Confirmed: the BCRA is intervening in the exchange rate.

[dlish]

@LuckyLuke Sorry I posted the wrong article! I meant this one https://www.infobae.com/economia/20...-estaria-mas-presionado-hasta-las-elecciones/

 

[Quilombo]

@LuckyLuke Sorry I posted the wrong article! I meant this one https://www.infobae.com/economia/20...-estaria-mas-presionado-hasta-las-elecciones/

I think with the jump we saw this week it's a sign of things to come. There are cracks appearing in the plan llegar of Milei and Caputo but they go all red faced and call you a communist son of a bitch if you say so. Whatever happened to facts not caring about one's feelings?

Anyways, the important take away for this year is this, IMO: if the dollar remains flat and inflation remains anything above 0%/month, Argentina becomes more expensive in dollars, further decreasing competitiveness of exports (soy and otherwise), manufacturing, fossil fuels, etc. and increasingly pressure on outbound currency flows in the form of imports from abroad (capital goods by companies or courier by consumer), vacations abroad because it's cheaper to visit Brazil than MDQ, and consumption of digital goods.

The government is forced to balance all of this while trying to increase the seats they have in congress; the question becomes what happens the day after? I seriously don't understand what the long term plan of these guys are, they increasingly remind me of Massa and trying to get to tomorrow instead of next year. There's nothing left to cut, the number of people who don't live in poverty but report being increasingly unable to make it to the end of the month keeps growing, and the shift in LLA Troll Centers has gone from rebutting criticism of Milei/Caput's governance with facts to just screaming at people on social media in the comments or calling La Nación or other right wing/center media zurdos/Ks/LN12.

Maybe it was here or somewhere else I saw it, but Milei and Co. have now been forced to implement those weird K policies meant to stem the bleeding of macroeconomic mismanagement, this time via a lower VAT for domestic tourism and trying to separate out where Argentines are spending their dollars abroad in to more specific categories, as if that negates the negative balance of trade.

While I don't think we're nearing the collapse of the government, I do think we are nearing a radical change in how Milei and Caputo must govern. There's nothing left to cut, there's very little growth, and more dollars flow out than flow in. This isn't sustainable, and we're barely 2 years in to their mandate which means something has to change, but I don't know what that something is. The thing I increasingly see the non-screaming red faced Mileistas say is tax burden, but Milei has only increased taxes since gaining power. Maybe they'll try the decoupling of a national/provincial VAT to let the provinces "compete" like they said they would, we'll have to see, but I seriously doubt this will be successful, like every other measure they've tried.

 

[Redpossum]

I think with the jump we saw this week it's a sign of things to come. There are cracks appearing in the plan llegar of Milei and Caputo but they go all red faced and call you a communist son of a bitch if you say so. Whatever happened to facts not caring about one's feelings?

Anyways, the important take away for this year is this, IMO: if the dollar remains flat and inflation remains anything above 0%/month, Argentina becomes more expensive in dollars, further decreasing competitiveness of exports (soy and otherwise), manufacturing, fossil fuels, etc. and increasingly pressure on outbound currency flows in the form of imports from abroad (capital goods by companies or courier by consumer), vacations abroad because it's cheaper to visit Brazil than MDQ, and consumption of digital goods.

The government is forced to balance all of this while trying to increase the seats they have in congress; the question becomes what happens the day after? I seriously don't understand what the long term plan of these guys are, they increasingly remind me of Massa and trying to get to tomorrow instead of next year. There's nothing left to cut, the number of people who don't live in poverty but report being increasingly unable to make it to the end of the month keeps growing, and the shift in LLA Troll Centers has gone from rebutting criticism of Milei/Caput's governance with facts to just screaming at people on social media in the comments or calling La Nación or other right wing/center media zurdos/Ks/LN12.

Maybe it was here or somewhere else I saw it, but Milei and Co. have now been forced to implement those weird K policies meant to stem the bleeding of macroeconomic mismanagement, this time via a lower VAT for domestic tourism and trying to separate out where Argentines are spending their dollars abroad in to more specific categories, as if that negates the negative balance of trade.

While I don't think we're nearing the collapse of the government, I do think we are nearing a radical change in how Milei and Caputo must govern. There's nothing left to cut, there's very little growth, and more dollars flow out than flow in. This isn't sustainable, and we're barely 2 years in to their mandate which means something has to change, but I don't know what that something is. The thing I increasingly see the non-screaming red faced Mileistas say is tax burden, but Milei has only increased taxes since gaining power. Maybe they'll try the decoupling of a national/provincial VAT to let the provinces "compete" like they said they would, we'll have to see, but I seriously doubt this will be successful, like every other measure they've tried.

Excellent analysis, very well written.

One thing, though. In your final paragraph, you say "we're barely 2 years in to their mandate". Are you sure about that? Milei became president on December 10 of 2023. I make that a year and a half ago,. not two years.

 

[Che1990]

I think with the jump we saw this week it's a sign of things to come. There are cracks appearing in the plan llegar of Milei and Caputo but they go all red faced and call you a communist son of a bitch if you say so. Whatever happened to facts not caring about one's feelings?

Anyways, the important take away for this year is this, IMO: if the dollar remains flat and inflation remains anything above 0%/month, Argentina becomes more expensive in dollars, further decreasing competitiveness of exports (soy and otherwise), manufacturing, fossil fuels, etc. and increasingly pressure on outbound currency flows in the form of imports from abroad (capital goods by companies or courier by consumer), vacations abroad because it's cheaper to visit Brazil than MDQ, and consumption of digital goods.

The government is forced to balance all of this while trying to increase the seats they have in congress; the question becomes what happens the day after? I seriously don't understand what the long term plan of these guys are, they increasingly remind me of Massa and trying to get to tomorrow instead of next year. There's nothing left to cut, the number of people who don't live in poverty but report being increasingly unable to make it to the end of the month keeps growing, and the shift in LLA Troll Centers has gone from rebutting criticism of Milei/Caput's governance with facts to just screaming at people on social media in the comments or calling La Nación or other right wing/center media zurdos/Ks/LN12.

Maybe it was here or somewhere else I saw it, but Milei and Co. have now been forced to implement those weird K policies meant to stem the bleeding of macroeconomic mismanagement, this time via a lower VAT for domestic tourism and trying to separate out where Argentines are spending their dollars abroad in to more specific categories, as if that negates the negative balance of trade.

While I don't think we're nearing the collapse of the government, I do think we are nearing a radical change in how Milei and Caputo must govern. There's nothing left to cut, there's very little growth, and more dollars flow out than flow in. This isn't sustainable, and we're barely 2 years in to their mandate which means something has to change, but I don't know what that something is. The thing I increasingly see the non-screaming red faced Mileistas say is tax burden, but Milei has only increased taxes since gaining power. Maybe they'll try the decoupling of a national/provincial VAT to let the provinces "compete" like they said they would, we'll have to see, but I seriously doubt this will be successful, like every other measure they've tried.

Yeah the LLA trolls just show you how bad things actually are and how desperate they are to change the narrative

 

[Redpossum]

It looks like the Blue dollar has closed the day at 1280.

Go, dollar, go!

 

[Che1990]

It looks like the Blue dollar has closed the day at 1280.

Go, dollar, go!

I can get for 1275 on Binance, an improvement but still overvalued.

 

[Quilombo]

Excellent analysis, very well written.

One thing, though. In your final paragraph, you say "we're barely 2 years in to their mandate". Are you sure about that? Milei became president on December 10 of 2023. I make that a year and a half ago,. not two years.

Sorry Red, I didn't word it quite right, I meant to say that we'll be barely 2 years in come the midterms (and even less now)

 

[Che1990]

Massive intervention yesterday to stop the dollar going up. Blue touched 1350. Now, back down. The dollar is floating of course, the market setting the price, not the BCRA

 

[Wayne Tompkins]

Just a minor anecdote from the field that may or may not be relevant: My gf showed up today soaking wet from the rain and out of medication. Frantic, she dragged me in a downpour to a pharmacy that is mercifully only a block away. She needed to use my "tarjeta" to pay for her medicine, about $120 US. How on Earth are Argentines paying for their medicine when they don't have an idiot American boyfriend to bail them out?

 

[Che1990]

Just a minor anecdote from the field that may or may not be relevant: My gf showed up today soaking wet from the rain and out of medication. Frantic, she dragged me in a downpour to a pharmacy that is mercifully only a block away. She needed to use my "tarjeta" to pay for her medicine, about $120 US. How on Earth are Argentines paying for their medicine when they don't have an idiot American boyfriend to bail them out?

I left for my winter break at the end of May. I’m anxious about the prices and dólar when I’m back on 21st August.

It’s only a matter of time until the dollar kicks off again.