Pay up Peru!

Thursday, May 10, 2018
by Patrick Dorinson

50 years ago in 1968, the Peruvian government of military dictator Juan Velasco began a program of land reform intended to replace the almost feudal system of farming that was a relic of the old Spanish colonial era.

Peruvian efforts at agrarian reform were meant to break up the vast tracts of rich farm land owned by a few wealthy families and give that land to the poor peasants who had done all the work to make it profitable. The plan ended up being an abject failure.

To pay for this folly, the Peruvian government issued land bonds to investors. Sounds like a good way to pay for this and right an old injustice.

But when hyperinflation in 1988 made Peru an economic basket case, Peru reneged on their obligation to pay the bondholders what they were owed.

So what is a bond?

According to the website Investopedia.com, “A bond is a fixed income investment in which an investor loans money to an entity -typically corporate or governmental-which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debtholders, or creditors, of the issuer”.

When Peru told those who held the bonds to pound sand those bonds weren’t worth the paper they were written on.

And who were some of the bondholders?

Some of the largest were hard working Americans like Teamsters, firefighters, police officers, building trades, food and commercial workers and bakers whose pension funds had invested in the Peruvian Land Bonds. And American taxpayers were also on the hook as states and municipalities also invested in these bonds.

In 2001 Peru’s high court ruled that the bonds should be paid but getting that money has been like pulling teeth and when they have been reluctantly paid, the bondholders got pennies on the dollar.

That ruling was 17 years ago and meanwhile around $2 Billion is still owed to those whose hard earned money financed Peru’s failed land reforms 50 years ago.

Why should you care if you aren’t a teamster or firefighter or any of the other unions or don’t live in any of the states or cities who invested in those bonds?

Well, first of all, Peru today has recovered nicely from its worst economic days and can afford to pay back the money they owe but refuse to do so.

And second they now wish to gain membership into the exclusive Organization for Economic Cooperation and Development or OECD.

Because of their outstanding debt their membership application is in jeopardy.

Or is it?

The head of that OECD is a man named Jose Angel Gurria, a career Mexican and international bureaucrat who in 2007 was given the award as “Globalist of the Year”. That should make you suspicious right away.

And who knew there was such an award!

Gurria is no friend of the United States and he is an avowed member of the Anti-Trump amen corner of international bottom feeding non-governmental organizations who like nothing better than to stick it to America.

And Gurria has a history of screwing American workers as he was one of the chief Mexican negotiators for NAFTA that devastated many American industries and cost U.S. jobs.

Gurria would like nothing better than to screw America once again and in the process screw President Trump and most of all American workers.

Well, screw me once shame on you. Screw me twice shame on me.

We shouldn’t allow Gurria and Peru to screw America again.

President Trump should put America first and tell Peru that no debt payment to American workers means no membership in OECD. Period.

Time to stop getting screwed by international anti-American bureaucrats like Jose Angel Gurria and international deadbeats like Peru.