Peso posts sharpest weekly fall since Milei took office

[Konner_Long]

A glance at Wikipedia is all that's needed to debunk the would-be experts: "In economics, inflation is an increase in the average price of goods and services in terms of money". That's it, no mention of printing money. Things get more expensive, we see inflation.

If you read a bit deeper, classical economics identifies "three separate factors that cause a rise or fall in the price of goods: a change in the value or production costs of the good, a change in the price of money which then was usually a fluctuation in the commodity price of the metallic content in the currency, and currency depreciation resulting from an increased supply of currency relative to the quantity of redeemable metal backing the currency". The second factor is presumably no longer relevant, only the third factor implies printing money. The first factor is very relevant, particularly if you consider the US Dollar as a base against which to compare local production costs.

And no, going from 200% annualized inflation to 35% (not 20%) does not count as "quite a feat" when Milei was responsible for a large part of the 200% by devaluing the Peso by 54% in December 2023.

More understanding and less didacticism would be useful, perhaps?

This is why financial education is so important. An economics 101 course or, hell, even a 15-minute YouTube video would have saved us all time here...

 

[modulus]

This is why financial education is so important. An economics 101 course or, hell, even a 15-minute YouTube video would have saved us all time here...

Our built-in need to identity one simple fix/reason for complex issues is a well-studied phenomenon.

 

[Ries]

Where is Milton Friedman when we need him?

he is in the afterlife getting it on with Ayn Rand, and, boy, is Milei jealous.

 

[steveinbsas]

he is in the afterlife getting it on with Ayn Rand, and, boy, is Milei jealous.

Most of those who actually know the answer to the question "Who is "Ayn Rand? are probably well aware that she was an athiest, and the only ones experiin n encing Ayn Rand's "afterlife" are (speaking both literally and literarily) "We The Living."

Source: Goodreads https://share.google/HyMRh04q0KI43YUVM

"Ayn Rand's first published novel, a timeless story that explores the struggles of the individual against the state in Soviet Russia."

I first read this Signent paperback edition of "We The Living" n 1966 and "Nos Que Vivimos" is the one Ayn Rand novel that I recommend to my Argentine friends.

 

[Jerry Nelson]

Inflation is caused by printing money. Period. Point blank. End of sentence.
It has nothing to do with the relative value of that currency vs other currencies.
So long as the government continues to rein in the money supply, inflation will be controlled.

The “printing money = inflation, period” take is a little too neat. Printing money can cause inflation, but it’s not the only driver. Inflation is about supply and demand for goods and services, not just the number of bills floating around.

Think about it:

• If the government prints money but people save it (like during a recession), prices might not move much.
• If supply chains break (oil shocks, pandemic shortages, war), prices rise even if the money supply stays stable.
• Expectations matter too — if businesses think costs will rise, they raise prices early, which feeds inflation.

That’s why central banks don’t just “stop printing money” — they also raise interest rates, manage credit, and watch supply shocks. Currency value versus others also matters because imports get pricier if your dollar buys less abroad.

So yes, money supply is important, but pretending it’s the whole story oversimplifies reality. Economics isn’t “period, point blank.” It’s messy, and ignoring demand, supply, and expectations is like blaming the thermometer for the fever.

 

[FrankPintor]

Well, here we are... the Peso "fell by almost 0.4 percent to hit 1,474.50 pesos per dollar, beyond the upper level of the band, which was set at 1,474.345 pesos per US dollar for today".

Peso breaches trading limit, upends Milei FX strategy

Peso hits 1,474.50 per dollar, beyond the upper level of Milei administration's trading limit.

www.batimes.com.ar

"With the breach of the trading band, the Central Bank is now allowed to intervene directly in the spot market, a move that would involve tapping into its precious foreign currency reserves". Except that USD 500+ million were burnt to no effect just before the PBA election, so I wonder where the money will come from now?

I hope I can get my next batch of money in at the CCL rate of 1495 Pesos / Dollar before things go sideways.

 

[Ries]

Most of those who actually know the answer to the question "Who is "Ayn Rand? are probably well aware that she was an athiest, and the only ones experiin n encing Ayn Rand's "afterlife" are (speaking both literally and literarily) "We The Living."

Source: Goodreads https://share.google/HyMRh04q0KI43YUVM

"Ayn Rand's first published novel, a timeless story that explores the struggles of the individual against the state in Soviet Russia."

I first read this Signent paperback edition of "We The Living" n 1966 and "Nos Que Vivimos" is the one Ayn Rand novel that I recommend to my Argentine friends.

she was also adamantly against giving the "unearned and undeserved", and yet she gladly took social security. And rent control, and publicly subsidized health care. The social worker who helped her get on medicare and SS was quoted as saying- “Reality had intruded upon her ideological pipedreams.”
Everybody has principles until the bill arrives.
And there are allegations that while living she had an affair with Alan Greenspan.

I am an atheist myself, but my jokes can often involve heaven and hell.
Life, as the poet once said, is full of contradictions.

The part about Milei being jealous, however, is indisputable.
(but how can he be a good libertarian and an Orthodox Jew at the same time?)

 

[devilclam]

Well, here we are... the Peso "fell by almost 0.4 percent to hit 1,474.50 pesos per dollar, beyond the upper level of the band, which was set at 1,474.345 pesos per US dollar for today".

Peso breaches trading limit, upends Milei FX strategy

Peso hits 1,474.50 per dollar, beyond the upper level of Milei administration's trading limit.

www.batimes.com.ar

"With the breach of the trading band, the Central Bank is now allowed to intervene directly in the spot market, a move that would involve tapping into its precious foreign currency reserves". Except that USD 500+ million were burnt to no effect just before the PBA election, so I wonder where the money will come from now?

I hope I can get my next batch of money in at the CCL rate of 1495 Pesos / Dollar before things go sideways.

What's your take on how this will play out?

 

[IamWaldo]

What's your take on how this will play out?

turn the question around; who is now betting on the peso, and more importantly why?

Inflation is driven not only by supply and demand, but also by uncertainty.
Take for example the dollar;
The dollar is a safe heaven for decades.. but Donald is messing with it.. He is more unpredictable than Biden,Obama,Bush etc. etc.. and that makes the dollar weaker compare to the euro or to many other currencies.

Now take the peso as example;
people were believing in Milei in the start; that's why you saw a strong peso.. because they believed in his reforms.. and honest; it couldn't get any worse (inflation wise).. So they betted on the peso.. but he lost the election by a landslide.. so unless the elections bring something for him.. or the polls give any kind of indication that he might be closing the gap.. i am giving the peso little chance

 

[Caribbean Cool]

If you parallel 1918-1920.....looking at the dates....the election.....the fact that a lot of people are pissed off....and a lot of businesses are closing (yes here in Canitas-Palermo-Recoleta), it is reasonable to think of peso 1800-2000 easily. Or much greater levels. This will have consequences for all of us.......good and bad. (this deteriation of the peso lately might be 'chicken feed'.)