Read this special report from Nomad Capitalist
Argentine president Cristina Kirchner is on a desperate campaign to cover up the gravity of her failures. Increasingly delusional and sad, she continues to use the Falkland Islands in an attempt to gin up nationalism and take the heat off herself among an increasingly destitute population irked over their economy’s heading into the abyss.
Argentines are mad – huge protests there show it – about everything from rising crime to sky-high inflation. Corruption scandals dot the now wildly unfavorable Kirchner, who is taking a page from every power hungry and nanny state dictator in attempting to re-write the constitution to allow herself a third term. Like every corrupt government on a spending spree, Argentina has been accused to distorting the numbers and punishing those who speak out about it. (Of course, don’t just blame Kirchner for that; the US did it earlier this year when they punished a ratings agency that downgraded their debt)
All the while, Argentina’s middle class is being pummeled by being forced to hold onto rapidly devaluing pesos and other currency controls, all in the name of soaring public spending on welfare programs that lock up the votes of the poorest citizens. Sound familiar?
As to the Falklands, there are similarities with my writing last week about the British takeover of Turks and Caicos, a self-governing overseas territory. With the Falklands, the shoe is on the other foot; the islands’ couple thousand residents are expected to affirm their loyalty to British Overseas Territory status this year. Just like with the Turks and Caicos, Argentina doesn’t like it. A Kirchner ally said Falkland residents “are implanted settlers who do not have the right to define the territory’s status”. Big government doesn’t care what you think. They just power and your money.
Argentina shows a powerful example of how narcissistic politicians will throw you – and your livelihood – under the bus to retain their personal image cult. Don’t like 24% inflation? Tough. Want to spend your own money outside the country, even if its worth only pennies? How dare you. The damage done in Argentina in just the last few years is staggering, but the parallels to the American economy – and the similar image cult among US politicians – is hard to miss.
Politicians will find an excuse to distract you while they take away your economic sovereignty. Unfortunately, most of your fellow citizens will believe whatever they’re told. Planting flags to diversify your money and never believing it won’t happen “here” are your best defenses. The US, for instance, has many of the tenets of malaise of Argentina, and if things were to worsen, I have no doubt the American government could cause a distraction by saying it wants greater control over Guam or some other insert-name-of-petty-issue-here.
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