Economists warn electing Milei would spell devastation

[Quilombo]

I think the non-disingenuous Milei fans would have to admit that at least for 6 months through a year or more things would be devastating, and I'm saying this as someone who doesn't want Massa or Milei to be president.

He's finally been admitting what many of us have assumed for a long time, it will be a market determined dollarization, which means the floor is $940 and the ceiling is infinity. Hyperinflation will occur in pesos, and elevated inflation in dollars will likely occur for a short period following the switchover due to shortages/economic downturn. This is what happens when you dollarize without reserves, and his team has been unable to get anyone/any organizations to extend a credit line to do so in the event of their victory.

Don't get me wrong, I think electing Massa will spell devastation, it will just be the slow, ongoing devastation since 2018 where Argentine regressed from being a high income country to being an upper middle income country, one of the few countries in the world to become poorer over time.

My crystal ball reading is that it doesn't matter who is going to be elected, poverty will increase, pensions and the minimum wage will continue to decrease, the peso will continue to fall in value, inflation will remain high, and nothing will improve because there is no political will to make long term, structural changes required to stabilize things.

 

[mc kenna]

And getting rid of public health and public education how does this help Argentina ? So many policies that are devastting for the working and middle classes .

Excuse me, have you seen or ever used public health and education yourself? i have, some of my family had and my balance tells me that you're better off seeing a witch doctor while you wait for your ''turno'', you see, sometimes creating the idea that someone will take care of you when in reality no one is coming is way worse than knowing you're on your own.
Education , i have nephews and godsons that they have no idea about basic survival everyday knowledge you need to interact in society , teachers can't write worth a shit much less teach how to write.
The doctor will see you three moons after the 31st of February so grandpa just go home and wait.
It is my understanding that Milei will review the performance of such services and perhaps offer a different way to do certain things, one thing is for damn sure, the quality of the services offered by this and previous governments is deplorable and if by any chance you find something that has some sort of humanity attached to it, it is due to the person that is treating you and not because of a norm or regulation.
There are tons of good people with good intentions in this land, we just lack the leadership needed to make them shine.

 

[retiredbanker]

Has anyone not seen the excessive vote buying of the govt here in support of Massa with bonuses being given to everyone and their uncle. And their sons and daughters! Does everyone now get a bonus and if so, where does the money come from (other than a printing press)? So all this money chasing goods and services only does one thing, much like a dog chasing its tail.

 

[antipodean]

Has anyone not seen the excessive vote buying of the govt here in support of Massa with bonuses being given to everyone and their uncle. And their sons and daughters! Does everyone now get a bonus and if so, where does the money come from (other than a printing press)? So all this money chasing goods and services only does one thing, much like a dog chasing its tail.

It’s called populism. The greatest disguise for industrial scale corruption ever.

 

[sergio]

I think the non-disingenuous Milei fans would have to admit that at least for 6 months through a year or more things would be devastating, and I'm saying this as someone who doesn't want Massa or Milei to be president.

He's finally been admitting what many of us have assumed for a long time, it will be a market determined dollarization, which means the floor is $940 and the ceiling is infinity. Hyperinflation will occur in pesos, and elevated inflation in dollars will likely occur for a short period following the switchover due to shortages/economic downturn. This is what happens when you dollarize without reserves, and his team has been unable to get anyone/any organizations to extend a credit line to do so in the event of their victory.

Don't get me wrong, I think electing Massa will spell devastation, it will just be the slow, ongoing devastation since 2018 where Argentine regressed from being a high income country to being an upper middle income country, one of the few countries in the world to become poorer over time.

My crystal ball reading is that it doesn't matter who is going to be elected, poverty will increase, pensions and the minimum wage will continue to decrease, the peso will continue to fall in value, inflation will remain high, and nothing will improve because there is no political will to make long term, structural changes required to stabilize things.

I think the non-disingenuous Milei fans would have to admit that at least for 6 months through a year or more things would be devastating, and I'm saying this as someone who doesn't want Massa or Milei to be president.

He's finally been admitting what many of us have assumed for a long time, it will be a market determined dollarization, which means the floor is $940 and the ceiling is infinity. Hyperinflation will occur in pesos, and elevated inflation in dollars will likely occur for a short period following the switchover due to shortages/economic downturn. This is what happens when you dollarize without reserves, and his team has been unable to get anyone/any organizations to extend a credit line to do so in the event of their victory.

Don't get me wrong, I think electing Massa will spell devastation, it will just be the slow, ongoing devastation since 2018 where Argentine regressed from being a high income country to being an upper middle income country, one of the few countries in the world to become poorer over time.

My crystal ball reading is that it doesn't matter who is going to be elected, poverty will increase, pensions and the minimum wage will continue to decrease, the peso will continue to fall in value, inflation will remain high, and nothing will improve because there is no political will to make long term, structural changes required to stabilize things.

Milei has the will to make long term structural changes however I don't think Congress has and I doubt that many citizens have the patience for serious reform. The deck chairs on the Titanic can be rearranged only so many times before the ship goes down. Without serious reform disaster is guaranteed.

 

[gringoexpress]

I think the non-disingenuous Milei fans would have to admit that at least for 6 months through a year or more things would be devastating, and I'm saying this as someone who doesn't want Massa or Milei to be president.

He's finally been admitting what many of us have assumed for a long time, it will be a market determined dollarization, which means the floor is $940 and the ceiling is infinity. Hyperinflation will occur in pesos, and elevated inflation in dollars will likely occur for a short period following the switchover due to shortages/economic downturn. This is what happens when you dollarize without reserves, and his team has been unable to get anyone/any organizations to extend a credit line to do so in the event of their victory.

Don't get me wrong, I think electing Massa will spell devastation, it will just be the slow, ongoing devastation since 2018 where Argentine regressed from being a high income country to being an upper middle income country, one of the few countries in the world to become poorer over time.

My crystal ball reading is that it doesn't matter who is going to be elected, poverty will increase, pensions and the minimum wage will continue to decrease, the peso will continue to fall in value, inflation will remain high, and nothing will improve because there is no political will to make long term, structural changes required to stabilize things.

Dollarization won't fix a thing. There's inflation in the USD as well, granted, less than in the peso but still significant. I have a house in Brazil and visit El Salvador frequently so I have front row seats to all of this, inflation in the USD is bad. Things in BRL have not shot up in price near as quickly. All the expats on Social Security voting for Massa out of self interest because they can't afford to live in the US understand some of this, but voting to continue impoverishing the people of Argentina to survive is not the only option. In El Salvador, with both USD and Bitcoin being legal tender, many people are starting to use Bitcoin for daily transactions. It's dead simple to use now and it works, and it can't be inflated by any central government. Many people in Argentina understand all of this and use Bitcoin as a form of savings, but it's still nearly impossible to spend directly here, in large part because of AFIP and currency control regulations. If Millei can simply neuter AFIP so people can choose which currency they want to use, I believe Argentina is a prime candidate for Bitcoin adoption, and the country can finally break out of this awful cycle of politicians printing money to keep themselves in power and ultimately robbing the money from the very people they are handing it back to.

The economic situation will be devastating for everyone anywhere when all the money printing and virus stupidity of the past few years comes to a head. The only solution is to allow people to use sound money. Argentina has a real chance to do just that with Millei.

 

[Reply Guy]

My crystal ball reading is that it doesn't matter who is going to be elected, poverty will increase, pensions and the minimum wage will continue to decrease, the peso will continue to fall in value, inflation will remain high, and nothing will improve because there is no political will to make long term, structural changes required to stabilize things.

I tend to agree with that statement. Since Massa and the Ks have already brought misery and devastation to Argentina, I can't imagine rewarding them with 4 more years.

If Milei wins will things get better, probably not, but let's at least try something different.

He's not proposing the same economic policies as Menem, the Junta or other past governments.

 

[Jerry Nelson]

Your statements are speculative at best, when you claim that Milei will be better for everyone else, especially when it contradicts what many people, including numerous economists, are saying. Furthermore, many people intend to vote against him.

You made a sweeping statement, asserting that Milei will be better for everyone else. When you combine this with your previous post, you are disregarding the significance of a woman's right to control her body and gay rights. These social issues are intertwined with the economy, particularly for those who are gay and pro-abortion. For instance, Milei might not provide job protections for gay people, or he may choose not to offer support to women seeking abortions. Therefore, I would argue that your statements are entirely incorrect.

Do I REALLY need to point out yours are speculative as well?

 

[Quilombo]

Milei has the will to make long term structural changes however I don't think Congress has and I doubt that many citizens have the patience for serious reform. The deck chairs on the Titanic can be rearranged only so many times before the ship goes down. Without serious reform disaster is guaranteed.

My issue is that dollarization is gimmicky, if he was serious about structural long term reform he would do things like an independent BCRA, prohibit monetary transfers from the treasury to cover budget shortfalls, implement a positive real interest rate both for loans and savings, etc.

We've talked about how so much of Argentine society thinks there's a shortcut to life, and that's just what dollarization is hoping to accomplish, it's akin to a diabetic blinding themself so they can't see chocolate; yeah, it might work, but wouldn't it be better and less chaotic to actually address on the core issues?

I tend to agree with that statement. Since Massa and the Ks have already brought misery and devastation to Argentina, I can't imagine rewarding them with 4 more years. If Milei wins will things get better, probably not, but let's at least try something different. He's not proposing the same economic policies as Menem, the Junta or other past governments.

I think this is what motivates 75% of the people that are/will vote for him, they're not true believers/don't care for the anarcho-capitalist schtick, they're just willing to try anything different. That being said, if Milei loses, it won't be because Massa was a better candidate or some grand conspiracy that the 25% of Milei's fellow travelers keep talking about as being perpetuated against him, but rather because Milei will manage to have snatched defeat from the jaws of victory.

All he had to do was be "normal" and not talk about overly polarizing things, something he's learned too late it seems based on the general election results. Massa is one of the worst economy economy ministers in the world, all the socio-economic metrics are negative and would be a cakewalk for any opposition figure, yet it's a coin toss because Milei can't stop talking about dumb shit.

We'll see who wins a week today, but I stand by my prediction that the average Argentine is in for a world of pain.

 

[Big Swifty]

In the countries that dollarised wasn't inflation tamed?

Not in Lebanon. I wish I could remember the name of the podcast I listened to on this subject several months ago where they went in depth on the effects of using the dollar on the economy, told primarily from the point of view of merchants. It didn't eliminate the problem as much as it just changed the details of the problem - 6 of one, half-dozen of another. Might have been a TED Talk.

Here's a link and summary on inflation in Lebanon I just Googled showing that inflation has not only not be tamed, but is predicted to rise.

Lebanon's Inflation Will Reach Highest Post-War Level In 2023

Key View We expect that Lebanon’s inflation will accelerate from 171.2% in 2022 to a nearly four decade-high of 255% in 2023. Additional hike in custom tariffs, weaker currency and

www.fitchsolutions.com

We forecast that Lebanon’s average inflation will surge from 171.2% in 2022 to 255% in 2023, the highest rate in nearly four decades....

A country is certainly free to run their economy as they want and use whatever currency they choose. I just think it's short-sighted to solve a current problem by surrendering monetary autonomy to the US Federal Reserve (who obviously doesn't make decisions at all based on the needs of ARG) as well as several other disadvantages that can easily be found with a Google search. I don't think it's the easy solution some people believe it to be, even those who acknowledge it won't be an instant fix. I think the problems are such that changing the currency isn't so much a solution as it is something that makes people think something is being done - maybe like rearranging deck chairs on the Titanic. But I get the sentiment of taking away responsibility from people who have continuously proven that they aren't responsible.