While I enjoyed a concert of lovely Ms. Candy Dulfer & Co. in Blue Note Tokyo on July 30, the ticker indicated on my mobile phone the end game of Mme. Kirchner in Buenos Aires had begun: The S&P downgraded Argentina’s rating to “selective default”. This was a very important news for me, because I just remembered I had started this official English weblog during the last day of my visit to Buenos Aires last year. At that time, nobody (yeah, really “nobody”) in the Japanese market regarded such a risk as imminent. However, I firmly believed this must set all the clock of the world history for its end game towards the next era.
Now, you may wonder why I’ve been believing such a crazy story? While analyzing the global macro, I always stick to design thinking with adaptive unconscious instead of system thinking. For the former, it’s essential to prefer qualitative analysis to quantitative one. That means I usually concentrated on finding factors around phenomena, which seem quite similar to ones around what happened before.
In the case of acute default in Buenos Aires, which Mme. Kirchner’s government, of course, rejected officially, I’ve been comparing it with Mexico’s case in 1994/95. In the course of the latter, the following events happened step by step:
– First of all, Mexico was invited mainly by the USG to join the OECD, a club of developed countries. That was in 1993 when I myself joined the Japanese diplomatic service, by the way and was partly in charge of this process.
– Afterwards, a huge amount of money from the world community was invested in Mexico. Her economy flourished.
– However, it was suddenly disclosed in the autumn of 1994 that almost all the official economic data and statistics released by the Government of Mexico were fake. The world investor’s community was totally shocked and started capital flights massively from Mexico. Mexican peso was dramatically depreciated. To our surprise, the world economy as a whole didn’t collapse at the early stage, so that everyone believed it was again a temporary matter.
– “The moment of the truth finally” came almost 6 months after the default of Mexico. The USD suddenly began to be depreciated massively. While experts blamed FDI by US companies to Mexico for such a drastic change, the USG, especially, US Treasury officially explained it didn’t know the reason for that. Instead of seeking the truth behind that, the USG stuck to “benign neglect”, that is to say, it didn’t do nothing against that.
– The real target was Japan. JPY was massively appreciated against USD. Masayoshi TAKEMURA, Minister of Finance of those days, hurried to fly over to Washington D. C. to complain, but in vain. The collapse of the so-called “Heisei Bubble Economy” was accelerated.
OK, why don’t we apply the same historical scheme to the current Argentina’s case as follows?:
– Argentina was invited to G20, a club of leading countries, although she still suffered from the legacy of her own default in 2001/02. FDI accumulated.
– The illusion of Argentina’s economic flourishing was blown up, when folks in the market started to suspect her possible default. Officially, Mme. Kirchner’s government repeatedly denied such a possibility, although every single citizen on the street in Buenos Aires knows her vassals have invested a lot of money to CDS of Argentina’s government bond: The more its rating would be downgraded, the better off Mme. Kirchner and Co. would automatically become.
– Now, the turn came to the US. Ridiculously, some vulture funds in NY sued the Government of Argentina for paying the full amount of her once defaulted bond in 2001/02. The battle in the court began and continued. Finally, Argenina’s rating was downgraded to “selective default”, as I mentioned before.
Well, please stay tuned, because the end game of Mme. Kirchner didn’t really come to end, since Italian bond holders will be gradually involved to this story from now on. It’ll take some more time, maybe some more months, before we’ll recognize the world economy as a whole will have been captured by this trick.
This time, Shinzo ABE, our Japanese Prime Minister will be sacrificed due to massive appreciation of JPY by simultaneous massive depreciation of USD plus EURO. It’s not any other parts of the world but JAPAN that is to be targeted. Of course, his economic policy since 2012 called “ABENOMICS” will be shut down.
BUT, don’t forget Mme. Kirchner already paid courtesy calls on Pope Francis twice, and the Pope declared he will come back to his home town, Buenos Aires, in 2016. Besides that, Pope Francis has enthusiastically commited himself to the Middle East Peace Process and even visited Israel recently to call for peace.
We should focus on the hidden axis among Argentina, Vatican and Israel behind the whole story. Please remind yourself of the fact that Argentina and Israel have been historically connected with each other by trading Uranium, while Argentina has been famous for not having given back the so-called Nazi gold. In addition, Vladimir Putin declared Russia’s intention to cooperate with Argentina in the field of nuclear power.
Anyway, the real end game of the world history has just begun in BA. Keep in mind and try to relax until “the moment of the truth” will come soon.