The USD Depreciation usually has no effect on the Peso in Argentina as Argentina is in a league of it's own. It's currency is heavily restricted and has capital controls. All of Argentina as far as I'm concerned is not worth investing and the international community agrees with me. The international community only puts their money into financial assets, i.e
I have deleted most of your quote due to character limits on posting.
1) The devaluation of the dollar absolutely has an impact on the value to Argentinian pesos. The relative strength of different economies is representative in the relative differences in the exchange rate over the last year, otherwise they would all change the same agaisnt the USD. If not, please point me in the direction of the arbitrage opportunities between other currencies for the infinite money glitch.
2) What are the heavy restrictions and currency controls? For the most part it is operating freely.
3) Its pretty amazing that the peso has been getting stronger over the last 6 weeks even with the government purchasing about $1.6B of USD to build reserves and pay debt.
4) International community is looking at investing in Argentina. San Juan has multiple major mining projects going on both expansions and new sites. Rio Tinto is building a lithium mine in Salta. American Oil production looks to have peaked in October, nevertheless, the Permian basin and shale production is leveling off and will begin to decline due to the aging and lower quality of wells. The oil service companies have already said they are looking at other places to go internationally with most looking to the middle east, and some looking at expanding in Argentina due to the similar shale resource. You can listen to their quarterly calls. Saputo (Canadian) just sold 80% of La Paulina to a Peruvian company. Saputo focusses on different regions globally (Canada, US, Australia, UK) and this new company is expanding through South America.
5) The US government thus far hasn't even been willing to underwrite and guarantee investment in Venezuela and isn't guaranteeing anything about recovery of debts there, where is your proof that companies risk is mitigated when investing in Argentina? The fact that the RIGI regimen was passed as law and not decree provides additional security to international companies.
6) That is why the banks only setup a loan facility far smaller than the 20B Bessent initially suggested, due to risk, but its not being secured by the US government.
7) The country risk has decreased from 1800+ to now around 500. That is how financial institutions price risk. So now its US Interest rate plus 5% instead of 18%. It has dropped remarkably. You can suggest whatever you want, but the financial markets are what counts in practice and they are responding positively.
8) Based on your logic no country could ever turn itself around from poor economic history yet they do. And this government is meeting debt obligations, and they have implemented austerity measures and are operating at a fiscal surplus, etc. This is again indicated by the country risk, so its not a point of discussion but fact.
9) The fact that Milei won the mid-terms with far more support than expected and the left still hasn't presented any reasonable opposition, and a younger generation that is more supportive of the right, I am not sure what is indicating the political instability you mentioned. The squeaky wheel gets the grease so that might be what you hear in the news but it isn't the feeling of the population. People understand that 60% of the economy is informal and a country cannot sustain itself that way.
10) Growth has already stalled, so if that is it, why is he going to win in 2027?
11) What exactly is the currency manipulation going on that you keep on talking about? The government is purchasing much less than it and the US treasury did prior to the election and the dollar is going down. And they are purchasing to build reserves and pay foreign debts. They are now burning pesos to reduce inflation impacts and trying to balance interest rates in doing so. But other than around the election due to news being made by the left, the pesos is not near the limits of the bands and is being freely traded.
12) The comment about living off the government was not about handouts. It was about previous governments supporting a far stronger peso creating parallel exchange rates that allowed you to effectively live at a massive discount when the Blue dollar was double or triple the official dollar.
13) What is he doing that is absolutely destroying the country? Are there not protectionist policies that have been in place for decades in the country? Are industries just not competitive against the rest of the world even with salaries what they are here? The textile industry being called out by Caputo is a great example. Similar to the Techint callout for the pipeline bid where they were willing to accept an Argentian bid 10% higher.
14) What ethics or lack of morals are you seeing in business here? Have you actually tried to perform on a cost basis analysis of a business here? To be able to make almost any profit for a restaurant for instance, the meal would need to cost about 4.5x the cost of food. There are some pretty heavy taxes here compared to other countries. They also don't have access to cheap money like in many parts of the world for loans etc. So either they are getting killed on that or they need to invest 100% without loans. Buenos Aires seems to be exceptionally more expensive than other parts of the country, but that is the Free Market. If people stopped buying Empanadas at 50k/dozen then the prize will come down. If they continue to pay that then they see it as "worth it". This is no different than the greed that has ripped through North America since the pandemic.
15) I find Argentinians and other nationalities that live here to be quite friendly and easy going and great people. If you believe they are unethical and morally compromised and treat them as such, then I guess the question is are they treating you different because of how you treat or project onto them or is that just how they are?
16) I don't understand what you mean by being a foreigner is seen as a step up. Are you suggesting that they accept that you are better than them because you are a foreigner? I have never come across this anywhere in the world. If anything, they would see you as a source of money.
17) How much more and on what basis do you see prices going up? At some point it cannot because literally there is no money to be spent on it. Consumption at supermarkets is going down. With regards to meat, the price jumped in December when the quota to the US increased because now they need to compete more globally for cattle. But the price of meat is still far cheaper here than it is in the US or Canada. I still find that the costs of goods at restarants haven't doubled since last year in USD terms, and the cost of inputs (supermarket, fruits and vegetables) to be fairly stable or even cheaper here over that time. I do not live in BA. The price of other items has decreased significantly, air conditioners, fridges, kitchen appliances etc.
18) The price of restaurants is not only based on the price of food. There is also rent, labour, utilities etc, which have all increased as well. Again, actually try and calculate what the cost would have to be to operate profitably.
19) Provide evidence that inflation is 10% a month. My rent is not increasing based on that amount, nor am I observing any prices increasing at that rate. You are referring to when the government had INDEC control the values etc. That is not at all what is going on now nor the discussion around changing the basket used to calculate inflation. That is based on a survey from 2018 which is being called into question now as not being representative given the cost of services etc. Changing it now, also makes it difficult to compare with previous periods. ie post pandemic under previous governments when it was far worse. Nobody in this thread is talking about the US or Trump. What is occuring in the US is not the topic of discussion here. and based on your previous statements, the value of the USD does not impact the peso.
20) You have not provided any examples, but are making fairly sweeping statements. It appears that this government is making changes and those are being accepted by the population hence the midterm results, and foreign institutions as indicated by the markets, willingness to invest, and country risk to loan.
