Argentina’s Kirchner threatens prison for those who refuse to buy bonds

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Argentina’s Cruella (or Cretina, take your pick) de Kirchner is desperate for money. That should not surprise anyone since she has somehow found a way to bankrupt the already bankrupt Argentine economy. But that is par for the course when you subscribe to the corrupt tenets of socialism, which benefit only those in the elite ruling class at the expense of the people. Nevertheless, with all the available wells running dry and facing the final demise of her headlong plunge into unsustainable 21st Century Socialism, Cruella is hopeful she has found a new source of revenue: the Argentine people.

In a bizarre proclamation, Kirchner has given the people of Argentina who have managed to hide cash from the government’s previous larcenous money grabs a choice: Either buy government bonds to finance her corrupt regime or face jail time.

Via Bloomberg:

Argentina’s Deadbeat Special: Buy a 4% Bond or Go to Jail

President Cristina Fernandez de Kirchner wants tax evaders hiding about $160 billion in dollars to help finance Argentina’s oil-producing ambitions. Her offer: Buy a 4 percent bond or face the prospect of jail time.

The tax authority announced the plan May 7, highlighting its information-sharing agreements with 40 nations and warning Argentines who don’t use the three-month amnesty window that they risk fines or arrest. Evaders have two options for their cash and the only one paying interest will be a dollar bond due in 2016 to finance YPF SA (YPF), the state oil company. The 4 percent rate is a third the average 13.85 yield on Argentine debt and less than the 4.6 percent in emerging markets.

A year after seizing YPF, Fernandez is funneling more money into the nation’s energy industry as the government struggles to boost production from the world’s third-biggest shale oil reserves. With Argentina already committed to pumping $2 billion of central bank reserves into a fund for energy investments and the highest borrowing costs in emerging markets keeping it from issuing debt abroad, the government is eyeing the billions of undeclared dollars that Argentines hold to help shore up reserves that have dwindled to a six-year low.

“The authorities need to take steps to open up external resources in the energy sector and to finance the Treasury and local governments,” said Sebastian Vargas, a New York-based analyst at Barclays Plc. “The amnesty is not negative for markets but it’s disappointing because they do little to solve balance-of-payment difficulties.”

[…]

Many Argentines hide assets to avoid a 35 percent income tax and a levy of as much as 1.25 percent on their personal wealth. Undeclared assets are also beyond the reach of the government, which in 1989 seized bank certificates of deposit in exchange for bonds and in 2002 converted dollar deposits into pesos.

Read the entire report HERE.

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