"Mrs. Kirchner justified the proposed seizure of $30 billion in pension assets by accusing the funds of having instrumented 'policies of plunder.' She said Argentina was setting an example of how to deal with the global financial crisis. ... The nationalization, if approved by Congress, will also provide Mrs. Kirchner with more cash for political patronage", my emphasis, Matt Moffett at the WSJ, 23 October 2008.
"That the state could seize retirement savings no doubt seems outrageous to Americans. ... Kirchner won't have trouble making the case for expropriation to Congress, which is controlled by her fellow Peronists. ... Since [2001 Argentina] has imposed price controls, defaulted on its debt, seized dollar bank accounts, devalued the currency, nationalized businesses and tried to set confiscatory tax rates with the aim of making society more 'fair'," Editorial at the WSJ, 23 October 2008.
"Across the developed world, solvent governments have temporarily nationalised banks whose survival was in doubt. Argentina, which often resembles the rest of the world through a distorted mirror, likes to do things differently. There the private pension system, which has suffered investment losses but is otherwise sound, now faces permanent nationalisation by a government whose own solvency has been called into question. ... The immediate effect was ... the Buenos Aires stock-exchange fell 24% in two days, and investors dumped Argentine bonds, sending their yield soaring to 28%. Many economists and opposition politicians fear that the government's intention is to raid the pension funds to fill a widening fiscal hole. 'A legalised robbery' was how La Nacion, a newspaper dubbed it in an editorial. ... 'It looks like they want to use the workers' money for non-pension spending,' says Gregorio Badeni, a professor at the University of Buenois Aires. ... By proposing the nationalisation, Ms. Fernandez has further undermined faith in her government's solvency and in property rights", my emphasis, Economist, 23 October 2008.
"Argentina's leftist government pressed forward with its controversial plan to nationalize private pension funds, laying out investment guidelines for the funds it wants to seize and lobbying Congress to approve the proposal. Taking over the $30 billion in pension fund assets will ease the cash crunch faced by President Christina Kirchner's government., but it has jolted investor confidence and triggered a dollar outflow. ... Kirchner said her move to seize the private funds is designed to protect contributors from alleged mismanagement amid the global market crisis. But economists say it is aimed at replenishing government offers ahead of midterm elections and sizable debt payments coming due", my emphasis, Michael Casey and Matt Moffett at the WSJ, 28 October 2008.
"Congress has yet to approve Argentine President Cristina Kirchner's move to seize $28 billion of retirement savings to fund her cash-strapped government, but already the plan has produced a thicket of problems. One troubling reaction: Argentines are cashing their peso bank accounts and lining up to buy dollars at crowded exchange houses. The peso fell 7% last month, prompting the central bank to spend at least $1 billion to defend it. It's an ominous situation in Argentina, where the government and the currency collapsed in 2001 amid a frenzy of withdrawals", John Lyons and Michael Casey at the WSJ, 1 November 2008.
This is big news. Countries stealing pensions is old news. Despite what Walter Wriston, once Citigroup chairman said, countries go bust. I wonder if any Obama financial advisor has a similar plan for US 401(k) accounts? Nothing any government official of any country says should be taken at face value. Look at the US "Social Security Trust Fund" (SSTF). It does not exist. Kirchner's concern for Argentina's investors is touching. I have an idea for her: tell Zimbabwe Ben (ZB) she needs commodity prices to increase to avoid defaulting on Argentina's debts to US banks. We'll see how quickly ZB asks his handlers what to do. I wonder who told Kirchner to try to seize the pensions? A financial advisor who was "formerly" with say, Goldman Sachs?