China’s shock “devaluation” was not the only one in 2015. It was the currency disruption that most people remember, even if years later they’re not sure exactly why. Paying attention to CNY makes sense, requiring no further explanation for why it might be given focus even from the otherwise unaware.

In December 2015, while global liquidity conditions further deteriorated the Argentine peso was likewise beaten down dramatically financial trading. From 9.803 pesos to the dollar on December 15, it was 13.33 two days later. The timing was, as usual, attributed to Janet Yellen and the first “rate hike” in the United States. Psychology is not unimportant, but as I wrote about a month before, this was something else wholly unrelated to the Federal Reserve’s clear confusion:

Like Brazil’s international financial experience, it looks like a “dollar” run and quacks like a “dollar” run. As we know from the second chart presented above, there aren’t any private banks as counterparties here, foreign or domestic (not that a domestic bank could even think to provide “dollars”), which raises an intriguing question – which central bank in the world is “on the hook” providing long derivative instruments (the counterparty to Argentina’s short derivative instruments, likely swaps and forwards, shown immediately above) and thus “supplying” “dollars” to Argentina in 2015? For almost any country, these are enormous sums; projected repo flows of -$12 billion and short forex of $15.3 billion speak to not just your everyday financial imbalance even in this swirling world of 2015.

Like China, Argentina got caught up in the “dollar” run or squeeze. It finally came to a merciful end in late February 2016, several weeks after the global illiquidity reset in worldwide liquidations.

Over the two years since then, Argentina has been busy in the Eurobond market. As the name implies, Eurobonds are the offshore brother of eurodollars; the former as tradeable securities drawn from existing savings, the latter credit based created, and destroyed, by bank balance sheet factors.

Therefore, in one sense it made great sense. Just as US companies during the worst of the Great “Recession” began borrowing hand over fist from the bond market in lieu of bank credit collapsing, the “rising dollar” pushed many countries and the corporations (and governments) inside them toward bonds as an alternate funding mechanism. These are not substitutes but in many cases a last resort.