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How Crazy Are Argentina President’s Hints of a US Plot to Remove Her?

President Cristina Fernández de Kirchner’s recent comments about an American plot against her speak to her base. But history tells us to take her somewhat seriously.
October 3, 2014, 9:19pm
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Amid Argentina's losing battle against hedge funds in a United States court and the increasing likelihood of an economic collapse in the country, President Cristina Fernández de Kirchner's recent comments about an American plot against her look a bit like a nutty conspiracy theory.

"If something was to happen to me, nobody should be looking to the Middle East, but to the North," Kirchner said on Tuesday during a 45-minute televised address to the nation. "There are some players in the economy who want to bring down the government and they want to do it with help from abroad."

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Kirchner was clearly referring to the US. She spoke a day after US District Judge Thomas Griesa found Argentina in contempt of court for transferring $161 million from Bank of New York Mellon to the Argentine state-controlled Nacion Fideicomisos bank, after he ordered her instead to pay Argentina's debts to two American hedge funds.

"This is not an isolated move by a senile judge in New York," Kirchner said. "Because vultures look a lot like the eagles of empires."

That's fiery rhetoric. But the thing is, Kirchner might not be so crazy.

"The post-World War II relationship between the United States and Latin America has been so riddled with plots of various kinds," Larry Birns, director of the Council on Hemispheric Affairs, told VICE News. "It's very difficult to scoff at these allegations because so many of them after the fact turned out to be true."

Birns wasn't defending Kirchner, or other South American leaders who regularly lashed out at the US.

To entice foreign investment after defaulting on their debts in 2001, Argentine leaders agreed to let creditors go to US courts to hash out grievances. In July, the hedge funds hauled Argentina into Griesa's court in Manhattan, looking to collect on their $1.5 billion investment. Griesa ordered Argentina to pay the hedge funds first, and its other debts second. The country refused and went into default again.

The country's economy was already stagnant, with inflation expected to reach 40 percent this year, according to The Economist. Now it's likely to decline further.

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"A lot of these Latin American countries have committed acts of dereliction and irresponsibility, and are somewhat to blame for what's on their plate," said Birns.

But Birns rattled off a list of US-led plots against Latin American governments that put Kirchner's conspiracy theorizing into perspective.

The US sent an aircraft carrier to Brazil in the 1964 in case then-President Lyndon Johnson chose to support a military coup there — Johnson didn't, but the coup succeeded and Brazilians lived under a dictatorship for 20 years. The CIA backed the assassination of Marxist Chilean President Salvador Allende in 1973. And evidence suggests the US was involved in the temporary overthrow of the late Venezuelan President Hugo Chavez in 2002.

Kirchner's audience is familiar with those episodes, so she's scoring points with voters with her speech. She's also less fearful of standing up against Washington as her predecessors might have been, said Birns.

Unlike a decade or two ago, Argentina isn't overly dependent on US investment. Its trade with China is growing fast, for example. If American investors stop backing the country because of the fear they might never get their money back, Chinese investors could fill the gap, he said.

But Argentina is still playing a dangerous game.

On Wednesday, Argentine Central Bank President Juan Carlos Fabrega resigned his post. He was in favor of negotiating with the American hedge funds.

Shares on Argentina's Merval stock index plummeted on the news, adding more momentum to the country's economic slide.

Vultures Circle as Argentina's Debt Crisis Gets Weird. Read more here.

Follow John Dyer on Twitter: @JohnDyerJr