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By Mario Cafiero, Ricardo Monner Sans and Francisco Javier Llorens
current BCRA Summary statement
The table above-Summary of Assets and Liabilities BCRA to August 31, 2008, as referring to their ability to exercise control and currency regulation, in order to preserve the value of the currency highlights the very delicate situation that is even before payment has been made to the Paris Club.
aggravated In framework of internal and external uncertainties, in the context of Argentina idiosyncrasies marked by the existence of the currency, to seek refuge in the dollar or other foreign currencies as a way of hoarding.
accounting techniques are not a dark science. His concepts and criteria are simple. Every transaction should be accounted for twice, to know the assets and liabilities of a company, institution or person. And analysis of the nature of these assets and liabilities give us a very important detail: to know that some of these assets and liabilities are circulating which are fixed.
The difference between current assets and current liabilities is known as working capital (FM), which is lacking or inadequate if unfortunately coincides with the initials of the IMF, of sad memory for our country. There must be a specialist accountant to realize that the more leeway to tell a company or institution will be much better prepared to overcome difficulties. Even a "perfect storm" as they often provide the complexities of modern finance. If you have any questions about these concepts, not need to consult the former head of the IMF and Central Bank Mario Blejer, but can go online to http://es.wikipedia.org/wiki/Fondo_de_maniobra
FM Basically what would current assets if a given time would be taken to repay all short-term debt (current liabilities) that has accumulated the company or institution, therefore the higher the FM of a company less likely you are to fall into insolvency. If the FM is negative, the current liabilities greater than current assets, in this case is urgent to increase current assets to repay short term debts. In most of the cases a negative FM is an indicator of future financial problems or budding.
The picture, unfortunately, FM tells us that the Central Bank would be negative in no less than $ 90,000 million, or $ s 30,000 million. It also shows the enormous ex-position, which has the BCRA as a lender of the Treasury, whereas in any province in Argentina long ago would have resulted in the failure of the provincial bank. Another
layout of the problem under the canon of the convertibility law, without this means sharing at all its precepts, is to address the monetary base of $ 99,090 million, with actual net reserves or dispose of $ s 7.136 million, the exchange rate should rise to nearly $ 14 per dollar.
Obviously this forecast
becomes even more unfavorable, if instead of the Monetary Base, take the broad monetary base, which includes deposits in other currencies ($ 110,000 million), or M2 ($ 161,000 million), or M3 ($ 296,000). This would indicate that the Central Bank would be really impossible now face a run on currencies and / or serious bank, the currency had fallen far better indicators than these. How
resulted in this situation?
To answer this question we must go back to that after the fall of the convertibility of the currency in late 2001, there was no means a profound rethinking of monetary policy instruments.
The change in the monetary policy of the currency board of Central Bank intervention in the foreign exchange market to buy foreign currency (for the purpose of holding a high exchange rate and promote exports) and the policy of "sterilization" of those Currency with the issuance of debt by the BCRA, was collected by patching in the legislation, introduced in time to the emergency, laws passed in a hurry to wander through without any study and reflection, and Decrees of Necessity and Urgency (or rather folly and Emergency Decrees).
Remnants of the old law of convertibility No. 23,928 and the Charter (CO) Central Bank No. 24,144, coexist with emergency legislation and DNUs, causing serious cracks, gaps and contradictions in the legislation governing the operation of the BCRA.
Parallel to this was conducted under a bad debt in default, without any intervention by Congress. The original proposal for Dubai, which could have been a reasonable solution to the problem, was successively relaxed and denatured, to the point that even kept the name until the end.
Thus it was a hybrid solution, or State, nor friendly to the market, although the sustainability plan the proposal made by Minister Lavagna, was based around stupidly in the market to refinance debt maturities. For this reason remained unresolved one-fourth of the debt, which multiplied the couple outside the claims for settlement, it became apparent that Argentina was blocked financially as a result of errors committed during the renegotiation own.
The next step in the error list, was the cash payment to the IMF and World Bank payments, instead of being reprimanded to these institutions for the disastrous outcome of their policies that Argentina was forced to comply under the debt pressure fraudulent inherited from the dictatorship that our nation became the only developing country in the world, bringing it to the catastrophe of 2001.
That counterclaim would have allowed at least start a lengthy repayment of debts owed to these agencies, and implement parallel currency squandered those payments, a genuine reconstruction of society from its very foundations Argentina, with special emphasis on children and youth.
This position would also have allowed to deny outright the IMF surveillance, in order to raise the fees very long payment to the Paris Club. Would have avoided the trap so that Argentina is self-enclosed result of cash payments to the IMF, the cash paid, or if you want to share, go before the IMF.
turn cash payment to both the IMF and Paris Club, it frontally contradict the state of emergency and need to justify his statement that Argentina's default, the courts of different countries who extended their jurisdiction. Including ICSID, under the World Bank, which nevertheless did not challenge, but on the contrary during the current government expressly submitted to its jurisdiction.
However, the state of emergency and necessity, although it is not easy to see from Puerto Madero, subsists throughout our country. It can be seen in every beggar, street child, cartonero or career that crosses our path, and the youth of our lower class, which no education and with 40% unemployment, sinking into drugs, crime , and marginalization, which affects the security of the entire population. Thus the state of emergency and need is also reflected in each offense that support our citizens as victims in this kind of creeping low intensity civil war, which we inherited as a result of the intervention in our economy from the IMF and World Bank .
the same way that satisfaction of a creditor by the current government increases the demands of the next raid on an error, a lie, or a failure by the current government, it also leads to the next, this being the situation where we are today.
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