the argentine government is very clear on why gradualism wont work and open about its reasoning. the country is on the brink of hyperinflation (16000% Y/Y and 95% poverty are numbers milei carries to the public).

that is the narrative he won a presidntial election with. meaning: if you drive towards a cliff you might want to get the car to stop immediately instead of simply stop accelerating and hope you will stop in time.

gradualism was tried by macri, but what ended up happening is that pretty much all they did was aquire more debt.

therefore, the shock therpary, according to the finance ministry, has a “fiscal anchor”, they argue that the issue isnt the debt per se but the fiscal deficit. if you are a household and you spend more than you make, you probably should immediately stop eating out at 1star restaurants and instead cook cheaply at home.

another shock was the “devaluation” of the peso. exchange controls. the dollar blue (black market rate) was 1:1000 while the official rate was 1:350. the implications of this are too complex to get into, but the when they lowered the official rate to ~800, the dollar blue actually dropped, meaning the peso gained a bit of value. why?

because, and again this is the finance minstries position, its about credibility. a shock therapy sends a clear message: we are serious, we don’t prolong. we know what needs to be done and we do it.

this credibility is extremly important when you think about investments and going back to the table with the IMF and the western world at large.

i can see how many bitcoiners who think they are libertarians are a bit confuaed by all this, one commentator said “global elites”. and milei also turns to OECD and away from BRICS. so keep in mind that fascism and dictatorships historically came to power with a narrative of liberty. and in fact, many bitcoiners arent libertarians even if they say they are. they are fascists (evil global elite (jews), evil US empire blablablabla).

milei is doing what he said he would do in his campaign. milei so far is true to his economic beliefs from the position he is at. the debate of gradualism versus shock therapy was settled by democracy when people voted for milei. they are willing to take a hard hit in the short term, because they want radical, pro market and pro western value change.