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Argentina 20 Years After La Crisis del 2001

Ponzi Scheme

Argentina 20 Years After La Crisis del 2001

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Juan Bravo did not realize when he entered the Caraza Shopping Center on December 19, 2001 that his world was about to change. December in the southern area of Greater Buenos Aires was never an easy month: the typical Argentine queues in front of ATMs and supermarkets had been joined by long lines of people of all ages and trades waiting for a meal at the comedores, community spaces organized for poor people to eat.

But when Juan and his family left through the mall’s automatic doors, only a few hours after entering, they saw not the daily dissatisfaction they were used to but an eruption of anger against the deeply rooted economic and political degradation.

December 2001 marked the worst economic crisis in Argentina’s recent history. The barricades that Juan saw that day were the start of an upheaval that would last for days. “La Crisis del 2001,” as it was called, remains etched in the memory of everyone living in the country at the time.

La Crisis del 2001

In early December that year, the government had frozen all USD bank accounts and restricted the withdrawal of money in ATM’s to only 250 pesos per week due to a lack of monetary liquidity. In previous years, Argentina had sustained a policy called “currency convertibility” that maintained the value of one Argentine peso equal to one dollar. But the reserves in the Central Bank did not match this monetary fiction. As a solution, taking loans became a systemic public policy, but without any plan for how to…

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