US ready to help with Argentina's fiscal turmoil

January Rug Pull surprise?


WSJ not reporting what was reported everywhere else

"In 2026, the country will face debt payments of US$4 billion in January and US$4.5 billion in July. The Central Bank has not accumulated international reserves in recent months and Economy Minister Luis Caputo promised last week that the monetary authority would sell “down to the last dollar” to support the value of the peso. The circumstances have left economists asking how that debt would be paid."
 
Sounds like Bessent is 'The Decider' today?

"Congress allows the Treasury secretary to have full control over the use of the exchange stabilization’s funds."

Or does the Fed Reserve have a say in it?

"Although Bessent said that a central bank swap line is among tools that could be deployed, the Treasury does not have direct control over swap lines.
That remains the purview of the Federal Reserve and its swap lines have been designed more to avoid global contagion and blow-back from foreign crises into the U.S. economy. Bessent on Monday said he did not expect contagion from the Argentine crisis.
A Fed spokesperson declined to comment on the possibility of a U.S.-Argentina swap line."
 
carride said:
The Central Bank has not accumulated international reserves in recent months and Economy Minister Luis Caputo promised last week that the monetary authority would sell “down to the last dollar” to support the value of the peso.
Click to expand...

This is gut-wrenching...to say the least.
 
Jeez it’s happening again.

The dollar starts to correct itself and then the government gets a loan to maintain the artificial exchange rate.

Exactly what’s happened throughout the Milei regime. The blanqueo, the reduction in alícuotas, the FMI loan, now the temporary scrapping of retentions and now a Trump loan.

What’s next?

2 days ago the dollar crypto was at 1550, actual reasonable. 2 days later it’s down to 1400.

All because of short term measures that will cause pain or problems later on.

😡
 
Che1990 said:
Interesting to see what will happen with this and what conditions they put on it.

Trump will come out of this winning. There will be instant concessions made, no conditional agreements later on as they know Argentina doesn’t stick to its commitments.
Click to expand...

Probably no conditions. Bessent is in panic mode as the last thing he wants is more dollars being sold on the world market. The dollar is taking a shellacking in the market as the major players are trading their cash and dollar-denominated bonds for gold and (now) silver. The USA has only itself to blame as no-one now trusts it after Biden froze Russian dollar assets. The new tariffs by the Trump administration are not helping either.

There's a good recent video on this (albeit you have to strain to decipher his accent):

 
bigbadwolf said:
Probably no conditions. Bessent is in panic mode as the last thing he wants is more dollars being sold on the world market. The dollar is taking a shellacking in the market as the major players are trading their cash and dollar-denominated bonds for gold and (now) silver. The USA has only itself to blame as no-one now trusts it after Biden froze Russian dollar assets. The new tariffs by the Trump administration are not helping either.

There's a good recent video on this (albeit you have to strain to decipher his accent):

Click to expand...
I don’t know. Consider how desperate Argentina is for dollars, surely there will be some Trump demand like a base in Ushuaia or kicking the Chinese out of Neuquén.

I understood it’s all for geopolitics - countering China in the region, and gaining access to the Antarctic.
 
Che1990 said:
The dollar starts to correct itself and then the government gets a loan to maintain the artificial exchange rate.

2 days ago the dollar crypto was at 1550, actual reasonable. 2 days later it’s down to 1400.
Click to expand...

I did not actually log in to WU, but it looks like their exchange rate is bak down to 1.471 from the recent high of 1.514.

USD to ARS | Convert US Dollar to Argentine Peso https://share.google/VyvpjDR32amRNrtGY
 
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