Of course it is. Gold and bitcoin are investment opportunities at best, financial bubbles at worst. People are free to gamble their money any way they want.
At the end of the day, global trade isn't done in either. You need legal tender to pay for your obligations.
Over 50% in poverty and 166% anual inflation, but we got a surplus!!1!
Obligatory, " , that sounds like California" post/gripe/whine.
the difference in quan y is a difference in quality
"the caste" won't be paying for it, th middle class, small businesses and poor people will.
First Year of Javier Milei's Economic "Miracle": Plunging Inflation, Surging Poverty, Rising Inequality and Slumping Industry | naked capitalismNo V-Shaped Recovery. In their first months in office, Milei and his Economy Minister Luis Caputo insisted that the economic pain would be short-lived and that the economy would begin recovering by late spring/early summer. That hasn’t happened. According to the OECD’s latest forecast, the economy will end up contracting by 3.8% this year — 0.5 percentage points more than it had predicted in May. If so, Argentina is on track to suffering the sharpest contraction of any economy in Latin America, including war-torn Haiti.
Slumping Industry. In theory, economic shock treatment is supposed to work in the private sector’s favour. The question is: whose private sector? And which part of the private sector? As the Argentine economist Guido Agostinelli recently told the Brazilian-Mexican podcaster Diego Ruzzarin, the three industrial sectors that have grown the most over the past year — agriculture, mining and oil and gas drilling — are all generally extractive in nature:
“They introduced big incentives for foreign companies to come, invest and extract… By contrast, industrial manufacturing is slumping.The Utilisation of Installed Capacity index perfectly illustrates the state of Argentina’s manufacturing industry, says Agostinelli. The current reading is 55%. To put that in context, it is roughly the same as the average level recorded during 2020, the year of COVID-19 lockdowns when economic activity worldwide fell off a cliff. Many companies have already fallen by the wayside. As of mid-November, 16,500 small and medium-sized enterprises had closed, according to the National Productive Front. From Ambito(machine translated):
The collapse in domestic consumption (NC: estimated at around 20%), the increase in service costs and the difficulty in exportingdue to an uncompe ive dollar are three of the main factors behind this worrying trend. The CAME estimates a 13.2% drop in sales of SME businesses, an alarming figure that reflects the impact of the recession on consumption.
This figure is supplemented by the closure of 10,000 kiosks and warehouses and the loss of 160,000 jobs in the sector. The crisis deepened in the second half of the year, according to the Association of National Businessmen and Women for Argentine Development (ENAC). Between July and October, another 6,500 companies stopped operating, adding to the 10,000 that had already closed in the first half of the year.
The Milei government’s austerity program is not being applied across the board. Readers will no doubt be surprised to learn that one of the few areas where spending is rising sharply is defence and security. According to the draft General Budget Law of the National Administration for Fiscal Year 2025, some US$ 6.2 billion (6 trillion pesos, at the official exchange rate) will be allocated to Defence and Security Services, representing 5.1% of the total budget.
This trend is likely to continue for as long as Milei is in power. If the 2025 budget is approved and the projections are fulfilled, spending on Defence and Security in Argentina is forecast to climb to between 0.8 and 1% of GDP. But that is still well short of the 2% threshold recommended by the North Atlantic Treaty Organization, NATO, of which Milei is determined to secure membership for Argentina as a global partner.
So, while many Argentine retirees have to choose between food or medicine, the amount of public funds earmarked for US and European-made weaponry is almost certain to grow. The government has also proposed creating a security agency to implement AI-driven “pre-crime”, which is about as far removed as government policy can possibly get from the basic principles of liberalism or libertarianism. From the government’s official bulletin (26/11/24):
That the advancement of technology, in particular Artificial Intelligence, represents one of the most relevant socio-technological changes for the general population.
That countries such as the United States of America, China, the United Kingdom, Israel, France, Singapore, India, among others, are pioneers in the use of Artificial Intelligence in their areas of government and Security Forces.
That the aforementioned countries use Artificial Intelligence in Video Analysis and Facial Recognition, Crime Prediction, Cybersecurity, Data Analysis, Drones and Robotics, Communication and Coordination, Virtual Assistants and Automation, Social Network Analysis and Fraud and Anomaly Detection.
same old story?
[Argentina] still owes $31 billion to the IMF — equivalent to 5% of GDP. In the next year alone, Argentina’s treasury must make $11.29 billion of debt payments, and to do that it must ac ulate enough US dollars. In November, Caputo and the IMF announced that they were in early talks about a potential new debt agreement.
Meanwhile, there’s still no word of when Argentina’s all-important cepo currency controls will be lifted. While lifting those controls could lead to a run on the peso, failure to lift them will make it harder to attract new foreign investment. Given how much US-denominated debt Argentina must repay next year, foreign investment is desperately needed.
The government and central bank were able to get enough dollars to keep themselves going this year through three main measures: a one-off ‘blanqueo de capitales’ (assets amnesty for capital repatriation), which brought in a reported $23 billion; the pawning of a large chunk of Argentina’s gold reserves, which has been conveniently forgotten in recent months; and a high-risk financial manoeuvre called the “financial bicycle,” which essentially encourages traders to engage in high-risk carry trades and is costing the government a fortune.
From El País:
If you are Argentine and can save, you will almost certainly do so in dollars. But imagine the government tells you that it will depreciate the peso at a rate of 2% per month. But if you buy pesos, it will pay you between 4% and 5% interest on them monthly. Your financial advisor will then recommend a very simple operation: exchange your dollars for pesos, buy bonds with those pesos or put them in a fixed term interest account, and buy dollars again once the difference has been harvested at the end of the month.The financial bicycle has not only brought in a substantial haul of dollars for Argentina’s central bank, it has also helped to “flatten” the dollar, which in turn has helped to bring inflation (in pesos) down. But it cannot go on indefinitely. For a start, it’s hugely expensive, having so far set the government back an estimated $100 billion. It is also riddled with risks:
The difference between the peso depreciation promised by the government and the interest rate you will have received will determine your profit margin. It sounds like a tongue twister, but it is an operation with a name and a surname: In Argentina, it is known as the “financial bicycle”; traders prefer to call it carry trade. It involves investors buying riskier currencies in the hope of pocketing enough interest to more than cover exchange rate losses.
The carry trade was a classic investment model during the Argentine dictatorship of the 1970s, revived in 2016 with Mauricio Macri, and now back again with the far-right leader Javier Milei. Argentines who have “ridden” the bicycle have gained up to 50% profit in dollars over the space of 10 months, another miracle to emerge from the Argentine macroeconomic meltdown.
The government and its supporters maintain that the dollar fell because there was fiscal adjustment, there is no more issuance, and therefore there are no pesos left over to put pressure on the demand for foreign currency. However, this coexists with another phenomenon. The same government offered exorbitant rates – 45 percent per year in dollars – for investors to sell dollars in exchange for buying government bonds that would pay for that fortune. That happened. And so the dollar collapsed. It’s called a carry trade and it has always ended badly.
In addition, the cheap dollar is beginning to generate classic and rapid effects on the deterioration of the external accounts, which will deepen as time progresses. Thus, while some hope that a new cycle has just begun in Argentina, others believe that what has happened so many times before will once again be repeated: inflation is controlled thanks to the cheap dollar, which is financed unsustainably with debt or scarce resources, and which is crippling the country’s productive structure.
At the end of the road, for some, there is prosperity.
That's how it is in California. All us schmucks are footing the bill, getting less and less in return.
that's not peculiar to California, the whole system works that way
Huge difference between NATO membership and NATO partnership. Ukraine knows this. Argentina should be spending at least 1% of GDP on defense for its own good.
Half the country is under the line of poverty. Priorities, I suppose
Well he's getting inflation under control and the budget looking good which is more than past governments did, so he's got the country on a better path.
Argentina got ass raped by a bag England in the Falklands.
I can only imagine the floppers in a real battle
There is no ref to call a fake penalty in war
Getting inflation and the budget under control isn’t putting food on the table. The economy shrank this year.
There are still tight currency controls and the central bank reserves are still negative.
I mean, I wish him well, but you gotta get your priorities in order. Argentina isn’t in a position to start a war with anybody right now. Last I heard they’re buying F16s from the US, a monumental waste of money while you have people literally starving.
There are people literally starving in America but we spend $1 Trillion on defense annually now. And some people want to send even more to Ukraine.
I’m all for a more solid safety net in the US, even though you’re comparing apples and oranges.
As far as military spending, review and cut MIC contractors. That’s where the money is going. Ukraine is cheap and money well spent.
It's terribly spent and who knows how much is lost to corruption. And Ukraine is just another excuse to spend endlessly on the MIC contractors.
I’m not going to defend the MIC, but still substantially cheaper than being directly engaged in an armed conflict. If I had to guess, much more is lost to corruption in military contracts. How much are we spending in boats our generals said they don’t need or the F-35s that were supposed to be operational a decade ago?
Plus, again, comparing apples and oranges. We don’t have debt in a foreign currency, currency controls, 100+ annual inflation, or anywhere near 50% below the line of poverty.
Who said we were going to be directly engaged in an armed conflict? You really think Putin is going to go on a suicide mission and pick a direct fight with NATO?
If we don't get our own budget under control, then anything is possible. We spend money like it's Monopoly money and that game can't last forever.
Even cheaper to not fund the Ukraine war and not be directly engaged in an armed conflict
The argument is that Russia is so weak we can bring them down cheaply by funding the Ukraine war. The reason we need to do that is that Russia is so powerful they pose a huge threat to us.
We're also told that if Ukraine gives up any territory in a negotiated end to the war then Russia will rearm and attack again.
Of course, even if Ukraine kicks Russia out of Ukraine entirely then Russia could still rearm and attack again.
It's a huge threat to Europe.
Protecting Europe is in our interest.
No one should expect you to understand.
typical democrat warmongers,,,,nothing new,,,,war good now,,,,,
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