Biden

MILEI

<p>The Argentine president has just stunned the Argentine people with a massive devaluation. Still nothing about bitcoin.</p>
<h2 id="collapse-of-the-peso">Collapse of the Peso</h2>
<p>The shock therapy begins in Argentina. Javier Milei has just announced a 54% devaluation of the peso against the dollar. This will be followed by an additional devaluation of 2% per month until further notice.</p>
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<p>The official exchange rate is now 800 pesos for one dollar, compared to 366 pesos previously. This rate is closer to the black market rate (~1000 pesos).</p>
<p>The discrepancy stems from Argentina maintaining since 2019 the exchange rate of the peso artificially high through capital controls. In other words, by prohibiting certain imports.</p>
<p>Incidentally, capital controls explain why local exchanges can no longer purchase bitcoins abroad.</p>
<p><em>“We are going to find ourselves in a worse situation than before for a few months, particularly in terms of inflation,”</em> stated Finance Minister Luis Caputo.</p>
<p>Mr. Milei has himself admitted that his recipe for economic stabilization could take up to two years to reduce inflation. <em>“To say otherwise is to lie,”</em> he confessed.</p>
<p>It’s an unannounced surprise during the campaign… Argentines certainly did not expect inflation to explode again so quickly.</p>
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     <p lang="es" dir="ltr">GRACIAS MILEI <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f631.png" alt="😱" class="wp-smiley" style="height: 1em; max-height: 1em;"><img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f1e6-1f1f7.png" alt="🇦🇷" class="wp-smiley" style="height: 1em; max-height: 1em;"><a href="https://twitter.com/hashtag/Milei?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#Milei</a> <a href="https://twitter.com/hashtag/Argentina?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#Argentina</a> <a href="https://twitter.com/hashtag/BuenosAires?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#BuenosAires</a> <a href="https://t.co/S0RD2MjF7f" rel="noopener noreferrer nofollow">pic.twitter.com/S0RD2MjF7f</a></p>— Airto Cortez (@Comando_Activo1) <a href="https://twitter.com/Comando_Activo1/status/1734727095903760666?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">December 13, 2023</a>
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<p>As a reminder, inflation is above 150% in Argentina. It has been 40% per year on average over the last decade. The country is also facing low foreign exchange reserves due to insufficient exports.</p>
<h2 id="h-what-about-the-campaign-promises-bitcoin">What About the Campaign Promises? Bitcoin?</h2>
<p>Since his election, the president has converted to Judaism in New York, been seen with the notorious Lolita Express client <a href="https://twitter.com/TheMcgWire/status/1732138288696160261" target="_blank" rel="noopener noreferrer nofollow">Bill Clinton</a>, not to mention the American puppet Zelensky. But there has not been much progress regarding his flagship promise to abolish the central bank.</p>
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<p>One of the obstacles is that its abolition and the adoption of the dollar as legal tender would require the approval of the Argentine Congress, or even an amendment to the constitution.</p>
<p>Yet, even though Mr. Milei won the presidency by a landslide, his Libertad Avanza movement is only the third political force in Congress.</p>
<p>Furthermore, Argentina would still need to have the necessary dollars to replace the pesos. Experts estimate that this could require up to 50 billion dollars. Argentina does not have it. On the contrary, Buenos Aires owes 44 billion dollars to the IMF…</p>
<p>Hence this devaluation. Milei surely has plans to sell off the country through massive privatizations. Perhaps to eventually recover the dollars needed to dollarize the country.</p>
<p>Unfortunately, selling off the family jewels can only be a short-lived wealth effect. It’s like selling your TV, couch, and car for a pittance and then renting them straight after. There are no miracles.</p>
<p>Not to forget that adopting the dollar means paying interest to American bankers rather than Argentine ones. By what magic could this benefit Argentines?</p>
<p>In the end, can we really expect the straw man of Uncle Sam to offer legal tender status to bitcoin when we see the Biden administration attacking it again in Congress?</p>
<p>Stay tuned for the next episode.</p>

Javier Milei Massively Devalues the Peso

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