Now Argentina pays for its oil and power instead of selling it. Argentina effectively dumped its own currency by fixing it one-for-one to the US dollar. It opened its borders to free trade and ended capital controls – permitting money to move in and out. Predictably, the money moved out and out. At least $189 billion of the nation's savings in its own banks, once freed from capital controls, floated north on the Money Gulf Stream to seek a safe haven in U.S. Treasury bills and other North American securities. In return for safety, Argentines accepted 4% and 5% returns on their U.S. investments. But then Argentina's government had to borrow it all back, paying, in 2001, a 16% interest rate to U.S. lenders. Out to the United States at 4%, back in from the United States at 16%, then out and in again-the ebb and flow, Mr. Beale-a financial suicide cycle that exploded, in December 2001, into riots in Buenos Aires, national bankruptcy and starvation in what had been South America's breadbasket. (link)