacking the president of the Argentine central bank. The head banker balked at Kirchner’s plan to seize $6.6 billion of the central bank’s foreign currency reserves to pay the government’s debt. With a more obedient central banker in place, the plan will now presumably go forward.
Argentina’s government is running out of money to confiscate. It already defaulted on most of its debt in 2001. In 2008 it confiscated the nation’s private retirement savings, to the tune of $30 billion. The latest money grab amounts to 17% of the central bank’s $48 billion in foreign currency reserves. The remainder will probably go quickly, and it’s hard to see where the government will find more money to steal. Then it will be time to run the presses.
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