caballero reyes
The Living Force
Reflections on President Milei of Argentina from the Mexicans YouTubers, Brothers Nacho and Mauricio (mau) Rodriguez.
From min.2.18 to min.20.18.
From min.2.18 to min.20.18.
"Libertarian economics was a scam perpetrated by the beneficiaries of the economic system that they were defending..."
[...]Vladimir Seroukhov: Vladimir Seroukhov, RBC. I have a currency-related question, if I may.
Javier Milei was elected President of Argentina the other day, and one of his main campaign promises was to replace the peso with the US dollar. Russia, on the contrary, has adopted a policy to dedollarise its economy by moving away from both the dollar and the euro in its international settlements.
What do you think about this process? Do Russia’s settlements with its economic partners in rubles and national currencies of countries friendly to us make any sense and offer us any benefits? Since we are talking about the ruble, what are the factors that affect the rate of the ruble the most, pushing it up or down? What are the main driving forces today?
Vladimir Putin: Allow me to begin with Argentina, so that we do not have to come back to this question later. Indeed, we all know about the idea that Argentina’s President-elect had to introduce the dollar in his country. Every country makes its own sovereign decisions, of course.
However, inflation in Argentina stands somewhere around 143 percent, I think, which creates a lot of challenges, as the country’s preceding leaders told me, in terms of repaying the loans Argentina contracted here and there. So the logic here is quite clear.
But this means that the country loses much of its sovereignty. If today’s leaders in Argentina do not see any other solution for addressing the country’s financial and economic woes, this is their decision to make. Still, this would substantially undermine their sovereignty.
There is also a socioeconomic aspect here. You are from RBC, right? Your channel specialises on these matters, so you have specialists who will understand what I am about to say, and ordinary people will also understand because this is not rocket science. You see, even pegging your national currency to the dollar can have serious socioeconomic consequences.
There was a time when Argentina faced major financial challenges, and people went as far as to attack banks. But what will happen if they switch to the dollar or peg their currency to the dollar? Any government seeking to solve its economic issues always thinks about honouring its social commitments.
I can note with satisfaction that the Government of the Russian Federation has been able to fulfil its social obligations in full despite the fact that defence spending and security costs have increased to a certain extent. Of course, some may say that this is not enough and that we must do more, like in Komi, for example, as I have just said, where we need to allocate more funds for relocating people, and so forth. That said, whenever the state promises something, it delivers on its commitments and honours them.
As for the dollar peg, there is non-discretionary spending: pensions, salaries for public sector employees, social benefits, and the like. Quite often, a state does not have enough money to cover these expenses. So what happens when you peg your currency to the dollar?
If they have a national currency – the peso, they have a tool to slightly increase inflation. True, this is certainly not very good, but still, it is a tool for balancing between a healthy economy and the fulfilment of social obligations.
But if you do not have a national currency, you cannot print more money. This leaves the government with only one option – to cut social spending, slash wages, pensions, benefits, spending on medicine, on roads, other things, and on internal security. There are no other options. And in this regard, any government puts itself in a very difficult position in terms of domestic political stability. If our partners make this choice, it is their right; any country can determine what it should do and how it should be done.
As for us, you said that we were the ones who rejected these settlements, but we have not rejected anything. The situation is that they have been creating problems with foreign currency settlements for us. By the way, in doing so, they are once again shooting themselves in the foot. Why are they seeking to restrain the dollar and the euro’s standing as universal currencies, as international reserve currencies? First of all, the dollar, of course.
In 2021, if I remember correctly, we used 87 percent of foreign currency to service our exports, including the dollar and the euro. The ruble, I think, accounted for about 11–13 percent, and the yuan, about 0.4 percent. As of September 2023, the ratio was as follows: the ruble, 40 percent; the yuan, 33 percent; and the dollar and the euro combined, 24 percent. Their share dropped from 87 to 24. Why did they do this? I repeat: they shot themselves in the foot.
Is this bad for us or not? Not really. Actually, the more we use the national currency in economic and financial transactions, the better. This boosts our sovereignty and our capabilities.
What does the exchange rate depend on? We have a floating exchange rate and it depends on market conditions, on the prices of our export goods, on growing demand within the country – and demand is growing. There is one more aspect – the Executive Order that was designed to regulate the foreign currency situation has played a role, and that, too, partly influenced the exchange rate.
What is the reason for this? In previous years, there was no need for any restrictions, because we received enough information from the countries that imported a significant volume of our goods, and we could track the movement of capital. Now we do not get any information from them because they cut off access. The Government and the Central Bank have no way of seeing what happens with the money that our exporters receive. The Central Bank and the Government have a legitimate interest in observing the ruble amounts accumulating, coming and going. In this sense, the Executive Order did introduce a few controls. But I believe that things will return to normal, so this is a temporary situation.
Overall, the financial market is generally stable. It is our priority to ensure this stability and predictability. And I believe we are succeeding in this.[...]
*The GOU, Grupo de Oficiales Unidos or Grupo Obra de Unificación, was an Argentine lodge or secret organization of nationalist tendency, created within the Argentine Army on March 10, 1943.
That same year it carried out a coup d'état against President Ramón S. Castillo, after the Década Infame, and governed the country until February 1946, with the main objective of maintaining the neutrality of the Argentine Nation during the Second World War and to prevent the workers' movement from leaning towards the political left.
Well, they sure have grandiose plans. Today Argentina; tomorrow All THE AMERICAS and over to Europe! Interesting to see how the new regime in Argentina views the rest of the Americas. (they have their baddies and goodies all identified)
Here’s that theme again of hard turn right, to save us from the Leftys, and promote “freedom”.
This looks to me like a revival of a fascist regime style that should have ended with WWII. Perhaps the gossip of 'nazi' towns in Argentina is not gossip afterall and perhaps the WWII has not ended but morphed into the Cold War, and it is about to run its last course with the conquest of the Americas.
Regarding this last aspect, in 2011, with Kirchnerism in power, Law 26,737 called "Protection of the National Domain on the Ownership, Possession or Tenure of Lands" was enacted. It limited the amount of land that a foreigner could acquire to 1,000 hectares in the core zone and then the different provinces drew their own equivalences in surface area.
Land Law - 26.737
Law for the Protection of the National Domain on the Ownership, Possession or Tenure of Lands, its purpose is to determine the ownership, cadastral and dominion, of the situation of possession, under any title or de facto situation of rural lands and to regulate, with respect to foreign individuals and legal entities, the limits to the ownership and possession of rural lands, regardless of their use or production destination.
I have seen that happening in Zimbabwe.Ok, here's the situation. Tonight at 9:00 p.m. in Argentina, Milei will announce the measures in his decree of necessity and urgency (basically enacting a law without going through congress). Among these measures would apparently be the repeal of the land law.
El megadecreto de Milei: derogarán la ley de extranjerización de tierras y un ente dejará de regular los precios de la yerba
El Gobierno avanzará sobre la norma que en 2011 limitó la venta de campos a extranjeros y cambiará funciones del Instituto Nacional de la Yerba Matewww.lanacion.com.ar
Let's see, this means that the country is going to be bought in parts. But to do that, even before repealing the law, you have to destroy the economy and society.
This is not Palestine...but....
In essence, a new land law will facilitate a new mineral resource allocation law. Not only that, but reclaiming the Falklands as argentinian, will open the 'gate' to the new oil fields discovered in the waters adjacent to Falkland Islands. There is gameplan.I have seen that happening in Zimbabwe.