20 December 2001: Argentina's president resigns amid riots
President Fernando de la Rua resigned and fled the presidential palace by helicopter after deadly riots over a freeze on bank withdrawals and a collapsing economy. Within days, Argentina declared a default on about $100 billion of debt, then the largest sovereign default in history. The peso's decade-long peg to the dollar was abandoned soon after, devastating savers who had trusted the banking system.
The lesson: A currency peg is only as strong as the government's ability to defend it.
What it meant for investors
$1,000 in Argentine government bonds at the start of 2003 → $1,800 today, vs $7,727 in the S&P 500.
We start the clock at the start of 2003, the first year in our price data after the event. That is 1.8 times the money, but $5,927 less than a plain index fund made over the same years.
What Argentine government bonds teaches: A high yield is usually a price for risk, not a gift, and serial defaulters tend to keep their habits regardless of what bond buyers hope.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2003 | $25.00 | $1,800 | $7,727 |
| 2005 | $30.00 | $1,500 | $5,763 |
| 2007 | $35.00 | $1,286 | $4,789 |
green = beat the S&P 500 · red = lost money
What if you bought Argentine government bonds? Every starting year and the full story →
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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