Wednesday, October 22, 2008

You know that Chavez is going to run out of money when...

Today the BBC carries (semi hat tip SYB) that the Argentina government will take over the private pension plans of Argentina. The excuse is to protect them from the turmoil of the world markets. First, there is no way that Argentina which is basically a permanently broke government can protect the money deposited in the private pension funds. I do not know how the private pension system worked in Argentina, it could have been good or bad, that is not the point. What I know for sure is the dismal record of ALL Argentina governments since Peron and how all in the end ate all the trust and savings of the people. The current administration is no exception as Cristina has already proven herself to be an incompetent ruler in the barely one year she has been in office as she messed up badly the agrarian crisis through her, oh, so very Peronist arrogance.

But this is in a way anecdotal for us concerned about Venezuelan matters. What this take over of the pension plans, pretty much a highway robbery if you ask me, means is that Argentina has realized that it cannot rely on Chavez anymore to shore up its financial troubles. Maybe Chavez thinks Venezuela is safe from the financial global mess but in Argentina they know how to add and rest, and better than Chavez it seems. Thus they are taking measures, in true Peronist style, to make sure Cristina can keep making populist promises. We all know how it is going to end: after an initial apparent improvement through creative accounting the reality will come to roost. Then we will see yet again another massive devaluation of the Argentina currency, whatever name it will have at that time. The people that 14 years ago started saving in these plans will not be allowed to remove their deposits, or partially at best, and what they must leave will be eaten by devaluation and inflation. A fraction of it will have gone to buy out piqueteros and the sort, and the bulk to people close to the Peronist party. O just plain waste. They are good at waste in Argentina.

And the Argentine cycle will start again as after an interregnum of sorts (the current opposition mayor of Buenos Aires?) they will vote in yet again a new Peronist government, apparently never learning the lessons of history.

I am not laughing at Argentina because the future of chavismo is to become our own Peronist version, bankrupting the country every couple of decades. Meanwhile the current crowd at Casa Rosada gives us a new meaning for rats abandoning ship.

-The end-

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