Argentina Activates 'Financial Terrorism' Law Against Hedge-Fund Economic Warfare
August 17, 2014 • 11:13AM

Argentina is playing hardball. Accompanied by giant headlines in financial media screeching about "economic crisis," Donnelley & Sons, a U.S. printing firm that has operated in Argentina for many years, and has no financial problems at all (assets larger than its liabilities, little debt) — filed for and was declared to be in bankruptcy from one day to the next last week, leaving 400 workers on the street.

The government responded by activating a never-before-used Anti-Economic and Financial Terorism Law to file charges against Donnelley for filing for a fraudulent bankruptcy with intent to "alter the economic and financial order" and "sow terror among the population." The government intends to also file before the U.S. Securities and Exchange Commission for an investigation of this fraudulent behavior.

"I don't believe in coincidences," President Cristina Fernandez de Kirchner explained, in an August 14 speech launching a new federal low-cost housing construction program. She reported that the federal tax bureau, AFIP, had already begun investigating which companies operating in Argentina are owned by the vulture funds. Sure enough, Donnelly is 60-70% owned by speculative "investment funds," with BlackRock owning a critical share, which it had been sold by Paul Singer's NML (leading the vulture assault on Argentina) less than a year ago.

Investigations into these "investment funds" will continue, the President reported. This was the second message delivered this week to the would-be financial powers, that this government will take action to defend the Argentine people. Earlier in the week, the AFIP raided the headquarters of HSBC bank, pursuant to its tax fraud and money-laundering case against that British "Crown jewel."

Fernandez linked the bankruptcy filing to the threat made by by Mark Brodsky, head of the vulture fund Aurelius, in an August 13 press release, that "the worst is yet to come" for Argentina, because it failed to settle with the vultures. "What worst is yet to come, Mr. Brodsky?"

Fernandez demanded, in this speech, and another right afterward to supporters, that the Argentine people understand that the vulture funds are not only acting out of greed; this is "a political and geopolitical decision which seeks to indebt Argentina again," in order to force Argentina to hand over its resources as payment for those debts. Similarly, they declare bankruptcy because "they want unemployment. Why do they want unemployment? Because unemployment is the great social disciplinarian," forcing people to accept any job, at any pay, if they are to work.

"They want to see us on our knees. Well, with me as the President, they are not going to see us on our knees."