Is Argentina the Greece of 2014?

With markets falling apart around the world, everybody is looking for a culprit. The most likely one at hand seems to be Argentina. No, it’s not one of the world’s biggest economies (it’s at 25 in And yes, Argentina has been the victim of chronic economic malaise since time immemorial.

Still, Argentina has the capability to through the world’s markets. That’s what it seems to be doing now. Argentina’s ongoing troubles and are pretty much the direct cause of the 3.64 percent decline in Spain IBEX index. That was led by companies with exposure to Latin America (and Turkey).

More generally, the weight of a troubled economy like Argentina’s on world markets is out of proportion to its size. Europe is hardly out of the Greek crisis and now we are again looking at the possibility of a sovereign default. Even those who have no exposure to Argentina see the country’s troubles as a test of the ability of other emerging markets, including China, India and Russia, to weather an economic storm. Argentina may be a serial defaulter, but it’s still a bellwether for worldwide risk; its difficulties are putting investors in what strategists are calling a ” mindset and seem to have spurred a worldwide flight to safety.

There are few countries in the world (except for and Zimbabwe) whose economic wounds are as as Argentina’s. Was she able to turn back the clock, even Argentine president Cristina Fernandez de Kirchner might seek to go back and reach an accommodation with her country’s creditors. Unfortunately, she can’t, and what we’re seeing is an economy that’s spiralling deeper into sickness. Now world markets are


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