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After and due to their failed attempt to raise a "Bitcoin bond," the market doesn't believe in the government. Their non-Bitcoin based sovereign debt is now tra

After and due to their failed attempt to raise a "Bitcoin bond," the market doesn't believe in the government. Their non-Bitcoin based sovereign debt is now trading at 30 cents on the dollar, down from 94 cents on the dollar last March. [1] This makes it all but impossible for them to raise more sovereign debt on the capital markets. I don't think it's the price of Bitcoin so much as their going all-in on it and then seeing their gamble collapse out from under them. They've now lost money on all the "dip buys" their dictator was tweeting about - in English only - to show off to the laser-eyed. Their issue is that they showed such poor judgement. [edit] Further, of course, they're thumbing their nose at the IMF by refusing to roll back BTC-as-tender. No matter what you think of that demand or that policy decision, if the IMF is the only one lined up to bail you out, it's their way or the high way. [1] https://www.boerse-frankfurt.de/bond/usp01012ca29-el-salvador-republik-7-125-19-50 https://www.boerse-frankfurt.de/bond/usp01012ca29-el-salvado...

loceng 5y ago
> Their issue is that they showed such poor judgement. The "they" in your statement is solely the dictator, no?
nopq 5y ago
> their dictator El Salvador is a parlamentary Republic with independent political parties and an elected president. https://en.m.wikipedia.org/wiki/Politics_of_El_Salvador https://en.m.wikipedia.org/wiki/Politics_of_El_Salvador
- nsn90 5y ago
  salvadorean here, dictatorship means absolute power, which he currently has now that they control the 3 branches [1] [1] https://edition.cnn.com/2021/09/06/world/el-salvador-president-nayib-bukele-consecutive-terms-intl/index.html https://edition.cnn.com/2021/09/06/world/el-salvador-preside...
  - 6sup6 5y ago
    Did he persecute people like Pinochet did? Calling him a dictator is like having someone saying that misgendering them caused them PTSD: it is putting war induced trauma in the same bag as whatever misgendering is.
    - arcticbull 5y ago
      "Persecuting people like Pinochet" isn't really the bar. I was alluding to the time he brought the military into the legislature to force through his 'crime package.' [1] Belorussian leader Alexander Lukashenko refers to himself as the "last dictator in Europe" and I don't think he "persecutes people like Pinochet." He was also elected. [1] https://www.npr.org/2020/02/10/804407503/troops-occupy-el-salvadors-legislature-to-back-president-s-crime-package?t=1652345374623 https://www.npr.org/2020/02/10/804407503/troops-occupy-el-sa...
    - vba616 4y ago
      I have no idea who exactly is or isn't a dictator, but there is a Spanish word for the situation when a democratically or legally elected leader acquires dictatorial powers by breaking down institutions: it's called an "autogolpe" or self-coup. I realize it happens outside of Central and South America, but it's suggestive that there's a specific word.
riffraff 5y ago
the bitcoin bond was worse than the existing el salvador bonds in all ways. I.e. you could have bought a normal bond and bitcoin spending the same amount of money and having strictly better returns in all circumstances. And reportedly, nobody bought them[0]. I am not sure that emission scared investors, if anything, had someone showed up to buy them, it would have been free money fo the government. [0] https://www.msn.com/en-us/money/markets/el-salvadors-bitcoin-bond-reportedly-hasnt-lured-a-single-investor-and-markets-are-bracing-for-a-default-on-conventional-debt/ar-AAWSi0V https://www.msn.com/en-us/money/markets/el-salvadors-bitcoin...
- xiphias2 5y ago
  It was a way to get around bond regulations, the bond is a wrapper around Bitcoin. It’s similar to how some companies buy MSTR because they are not allowed to buy Bitcoin directly, but want some exposure.
  - riffraff 5y ago
    but these are junk bonds, it's not like there's pension funds that are going to buy them. MSTR as a bitcoin proxy made sense at a time when you could not easily own bitcoins, but there are direct ways to do it now anyway (GBTC, BITO). I am ignorant and I just don't know, but which regulation would forbid you from buying a bitcoin ETF but allow you to buy junk el salvador bonds?
    - adament 5y ago
      A pension fund might very well be allowed to buy junk bonds since it is a well-known if risky instrument whereas bitcoin ETFs are a newfangled weird instrument that is probably not covered by their guidelines. I mean allowed in the sense that the investment guidelines set by the board allow it. Source: I work at a pension fund where I think we are in precisely this situation.
      - xiphias2 5y ago
        I think in the next few years the pressure for junk bonds like this in pension funds will just grow as inflation rate moves farther away from bond yields.
api 5y ago
> their dictator was tweeting about Sounds like a line from Snow Crash but its... real...

loceng 5y ago

> Their issue is that they showed such poor judgement. The "they" in your statement is solely the dictator, no?

nopq 5y ago

> their dictator El Salvador is a parlamentary Republic with independent political parties and an elected president. https://en.m.wikipedia.org/wiki/Politics_of_El_Salvador https://en.m.wikipedia.org/wiki/Politics_of_El_Salvador

nsn90 5y ago
salvadorean here, dictatorship means absolute power, which he currently has now that they control the 3 branches [1] [1] https://edition.cnn.com/2021/09/06/world/el-salvador-president-nayib-bukele-consecutive-terms-intl/index.html https://edition.cnn.com/2021/09/06/world/el-salvador-preside...
- 6sup6 5y ago
  Did he persecute people like Pinochet did? Calling him a dictator is like having someone saying that misgendering them caused them PTSD: it is putting war induced trauma in the same bag as whatever misgendering is.
  - arcticbull 5y ago
    "Persecuting people like Pinochet" isn't really the bar. I was alluding to the time he brought the military into the legislature to force through his 'crime package.' [1] Belorussian leader Alexander Lukashenko refers to himself as the "last dictator in Europe" and I don't think he "persecutes people like Pinochet." He was also elected. [1] https://www.npr.org/2020/02/10/804407503/troops-occupy-el-salvadors-legislature-to-back-president-s-crime-package?t=1652345374623 https://www.npr.org/2020/02/10/804407503/troops-occupy-el-sa...
  - vba616 4y ago
    I have no idea who exactly is or isn't a dictator, but there is a Spanish word for the situation when a democratically or legally elected leader acquires dictatorial powers by breaking down institutions: it's called an "autogolpe" or self-coup. I realize it happens outside of Central and South America, but it's suggestive that there's a specific word.

riffraff 5y ago

the bitcoin bond was worse than the existing el salvador bonds in all ways. I.e. you could have bought a normal bond and bitcoin spending the same amount of money and having strictly better returns in all circumstances. And reportedly, nobody bought them[0]. I am not sure that emission scared investors, if anything, had someone showed up to buy them, it would have been free money fo the government. [0] https://www.msn.com/en-us/money/markets/el-salvadors-bitcoin-bond-reportedly-hasnt-lured-a-single-investor-and-markets-are-bracing-for-a-default-on-conventional-debt/ar-AAWSi0V https://www.msn.com/en-us/money/markets/el-salvadors-bitcoin...

xiphias2 5y ago
It was a way to get around bond regulations, the bond is a wrapper around Bitcoin. It’s similar to how some companies buy MSTR because they are not allowed to buy Bitcoin directly, but want some exposure.
- riffraff 5y ago
  but these are junk bonds, it's not like there's pension funds that are going to buy them. MSTR as a bitcoin proxy made sense at a time when you could not easily own bitcoins, but there are direct ways to do it now anyway (GBTC, BITO). I am ignorant and I just don't know, but which regulation would forbid you from buying a bitcoin ETF but allow you to buy junk el salvador bonds?
  - adament 5y ago
    A pension fund might very well be allowed to buy junk bonds since it is a well-known if risky instrument whereas bitcoin ETFs are a newfangled weird instrument that is probably not covered by their guidelines. I mean allowed in the sense that the investment guidelines set by the board allow it. Source: I work at a pension fund where I think we are in precisely this situation.
    - xiphias2 5y ago
      I think in the next few years the pressure for junk bonds like this in pension funds will just grow as inflation rate moves farther away from bond yields.

api 5y ago

> their dictator was tweeting about Sounds like a line from Snow Crash but its... real...