Traders bet on weaker Argentine peso as Milei’s IMF deal looms

[MilHojas]

Traders bet on weaker peso as Milei’s IMF deal looms

Investors see Argentina’s peso on the verge of devaluation again, but for Javier Milei, such a step could prove costly – especially ahead of midterm elections in October.

batimes.com.ar

 

[Vossos]

Spending 1 billion USD in 6 days to maintain the rate seems pretty astonishing and wildly unsustainable. Doesn’t that amount to something like 10% of GDP?

 

[carride]

Yesterday the eighth day in a row attempting to influence the market without luck. Now at a U$D 1.3b run.

https://buenosairesherald.com/economics/dollar-peso/informal-dollar-rate-surges-in-argentina-amid-imf-deal-uncertainty

 

[Dim Witty]

IMF loans come with disastrous conditions.
They require countries to implement rigid fiscal austerity measures, raise taxes, devalue currency, and privatize (more dismantling of “The State”). In short, a Neoliberal, Libertarian wet dream. A textbook modelling of a fascist oligarchy.

 

[LuckyLuke]

IMF loans come with disastrous conditions.
They require countries to implement rigid fiscal austerity measures, raise taxes, devalue currency, and privatize (more dismantling of “The State”). In short, a Neoliberal, Libertarian wet dream. A textbook modelling of a fascist oligarchy.

Humans when viewing animal behavior tend to anthropomorphize them which often fails to explain natural animal behavior such as mothers eating their young.

Americans, I would venture to say, tend to "Americanize" argentine behavior in that they see Argentina through an capitalistic, modern monetary theory, first world, reserve currency lens.

Fascism by definition is ultra-nationalistic and involves consolidation of The State, including the co-opting of private enterprise as State property. I don't see how dismantling The State is fascist though I would agree that Argentina seems pretty Oligarchic.

Libertarians tend to follow Austrian economics which requires a balanced State budget, which can seem very austere compared to Modern Monetary Theory which allows the state treasury to finance it's own deficits. However, a balanced budget is entirely reasonable for countries that have limited access to sell bonds on the foreign market to finance their public debts.

 

[Redpossum]

Humans when viewing animal behavior tend to anthropomorphize them which often fails to explain natural animal behavior such as mothers eating their young.

Americans, I would venture to say, tend to "Americanize" argentine behavior in that they see Argentina through an capitalistic, modern monetary theory, first world, reserve currency lens.

Fascism by definition is ultra-nationalistic and involves consolidation of The State, including the co-opting of private enterprise as State property. I don't see how dismantling The State is fascist though I would agree that Argentina seems pretty Oligarchic.

Libertarians tend to follow Austrian economics which requires a balanced State budget, which can seem very austere compared to Modern Monetary Theory which allows the state treasury to finance it's own deficits. However, a balanced budget is entirely reasonable for countries that have limited access to sell bonds on the foreign market to finance their public debts.

Ok, Luke, excellent observations

Now, can you repeat that but in terms you'd use to explain it to a not-too-bright 14-year old? Try it, please. Just as an exercise.

 

[Dim Witty]

Humans when viewing animal behavior tend to anthropomorphize them which often fails to explain natural animal behavior such as mothers eating their young.

Americans, I would venture to say, tend to "Americanize" argentine behavior in that they see Argentina through an capitalistic, modern monetary theory, first world, reserve currency lens.

Fascism by definition is ultra-nationalistic and involves consolidation of The State, including the co-opting of private enterprise as State property. I don't see how dismantling The State is fascist though I would agree that Argentina seems pretty Oligarchic.

Libertarians tend to follow Austrian economics which requires a balanced State budget, which can seem very austere compared to Modern Monetary Theory which allows the state treasury to finance it's own deficits. However, a balanced budget is entirely reasonable for countries that have limited access to sell bonds on the foreign market to finance their public debts.

Interesting: ..."the co-opting of private enterprise as State property" - How's that work?

 

[LuckyLuke]

Interesting: ..."the co-opting of private enterprise as State property" - How's that work?

Think of it like Trump deciding to mobilize the national guard to protect the US/Mexico border. He then decides that the Greyhound bus network is now required to transport all National Guard & immigrants awaiting deportation to detention centers. Then he mandates that Southwest Airlines will now be renamed to "Southward Airlines" and will dedicate all southbound flights to the deportation of immigrants. He then requires NIKE start producing all the National Guard uniforms and prison jumpers for immigrants awaiting deportation. Tyson chicken plants are to start diverting 50% of their products to feed the National Guard. Ford car factories will now start producing cages, handcuffs, retrofitting buses for transporting detainees. You get the idea...

 

[Quilombo]

Yesterday the eighth day in a row attempting to influence the market without luck. Now at a U$D 1.3b run.

https://buenosairesherald.com/economics/dollar-peso/informal-dollar-rate-surges-in-argentina-amid-imf-deal-uncertainty

Spending 1 billion USD in 6 days to maintain the rate seems pretty astonishing and wildly unsustainable. Doesn’t that amount to something like 10% of GDP?

Incredible isn't it? Despite this intervention it still resulted in the MEP/CCL closing at $1,304 and $1,306 respectively.

What does 1.3 billion dollars look like? Well...

- You could rebuild Bahia Blanca 4 times
- You could vaccinate 16,250,000 people against dengue
- Build 52,000 units of public housing for people living in villas
- Build 433 KM of roads
- Build a Small Modular Reactor (SMR) for a nuclear power plant
- A year's salary for 93,888 doctors
- Give every man, woman, and child in Argentina about $30/each

Or, as Milei and Caputo decided: try to keep the MEP/CCL dollars away from their real, market determined prices, making trips to Europe, the US, and Brazil cheap in pesos for the rich.

Good thing we: don't need to rebuild Bahia Blanca, don't need to vaccinate millions against dengue, don't have tens of thousands of people living in villas, don't need hundreds of KMs of new roads, don't have an electricity deficit in Argentina, and don't need more public sector doctors.

What a wise use of public funds; VLLC!

 

[carride]

Pablo Repetto, head of research for Aurum Valores brokerage, said Caputo had tried to reverse expectations of a devaluation, but failed to calm the waters. The Central Bank kept selling off dollars through the end of the week, shedding US$84 million on Thursday and US$192 million on Friday. With Friday’s results, the monetary authority has been on a ten-day selling streak in which it lost US$1.6 billion.

IMF confirms Argentina requested US$20 billion, conversations ‘very advanced’ - Buenos Aires Herald

Economy Minister Luis Caputo had said the country and the staff had agreed on the amount

buenosairesherald.com