Author Box
Articles Categories
All Categories
Articles Resources

2012 Argentina - Economics, Trade, and Politics

April 18, 2012 | Comments: 0 | Views: 207

It's very hard to have legitimate dialogue with foreign nations or engage in free-trade negotiations at a time when nations are busy seizing foreign assets and nationalizing oil wells, gas production, mines, and water filtration plants. Such huge capital outlays and direct foreign investment exist so that companies can turn a profit, otherwise they wouldn't bother building up those industries abroad. When those assets are stolen or taken over by another government, the diplomacy discussions take a turn for the worst. Okay so, let's talk about South America, specifically Argentina in this quick case study.

The LA Times had another piece to this puzzle recently in an article published on April 18, 2012 titled; "Argentina Moves to Take Over Oil Firm - The Bid to Nationalize YFP Outrages Spain, Where the Main Shareholder is Based," by Chris Kraul and Andres D' Alessandro.

What many people don't understand is that the socialist government of Argentina as the inflation rate there at an estimated 9.8% current, and well, any economist will tell you that such inflation is completely unsustainable. Also because of the challenges Argentina had in 2000 coupled with this recent move, all but expected by global trade analysts foreign direct investment is down by 30%, yes, right "who would have thought," is what you are probably thinking here.

Still, Argentina even with all of its previous financial and economic challenges over the last 4-decades it seems to wish to follow Hugo Chavez, Evo Morales, and Rafael Correa into the same economic ditch by seizing foreign industrial assets. You see, Venezuela, Bolivia, and Ecuador have all gotten this notion along with a few other ALBA nations that the ghost of Simon Bolivar is speaking to them and that the Western World is out to steal their resources.

The reality is that whenever a nation's government seizes foreign assets like this, immediately the production drops off so significantly that the enterprise stolen no longer makes money, but becomes a costly inefficient liability. Again, "who would have thought" other than let's say Ayn Rand? The Wall Street Journal on April 17, 2012 put it rather bluntly in an article titled; "Argentina to Seize Control of Oil Firm," by Matt Moffett and Taos Turner.

Although it didn't mention that when Venezuela failed to renew the oil leases to the US companies after promising to do so, and after significant upgrades were made in anticipation of that promise, that the Venezuelan Government showed a 35% decrease in production. This is much more typical of what happens and thus, is practically the rule, not the occasional anomaly where a government can actually run an oil enterprise efficiently enough to compete with free-enterprise - that rarely ever happens or even comes close.

What I find somewhat fascinating is that this happened or occurred during and right after the Obama Administration visited the Americas Summit Meeting in Columbia, and one might say that Socialism is on the march in South America, and also in other places here in North America - smile, I think you see what I am saying here. Interestingly enough, on a side note there was a recent executive order which would allow the US Executive Branch to take over full control of natural gas production, at their discretion.

Lance Winslow has launched a new provocative series of eBooks on Global Economic Concepts. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank;

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

2012 Argentina








Nationalizing Oil Asets


Government Seizes Foreign



Rather than blame others, take personal responsibility to reduce our dependence on oil by using less of petroleum derived products. Repeatedly we are hearing about oil spills, rising prices on oil

By: Kyles Humphrey l News & Society > Energy l October 17, 2012 lViews: 233

Traditional analysis of debt and deleveraging (the process where households, corporations and governments are forced to reduce their overall debt) is often biased and incomplete. Opinions of how to

By: Ben Esget l News & Society > Economics l August 11, 2012 lViews: 295

In this high paced digital age, it's easy to become displaced from the people and places around you. However, it's important to support your community and your neighbors who live in it, and work hard

By: Monai Gupta l News & Society > Politics l July 11, 2012 lViews: 332

In a bold, unpredictable move, President Obama declared on Monday his desire to extend the Bush-era tax cuts for all but the highest-income earners, by which he means anyone richer than Al and Peg

By: Scott Spiegel l News & Society > Politics l July 10, 2012 lViews: 228

Bipartisanship isn't always sweet. Especially when it comes to the politics of sugar.

By: Larry M. Elkin l News & Society > Politics l July 09, 2012 lViews: 237

In a direct reflection of the financial market's currently unsteady nature, the wholesale energy markets tumbled to a four-month low at the end of May. The bearish market was thanks to the continuing

By: Graham N Paul l News & Society > Energy l July 09, 2012 lViews: 221

Traditional analysis of debt and deleveraging (the process where households, corporations and governments are forced to reduce their overall debt) is often biased and incomplete. Opinions of how to

By: Ben Esgetl News & Society > Economicsl August 11, 2012 lViews: 295

There has been a trend for many governments around the world to augment national budgetary resources by incurring debt. This debt is raised through deficit budgets supplemented by quantitative

By: Ashok Malhotral News & Society > Economicsl April 25, 2012 lViews: 242

Not long ago, I had the opportunity to discuss economic philosophy with something that was less-than-human. Now you might think that this is a negative, but I assure you it isn't. Nevertheless, when

By: Lance Winslowl News & Society > Economicsl April 25, 2012 lViews: 191

The economy suffers when banks concentrate on collecting fees rather than deposits. And on making trades rather than loans.

By: Larry M. Elkinl News & Society > Economicsl April 24, 2012 lViews: 208

Anyone on a budget can benefit using money saving tips. With the uncertain political and economic climate, it pays to turn over a few stones.

By: George Wul News & Society > Economicsl April 23, 2012 lViews: 225

This article discusses the need for having a long-term food supply as part of an emergency preparedness plan during uncertain economic times. No more than ever, this is an issue that needs to be

By: Ashley Buenol News & Society > Economicsl April 22, 2012 lViews: 190

If you are going to write articles online, you are going to inadvertently increase your critical thinking skills. The reason is simple - because as you are preparing an article you are explaining to

By: Lance Winslowl Self Improvement > Mind Developmentl August 02, 2012 lViews: 302

Back when I was in high school and college I was a spectacular athlete, and I'm not afraid to say so now. At the time, it might not been inappropriate, as it would have shown an inflated ego, but I

By: Lance Winslowl Self Improvement > Mind Developmentl August 02, 2012 lViews: 496

Some say it takes brilliance to solve problems, and that may be so. The same folks will tell us that it takes a genius to not have the problem in the first place. Nevertheless, generally speaking

By: Lance Winslowl Business > Risk Managementl July 24, 2012 lViews: 239

Most people would agree that Mother Nature through evolution has done a wonderful job organizing things. There is a food chain, and cyclical events, and all the while all the species on the planet

By: Lance Winslowl Reference & Education > Naturel July 15, 2012 lViews: 218

A few months ago, I was at Starbucks talking to someone about stocks and bonds, he and his wife had worked hard and were worried about the stock market. They wanted something much less risky. He

By: Lance Winslowl Investing > Stocksl July 11, 2012 lViews: 433

Now then, have you ever wondered what's up with our known, sensed, and observed reality - have you ever considered that it all started with a simple plan, or a simple set of rules, much like particle

By: Lance Winslowl Reference & Education > Naturel July 08, 2012 lViews: 313

Discuss this Article

comments powered by Disqus