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Message
Milei is already proving the Left-wing economic establishment wrong
Posted on 5/10/24 at 7:20 am
Posted on 5/10/24 at 7:20 am
Link to article…
Argentina has historically been a country of failed governments, economic collapses, and debt defaults. Yet incredibly there are signs that – against all the odds – the bold, free market reforms of its libertarian President Javier Milei are beginning to work.
With inflation falling, interest rates coming down, and the peso on fire in one market, Milei is already proving the global Left-wing economic establishment – addicted to bigger government and endless deficits – wrong. Indeed, it may provide a template for other countries to escape from zero growth.
First, what’s changed in the country: inflation has fallen to 11pc and Milei predicts it will fall further. While a monthly figure (this is Argentina after all), price rises may be coming back under control after soaring above 300pc annually.
Last week, Milei announced that the country had recorded its first quarterly budget surplus since 2008, a modest 0.2pc of GDP, but still an astonishing achievement in such a short space of time, especially for a country that has run deficits for 113 of the last 123 years.
Then, earlier this week, the central bank, which Milei has not yet gotten around to abolishing as he pledged, cut interest rates for the third time in three weeks. While they are still at an eye-watering 50pc, that will start to feed through into the economy very soon. Investors have started to notice.
According to Bloomberg data, in the blue-chip swap market the peso was the best-performing currency in the world in the first quarter of this year, and the bond markets are rallying as well.
It may also get better over the months ahead. With stabilising prices, and a rising currency, investment should start flowing again into a country rich in natural resources and hyper-competitive on wages costs.
Argentina has historically been a country of failed governments, economic collapses, and debt defaults. Yet incredibly there are signs that – against all the odds – the bold, free market reforms of its libertarian President Javier Milei are beginning to work.
With inflation falling, interest rates coming down, and the peso on fire in one market, Milei is already proving the global Left-wing economic establishment – addicted to bigger government and endless deficits – wrong. Indeed, it may provide a template for other countries to escape from zero growth.
First, what’s changed in the country: inflation has fallen to 11pc and Milei predicts it will fall further. While a monthly figure (this is Argentina after all), price rises may be coming back under control after soaring above 300pc annually.
Last week, Milei announced that the country had recorded its first quarterly budget surplus since 2008, a modest 0.2pc of GDP, but still an astonishing achievement in such a short space of time, especially for a country that has run deficits for 113 of the last 123 years.
Then, earlier this week, the central bank, which Milei has not yet gotten around to abolishing as he pledged, cut interest rates for the third time in three weeks. While they are still at an eye-watering 50pc, that will start to feed through into the economy very soon. Investors have started to notice.
According to Bloomberg data, in the blue-chip swap market the peso was the best-performing currency in the world in the first quarter of this year, and the bond markets are rallying as well.
It may also get better over the months ahead. With stabilising prices, and a rising currency, investment should start flowing again into a country rich in natural resources and hyper-competitive on wages costs.
13
Posted on 5/10/24 at 7:23 am to Placekicker
He’s a far right wing bigot - NYT, WaPo
Posted on 5/10/24 at 7:24 am to Placekicker
If it works, its now racist according to progressives.
Posted on 5/10/24 at 7:31 am to Placekicker
quote:
Milei
Posted on 5/10/24 at 7:33 am to NIH
quote:.....
He’s a far right wing bigot - NYT, WaPo
that is turning a "profit".
interesting that their statements never/rarely include that last part.
Posted on 5/10/24 at 7:35 am to Placekicker
Argentina had a few problems that hopefully Milei can continue to tackle. First, inept economic policy makers who did not even know how to manage even a socialist form of economics much less anything resembling free market. The fact that after 4-5 months he stabilized conditions and reversed stupid policies should tell the average Argentinian what kind of kleptocratic fools they had in power for the last 15-20 years.
He's going to have to increase industrial capacity in order to blunt the power of the Estancios who own lots of land and wield enormous power. Argentina is still dependent on agricultural products and to a large extent it gets them in trouble from time to time. It's probably the #1 reason why Argentina despite having fantastic advantages like natural resources and a relatively literate population went from being one of the wealthiest countries prior to 1920 to a basket case today.
He's going to have to increase industrial capacity in order to blunt the power of the Estancios who own lots of land and wield enormous power. Argentina is still dependent on agricultural products and to a large extent it gets them in trouble from time to time. It's probably the #1 reason why Argentina despite having fantastic advantages like natural resources and a relatively literate population went from being one of the wealthiest countries prior to 1920 to a basket case today.
Posted on 5/10/24 at 7:37 am to Placekicker
More from the article:
First, even without a majority in parliament, he has been ruthless. Whole government departments have been closed down overnight, regardless of the immediate consequences. The Ministry of Culture was axed, so was the anti-discrimination agency, and the state-owned news service. Only last month, he unveiled plans to fire another 70,000 state employees.
Milei hasn’t attempted to cut gradually, to control budgets, or to ease people out with early retirement, or hiring freezes. Instead, he has, as promised, taken a ‘chainsaw’ to the machinery of the state, yielding huge savings in the process.
Next, he has been bold. The president massively devalued the peso on day one, taking the financial hit upfront, and then tore up rent controls, price restrictions and state subsidies. He pared back workers’ rights, reducing maternity leave and severance compensation, and allowed companies to fire workers who went on strike.
He ripped away fuel subsidies, even though it meant a temporary spike in inflation. Sure, there has been some short-term pain, but the results are now becoming evident.
First, even without a majority in parliament, he has been ruthless. Whole government departments have been closed down overnight, regardless of the immediate consequences. The Ministry of Culture was axed, so was the anti-discrimination agency, and the state-owned news service. Only last month, he unveiled plans to fire another 70,000 state employees.
Milei hasn’t attempted to cut gradually, to control budgets, or to ease people out with early retirement, or hiring freezes. Instead, he has, as promised, taken a ‘chainsaw’ to the machinery of the state, yielding huge savings in the process.
Next, he has been bold. The president massively devalued the peso on day one, taking the financial hit upfront, and then tore up rent controls, price restrictions and state subsidies. He pared back workers’ rights, reducing maternity leave and severance compensation, and allowed companies to fire workers who went on strike.
He ripped away fuel subsidies, even though it meant a temporary spike in inflation. Sure, there has been some short-term pain, but the results are now becoming evident.
Posted on 5/10/24 at 7:39 am to Dock Holiday
Keeps winning:
Governments are hooked on subsidies and price controls, trying to buy their way out of every challenge with higher spending. Deficits are allowed to rise relentlessly, with no meaningful plan for ever bringing them down again. A corrupt, crony capitalism is allowed to flourish, killing competition.
But the Argentine leader is providing a blueprint for how to break free. The global economic elite keeps lecturing us on why we need more government and a more powerful state despite the painful lack of results. Argentina is challenging it in dramatic fashion.
It is just possible that it is starting to work.
Governments are hooked on subsidies and price controls, trying to buy their way out of every challenge with higher spending. Deficits are allowed to rise relentlessly, with no meaningful plan for ever bringing them down again. A corrupt, crony capitalism is allowed to flourish, killing competition.
But the Argentine leader is providing a blueprint for how to break free. The global economic elite keeps lecturing us on why we need more government and a more powerful state despite the painful lack of results. Argentina is challenging it in dramatic fashion.
It is just possible that it is starting to work.
Posted on 5/10/24 at 8:02 am to Dock Holiday
Pruning the dead from a fruit tree causes it to bear more fruit.
- Someone I love and serve
- Someone I love and serve
Posted on 5/10/24 at 8:37 am to Dock Holiday
quote:
Governments are hooked on subsidies and price controls, trying to buy their way out of every challenge with higher spending. Deficits are allowed to rise relentlessly, with no meaningful plan for ever bringing them down again. A corrupt, crony capitalism is allowed to flourish, killing competition.
But the Argentine leader is providing a blueprint for how to break free. The global economic elite keeps lecturing us on why we need more government and a more powerful state despite the painful lack of results. Argentina is challenging it in dramatic fashion.
It is just possible that it is starting to work.
Posted on 5/10/24 at 8:38 am to Placekicker
You’ll come for the sideburns. You’ll stay for the freedom.
Posted on 5/10/24 at 8:49 am to Placekicker
I was listening to a video on the way to work and they mentioned that corporations are flocking to Argentina to invest. Lithium and other resources.
Argentina's money problems will disappear very soon. Probably be replaced with other problems of the globalists billionaire sort.
Argentina's money problems will disappear very soon. Probably be replaced with other problems of the globalists billionaire sort.
Posted on 5/10/24 at 8:51 am to Placekicker
U.S. will probably take him out.
Posted on 5/10/24 at 8:58 am to Placekicker
quote:
Argentina has historically been a country of failed governments, economic collapses, and debt defaults.
Argentina was the 4th largest economy in the world less than 40 years ago. Saying that highlights how disastrous authoritarian economic policies can be.
Posted on 5/10/24 at 9:04 am to Placekicker
Sure sure...
It might be able to work in a small 3rd word country like Argentina, but it couldnt work in a country like the US.
[/leftist talking points off]
It might be able to work in a small 3rd word country like Argentina, but it couldnt work in a country like the US.
[/leftist talking points off]
Posted on 5/10/24 at 9:06 am to Placekicker
I fully expect our fricked up government to run a color revolution down there within a year.
Posted on 5/10/24 at 9:13 am to joshnorris14
quote:
Argentina was the 4th largest economy in the world less than 40 years ago. Saying that highlights how disastrous authoritarian economic policies can be.
My wife is from Argentina. She jokes that every conversation in Argentina eventually veers into “when we were rich and grand” territory.
Probably why she has taken so well to New Orleans.
Posted on 5/10/24 at 9:33 am to ned nederlander
quote:
Probably why she has taken so well to New Orleans.
Ned,
When I moved down here the owner asked the VP of the Caribbean if I would be okay living in Trinidad.
The VP said, " Trinidad has a lot of crime, lots of corruption, and everyone loves Carnival...year round, Richard is moving from New Orleans, should be right at home".
Posted on 5/10/24 at 9:35 am to Placekicker
The CIA is going to kill this guy.
Posted on 5/10/24 at 10:02 am to ned nederlander
Try like 100 years ago. 40 years ago they had just had their asses handed to them in the Falklands war with the British and had been a basket case before that because of the Peronists and successive military juntas running the place.
Interestingly, it's the British/Argentine relationship prior to the end of WWI that probably is most to blame for the problems that Argentina has dealt with over the last 80-90 years.
Interestingly, it's the British/Argentine relationship prior to the end of WWI that probably is most to blame for the problems that Argentina has dealt with over the last 80-90 years.
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