I remember back during the the big Argentine default of 2001 I was on an overseas real estate website and I saw a piece of land which was literally the size of Delaware for sale for $1,000,000 US. I remember thinking that even if the land was deep in the barren steppe of Tierra del Fuego it still had to be a deal at that price. There would have to be minerals under there of some sort. All I had to do was find 1 million dollars.
Then I thought about it. Even at such a cheap price for such a massive piece of land it’s unlikely that much would come from it economically. At least for me. Sure I could buy the land and I might “own” it. But what was to keep the government from just taking it when it wanted? Say I discovered oil on my property. What are the chances in Argentina that I get to keep my mineral rights? Probably not so good. And that was in 2001. Things have only gotten worse under Argentina’s neo-Peronist regimes.
I “decided” against the purchase.
Where there are good property rights economies tend to do well. When contracts are honored and people can make informed business decisions economies very often prosper. Argentina however is not such a place and as such it’s looking at yet another default.
America should learn from its once very wealthy but now destitute South American brother. Let the politicians take over the economy and it is just a matter of time before destruction comes knocking.