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To: Alex who wrote (56811)	7/29/2000 7:25:49 PM
From: d:oug	Read Replies (2) \| Respond to of 116815

Alex or anyone else, Is this article about Argentina accurate? dailyreckoning.com A Safe, Simple Way To Make 183% In Argentina Steve Sjuggerud Argentina may look a lot like Europe and the U.S., but in some ways, it’s better. From the ancient glaciers of Patagonia to stunning Iguazu—one of the world’s largest tropical waterfalls—Argentina is beautiful. There’s a heavy European influence in the capital of Buenos Aires... ...a European-sounding language called Castellano ... ornate architecture you’d expect to see in Paris. Even more surprising, you can ski there in July. Even better, there’s no such thing as Big Government. Everything that moves, including the postal service, has been privatized. The Argentineans are slow to blame their government for anything. They realize that financial illness requires tough medicine—not government handouts. As a society, they’ve fully accepted that premise. Profiting From a Fixed Exchange Rate In 1991, the Central Bank of Argentina relinquished their power to print money. Since then, the government has been subject to the same constraints that you and I are when it comes to cash. We can’t spend it unless we earn it or borrow it first. Neither can they. Almost every other government in the world has the temptation of cheating—printing money to finance their wishes, desires and crises. Not Argentina. So for almost a decade, there has been a fixed exchange rate system in Argentina that has worked wonders. There is no inflation in Argentina. ... even though the country is on hard times right now, nobody there would consider going back to the old way of printing money (devaluing) as a short- term fix. Argentina’s uniquely stable money system is causing some problems for Argentineans now. When Alan Greenspan raises interest rates, Argentine interest rates have to rise even more to keep the peso and the dollar equal..... ... difficult to swallow, especially in the face of their two-year-old recession. With total government debts equaling 41% of GDP, foreign investors—who call the shots, not the IMF—have been taking their capital out of the country. To give you an idea of how "dead" foreign investment is in Argentina, I was on the floor of the..... I’ve never seen a more bearish consensus anywhere, the exact opposite of the United States. That’s why the opportunity here isn’t in stocks..... ... on government bonds to ridiculous levels. It’s not the IMF that’s continuing the recession. Nor is it the heavily unionized labor market. What’s hurting the economy is the cost of capital..... ... high interest rates..... I thought because of all this Argentina might break its link with the dollar..... Despite the fact that Argentina is a country with no inflation, the government has to pay interest rates in the teens..... ... the outcome should be: If the crisis boils over, the country will dollarize. Interest rates will come down..... Let’s say the crisis dissipates instead..... And if absolutely nothing happens.....