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Don’t Déjà Vu Me, Argentina.

 Oh what a circus, oh what a show. 

Javier Milei, the leading candidate to be Argentina’s next president, is a libertarian economist who named his dogs after Milton Friedman, Murray Rothbard and Robert Lucas. 

He’s also an avowedly devout Roman Catholic who boasts of his many sexual adventures, and says his first acts in office would include abolishing Argentina’s central bank and sending a bill to Congress to ditch the peso and use the US dollar instead. 

He made this gloriously frank assessment: Central banks are divided in four categories: the bad ones, like the Federal Reserve, the very bad ones, like the ones in Latin America, the horribly bad ones, and the Central Bank of Argentina.

Milei’s plan to adopt the dollar is that Argentina tried just such a policy in the past, and it ended catastrophically. 

The peso was locked in a one-to-one. Now, it’s worth 350. 

Incredibly in hindsight, the Macri government successfully issued a “century bond” in 2017 after it had finally resolved the battle with creditors from its previous default. That bond wouldn’t repay principal until 2117, and there were buyers.

And yet, in 2018 Argentina hiked rates to 40% to defend the peso, and needed help once more from the IMF. That policy collapsed amid political crisis in late 2001 as unemployment exceeded 20%. It’s amazing that it has appeal again.

Evita, the musical of Eva Peron’s life


Dollarizing could undermine the entire project. 

The experience of the European countries like Greece that adopted the euro suggests that abolishing Argentina’s central bank would merely leave the country under monetary policy designed for someone else. 

Without devaluation as an option, the Greeks and others had to suffer through austerity and recession.

John Authers Bloomberg 17 August 2023


Argentina, IMF och Lagarde


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