As the case of Argentina shows, getting
into the cycle of debt-and-bust is apparently not a good way to deal with financial stability. And
although I don’t understand what bonds are, it appears to me there is a big hand of these bonds in bringing Argentina down to bankruptcy, time and
again.
Closer to the home front, there was
a news item stating the International Finance Corporation (IFC), one of those
shadowy corporations from America, wants to start issuing bonds to Nepal—while I
don’t want to sound pessimistic here, it would probably be wise of the Nepali
government to find out exactly what these “bonds” are and how bonded people are
going to remain in the future before issuing these out to their citizens. We do
have to be careful, especially with a rather recent history of people being “bonded”
laborers in Nepal, that such cycles of debt don’t start in Nepal, just because
our government officials failed to understand what they were getting themselves
into.
Although I have zero knowledge of
the great machinations of finance, I have had the chance to hobnob with people
who do handle these giant financial institutions at a few points in my life. And
one conversation I remember clearly is with someone who was heading a regional
bank in Nepal, who shared with me over a quiet walk in the Himalayas that his
country no longer issued government bonds, unlike the USA. From what I could
understand, he didn’t appear to think bonds were wise things to issue.
The USA, of course, has been issuing
these bonds with abandon, at the rate of 85 billion dollars a month. Even the
thought that it might go down to $75 billion dollars a month has brought on
mass hysteria on the American financial front. On one hand, this kind of free
spending creates a splendid sense of being wealthy. On the other, it appears
that at some point this action catches up, and creates consequences to the
financial system. Eventually somebody has to pay back all that money owed. And
clearly its not going to be Mr. Bernacke, who has joined the Brookings Institution
and no doubt has a rather nice salary. I would bet a chocolate bar (since I don’t
like gambling with money) that it’s the American worker working at McDonald’s
at $10 an hour who’s going to end up paying most of this debt.
Then, of course,
there are these other countries that seem to be falling to pieces, because they
were unwise enough to “bond” themselves to the American economy.
The most interesting thing about the
Argentina’s falling peso is the news items that have followed. If all the great
newspapers of the world are to be believed, the Argentinians are falling to
pieces because they really want to save their pensions in dollars and their
government won’t allow them. With such nonsense passing for mainstream news, it’s
no wonder the Onion is considered the “finest news source” in America.
Of course, Argentina has made other
mistakes. I took a class called “Feast or Famine” during my freshman year, and
if I remember correctly, Argentina is one of these great South American countries
whose entire land mass is owned by about a dozen white farmers who control most
of the land. All these farmers used to grow beef (which is never such a wise
commodity to sink your country’s entire finance into—beef being rather bad for
people’s health. From a Buddhist point of view, I’d say this brings on bad
karma.) And now, it appears, all these farmers have switched to growing
Monsanto corn.
“The Monster is right on top of us,” said the
Argentinian people as they fought Monsanto. As of January 9th, a Monsanto seed plant was halted in Argentina, but for how
long, that remains to be seen. Monsanto is a cunning multi-headed hydra--its most recent tactic seems to be to get poor innocent Manmohan Singh to sing praises about genetic technology, consequently raising its stock prices in India. I have my doubts about how high these stock price rises actually are. Indians on the one hand are incredibly fanatic about the greatness of science (the Nehruvian legacy.) On the other, I've found the common sense of Gandhi has always trumphed Nehru eventually. And how easy is it for an American corporation and buy its own stock and raise the price to give the illusion that its doing really really well in India?
Bonding your country’s economy to
either the US dollar or Monsanto is not a wise way to stay financially solvent,
says the Argentina case. Lets hope other countries around the world learn from
it.
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