The economy will be dollarized soon... it has to be.

[Ries]

Nobody knows.
NDAs are in place.

 

[Bajo_cero2]

How do you expect to dollarize without dollars is a mistery…

 

[jlynch]

How do you expect to dollarize without dollars is a mistery…

There is no shortage of dollars in Argentina they are just not available to the government.
All the dollars stored in mattresses and in overseas bank accounts. A trustworthy government could entice some of them into banking system through amnesties etc. Get all argentina entrepreneurs back from Uruguay. Encourage investment in the country. All the dollars Massa will collect from the FATCA agreement with the US, they should be arriving soon!!!

 

[Quilombo]

How do you expect to dollarize without dollars is a mistery…

This is what I keep telling people: dollarization is great for those with dollars, but the lie being sold by Milei that dollarization will basically be making the blue the official exchange rate is BS, there are no reserves, and who is going to lend money to a country that has 130%+ inflation and is about to cause a gigantic recession by changing currencies/broader economic policy. If Milei comes first or even second in the PASO I'm personally guessing a blue of at least double today's value because it will be cheaper than whatever the exchange rate once he takes office, and even more so than when dollarization occurs.

There is no shortage of dollars in Argentina they are just not available to the government.
All the dollars stored in mattresses and in overseas bank accounts. A trustworthy government could entice some of them into banking system through amnesties etc. Get all argentina entrepreneurs back from Uruguay. Encourage investment in the country. All the dollars Massa will collect from the FATCA agreement with the US, they should be arriving soon!!!

The only thing I remember about the "lluvia de inversiones" was that it never happened, despite us being told it was always on the horizon under Macri. I suppose the Milei types would say it's because he didn't go hard enough and wasn't sufficiently pro-business, but I don't personally agree with that take myself.

The next signal will be Friday when the latest inflation numbers are published and I'm guessing they're going to be bad.

 

[laurencio]

I have trouble explaining to my bank that I need new, unblemished, untorn, un-ink-stamped, un-written-on $100 bills.

 

[FrankPintor]

I have trouble explaining to my bank that I need new, unblemished, untorn, un-ink-stamped, un-written-on $100 bills.

It's quite difficult to deposit money at an ATM, with the awful condition of the banknotes jamming the ATM mechanism. Or the ATM just spits everything out again. And I mean the 1000 peso ones, which should be in better condition since they're newer. 500 peso notes are a pita.

 

[Reply Guy]

The only thing I remember about the "lluvia de inversiones" was that it never happened, despite us being told it was always on the horizon under Macri. I suppose the Milei types would say it's because he didn't go hard enough and wasn't sufficiently pro-business, but I don't personally agree with that take myself..

Curious, what do you think the reason was?

 

[Quilombo]

Curious, what do you think the reason was?

I think the overriding reason was lack of systemic trust and a low ROI from the POV of international firms/investors, which is the same reason I think dollarization, a new currency, etc. will all fail until the core issue of stability is addressed.

At the end of the day companies are interested in making money, and they rightfully surmised that whatever opportunity there was to do so here, it wasn't worth the risks/byzantine regulations when it can be done easier in neighboring countries and other regions. I'm not saying it's ethical or I agree with that from a philosophical perspective, it's just the reality that Argentina's economy at a macro level isn't attractive to businesses unless you're one of the monopolies that already exists here or are a Peronist/JxC aligned company that has their blessing to extract wealth for kickbacks or whatever.

You don't make Argentina attractive to businesses by getting rid of the minimum wage or busting unions or making a 60 hour work week, you make it attractive via stability. Money goes to where the rules of the game are clear, and that's not possible in Argentina as we just lurch from crisis to crisis for almost 100 years straight now.

 

[Reply Guy]

Thank you. That make sense.

How does any president make it more attractive? Even if one president arrives in office and implements reasonable rules and regulations, investors will still fear that the next president may reverse the changes. I don't see any realistic fix.

I think the global macro environment improves over the next decade and favors countries like Argentina, but that anything politically is done to capture and create sustainable growth is hard to imagine. I've been here too long, not to be cynical.

 

[Quilombo]

Thank you. That make sense.

How does any president make it more attractive? Even if one president arrives in office and implements reasonable rules and regulations, investors will still fear that the next president may reverse the changes. I don't see any realistic fix.

I think the global macro environment improves over the next decade and favors countries like Argentina, but that anything politically is done to capture and create sustainable growth is hard to imagine. I've been here too long, not to be cynical.

I think it requires a cross party political consensus that both acknowledges what the country has been doing is not sustainable, and that whatever changes are made, they are agreed to for a longer period of time than 4 years.

However, given the current political alignments within the country, that's not possible unless JxC and Milei together get say 60% of the votes and shutout the Peronists from wielding power. I specifically mention them not because I agree with the right wingers (much to the contrary) but because the Ks/PJ are the ones who are convinced that printing money doesn't have any consequences as we barrel towards 200% inflation and 300% interest rates on credit cards.

I don't think the country needs a shock therapy of neoliberalism or to reinvent the wheel, we can start small via something as simple as having spending be in line with tax collection, and I don't even think we have to go even as far as eliminating social plans to accomplish this like Bullrich and Milei want to.

Hell, if the Peronists don't want to take the economic problems seriously you can turn the screws on them by doing something like framing the debate as Aerolineas Argentinas vs Potenciar Trabajo; we're a developing country and only have enough money for one, so which is it? the blackhole of Air Campora that sucks up billions of USD so rich people can fly on an Argentine airline to Miami or Madrid, or a meager social plan that keeps people from starving to death? I think most people would logically agree that it's better to keep the social plan, and it has the added benefit of pining the piquietros against the Campora and exposing the later for being the lazy assholes; most people who collect social plans do some work, while the Campora are basically ñoquis who have achieved state capture of various bodies, sucking up funds from people that actually need the government's help.

But I digress, much like yourself I'm rather cynical, and even more so after reading LLA's platform/their VP's comments (I hated them before, but even more so now); these people are much more interested in "owning the libs" than solving Argentina's systemic problems, they basically want to legalize shooting piquietros, further privatize healthcare, ban abortion, and pretend LGBT don't exist at best, and disappear us at worse.