Return to Argentina

May 9, 2016


Over the past 20 years, my 16 trips to Argentina have allowed me to personally experience that country’s roller coaster of governance, finance, policy application and rejection. We are back again with a GIC special delegation ( This time we are examining the spring buds of an attempt at national reconstruction.

Our delegates include central bankers, investment advisors, economists, and global thinkers. Many sessions are in private settings, so conversations may be conducted freely. At the end of the week, a public conference in Montevideo, Uruguay, will allow us to share some reflections and convene a panel on global monetary forces. We are humbled by the invitation to be part of that discussion.

I can personally recall the time when the foreign exchange rate was one Argentine peso to one US dollar. Now it is 14 pesos to one dollar. Such is the legacy of successive regimes that confiscated wealth and drove businesses and professionals away. The new regime had to devalue and start over. They demonstrated leadership and did so immediately upon taking office.

This country has now settled its debt after enduring years of pariah status in international debt markets as a result of its historic defaults (most recently In 2014). Markets quickly readmitted the new Argentina, with successful financing. What a remarkable change from the days when banks were closed and citizens couldn’t take their money out of their accounts. The people marched in the streets, chanting “No al corralito!” to a rhythm they beat with wooden spoons on kitchen pots. Loosely translated, the chant means, “Don’t put a fence around our bank deposits!” On one trip here I left a restaurant, joined the march, and took up the chant.

Will the new policies and open, entrepreneur-focused government succeed? Can there be capital inflows and investment and growth? That is what we are here to discuss.

We also will discuss how this change happened. There were no tanks in the streets. There was no military coup. Images of the past history of South America are conjured as we contemplate this change. This time it happened with votes, not guns.

So we will also ask whether this political transition is anomalous and whether it is possible elsewhere. Can democracy throw off the oppressive yoke of socialism? Cuba, Venezuela, and others are now front-line states in this debate.

A past regime inspired Andrew Lloyd Webber’s moving song “Don’t Cry for Me, Argentina.” We’re here to discuss and explore and have a dialogue over new policy. I’m here to cheer for Argentina, a marvelous country with welcoming and friendly people who are seeking a better life. No more crying.

It is proving to be a fascinating week.


The ideas and opinions expressed in this blog are those of the author, and they should not be perceived as investment advice or as any other kind of advice.

The preceding is a commentary by Cumberland Advisors and has been reposted with permission. Cumberland Advisors commentaries are available at

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