Joseph Stalin once said “I trust no one, not even myself.”

Such is life in Argentina these days, where anyone and everyone is under the microscope to pay for President Christina Kirchner’s madness and economic totalitarianism. She’s made it illegal to spend money outside the country. Forced Argentines to hold rapidly deteriorating pesos. Imposed price controls and banned grocery coupons. Shut down dissent in the media.

As Buenos Aires expat Jerry Nelson told me recently, the place is falling apart. That’s no surprise to anyone who has paid attention over the dozen years since the last “Corralito” where Argentina took quick steps to bankrupt most of their people.

No doubt, Cristina is one of the most anti-market forces in the world. She’s squandered vast amounts of Argentina’s natural wealth pushing to turn it into a socialist gulag. But like every desperate government, there are a series of steps to be played out in times like this. One of those steps is to scapegoat everyone you can to hold onto power as long as possible.

Cristina’s latest ploy is to chase down the evil “tax evaders” with an estimated $160 billion in offshore accounts. The actual amount is indeterminable since Cristina’s trashing of the Argentine peso has created a black market that reflects the true value of the fallen currency. To those who have chosen to park their funds safely outside of this madman’s grasp, she offers a choice.

Buy Argentine bonds at ridiculously low interest rates, or be arrested.

Specifically, the proposal would force those with the foresight to create an escape hatch for their money to buy bonds yielding 4% to fund Argentina’s state-owned oil company. Nothing wrong with that, except that the state-owned oil company was stolen. After the government privatized it and sold it to a Spanish company in the 1990s, Cristina came in and took it right back last year. “It’s Mine!”

As for the 4% yield, it’s less than one-third the yield for other Argentine debt. In fact, nobody wants to touch anything in Argentina. No market wants to give them any money. Even their leftist allies in central and South America are leaving them for dead. Heck, you can get 20% or more throwing a few pesos into an Argentine bank account. That’s how bad things are and how rampant inflation is.

Which shows exactly how Big Government works. The great dictator Cristina Kirchner knows she’s tanked the country. So she creates a sideshow – this time ramping up oil production – to try and keep the serfs happy. After all, the country’s despair is the fault of the evil rich and those who have lives and/or money outside Argentina. They haven’t paid their “fair share” and we’ve got to make them pay.

Sound familiar?

You can say these evil-doers have it coming to them. How dare they keep any money outside of Argentina? But you have to ask: wouldn’t you?

Would you keep your money tied up in banks where you were forced to hold a local currency that was plummeting in value? In a country run by a woman who has proven time and again that she feels ANYTHING she wants is hers for the taking? Where strict capital controls forbid you to leave the country with barely anything of value in case things get even worse? In predictable fashion, Argentina has even outlawed the exchange of increasingly worthless pesos into gold.

When you consider that Argentines seem to have revolution coded in their DNA, it’s not a place I’d want to be hanging around when things REALLY hit the fan.

And as if you should be surprised, the Argentine government’s mad dash to grab all the private wealth they can has led to quite the surveillance state. They’ve long been spying on individuals’ credit card bills and any other data they can get their mitts on to stop the mass capital flight and keep as much as they can within arm’s reach.

You can moralize against these “tax evaders” all you want, but when all your morals come from what a corrupt, tyrannical government tells you, it’s time to re-think. Would you suggest that the Jews keep their money, possessions, and themselves in Nazi Germany? Would you not flee when a madman threatened to wipe out everything you had and control your every move? When 36% of your country’s GDP is tucked away offshore by individual savers, you know the government has done something wrong.

Even Cristina herself knows this, considering it’s an open secret in Buenos Aires that she and her family have personally pilfered millions of dollars now held in European bank accounts. She’s no dummy; she just hopes you are. Government is the biggest proponent of “do as I say…”.

After all, this is the same government that confiscated bank CDs and forced depositors to turn them into government bonds. You know, like the ones they defaulted on? A decade ago, the government forced savers to convert their US dollar deposits into peso deposits.

Argentina makes Cyprus look like a picnic. This is part of the playbook when governments get desperate enough. Long gone are the populist, cheery-sounding promises of “lifting people out of poverty”. Such promises are replaced by thuggish demands for anything of value you have to be turned over to Big Government. When things get bad enough, they no longer even pretend to care about you, Joe Citizen. It’s all about plugging the holes and keeping their control.

But what was it ever about to begin with?

Andrew Henderson
Last updated: Aug 18, 2021 at 7:19AM