It looks from all signs that Argentina is once again going down the tubes into fiscal insolvency. This was caused once again by fueling the socialist dream of free stuff for everyone with no one to pay for it. What is surprising is they have been through this before ten years ago and actually manged to put together some decent growth in 2005-2007. But when they elected a leftest President Cristina Elisabet Fernández, their version of Obama lack of fiscal discipline has ruined the country.
Today Fitch cut its long-term rating for Argentina to "CC" from "B," a downgrade of five notches, and cut its short-term rating to "C" from "B". A rating of "C" is one step above default. This is on top of the ruling last week by the Manhattan federal court who ordered Argentina to set aside $1.3bn for certain investors in its bonds by December 15, even as Argentina pursues appeals. This is because there are large block of investors that don't want to be left holding bag like in 2002.
Why should we care? Argentina can be seen a microcosm of what is to come in the US when congress doesn't get a handle on spending. Currently they have an official inflation rate of 10.2 percent in October but they cook the books like the Fed does and many observers feel that real inflation is over 20 percent right now.
20 percent inflation in the US will destroy what is left of any growth. It will devastate the poor who depend on SNAP and EBT to eat and anyone on fixed income retirement. At 20 percent you might as well burn the money, nor really buying any tangible commodity before the price increases is a better bath for later bartering.
Argentina suffered major unrest and civil disorder during there last default. They will so again and our media will not cover anything about it