Argentina's President-elect Javier Milei said on Friday that the closure of the country's central bank, a signature campaign pledge, was a "non-negotiable matter", according to a statement from his office posted on social media platform X.
The long term effects are going to be serious whiplash. The monetary regime would go from severe inflation to super low inflation (below what Argentina needs). They will essentially be using Argentinian Government funds to buy US dollars, thereby helping the US keep its inflation under control.
That’s good for the US, but Argentina may fall into a recession. Growing economies need a growing money supply or businesses will not be able to borrow money to expand. By essentially hitching their economy to the slower growing US economy, Argentina is ensuring that their businesses pay high interest rates to borrow money. The US government is paying you 5%, risk free. Why tf would anyone loan money to Argentina less than 10-15%?
Remember how US tech companies all fired people at the same time when the Federal Reserve increased interest rates (it happened)? That’s what will happen to many companies in Argentina at the same time.
Edit: lol, he was just lying about “dollarization” for votes because it’s nuts:
He added no dollarization was planned in the short-term, as fiscal and monetary stabilization were need, the first source said.
Yes, its gonna be serious and difficult, but like said they are willing to put up with it… with they I mean the 55% that voted him of course…
And no, the dollarization was not a lie, like he said (his whole campaign…) it’s for the long term, first comes solving the gigantic Economical Deficit the State currently generates, then it’s Public Organization’s and then cutting taxes, only then he’ll move forward with it obviously because otherwise is suicide.
And this is very important to remark: News Outlets other than Javier Milei’s Official Twitter Account or the Government’s Official Channel (after December 10) ARE NOT TO BE TRUSTED. You may think this is just him shielding against media “calling him out” but there is a serious issue with Argentina’s News outlets: They are funded by the current government and are VERY functional to it. Other International Media arent necessarily but yeah it’s obviously more profitable to report “Argentina’s new president is A NAZI” than “Argentina’s New President Denies the Made up Number of Dictatorship deaths” (which just in case, the authorities that made up the number did confess to making it up in national TV)
Hell, its even as bad he’s been putting “Official Communication” posts to clarify that what the media is saying about his proposals or plans is false, including those claims of him backing down on Dollarization.
The long term effects are going to be serious whiplash. The monetary regime would go from severe inflation to super low inflation (below what Argentina needs). They will essentially be using Argentinian Government funds to buy US dollars, thereby helping the US keep its inflation under control.
That’s good for the US, but Argentina may fall into a recession. Growing economies need a growing money supply or businesses will not be able to borrow money to expand. By essentially hitching their economy to the slower growing US economy, Argentina is ensuring that their businesses pay high interest rates to borrow money. The US government is paying you 5%, risk free. Why tf would anyone loan money to Argentina less than 10-15%?
Remember how US tech companies all fired people at the same time when the Federal Reserve increased interest rates (it happened)? That’s what will happen to many companies in Argentina at the same time.
Edit: lol, he was just lying about “dollarization” for votes because it’s nuts:
https://news.yahoo.com/finance/news/milei-economic-team-led-former-175214678.html
Yes, its gonna be serious and difficult, but like said they are willing to put up with it… with they I mean the 55% that voted him of course…
And no, the dollarization was not a lie, like he said (his whole campaign…) it’s for the long term, first comes solving the gigantic Economical Deficit the State currently generates, then it’s Public Organization’s and then cutting taxes, only then he’ll move forward with it obviously because otherwise is suicide.
And this is very important to remark: News Outlets other than Javier Milei’s Official Twitter Account or the Government’s Official Channel (after December 10) ARE NOT TO BE TRUSTED. You may think this is just him shielding against media “calling him out” but there is a serious issue with Argentina’s News outlets: They are funded by the current government and are VERY functional to it. Other International Media arent necessarily but yeah it’s obviously more profitable to report “Argentina’s new president is A NAZI” than “Argentina’s New President Denies the Made up Number of Dictatorship deaths” (which just in case, the authorities that made up the number did confess to making it up in national TV)
Hell, its even as bad he’s been putting “Official Communication” posts to clarify that what the media is saying about his proposals or plans is false, including those claims of him backing down on Dollarization.