They are going to adopt the dollar. He’s been very clear on that. The Central Bank has no dollars, so it’s going to be tricky to pull off.
It took 9 months in Ecuador. Maybe they can get it done in 6. But he doesn’t take the reins until December 10th.
Practically nothing happens during ‘summer’ at this time, neither December or January when everyone hits the beaches. That can perhaps work to his benefit.
But once they have some stability to the country, maybe then they can consider an alternative model. And bring in private money, but I sense he’ll have bigger problems than doing that. There’s only so much he can achieve in his tenure don’t forget.
Adopting the dollar is going to stop that crazy inflation in its tracks, but it’s also going to cause havoc for all the free education, bus passes etc, and government employees out of work, not to mention raising money in international markets. Those people affected are going to be kicking and screaming. It’s not all sunshine and rainbows initially. Their economy has been sooo distorted for decades now. With so many peculiar side effects, like people’s sole job to be to check and enforce prices. Currency speculation and FX. I’m sure there are some Argentine’s that can share other peculiarities.
Definitely going to be very interesting to monitor. But don’t expect any movements towards Bitcoin I wouldn’t say. More likely the crypto dollar (or USDT).
Exactly this!
reply
appreciate the perspective, can you share any links to Milei’s dollarization plans?
reply
Sure, I recommend this video link, with subtitles. YouTube (on long press on mobile) can translate them into your device language:
reply
awesome, thanks!
reply
It mentions the problem of securing dollar funds for the transition. What it doesn’t mention and what my head says could be possible is China having a part to play in this. Providing dollars for energy & agricultural concessions with repayment in Yuan.
reply
Great perspective
reply
"Adopting the dollar is going to stop that crazy inflation in its tracks" in Venezuela everybody uses USD and still there is hiperinflation, not sure if making USD legal tender will stop the inflation in Argentina.
reply
Most people (at a grass roots level) have done the same in Argentina. If they can get their hands on dollars. It has been a defence mechanism.
It’s different if the people use it as a SoV, versus the state itself repricing everything domestically in USD.
Argentina hasn’t had hyperinflation in real estate (priced in dollars) this past decade. If anything it’s experienced deflation in those assets.
Same I expect will be true for other products, when converted from pesos to dollars. Perhaps some moderate inflation, but nothing in comparison to what they have been dealing with.
reply
Planning to head back to BsAs in North American summer, assuming there's not some apocalypse. Will bring USDT this time and see how it greases the skids. Figuring out black market exchanges, and traveling with enough cash, was such a PITA back in the day.
Any Argentine stackers around? @IgnaciobTato, looks like maybe you're from there?
reply
Hope you feel comfortable using USDT on Tron for more than a few seconds 😅 that seems to be the norm right now.
reply
Have never done it, will have to figure it out. Not looking forward to it, it makes me feel dirty even thinking about it :(
reply
100%. A decent metaphor for how bad things have gotten over there.
reply