Argentina Economy, Election, and possible default?

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Re: Argentina Economy, Election, and possible default?

Post by admin » Tue Sep 17, 2019 4:22 pm

I hear a lot bla, bla about the wonders of hard rock lithium mining in Australia and how it is going to put brine out of biz. at the end of the day, that chilean brine is still the cheapest lithium in the world to produce.

I think the chilean lithium is positioned for a perfect storm. Prices are dropping due to the delays in ramping up all these battery plants around the world, with a temporary over supply situation; that is going to kill off all the junior miners and probably a lot of the hard rock miners too. The funding will dry-up for them, given the status of the market. most can not produce for sub-3000 to 4000 dollars a ton (processed) like say SQM can.

Then, if the price of oil goes $80+ for any length of time, there will be a sudden big push to bring all the EV cars projects to market, creating a sudden shortage. That will all happen in about 2-3 years window; or, at least way shorter than all the EV critics thought.

just look at what the market did a few years ago when oil hit $100 a barrel. That was not Tesla that made the big leap forward in EV. It was the price of other energy. EV cars and renewables need just one more good run at $100 dollars a barrel for about a year to really get everything moving and entrenched, such that when the price of oil does retreat again, there is no turning back in terms of long-term investment commitments by companies and governments.

Only this time it will be go big, go long, or go home on the EV ecosystem investments front. No one is going to want to mess around with a bunch of junior lit explorers that are still learning how to speak spanish, let alone mine lithium, for fear of missing out on the "peak lithium" market run through the end of 2030. The big boys are adding capacity and reserves, so they can run the table when the time comes.

The days of "wild cat" lithium producers are over; and those big, multi-billion dollar battery plants opening up need steady, reliable, lithium supplies. Argentina has never been that, for anything. This is a two horse race, Chile and Australia. No one else will be a major player before 2030; regardless of what the pretty pictures in those stock perspectives say on wall street.

Chile also has the other EV horses in the race: copper and cobalt. They are working on reactivating the old cobalt mines in chile. chile was once the largest producer in the world of cobalt, and at much higher grades than africa.

The gap between Chile and Argentina development is just going to get bigger and bigger over the next decade; unless something very, very big changes over there. Unfortunately, that change is probably going to require something very, very bad to happen over there first. These 'little' Argentina crisis, every few years, simple do not seem to be sufficient to motivate Argentineans to make any real reforms.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Wed Sep 18, 2019 11:04 am

I don't know what Argentina is up to, but here is the second article on bolivian lithium in as many days:

https://www.clarin.com/viajes/fotogaler ... uidcN.html

Guaranteed, someone is getting their wallet lifted.

In those slides, there is mention of Argentina proposing an "opec" of lithium; while, also still repeating those extremely wrong stats about lithium production in Chile.

Chile getting involved in a "opec" of lithium, would likly be in practice be more of a "mercosur" of lithium. Perhaps they are thinking they can get an angle to control chile's supply growth, and its ability to crush all those junior lit projects in Argentina and bolivia. Don't know, but something is rotten in Jujuy.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Wed Sep 18, 2019 11:06 am

sort of also smell Chinese money driving this.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Thu Sep 19, 2019 4:23 pm

so here is almost the exact same article promoting lithium mining in Bolivia, but in english on yahoo; all within days of each other. probably some sort of pump and dump stock scam.

https://news.yahoo.com/bolivia-huge-unt ... tml?bcmt=1#
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Re: Argentina Economy, Election, and possible default?

Post by admin » Thu Sep 19, 2019 5:55 pm

here is a far more realistic national geographic article on Bolivia's "mythical" lithium industry:

https://www.nationalgeographic.com/maga ... what-cost/

They are producing like 15 tons of lithium a year. That is about $20,000 U.S. of lithium a year. That is the most expensive lithium on the planet.

Besides being in Bolivia (which is sufficient kill it), the number one thing that will insure Bolivia is never a serious player in this century, is the lithium has 21 to 1 time magnesium to lithium content vs. chile and Argentina that more typicaly 4-5 ratio magnesium/ lit. It costs money to extract that, and technical skill to refine it.

oh, and their german "partner" mentioned in the article, that is suppose to provide the technology and financing, has never produced a gram of lithium. They have no experience in it.

one thing that is becoming an obvious problem with lithium juniors, everywhere, is the lack of experience among their technical staff in processing it at scale. Bolivia is not even close.

yea, that is going to end well. Just another socialist / populist political scam. Argentina might, might, be in in the game someday; but, never Bolivia.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Fri Sep 20, 2019 7:42 pm

this is excellent article on what is "money", and why Argentina does not have it:

https://www.forbes.com/sites/johntamny/ ... esses/amp/

I would however make minor change, and probably is of no real significance, a better metaphor for money is that it is more like oil in a motor. It allows different parts of the machine to exchange energy, without tearing itself apart.

Argentina needs an oil change.
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Re: Argentina Economy, Election, and possible default?

Post by admin » Sat Sep 28, 2019 9:02 am

great article on how Argentina's macri administration lied and misled international investors and the IMF about their fiscal status. suprise, suprise.

https://www.project-syndicate.org/comme ... co-2019-09
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Re: Argentina Economy, Election, and possible default?

Post by at46 » Sat Sep 28, 2019 10:42 am

admin wrote:
Sat Sep 28, 2019 9:02 am
great article on how Argentina's macri administration lied and misled international investors and the IMF about their fiscal status. suprise, suprise.

https://www.project-syndicate.org/comme ... co-2019-09
"The economic argument was that the government could afford to borrow along the adjustment path, because debt was low (after all, Argentina had defaulted in 2001 on its nearly $100 billion debt)."

The wording there is pretty deceptive - the debt was low not because of the default per se but because of the removal of the one-to-one peg to the US dollar - which had sucked all the juice out of the economy in the previous decade - and a subsequent peso devaluation. It is that devaluation that eventually allowed Argentina to accumulate large fiscal and current account surpluses and pay off the debt.

Chile has been playing the same game with it's own peso devaluation - the former Chilean minister of finance who wrote that article would know.

From here:

https://economics.rabobank.com/publicat ... 20012002-/

"When the IMF stops providing new loans in December 2001, Argentina fully loses its access to foreign finance. In order to regain the access to the international financial markets it lost in the run up to the crisis, the government needs to restructure the debt on which it defaulted. However, as Argentina posts large surpluses on the fiscal and current accounts after the default and large devaluation of the peso, access to foreign finance has become less urgent. Argentina takes a hardline approach against creditors, which results in protracted negotiations. By 2010, 92% of the Argentine defaulted debt has been restructured. However, ongoing litigation by holdout creditors could lead to a new Argentine default in the near future."

Here's another interesting bit from my link: "With a total amount of almost USD 22bn in 2000 and 2001, the IMF support for Argentina is larger than its support for any other country at this time."

Lo and behold, the corrupt IMF and Argentinian elite have been at it for a while - a union made in hell.

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Re: Argentina Economy, Election, and possible default?

Post by admin » Sat Sep 28, 2019 11:49 am

among many other problems, the big one was the nationalization of the pension system and the debt.

the whole mess, no matter how it is looked at, functioned as a massive wealth transfer from the poor to the rich; essentially asset stripping the country like a bankrupt zombie company, taking out a last moment loan (IMF, private bond placement, etc), and transfering the funds to the majority shareholders and corporate officers.

The poorest Argentines got less purchasing power for their labor, while wiping out what little saving most none-dollar holders / earners had in the form of the pension system, public services, etc. Ironically, it was all done under the cover of more 'socialism', or promising more inequality reduction transfers of wealth to the poor and working class; when in fact, the bulk of the wealth of the country was hitting the exit.
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Re: Argentina Economy, Election, and possible default?

Post by at46 » Sun Sep 29, 2019 11:28 am

admin wrote:
Sat Sep 28, 2019 11:49 am
Ironically, it was all done under the cover of more 'socialism', or promising more inequality reduction transfers of wealth to the poor and working class; when in fact, the bulk of the wealth of the country was hitting the exit.
A greater irony may be that the exactly same thing, only on an even bigger scale, has taken place under the capitalist Macri. Comparing the two, I'd take the socialist lip service over being raped by the golden bull any day :)

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Re: Argentina Economy, Election, and possible default?

Post by admin » Tue Oct 01, 2019 7:36 pm

well, here is some more lip service then from the Fernandez regarding not wanting to default vs. not having a choice to default. hope is not a plan.

https://www.forbes.com/sites/kenrapoza/ ... ts-on/amp/
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Re: Argentina Economy, Election, and possible default?

Post by 41southchile » Sun Oct 27, 2019 10:07 pm

Well results are in, Chao Macri.
“Facts do not cease to exist because they are ignored.”

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