Author Topic: Argentina Milei  (Read 5661 times)

Crafty_Dog

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Argentina Milei
« on: January 19, 2024, 10:08:02 AM »
By popular demand!  :-D

ccp

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Re: Argentina Milei
« Reply #1 on: January 19, 2024, 10:15:46 AM »
 :-D :wink:

Body-by-Guinness

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Re: Argentina Milei
« Reply #2 on: January 20, 2024, 05:34:18 PM »

Body-by-Guinness

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Re: Argentina Milei
« Reply #3 on: January 20, 2024, 05:36:03 PM »

Body-by-Guinness

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Commentary …
« Reply #4 on: January 24, 2024, 06:38:43 PM »

Body-by-Guinness

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The Leader Channeling Enlightenment Thinkers
« Reply #5 on: January 25, 2024, 08:19:43 AM »


ccp

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Re: Argentina Milei
« Reply #7 on: February 06, 2024, 08:19:07 AM »
a polar opposite to post WW 2

"By 2020, a document had been found at the Buenos Aires Nazi headquarters detailing 12,000 Nazis in the country with accounts at the Credit Suisse investment bank in Zürich, Switzerland, reputedly included several people related to businesses blacklisted by the US and UK due to their Nazi support."

https://en.wikipedia.org/wiki/Ratlines_(World_War_II)#:~:text=By%202020%2C%20a%20document%20had,due%20to%20their%20Nazi%20support.

ME :  Thank you Milei! Your support is appreciated.

Crafty_Dog

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DougMacG

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« Last Edit: February 20, 2024, 07:24:09 AM by DougMacG »

Crafty_Dog

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« Last Edit: February 28, 2024, 03:26:42 PM by Crafty_Dog »

DougMacG

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Re: Milei at Davos, at CPAC
« Reply #11 on: February 29, 2024, 06:32:03 AM »
Goofy guy, unlikely hero, but he speaks truth against power better than anyone in the world in a long time, maybe since Reagan and Thatcher, and maybe even more clearly than them.

I wish and hope our leaders learn something from him.

I looked but was unable to find an English translation transcript of both speeches.

Near as I can tell, he is exactly right on all his points.

How come we have to go all the way down the road to failure and collapse to discover truth.

Socialism, Leftism, is NOT altruistic. Was it altruistic to destroy the black family? Was it altruistic to destroy our schools and universities? Is it altruistic to destroy our national defense, our border? To kill off our unborn? Is it altruistic to destroy our media, our culture, even our comedy?

It is certainly not altruistic to turn never before achieved prosperity into poverty.

And he gets the moral case for freedom, even economic freedoms!

Why won't that sell here?
« Last Edit: February 29, 2024, 06:34:59 AM by DougMacG »

Crafty_Dog

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Re: Argentina Milei
« Reply #12 on: March 11, 2024, 11:05:20 AM »

Does Argentina’s Milei Fear Dollarization?
For a heavily indebted state, it’s expedient to keep running the peso printing press.
Mary Anastasia O’Grady
March 10, 2024 4:07 pm ET
WSJ

On the heels of the defeat of his sweeping 664-article omnibus bill in Argentina’s lower house last month, President Javier Milei has launched a new political strategy to advance his reform agenda. This one engages the country’s 24 governors, many of whom may support him thanks to the honeymoon his government still enjoys with the public.

Going around a Congress dominated by special interests to talk directly to the people who elected him is a savvy move. But it’s accompanied by a Milei decision to delay monetary stabilization. The president seems to be gambling that he can recover fiscal balance in government accounts first and that a steadier peso, and all the good things that come with it, will naturally follow. In the meantime, the public has to eat the high inflation that he promised to kill. He may succeed. But he’s playing with fire.

Long before his campaign for president, the self-described libertarian repeatedly denounced Peronism and all its empty promises. During the campaign, in his inauguration speech on Dec. 10 and in his January talk at Davos, he reaffirmed his radical vision for Argentina: Dismantle the welfare state, unleash the animal spirits and restore the nation to its former glory. On March 1, in his first speech to Congress, he again delivered a passionate defense of liberty, warning lawmakers that if he has to he’ll use executive decree to restore God-given rights usurped by the political class.

“The disaster” in which the country finds itself is no coincidence, he said in the televised address. Rather, “it is a conscious and planned scheme” involving “an intimate relationship between the privileges of politics and the discomfort of common Argentines.” It drives “high public spending, fiscal deficit, debt” and money printing. The political elite uses the system “to expropriate wealth from good Argentines and give it to their clients and friends.” This “business protected by lies” is the “regrettable material and spiritual state of our nation.”

After lambasting the legislators before him, the former television personality invited “governors and former presidents and leaders of the main political parties to lay down our personal interests and meet this May 25, in the province of Córdoba, for the signing of a new social contract called the May Pact: a social contract that establishes the 10 principles of the new Argentine economic order.” These include private-property rights, fiscal restraint, choice in pension savings, labor deregulation, reform of revenue sharing with the provinces and open trade. Mr. Milei asked the nation for “patience and trust” and proposed a negotiated fiscal agreement with the provincial governors ahead of the May Pact.

It’s great to have someone at the Argentine helm who touts the morality of the market as well as the utilitarian case for freedom. Either by executive decree or by enforcing existing law, Mr. Milei is signaling change for the average José: Protesters no longer have the right to block roads; victims of crime are entitled to justice; teachers unions have an obligation to students; rent control is repealed.

Yet triple-digit annual inflation remains intractable. Mr. Milei’s campaign promises to dollarize and close the central bank are now medium-term goals. A fiscal balance achieved in January isn’t sustainable, the economy is in recession, and inflation expectations by market participants at over 200% for the year are nothing to brag about. A $9 billion increase in international reserves isn’t a surge in confidence. It’s the result of printing pesos to buy the dollars and then issuing debt at high interest rates to sop up those pesos.

Inflation is always and everywhere a hidden tax on savers, workers, consumers and pensioners. In Argentina, as prices in pesos have shot up, the purchasing power of the nation has dwindled, making people poorer. But as the peso loses value against the dollar, so does the peso debt on the government’s balance sheet. Devaluing the currency is a surreptitious way to extract resources from the population, over and above explicit taxes. Government payments to suppliers and utilities also lose value in real terms.

Inflation then is a good deal for a heavily indebted state and a raw deal for the rest. Could it be that Mr. Milei’s economy minister, Luis Caputo—and other retreads from former failed administrations who are in the Milei cabinet—fears being part of a government that is without a peso-printing press? It seems possible.

Mr. Milei has a mandate for change, but it won’t last forever. The longer it takes to solve inflation, the more time there is for something else to go wrong. To recover prosperity Argentina needs dollars to flow into the banking system. That will happen when Mr. Milei lifts exchange, capital and trade controls and lets the nation save, invest, earn and spend in the currency it chooses. Argentina will dollarize itself.

Crafty_Dog

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Crafty_Dog

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FO: Milei re-Americanizes?
« Reply #14 on: April 02, 2024, 11:23:58 AM »
(5) ARGENTINA’S MILEI MAY HINDER CHINA’S SPACE PROGRAM: U.S. Ambassador to Argentina Marc Stanley recently said he was surprised that Argentina would allow the Chinese People’s Liberation Army (PLA) to operate a military space facility in the country.
Stanley was referring to the Espacio Lejano Station, a Chinese Strategic Support Force space observation base that’s part of the Chinese Deep Space Network.
Why It Matters: Argentine President Javier Milei has already taken several steps toward re-Americanization, including renouncing a previously approved BRICS+ membership. The U.S. Government is likely to pressure Milei to shut down the Neuquén base in his first term in order to hinder China’s space warfare and exploration capabilities. – J.V.

Crafty_Dog

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WSJ: Milei's Achilles Heel
« Reply #15 on: April 28, 2024, 03:44:48 PM »
Javier Milei’s Achilles’ Heel
Without a credible dollarization strategy, Argentina’s president is at risk of failure.
Mary Anastasia O’Grady
By
Mary Anastasia O’Grady
Follow
April 28, 2024 3:58 pm ET



Argentina’s central bank will soon issue a 20,000-peso note, replacing the 2,000-peso note as the largest-denomination bill in circulation. At the official exchange rate, the new bill will be worth around $23. A 50,000-peso note is expected to follow.

This is no doubt painful for Argentines who voted for President Javier Milei in October because he pledged to dollarize the economy and close the central bank. Adding insult to injury, the central bank said it plans to decorate the new 20,000-peso note with an image of Juan Bautista Alberdi, father of Argentine classical liberalism and a staunch advocate of sound money. Alberdi died in 1884, but if he were still around I’m betting he’d sue for defamation.

It’s been four months since Mr. Milei took the oath of office, promising to free the nation from the strictures of Peronism. With a passion for liberty and irreverence for the establishment, he’s generated excitement among long-suffering Argentines tired of a century of government modeled on Mussolini’s Italy. He rails against socialism and endorses Western civilization. He backs Israel, a welcome foreign policy in a region that increasingly bows to Tehran.

Yet Mr. Milei’s talk of freedom is at odds with exchange, capital, and lingering price controls. Monthly inflation for March was below market expectations but still high at 11%. “On an annual basis, headline inflation accelerated to 287.9% [year over year],” Goldman Sachs reported April 12. “Core inflation printed at a lower but still high 9.4% [month over month] in March, reaching 300.0% [year over year].”

In a speech to the nation last week the president boasted that in the first quarter of this year his government achieved a budget surplus—not seen since 2008—of around $309 million, or roughly 0.2% of gross domestic product. This austerity is a main driver of the drop in inflation, down from a monthly print of 25% in December. But it isn’t enough. Inflation expectations remain high. The International Monetary Fund’s inflation forecast for 2024 is 150%, and 45% for 2025.

Nor are the cuts sustainable. They’ve been achieved by denying pensioners inflation adjustments, shutting down public works and putting the kibosh on payments to utilities. As Goldman Sachs explained, this “adjustment” along with “a drag on real economic activity impacted by the erosion of household disposable income should contain price pressures.” In other words, progress on inflation is expected to come from recession and cutting into the bone of government services.

There’s method to this madness since elevated inflation reduces the value of government debt—now at 80% of GDP—in dollars. But the pernicious effects of such a strategy on investment, economic growth and development are undeniable. One question is how long consumers and wage earners will support Mr. Milei if currency uncertainty discourages badly needed capital inflows and there is a persistent decline of real income and purchasing power.

By adopting a credible dollarization strategy immediately, Mr. Milei could stop inflation in its tracks. Instead he’s first trying to address fiscal and regulatory distortions.

A December executive “decree of necessity and urgency” aimed at liberalizing key parts of the economy has scored some points. In a tweet last week, Argentine economist Federico Sturzenegger noted a new open-skies agreement with Chile and authorization for online purchases and home delivery of medications. Yet an appeals court declared the crucial labor reforms in the decree unconstitutional.

The matter now goes to the Supreme Court. But in any case, Mr. Milei won’t be able to restore Alberdi’s Argentina by decree. This is why in February he submitted to Congress a mega-reform bill named the Law of Bases and Starting Points for the Freedom of Argentines. It would have cleared the way to sell 40 state-owned companies; enact political, judicial, education and tax reforms; and open public infrastructure to private investment. It was just what Argentina needs.

But his Liberty Advances party is a minority in Congress, and that made the bill politically impossible in its entirety. When Congress countered with a diluted version of the law, a miffed Mr. Milei pulled it.

Now he’s left with only untenable fiscal cuts and his use of inflation to reduce the dollar value of Argentine debt, both of which threaten to induce many months of pain and scare away investors. After a benchmark interest rate cut last week, Goldman Sachs noted that “the central bank has opted to deepen financial repression as a tool to clean its balance sheet.” To the extent it’s working, it’s also eating away at household disposable income, the investment bank said.

None of this is good for the visionary president, who needs to break the stranglehold of special interests in a dysfunctional legislature and needs popular support to do it. If he doesn’t change course, he could easily turn out to be one more mediocre Argentine president—or worse. Mr. Milei’s government needs stable money, and fast.

Write to O’Grady@wsj.com.

Body-by-Guinness

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Contrary to Predictions, Argentina’s Sky has Yet to Fall
« Reply #16 on: May 09, 2024, 02:43:27 PM »

Crafty_Dog

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Re: Argentina Milei
« Reply #17 on: May 09, 2024, 03:27:55 PM »
Scott Grannis tells me he was in Argentina for three weeks last month and is helping organize a CATO shindig there to celebrate Milei.

ccp

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Re: Argentina Milei
« Reply #18 on: May 10, 2024, 05:31:53 AM »
does he tango?

Body-by-Guinness

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Milei Extolls Spain to Adopt Libertarian Reforms
« Reply #19 on: May 21, 2024, 04:14:36 AM »
For my money the takeaway here is that any party that does not align with the European nanny state is “far right:”

https://www.yahoo.com/news/argentinas-milei-stars-global-far-163146655.html?soc_src=social-sh&soc_trk=fb&tsrc=fb

Crafty_Dog

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Re: Argentina Milei
« Reply #20 on: May 21, 2024, 10:14:22 AM »
A good and bright friend recently sent me some clippings, a few of which were from The Economist.  I used to read it back in the 70s and 80s, but the bias you describe oozes from its all-knowing aura of condescension.

Crafty_Dog

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GPF: Argentina Milei: The State of the Transformation
« Reply #21 on: May 25, 2024, 05:55:15 AM »



Geopolitical Futures
May 24, 2024
View On Website
Open as PDF

The State of Argentina’s ‘Transformation’
Milei’s government has been more pragmatic than it said it would be.
By: Allison Fedirka
Argentine President Javier Milei will not be commemorating his country’s revolution on May 25 as originally planned. At the beginning of the year, he intended to use the holiday as an occasion to sign the Pacto de Mayo, a 10-point declaration meant to establish a new social contract and economic order for the country, one that he hoped would receive the support of political leaders from all parties and provinces. Instead, he will be in the city of Cordoba to give his state of the union address and oversee more modest ceremonial celebrations.

The government still has every intention to pursue the Pacto de Mayo, but Milei publicly pre-conditioned the deal’s signing on the passage of the Bases Law and certain tax reforms. These have been passed by the lower house of the Argentine legislature but still need to be approved by the upper. Put simply, Milei’s reforms are not advancing as quickly as he would like, pitting him against growing social pressure amid difficult economic conditions. Yet his government has proved more pragmatic than expected, so Milei may have more time to execute his changes.

One of the public’s biggest complaints is the decline of purchasing power, which owes to inflation brought on by the government’s decision to lift market controls. Private employees fared significantly better than public employees, with respective decreases of 11.2 percent and 21.3 percent. More concerning is that in the past six months, the country’s minimum wage has lost 29 percent of its purchasing power, pushing more people into poverty. Argentina’s Pontifical Catholic University estimates that the poverty rate now stands at 57 percent. While better insulated from economic shock, even the country’s upper class has started to feel the pinch as inflation outpaces favorable exchange rates and a sharp decline in disposable income.

Purchasing Power Decline
(click to enlarge)

Despite the Milei government’s extreme adherence to libertarian economic principles, it has shown a willingness to be less rigid in strategic moments and fairly responsive to social pressure. At the beginning of his term, for example, Milei allowed prices on all items to rise unchecked, only to later slow inflation by reducing the rate of subsidy cuts and putting price caps on certain items amid public backlash. In April, university students – a demographic that strongly supported Milei’s presidential candidacy – protested against what they saw as insufficient government funding and resources; weeks later, the government raised the functional budget for national universities by 270 percent. One of Milei’s first acts as president was to present a series of decrees meant to overhaul the economy and political system. When met with fierce opposition in the legislature and the judiciary, the government toned down its proposals in the more palatable Bases Law proposal currently making its way through the legislature. (The new version would still enable Milei to move forward with many of his desired reforms but requires less political sacrifice.)

Monthly and Annual Inflation Rates
(click to enlarge)

In fact, the Bases Law shows that the administration is capable of taking its time to advance reforms if doing so translates to more political support. Major components of the proposal call for the partial-to-full privatization of a handful of state-run companies and the scaling down of private companies to make them more efficient. Naturally, this upset Argentine unions, so the government is studying each case and entering negotiations with corresponding unions to make the proposal more palatable.

By insisting that the Pacto de Mayo remains on the agenda, the Milei administration has signaled its near-term plans to continue with reforms once the Bases Law is passed. Among the pact’s priorities are the schemes through which Buenos Aires funds the provinces, a renewed interest in provincial commitment to promote resource extraction, and the opening of the economy to international trade and commerce. The government also plans to reduce taxes on foreign currency exchanges, agriculture exports and financial transactions. It believes it will benefit from the planned cuts. The forex tax will support the elimination of the parallel exchange market, and the export tax will encourage exports and win favor among farmers, a large and influential group in the country. Unlike with the Pacto de Mayo, however, the government conditioned these moves on a resumption of economic growth rather than a particular deadline, thereby reducing the risk of embarrassing itself for taking longer than expected to deliver on plans.

Argentina | Exchange Rates
(click to enlarge)

Critics of Milei argue that the government is touting false progress and that deteriorating economic conditions are just the beginning of the country’s troubles. The government has trumpeted its success in no longer running a public deficit and reducing monthly inflation to a single digit. The counterargument is that annual inflation remains high, and recession and lower purchasing power abated inflation, not the government. Critics also argue that it’s easy to reduce a deficit when the government simply stops spending any money – a charge that isn’t without merit. Other concerns are the reforms’ knockoff effects, which include potentially increased unemployment and security problems. Emerging anecdotal evidence – such as construction workers being laid off due to less government-funded public works projects and a police strike in Misiones province – feed these concerns.

Argentina's Public Spending
(click to enlarge)

The problem with Milei’s approach to reform – which he has called “shock therapy” – is that it assumes and plans for the economy to get worse before it gets better. It is predicated on high risk and high reward. The Argentine economy appears in worse shape now than when Milei took office. However, under the shock therapy strategy, the economy would look this bad as a matter of course – even if it were successful.

At this point, economic health alone isn’t a reliable indicator of the potential success or failure of Milei’s planned overhaul. A more subtle look at the government’s response to political and social pressures shows that it may be adept enough to keep reforms moving forward. If that’s the case, the next big challenge will be fine-tuning the new economic model so that the changes stick.