We recall a meeting, back in the ’90s, with Mr. Carlos Menem. “Can investors rely on Argentina’s commitment to keep the dollar and the peso linked together?” we asked.

“Absolutely,” replied Argentina’s president. “We would never give up the peso-dollar link. It is too important to our economy. Without it foreign investors would leave and the economy would collapse.”

Five years later, Argentina cut the peso loose from the dollar. Foreign investors fled and the economy collapsed.

What lesson can you draw from this narrow set of facts? If you say, ‘politicians can’t be trusted,’ you are merely stating an obvious, universal truth, like ‘public toilets stink.’ But do they stink more on the pampas than, say, in London or New York? That is the question before us.

We begin by posing other leading questions: can investors depend on the money custodians north of the Rio Grande more than they could depend on those

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by Manuel Alvarez-Rivera, Puerto Ricobr /br /Just two years after holding a A HREF="http://globaleconomydoesmatter.blogspot.com/2007/05/iceland-2007-parliamentary-election.html"parliamentary election/A, voters in Iceland are likely to return to the polls next May 9 for an early general election. Normally, the poll would not need to be held until 2011, but these are anything but normal times in the Nordic island nation, whose economy has been devastated by the ongoing global financial crisis.br /br /With all of Iceland's three major banks under receivership since October; the national currency (the krona) having lost over half its value and the stock market over 90 percent of its value; inflation and unemployment on the rise; and the GDP expected to contract by ten percent this year, public discontent over the perceived mismanagement of the economy by the coalition government of Iceland's two major parties - the conservative Independence Party and the left-of-center Social Democratic Alliance - has fueled mounting ...