The US Administration still has issues with communist states and their central banks. Dissolving the central bank still allows him to link the Argentinian currency to the US dollar unhindered, which protects the petro-dollar.
A country must have an official currency. Tax-wise. It needs something that it can say "you owe this much". You can open the floodgates of barter, but at the end of the day, everyone involved needs to be able to say "I earned seven gold dubloons, and thirteen pieces of silver. That was worth X venuzuelan pesos at their transaction dates, the value of which I must remit to the government."
Saying the Venuzuelan government will accept USD as tax payments is de-facto making it the official currency of the land, whether or not Venezuelan pesos are also still allowed, since it's the more powerful currency: If everyone needs to pay taxes, they'll need to collect enough currency to pay it in one of the acknowledged forms, and if they've no faith in the Peso, they'll charge USD, making it the default dollar country-wise.
(And to those thinking "the farmers might just barter in wheat and cattle entirely, they could just exchange them for USD at tax time to pay off the tax debt"... That's literally called selling the product for money.)
You got a downvote, and yet I can't see how the US would be mad at Argentina pegging its currency. They've never got mad at any of the other countries that do it. If anything, the government just prints more money to satisfy their currency needs as well, which reduces their debt.
So he wants to dollarize and replace their shitty central bank with the US federal reserve?
Argentina will go from corrupt with heavy spending to being another vassal state tied to the failing zog system. It will enslave the people to the federal reserve central bank, the American system, and its ((owners)). It's better to be in charge of your own currency, not supplicate yourself to a fiat hyperspender a continent away from you.
Cut back social spending and peg yourself temporarily to the euro/dollar/yuan if you want extra stability. The bank/gov has to cut spending but I'd retain independence.
As bad as the fed is, this is 10 steps better than what they had, and may provide cover and capital to achieve his other aims.
It's also more stable and likely to work short term while also being 1 more scalp he can claim and display.
It looks like win/win/win to me. Is it the absolute perfect white room solution? No. Is it more immediately achievable, with less pain, and more benefits from a foreign policy position? Absolutely.
It also has the benefit of locking in a policy position. This is what leftists are great at, locking something in. They let 500k migrants in. It's much harder to get rid of them than it was to invite them in to pillage your country. They sign agreements with foreign nations. It's harder to break these agreements with worse consequences than it is to make them. If you just take control of your federal reserve, which is run and managed by commies, absolutely full of them, then they'll work to frustrate you at every step (see Trump's first administration) and also be 100% ready to go back to the way things were the moment you leave office.
This is a far more permanent decision. It's locked in. Eat shit libtards.
No the fed is 100 times more powerful and you will have to have a revolution to get rid of it. Regardless milei is simply another nwo plant who will sell whatever is left of argentina to the highest international bank bidder.
Shutting down the central bank collapses most of the monetary interference structure in the economy. This will likely collapse the inflation rate and allow the economy to begin repairing itself.
The first issue is obviously debt
The central bank was going to fuck Argentina's creditors over with inflation so that they could pay the debt with funny money. Dissolving the bank will basically force Argentina to pay what they owe. Also, they can't introduce stupid policies to not pay back bonds, so they just have to treat it like they would any creditor. Worst case scenario, the creditors can now actually negotiate to have their shit paid back on an individual level, and forgein investment can return, knowing that the Argentinians can't get out of forgein debt with inflation.
Fight against corruption
Dissolving the central bank is a keystone to defeating corruption, as it is the cause of most of the corruption of the economy at a high level, and within the financial sector, as it is in every country. Leftism exists to perpetuate corruption as an influence racket, so his war on Leftism will be a war on corruption simultaneously.
you become slave to whatever currency thus slave to the country that issues that currency.
The US allows it, but doesn't advise it, because even they know it's actually quite risky for the economy of the state that does it. Fundamentally, it's a desperate move to try and push the Argentinan economy out of the hyper-inflation that it's in without causing an instantaneous economic depression. The currency can now be inflated at (what is probably closer to 10% in reality), rather than the 145% it's sitting at now.
it won't make Argentina's bad debt magically go away
Of course it won't. But what it will do is free Argentinians from being burdened by the government's credit rating. Dollarize, and suddenly private citizens and businesses can borrow at more reasonable 8-10% while the government can't. This allows commercial life to carry on even while the government continues to be a tire fire. This is exactly what happened in Ecuador and El Salvador.
it's just going to make Argentina's debt more difficult to repay since denominated in dollars.
What it would be repaying it's debt with is worthless money, which is effectively robbing the creditors. If you tell the creditors that you're going to pay back the debt with money that's worth something, they'll be much more amicable to a re-negotiation of the terms of the debt servicing. Weimar Germany actually used it's hyper-inflation to force creditor nations into debt forgiveness because it was clear that there would be no chance of the Germans paying back the value of the debt. Argentina would be doing the opposite: guaranteeing a return of investment to the creditors, as opposed to having a 100% loss.
. The economy doesn't just "repair itself" in a country in such bad situation like Argentina.
Typically, these socialist conditions can be flipped overnight, as the market basically explodes with unregulated trade, especially at the smallest level. The economy actually does begin to recover as price discovery takes effect and regulatory interference is stopped.
The US FED is going to punish them with extreme prejudice.
I see no reason why the FED would have such a need. Fundamentally, the Fed and the IMF want their fucking money back at a certain point, and are ecstatic to keep pushing out USD. Argentina just said that "yes, you'll get paid with USD, and yes we want some dollars". Argentina is clearly not a rival in this scenario, so they're not going to be punished like the Eurozone is.
I don't see how shutting a central bank down is going to solve anything
It does exactly one thing:
It formalizes the currently informal situation which insulates private wealth from government policy. Argentinians already have zero faith in their currency. Argentinian private citizens already hold billions in US cash.
he ded
The US Administration still has issues with communist states and their central banks. Dissolving the central bank still allows him to link the Argentinian currency to the US dollar unhindered, which protects the petro-dollar.
He might still, very well, be alive.
A country must have an official currency. Tax-wise. It needs something that it can say "you owe this much". You can open the floodgates of barter, but at the end of the day, everyone involved needs to be able to say "I earned seven gold dubloons, and thirteen pieces of silver. That was worth X venuzuelan pesos at their transaction dates, the value of which I must remit to the government."
Saying the Venuzuelan government will accept USD as tax payments is de-facto making it the official currency of the land, whether or not Venezuelan pesos are also still allowed, since it's the more powerful currency: If everyone needs to pay taxes, they'll need to collect enough currency to pay it in one of the acknowledged forms, and if they've no faith in the Peso, they'll charge USD, making it the default dollar country-wise.
(And to those thinking "the farmers might just barter in wheat and cattle entirely, they could just exchange them for USD at tax time to pay off the tax debt"... That's literally called selling the product for money.)
I think we already tried that, and it failed.
Yeah, I remember when Trump "failed" on the border wall up to and literally during it's construction.
You got a downvote, and yet I can't see how the US would be mad at Argentina pegging its currency. They've never got mad at any of the other countries that do it. If anything, the government just prints more money to satisfy their currency needs as well, which reduces their debt.
So the CIA won't kill him, but China still might?
So he wants to dollarize and replace their shitty central bank with the US federal reserve?
Argentina will go from corrupt with heavy spending to being another vassal state tied to the failing zog system. It will enslave the people to the federal reserve central bank, the American system, and its ((owners)). It's better to be in charge of your own currency, not supplicate yourself to a fiat hyperspender a continent away from you.
Well, what's your solution?
Cut back social spending and peg yourself temporarily to the euro/dollar/yuan if you want extra stability. The bank/gov has to cut spending but I'd retain independence.
As bad as the fed is, this is 10 steps better than what they had, and may provide cover and capital to achieve his other aims.
It's also more stable and likely to work short term while also being 1 more scalp he can claim and display.
It looks like win/win/win to me. Is it the absolute perfect white room solution? No. Is it more immediately achievable, with less pain, and more benefits from a foreign policy position? Absolutely.
It also has the benefit of locking in a policy position. This is what leftists are great at, locking something in. They let 500k migrants in. It's much harder to get rid of them than it was to invite them in to pillage your country. They sign agreements with foreign nations. It's harder to break these agreements with worse consequences than it is to make them. If you just take control of your federal reserve, which is run and managed by commies, absolutely full of them, then they'll work to frustrate you at every step (see Trump's first administration) and also be 100% ready to go back to the way things were the moment you leave office.
This is a far more permanent decision. It's locked in. Eat shit libtards.
No the fed is 100 times more powerful and you will have to have a revolution to get rid of it. Regardless milei is simply another nwo plant who will sell whatever is left of argentina to the highest international bank bidder.
He might be doing exactly that.
Adopting the US dollar means adopting its federal reserve central banking.
Shutting down the central bank collapses most of the monetary interference structure in the economy. This will likely collapse the inflation rate and allow the economy to begin repairing itself.
The central bank was going to fuck Argentina's creditors over with inflation so that they could pay the debt with funny money. Dissolving the bank will basically force Argentina to pay what they owe. Also, they can't introduce stupid policies to not pay back bonds, so they just have to treat it like they would any creditor. Worst case scenario, the creditors can now actually negotiate to have their shit paid back on an individual level, and forgein investment can return, knowing that the Argentinians can't get out of forgein debt with inflation.
Dissolving the central bank is a keystone to defeating corruption, as it is the cause of most of the corruption of the economy at a high level, and within the financial sector, as it is in every country. Leftism exists to perpetuate corruption as an influence racket, so his war on Leftism will be a war on corruption simultaneously.
The US allows it, but doesn't advise it, because even they know it's actually quite risky for the economy of the state that does it. Fundamentally, it's a desperate move to try and push the Argentinan economy out of the hyper-inflation that it's in without causing an instantaneous economic depression. The currency can now be inflated at (what is probably closer to 10% in reality), rather than the 145% it's sitting at now.
Of course it won't. But what it will do is free Argentinians from being burdened by the government's credit rating. Dollarize, and suddenly private citizens and businesses can borrow at more reasonable 8-10% while the government can't. This allows commercial life to carry on even while the government continues to be a tire fire. This is exactly what happened in Ecuador and El Salvador.
What it would be repaying it's debt with is worthless money, which is effectively robbing the creditors. If you tell the creditors that you're going to pay back the debt with money that's worth something, they'll be much more amicable to a re-negotiation of the terms of the debt servicing. Weimar Germany actually used it's hyper-inflation to force creditor nations into debt forgiveness because it was clear that there would be no chance of the Germans paying back the value of the debt. Argentina would be doing the opposite: guaranteeing a return of investment to the creditors, as opposed to having a 100% loss.
Typically, these socialist conditions can be flipped overnight, as the market basically explodes with unregulated trade, especially at the smallest level. The economy actually does begin to recover as price discovery takes effect and regulatory interference is stopped.
I see no reason why the FED would have such a need. Fundamentally, the Fed and the IMF want their fucking money back at a certain point, and are ecstatic to keep pushing out USD. Argentina just said that "yes, you'll get paid with USD, and yes we want some dollars". Argentina is clearly not a rival in this scenario, so they're not going to be punished like the Eurozone is.
Last I heard their government had said 180%. And that's the official rate.
It does exactly one thing:
It formalizes the currently informal situation which insulates private wealth from government policy. Argentinians already have zero faith in their currency. Argentinian private citizens already hold billions in US cash.
ohhhhh muh holy debt