Federal A new round of interest rate hikes has caused turmoil in global financial markets. During the previous Fed rate hike cycle, U.S. interest groups and financial institutions joined forces to create debt crises in multiple emerging market countries and seize huge economic benefits from these countries. In the "toolbox" of the United States to maintain financial hegemony, the infamous " Vulture Fund " is one of them.
"Vulture Fund" has historically maliciously pursued sovereign debts and obstructed its debt restructuring for dozens of developing countries such as Argentina . This is not only due to its bloodthirsty nature, but also inseparable from the overall considerations of the US government's condonation, financial judicial power and the US national strategy.
In the current global economic turmoil, people have seen more clearly the figure of the US government and financial tycoons such as the "Vulture Fund" join forces to sharpen their knives and reap global interests.
1. Malicious harvest: bloodthirsty nature is revealed
"Vulture Fund" refers to a fund that acquires defaulted bonds at a low price and seeks high profits through malicious lawsuits. It is named after its interest in defaulted bonds, just like vultures like eating rotten meat. It is essentially a junk bond speculator. The recognized characteristics of "Vulture Fund" are tricky, tough and barbaric. Once targeted by it, it will inevitably "lose blood and flesh".
"Economic Terrorist!" Former Argentina President Christina once condemned the US "Vulture Fund" in this way. After ten years of hunting, sucking bones and marrow, the nature of the "Vulture Fund" is fully revealed in Argentina's debt crisis.
In the 1990s, Argentina used the international low interest rate environment to borrow heavily, and was also imbued with the "neoliberal" ecstasy by the United States. By the time the financial crisis broke out in 2001, the debt amount reached 100 billion US dollars. Because it was unable to repay the debt, it was forced to reorganize the debt twice in 2005 and 2010. About 92% of creditors accepted the restructuring plan. The "Vulture Fund" represented by NML Capital, a subsidiary of Elliott Management, took the opportunity to purchase original bonds at a low price from creditors who had never accepted debt restructuring. In 2005, it filed a lawsuit, demanding that Argentina repay the principal and interest of the debt in full.
According to Spanish Le Monde, NML Capital purchased a bond issued in Argentina of $630 million for a denomination of about $48 million, which is equivalent to only paying about 7.6% of the denomination of the bond, but requires a full return.
The Argentine government believes that the "Vulture Fund" does not provide any loans and only makes profits by purchasing defaulted bonds, which is essentially debt extortion.
However, due to US judicial intervention, Argentina was unable to fulfill other repayment obligations normally. In 2016, the Arab government was forced to reach an agreement with several major "vurpent funds" to repay principal and interest totaling approximately US$4.65 billion. This amount is equivalent to 0.83% of Argentina's GDP that year.
2. Evil rights protection: US financial judicial "escort"
"prey" of the "vulture fund" is to some extent created by the United States, and its intensification of speculation is closely related to the US authorities' tolerance and partiality. In the 1990s, the Menem administration of Argentina launched neoliberal reforms in accordance with the "instruction" of the United States, which eventually triggered the 2001 financial crisis. After the Argentine left-wing government came to power, the US "Vulture Fund" took advantage of the situation and purchased bonds at a low price and obtained high returns through US judicial litigation.
In October 2012, the Argentine frigate "Liberty" stopped at the Ghana port. NML held a US court ruling to seize the frigate through the Ghana Commercial Court, in order to threaten Argentina to repay its default debt. The Algerian side appealed many times, and the U.S. Supreme Court finally ruled to uphold the verdict of US federal judge Grissa.
In June 2014, the Afghan government transferred approximately US$540 million to the liquidation bank Bank of New York Mellon in the United States to pay the principal and interest due to the creditors who accepted the debt restructuring. But the asset was frozen by Grissa on the grounds that Afghanistan had to pay the default debt of the "Vulture Fund".In view of the failure of the Argentina government to reach an agreement with the "Vulture Fund", the US rating agency has fueled the fire, and Standard & Poor's lowered the Argentina credit rating to "selective debt default", further deteriorating the debt repayment ability of this Latin American country.
In this regard, Joseph Stiglitz, winner of the Nobel Prize in Economics and professor at Columbia University in the United States, wrote an article pointing out that A country that is willing and capable of repaying debts defaulted due to judge obstruction. This is the first time in history. The "Greisa Ruling" of threatens the normal operation of the international financial market.
Liao Shuping, a researcher at the China Banking Institute, pointed out incisively that The US government could have prevented the "Vulture Fund" from asking for huge compensation through the federal court, but did not take any substantial actions. Instead, it condoned and encouraged the "Vulture Fund" to steal Argentina's national property.
Zhang Yuewen, a researcher at the Institute of Finance of the Chinese Academy of Social Sciences, believes that the international litigation action of "Vulture Fund" provides opportunities for the United States to implement financial hegemony and long-arm jurisdiction. Wall Street Financial forces have long had close ties with the U.S. Congress and the federal government, and have the motivation and ability to interfere in national laws and policies to safeguard their unjust enrichment.
According to ABC, the president of the "Vulture Fund" Elliott Management Company, Paul Singer, is the Republican funder and is known as the "most wanted donor" of the Republican Party.
After Argentina was forced to pay full payment of debts owed to the "Vulture Fund" and others, in April 2016, Grissa announced the cancellation of the freezing of daily accounts to Argentina. Argentina officially emerged from the "selective debt default" and after being deprived of its financing rights in the international market for 15 years, it has become a "normal country" in the international capital market again.
3. has suffered a lot of bad results: deepens the development dilemma of fragile countries
The hunting of the "Vulture Fund" has made the debt countries pay incalculable economic costs and development costs, which directly affects their international market credit and financing channels, and seriously hinders the economics of the debt countries from getting out of the quagmire.
United Nations Former independent expert on foreign debt and human rights issues, Bohoslavsky once said that the "Vulture Fund" took advantage of the situation, resulting in a timely, fair and orderly resolution of the financial crisis, delaying the conclusion of the debt restructuring agreement, and aggravating the suffering of the people of the country affected by the financial crisis.
Former Secretary-General of the Organization of American States Former Secretary-General of the Organization of American States commented on the "Vulture Fund" in Sursa: "National bankruptcy will cause huge harm to the poorest people, but it will never be a 'big thing' for those who are unpopular in global economic activities. On the contrary, the crisis is an opportunity for them."
fell into an economic recession in 2012 and reached an agreement with the "Vulture Fund" in 2016, the annual growth rate of Argentina has hovered at a low level between negative 2.5% and 2.7%, while inflation has remained high between 22.3% and 41.1%. Argentina is still one of the most indebted countries in Latin America.
The French Institute of International Relations and Strategy website published an article by Pierre Jacquesmo, former ambassador of French to Kenya , Ghana and other countries, pointing out that 32 African countries were entangled by the "vurpent funds", and the latter purchased the debt at a low price, and then sued the relevant countries, demanding that the debt be repaid according to the original value. In Africa, the winning rate of cases like Vulture Fund is three-quarters.
Also, according to Russian News Agency in July this year, 47% of the Sri Lankan government's loans come from the international financial market, and its "debt trap" is obviously made in the West. Its debts owed to Westerners were resold to the "Vulture Fund".
In June this year, protesters holding slogans and vulture paper puppets hit the US Elliott Management Company in New York, strongly condemning the "Vulture Fund"'s consistent plundering of vulture countries and warning Sri Lanka's debt will become the target of harvest and erosion for such predators.
If there is a "debt trap", the typical operation of "Vulture Fund" is to use rules to create traps.
In order to limit the harm of speculation, the United Kingdom, Belgium and other US allies have also legislated to crack down on the "Vulture Fund" litigation activities, but the United States chose to tolerate it.
"Vulture Fund" takes advantage of the situation to rob the debt-related countries but is protected by the US government and judicial system. It is similar to the US military-industrial complex 's act of instigating the government to ignite fires everywhere and make a fortune in war, reflecting the cold-blooded nature of American culture that ignores the safety of other countries for their own selfish interests.
column editor: Gu Wanquan Text editor: Lu Xiaochuan Title picture source: Xinhua News Agency Photo editor: Zhu Qi
Source: Author: Xinhuanet
