Javier Milei Is Not a Problem for Argentina. Socialism Is.
Argentina’s problem is not Milei.
The Central Bank of Argentina does not have to devalue the peso due to the victory of Javier Milei in the primaries. The Central Bank of Argentina and the Peronist government have been devaluing the peso and sinking the currency for years. It must devalue because the central bank has run out of reserves.
Argentina is not facing an “anti-system” or “far-right” threat. They already have a far-left and anti-system government. The extractive and confiscatory monetary and fiscal policies of the XXI Century Socialism championed by Peronist Fernandez de Kirchner. The so-called “Inclusive” monetary policy, as Axel Kicilloff, Cristina Fernandez de Kirchner’s ex economy minister, denominated it.
The Peronist policy of maximum interventionism as well as fiscal and monetary irresponsibility has destroyed Argentina and left the central bank without reserves.
The peso has lost more than 90% of its value against the US dollar since Alberto Fernández took office, and inflation in Argentina already exceeds 110% annualized, with 39% of the population living in poverty.
In the years of the “XXI Century Socialism” governments of Cristina Fernández de Kirchner and Alberto Fernández, a completely uncontrolled increase in the monetary base obliterated the local currency. The center-right Macri government, which took office briefly between Kirchner and Fernandez, made the mistake of thinking that gradual and soft measures could curb the inflationary spiral, especially because he did not consider the evidence of the time bomb left by Fernandez de Kirchner in future monetary issuance commitments via short-term debt at very high rates accumulated at the central bank (the Leliq, Lebac, and Pases). This central bank remunerated debt grew by 22 billion equivalent US dollars during the years of Cristina Fernández de Kirchner. The Macri government reduced it by $26 billion. These issuances of “remunerated” central bank debt are future monetary base increases and guaranteed inflati
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