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By Antony P. Mueller
Argentina belongs to the large group of countries that have been systematically ruined by their own governments. There is no easy way out of this.
If he keeps on swallowing all of IMF's prescriptions, I doubt Argentina would ever be out of debt disease.
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He has to be careful playing their game, but they are offering desperately needed capital for a government that's printing like crazy.
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It is always dark before it becomes light. I think he is headed in the right direction, l hope he and the people persevere.
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I agree. There was no quick and easy fix for the problem he took on.
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70 sats \ 2 replies \ @gmd 29 Oct
yup... no easy fix, he may not succeed even though he's doing what must be done.
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Good point. That makes it hard to assess how he's doing. We don't know what a reasonable comparison is.
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This take time to complete. I believe he is going in the right direction, but the people have to walk the same path.
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It would be nice if people were selfless and got behind what he wants to do. He can make the country prosper, but with all the dead weight it is going to die.
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Parasites, by definition, aren't interested in helping their host.
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I noticed. SN is having trouble with parasites, too.
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Any country with the alarming external debt that Argentina has, and no dollar reserves, will suffer. There is no miracle. Milei has to pay very close attention to what is happening in the world today, and how diplomatic he can be. Brazil and China are its best economic partners who belong to BRICS. Sometimes it's better to hold on to ideological pride and think about the greater good, which is your population.
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I think Milei has dedicated herself to working to get Argentina out of the nightmare that socialism has left in Argentina.
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Didn't know Milei had transitioned. Big if true.
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It's a big hole to dig out of.
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10 sats \ 1 reply \ @ca 29 Oct
"the negative side [...] Devaluation to 975 pesos from 322 to the dollar when he took office"
???
Devaluation? The previous government had fixed the exchange rate manually to an incredibly artificial low rate? Why do they keep calling it devaluation? He brought it closer to the real, market value.
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It's hard to keep track of all the nuance from the outside. Did internal prices in Argentina not undergo a similar change? If not, then it was just a nominal devaluation.
I recall reading about Argentina's strict capital controls to make sure people weren't swapping their pesos for dollars.
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what do you think @didiplaywell?
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Price inflation remains high (237% per year)
I can't believe a self-called economist lists that as an observation. Things like this are the reason I spend no time seeing what this so-called experts have to say.
So... just for you... here we go...
First, talking about yearly inflation in September to evaluate the current government is self-deceitful to say the least. Milei got into office on December, so they are judging him using inflation from the previous government. No words.
The fact that, respect to the same date from last year, inflation has been of 237% (or whatever, it doesn't matter) says absolutely nothing about the current course of the economy. The current monthly inflation rate and the current rate tendency is what really tells what's going on. The fact we inherited 237% of inflation from the previous government doesn't mean that's what it still is or will continue to be.
Current monthly inflation is below 3% and keeps getting lower by the month:
So no. Price inflation do not remains high.
Devaluation to 975 pesos from 322 to the dollar when he took office
I will lose IQ from reading this. First, jump was from 375 to 844, the rest of the augmentation up until today followed the same rate as in the previous government (see the graph here). Second, there was no devaluation, of course. That jump in price was a first attempt to officially recognize the equivalence the peso haves with the dollar in the real market AND the equivalence the previous government got to "hide officially", for you could buy dollars at 375 but you had to pay 155% more in taxes in the process, so the real price was 375x2,55 . That distortion which was already in place was an "officially implicit" devaluation which the current government proceeded to decrease by taking most of the burden of the taxes and rising the official price. That still is less than the real value in the market, which is 1200 aprox, which the current govt aims to reach to proceed to dollarize, to end the madness once and for all.
Worrying indicators are that the central bank money supply is not falling further
Another thing I'm almost offended about is that the article, dated today, uses data from the first three months of the year only. And again, it takes the instant picture as an authoritative indicator of all of what has happened and is to happen. Money supply has stopped already, and the printer has been shut down. The projections mentioned where made at the time not based only in the immediate situation but on the actions that where planned and already took place.
Argentina has experienced a loss of prosperity for more than fifty years
80 years, to be exact, when the downward socialistic delirium started.
One trigger to try something completely new is price inflation. This was already very high in all the previous decades, but in the past two years, it has risen rapidly.
This is imprecise. Current generations have been already in hyperinflation, which is not what happened now but we were close. Milei's promise was not to stop this inflation, but to stop the eternal inflation, which has been pervasive. Only in my life-span prices have risen by more than x1000 since I was born, and the first x100 happened even before the last socialistic government. So inflation was not a "trigger to try something new", for inflation in itself wasn't new, not even greater than before (though, again, Milei stopped it before hyperinflation could take place).
The greatest trigger was the rock-bottom decadence of the last socialistic government. And the one and only reason Milei was possible is that the last government made the critical error of allowing 16 yo teenagers to vote, all of which were feed by social networks only, thus being impervious to government propaganda. So Milei greatest promise was to put an end to the madness in general, not just inflation.
These can hardly be provided by the countryโ€™s export industry. Compensation would have to be made by foreign direct investment.
This is fundamentally wrong. Way too ignorant to make such a claim, specially since it's not hard to get a prime on Argentina's economy to fact-check (specially if you are going to write a critique about it). The only reliable source of money to pay for all the bills is precisely the export industry, due to Argentina's massive farming industry and soon-to-be oil industry. Foreign investment has an all important role on developing the private sector, but the burden of the finances rely on farming and oil exports almost exclusively.
Therefore, one should not expect too much anarcho-capitalism from the president.
Milei absolutely never promised otherwise. He was and is always explicit on the different between his own beliefs and what he knows is practicable once in office.
I did this only for you @Bell_curve. I'm in awe at how little it takes to be entitled to write in this "prestigious" journals for which absolute ignorance seems to be a mandatory requirement. Don't make me do this again please, I feel I lose IQ when reading articles like this.
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45 sats \ 3 replies \ @ca 31 Oct
How did mises.org publish that garbage of an article? Weird...
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Lots of sore fake libertarians who labelled themselves that way only because it made them feel important and gave them an excuse to get a fake job at a foundation. Now that they see someone actually doing something they know they have been all exposed as posers whose sole purpose in life was to keep cashing in donors money "for the cause" (of endless fancy gatherings and fancy platitudes disguised as sophisticated articles). They now must prove Milei wrong at everything otherwise they will be regarded as the useless posers they are.
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That's incredibly uncharitable. The author clearly had oversights, but this wasn't a piece trying to prove Milei wrong. Not everyone with criticism or concerns is an enemy.
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Clearly insufficient awareness of the available data by the author. Beyond that, it's likely just that none of the editors knew enough about the situation to catch the oversights.
It would definitely serve them well to run these past someone with first hand knowledge to avoid such embarrassing publications.
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Here's the thing, if people who know what's really going on there don't do what you just did, we're going to remain ignorant of the situation. Why is this such a burden for you?
Access to reliable information about Argentina isn't easy to vet and most of our journalists are substantially less friendly towards Milei than this author.
I appreciate getting the story corrected from someone who has direct knowledge. Thanks.
Someone else also made the point about the "devaluation", but I still had a question about it. Was there any effect on local prices when the official devaluation occurred? Or, was it purely recognizing what the true exchange rate already was?
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First months people "fear" of a dollar at 3000 pesos, so the rise prices according to that projection, of course it was wrong. No sells and the latest months they had to lower the prices.
The inflation numbers are a joke, for example, 1kg of yerba mate maybe it cost 1600 pesos, but... the supermarkets offers promotions like "The second one at 50% discount" or "Buy 3 and pay only 2", the price taken for inflation was 1600, not the real one xD, you need to talk with friends from Argentine to really understand the reality, the media is just too ignorant.
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That's really interesting. You're absolutely right about needing to learn this stuff from people who are there.
You definitely want to keep track of actual transaction prices for this kind of analysis.
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๐ŸŽฏ Boots on the ground, never trust the media, THANK YOU!.
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You're welcome Sr :)
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Thanks ๐Ÿ™ ๐ŸŽฏ Appreciate your insight
No more economic journal articles in the future!
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You're welcome Sr :)
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