Banking What is going on with the Blue dollar? Why is it going down?

[import export]

I watched this the other day. I didn't know who it was but found some of what he said interesting. Most people I know supported Milei and some still do but it is getting painful for them. The main arguments that they have are for not shutting down the Central Bank when that was the biggest thing he was saying going around with his chainsaw. And getting Argentina involved with the Ukraine and Israel. I don't know who Milei thinks wants that. No one I know supports that.

Most of the friends that now regret things are having a tougher time now getting by. Many just feel like Milei is out of touch with typical person now.

Milei has done a lot of things right like cutting down on spending, stopping some corruption, fixing regulations and making government smaller. Lots of things are positive. I still prefer an Argentina with Milei vs. the alternative.

I'm not claiming I could do any better. But I think the longer he waits to end currency controls the worst off things will be. All those billions of dollars that came in with the blanqueo are going to come back out of banks. It will be a game of musical chairs for people to withdraw their cash. They will buy properties or just stick it back under their mattress.

They know they need to end the cepo and there needs to be a formal devaluation. They know it will cause inflation to go back up. I don't see any other outcome than an eventual devaluation.

 

[oil rush]

More and more people are saying the same thing. Argentina peso is overvalued and needs to be devalued.

https://twitter.com/x/status/1844164233610567802

https://twitter.com/x/status/1844169897921872115

 

[Larry]

Many just feel like Milei is out of touch with typical person now.

Thank you for posting this. That is the same with those that I know that also previously supported him. To be fair, many still are but their support is fading.

More and more people are saying the same thing. Argentina peso is overvalued and needs to be devalued.

This interview makes you realize how far away from his original goal Milei is doing from what he campaigned on. He said he would dollarize the economy. He said he would end cepo by middle of 2024. That never happened. Now Caputo is saying it is childish to worry when they will end the cepo!

And Milei is frustrated with investors continually asking when the cepo will end! 🤡🤡
And he wonders why Elon Musk hasn't invested a penny in Argentina yet.

Subscribe to read

www.ft.com

Archived version of FT Article

 

[Finance Prof]

More and more people are saying the same thing. Argentina peso is overvalued and needs to be devalued.

https://twitter.com/x/status/1844164233610567802

https://twitter.com/x/status/1844169897921872115

They know they have to devaluate the currency but they know it will cause inflation which is inevitable. At least they could have blamed things on previous administration but only so long you can use that excuse even though that is the truth.

Next year will be ugly. Not sure what the plan is if the IMF doesn't work out a replacement loan package. Worse yet probably will have to get even more cash from IMF.

 

[legend]

And it keeps going down... The funniest part is definitely the memes about it

https://twitter.com/x/status/1843338816398242255

 

[Vince]

They know they have to devaluate the currency but they know it will cause inflation which is inevitable. At least they could have blamed things on previous administration but only so long you can use that excuse even though that is the truth.

Next year will be ugly. Not sure what the plan is if the IMF doesn't work out a replacement loan package. Worse yet probably will have to get even more cash from IMF.

Now that I am heading back to the USA next month I thought I would post about what I think about all of this. I supported Milei when he was campaigning. My wife and her family all voted for him. But now we all feel like he is failing to deliver on what he promised. He is fixing many things and that is a positive. But the other things are too severe to ignore.

There was a reason why he was so critical of Caputo before when he called him the worst Economic Minister in history. The government is manipulating the exchange rate just like his predecessors that he complained about so much. You can argue that the manipulation is worse than ever. His cuts are too severe and the increases are too far too fast. His foreign policy has been a mistake and he realizes that only now that Argentina is desperate.

Don't argue that Argentina would be on the brink if Massa won. No doubt about it. But Massa did not win and Milei needs to not make same mistakes as people before him. I am not saying this isn't a tough job because it is but the longer he is in office the less I think he really is knowledgable about economics like he says he is. He is an ideologue to the extreme. He has no flexibility and no empathy which is dangerous as a President of Argentina.

Most people who voted for him voted out of desperation for an impossible situation in Argentina. Talking to dogs, rock star antics, cloning his dogs. Strange but ok. They still thought there was a glimmer of hope. But for many that glimmer is fading.

I still support many things he is doing but I feel like many people aren't saying how they feel about all of this. Painful watching him doing the same thing that he criticized before.

 

[Wally]

Now that I am heading back to the USA next month I thought I would post about what I think about all of this. I supported Milei when he was campaigning. My wife and her family all voted for him. But now we all feel like he is failing to deliver on what he promised. He is fixing many things and that is a positive. But the other things are too severe to ignore.

There was a reason why he was so critical of Caputo before when he called him the worst Economic Minister in history. The government is manipulating the exchange rate just like his predecessors that he complained about so much. You can argue that the manipulation is worse than ever. His cuts are too severe and the increases are too far too fast. His foreign policy has been a mistake and he realizes that only now that Argentina is desperate.

Don't argue that Argentina would be on the brink if Massa won. No doubt about it. But Massa did not win and Milei needs to not make same mistakes as people before him. I am not saying this isn't a tough job because it is but the longer he is in office the less I think he really is knowledgable about economics like he says he is. He is an ideologue to the extreme. He has no flexibility and no empathy which is dangerous as a President of Argentina.

Most people who voted for him voted out of desperation for an impossible situation in Argentina. Talking to dogs, rock star antics, cloning his dogs. Strange but ok. They still thought there was a glimmer of hope. But for many that glimmer is fading.

I still support many things he is doing but I feel like many people aren't saying how they feel about all of this. Painful watching him doing the same thing that he criticized before.

Gonna miss you @Vince. Are you leaving for good? Or coming back to Argentina?

You make many good points and I agree with some of them. The fx intervention might work out in the short-term like is now for the government but it never works out in the long run in Argentina. Can't disagree with you about some people voting for him regretting it. Every time I hear that I think of what things would be like if he lost. I am willing to give him more time and see how things are next year.

I figured they wouldn't be able to end the cepo when they promised they would. They are praising low inflation but I think it is artificial. They know once they let the peso float freely it will massively depreciate and inflation will go back up. Between a rock and a hard place.

I do agree with some friends that call him a narcissist. I am glad he stopped taking those narcissistic international trips for more awards. That wasn't helping his cause. And I hope his foreign policy gets better. Next year will be difficult. People are celebrating like there are a lot of accomplishments but Argentina is still in terrible shape.

They can take a victory lap once many of these problems are solved.

 

[Larry]

And it keeps going down... The funniest part is definitely the memes about it

https://twitter.com/x/status/1843338816398242255

This would be funny if it was not the total opposite of what is happening. Beef consumption is at a 110 year low. Most people have had to cut back on beef and other protein.

 

[CecilM]

Now that I am heading back to the USA next month I thought I would post about what I think about all of this. I supported Milei when he was campaigning. My wife and her family all voted for him. But now we all feel like he is failing to deliver on what he promised. He is fixing many things and that is a positive. But the other things are too severe to ignore.

There was a reason why he was so critical of Caputo before when he called him the worst Economic Minister in history. The government is manipulating the exchange rate just like his predecessors that he complained about so much. You can argue that the manipulation is worse than ever. His cuts are too severe and the increases are too far too fast. His foreign policy has been a mistake and he realizes that only now that Argentina is desperate.

Don't argue that Argentina would be on the brink if Massa won. No doubt about it. But Massa did not win and Milei needs to not make same mistakes as people before him. I am not saying this isn't a tough job because it is but the longer he is in office the less I think he really is knowledgable about economics like he says he is. He is an ideologue to the extreme. He has no flexibility and no empathy which is dangerous as a President of Argentina.

Most people who voted for him voted out of desperation for an impossible situation in Argentina. Talking to dogs, rock star antics, cloning his dogs. Strange but ok. They still thought there was a glimmer of hope. But for many that glimmer is fading.

I still support many things he is doing but I feel like many people aren't saying how they feel about all of this. Painful watching him doing the same thing that he criticized before.

I completely agree with everything you've said. It’s evident that there's a significant lack of empathy towards the most vulnerable populations, and the inflexible approach taken by Milei is alarming. The severe cuts are disproportionately affecting the middle and lower classes, and many who initially supported him are now feeling disillusioned, hurt, and frustrated.

It's painful to watch him repeat the same mistakes he once criticized. While I agree that the country would be in a disastrous situation under Massa, we must recognize that the people are enduring one of the worst crises in recent history. This collective hardship breeds general discomfort, and his approval ratings reflect that reality.

It’s heartbreaking to see how the hope many had has faded, especially for those who wake up every day before dawn, working over ten hours just to make ends meet, counting every peso to recharge their transport cards. The sadness and indignation I feel for these individuals are overwhelming. Many voted for him out of desperation and anger, clinging to that fleeting glimmer of hope. Unfortunately, I’ve lost that hope, not for myself, but for those struggling to survive.

 

[Avocado]

Now that I am heading back to the USA next month I thought I would post about what I think about all of this. I supported Milei when he was campaigning. My wife and her family all voted for him. But now we all feel like he is failing to deliver on what he promised. He is fixing many things and that is a positive. But the other things are too severe to ignore.

There was a reason why he was so critical of Caputo before when he called him the worst Economic Minister in history. The government is manipulating the exchange rate just like his predecessors that he complained about so much. You can argue that the manipulation is worse than ever. His cuts are too severe and the increases are too far too fast. His foreign policy has been a mistake and he realizes that only now that Argentina is desperate.

Don't argue that Argentina would be on the brink if Massa won. No doubt about it. But Massa did not win and Milei needs to not make same mistakes as people before him. I am not saying this isn't a tough job because it is but the longer he is in office the less I think he really is knowledgable about economics like he says he is. He is an ideologue to the extreme. He has no flexibility and no empathy which is dangerous as a President of Argentina.

Most people who voted for him voted out of desperation for an impossible situation in Argentina. Talking to dogs, rock star antics, cloning his dogs. Strange but ok. They still thought there was a glimmer of hope. But for many that glimmer is fading.

I still support many things he is doing but I feel like many people aren't saying how they feel about all of this. Painful watching him doing the same thing that he criticized before.

Thank you @Vince! It is refreshing to hear honesty from Milei supporter. Even my friend that vote for Milei won't admit any fault. They pretend all is going as planned when I know this can not be how people feel.

The inflation going down is fake. Read article. "The official rate is devalued by 2 per cent a month, a depreciation that has been outpaced by the rise in consumer prices this year. This has led exporters to complain that almost all of the competitiveness gains from December’s 54 per cent devaluation have now been wiped out."


You make good point about Milei not understanding economics like he pretend. Listen to Hans-Hermann Hoppe about what he say about Milei. Milei said he studied him. He said Milei's worldview has sophistication of typical American high school graduate (17:40). He said he doubts he really studied Rothbard even though he always mentions him.

Good luck in America @Vince.

 

[oil rush]

Now that I am heading back to the USA next month I thought I would post about what I think about all of this. I supported Milei when he was campaigning. My wife and her family all voted for him. But now we all feel like he is failing to deliver on what he promised. He is fixing many things and that is a positive. But the other things are too severe to ignore.

There was a reason why he was so critical of Caputo before when he called him the worst Economic Minister in history. The government is manipulating the exchange rate just like his predecessors that he complained about so much. You can argue that the manipulation is worse than ever. His cuts are too severe and the increases are too far too fast. His foreign policy has been a mistake and he realizes that only now that Argentina is desperate.

Don't argue that Argentina would be on the brink if Massa won. No doubt about it. But Massa did not win and Milei needs to not make same mistakes as people before him. I am not saying this isn't a tough job because it is but the longer he is in office the less I think he really is knowledgable about economics like he says he is. He is an ideologue to the extreme. He has no flexibility and no empathy which is dangerous as a President of Argentina.

Most people who voted for him voted out of desperation for an impossible situation in Argentina. Talking to dogs, rock star antics, cloning his dogs. Strange but ok. They still thought there was a glimmer of hope. But for many that glimmer is fading.

I still support many things he is doing but I feel like many people aren't saying how they feel about all of this. Painful watching him doing the same thing that he criticized before.

For sure things could be better. But things could be much worse too. Not going to be a quick and easy ride.

 

[CecilM]

For sure things could be better. But things could be much worse too. Not going to be a quick and easy ride.

At what cost? The most vulnerable people can’t wait... He said the cuts would be directed at the political elite ("la casta"), but we can clearly see that’s not what he’s delivered.

 

[Bob]

I do agree with some friends that call him a narcissist. I am glad he stopped taking those narcissistic international trips for more awards. That wasn't helping his cause. And I hope his foreign policy gets better. Next year will be difficult. People are celebrating like there are a lot of accomplishments but Argentina is still in terrible shape.

They can take a victory lap once many of these problems are solved.

Totally agree about all those unnecessary trips abroad. At least they slowed down.

They seem to have a plan that is working to slow down inflation but I wonder how long they can do the same plan. How long can they keep up with the same intervention? Just seems like sort of a ponzi scheme. Eventually people will sell their pesos and take profits. I can't see people holding their savings in pesos for too long. Once it starts it will be a race to the exits.

Once the government opens the floodgates on imported goods into Argentina at reduced taxes, all the local companies will go out of business and even more unemployment.

 

[Betsy Ross]

Now that I am heading back to the USA next month I thought I would post about what I think about all of this. I supported Milei when he was campaigning. My wife and her family all voted for him. But now we all feel like he is failing to deliver on what he promised. He is fixing many things and that is a positive. But the other things are too severe to ignore.

There was a reason why he was so critical of Caputo before when he called him the worst Economic Minister in history. The government is manipulating the exchange rate just like his predecessors that he complained about so much. You can argue that the manipulation is worse than ever. His cuts are too severe and the increases are too far too fast. His foreign policy has been a mistake and he realizes that only now that Argentina is desperate.

Don't argue that Argentina would be on the brink if Massa won. No doubt about it. But Massa did not win and Milei needs to not make same mistakes as people before him. I am not saying this isn't a tough job because it is but the longer he is in office the less I think he really is knowledgable about economics like he says he is. He is an ideologue to the extreme. He has no flexibility and no empathy which is dangerous as a President of Argentina.

Most people who voted for him voted out of desperation for an impossible situation in Argentina. Talking to dogs, rock star antics, cloning his dogs. Strange but ok. They still thought there was a glimmer of hope. But for many that glimmer is fading.

I still support many things he is doing but I feel like many people aren't saying how they feel about all of this. Painful watching him doing the same thing that he criticized before.

Hope your parents are doing well. I remember reading that your parents are sick and you're going back to take care of them.

I don't think any President of any country gets things right completely. I hear your arguments but he is probably doing the best he can under a difficult scenario. I do think they will eventually end CEPO but it has to be at the right time. Doing it too soon will be a disaster. I do agree with you that Caputo was not the right choice but it is what it is.

 

[Joe]

Thank you for posting this. That is the same with those that I know that also previously supported him. To be fair, many still are but their support is fading.

This interview makes you realize how far away from his original goal Milei is doing from what he campaigned on. He said he would dollarize the economy. He said he would end cepo by middle of 2024. That never happened. Now Caputo is saying it is childish to worry when they will end the cepo!

And Milei is frustrated with investors continually asking when the cepo will end! 🤡🤡
And he wonders why Elon Musk hasn't invested a penny in Argentina yet.

Subscribe to read

www.ft.com

Archived version of FT Article

Good article on FT. Like many, I think Milei is doing a lot of good. Shrinking the state is a good thing that should happen in more countries. Cutting spending is good but it looks like the Provinces are just adding on taxes that he is cutting.

That article does a good job of also highlighting that Caputo and Milei aren't on the same page. Caputo says in the article that ending the Cepo doesn't matter and honestly nobody asks about currency controls. But then in the same article Milei is saying he is frustrated with investors who demanded to know when the controls will be scrapped. You can see the clear difference that they aren't on the same page.

Of course investors are waiting for the currency controls to end! There is a lot of BS by Caputo in that article. Preventing like Argentina is still considering whether to start negotiations with IMG on a replacement loan package. That is funny. Argentina is desperate.

 

[Todd]

Now that I am heading back to the USA next month I thought I would post about what I think about all of this. I supported Milei when he was campaigning. My wife and her family all voted for him. But now we all feel like he is failing to deliver on what he promised. He is fixing many things and that is a positive. But the other things are too severe to ignore.

There was a reason why he was so critical of Caputo before when he called him the worst Economic Minister in history. The government is manipulating the exchange rate just like his predecessors that he complained about so much. You can argue that the manipulation is worse than ever. His cuts are too severe and the increases are too far too fast. His foreign policy has been a mistake and he realizes that only now that Argentina is desperate.

Don't argue that Argentina would be on the brink if Massa won. No doubt about it. But Massa did not win and Milei needs to not make same mistakes as people before him. I am not saying this isn't a tough job because it is but the longer he is in office the less I think he really is knowledgable about economics like he says he is. He is an ideologue to the extreme. He has no flexibility and no empathy which is dangerous as a President of Argentina.

Most people who voted for him voted out of desperation for an impossible situation in Argentina. Talking to dogs, rock star antics, cloning his dogs. Strange but ok. They still thought there was a glimmer of hope. But for many that glimmer is fading.

I still support many things he is doing but I feel like many people aren't saying how they feel about all of this. Painful watching him doing the same thing that he criticized before.

Good luck back in the States @Vince! What would you recommend Milei does differently? It seems very divided here. People either love him or hate him. Almost feels like Trump vs. Biden.

 

[Vince]

Gonna miss you @Vince. Are you leaving for good? Or coming back to Argentina?

Will probably be back but not sure on timing. Not so easy to go back and forth since I have kids that are in school. The plan from a long time ago was possibly to have them go to high school in the States anyway and the plan was always for them to go to a good University here vs. Argentina. Love Argentina but not nearly the opportunities for the kids when they are done with school so it may be good timing. I love Argentina and we're not selling our property. A relative is renting it out for 2 years.

Thank you @Vince! It is refreshing to hear honesty from Milei supporter. Even my friend that vote for Milei won't admit any fault. They pretend all is going as planned when I know this can not be how people feel.

You're welcome. I know you're on the other end of the political spectrum and that is ok. You have LOTS of company including some of my wife's family. I still think Argentina is much better under Milei vs. Massa. I know it will take time. Give it a year @Avocado. See how things turn out for next year's mid-term election. We will know by then who was right or wrong.

Hope your parents are doing well. I remember reading that your parents are sick and you're going back to take care of them.

I don't think any President of any country gets things right completely. I hear your arguments but he is probably doing the best he can under a difficult scenario. I do think they will eventually end CEPO but it has to be at the right time. Doing it too soon will be a disaster. I do agree with you that Caputo was not the right choice but it is what it is.

Parents are both deteriorating healthwise. That is the urgency to get back.

Agree it will take time but it just irks me to see Milei falling under the same trap as past Presidents. In the short-term he can just calm down his rhetoric. It was one of the reasons why I hated Trump. If he just kept his mouth shut and toned it down he would have a much easier time. I think Milei could follow the same advice. He is going to have to make peace with others (both here in Argentina and outside of Argentina).

The plan has to be more than just sticking it to the middle class. That isn't going to work. Sure prices had to come up but if they keep on that path it is going to be to his doom. People forget how poor Argentina is. Look at the statistics and you can see the majority of Argentineans make less than $500 USD per month. Dollarization was never going to happen. Many of us already knew that. But some people are just figuring this out.

He is doing a lot of things right.

 

[Jeb Spencer]

In 2024, Argentina's public debt is expected to grow more than ever before in history. Under the policies of Milei/Caputo, Argentina will probably owe $125+ billion more by the end of the year than it did at the end of 2023. This huge increase in debt is happening because of these things:

• The government is borrowing money to cover its regular spending, pretending there's no budget deficit when there actually is one.
• They are encouraging financial speculation where people can make up to 70% profit in dollars each year.

This means Argentina will spend almost double its yearly budget just on paying off this debt. This situation is considered worse than previous economic policies under Macri-Caputo in 2016-2018 and Videla-Martínez de Hoz in 1979-1981.

The actions of Caputo and Milei are intentional, with the goal of benefiting a few at the expense of the whole country, which goes against the principles of liberalism and looks more like the economic control seen in socialist or communist systems.

 

[oil rush]

I have also started seeing more posts from people talking about the overvaluation of the peso because of the government paying interest on holdings. Seems like the rich will get richer and many will be at risk.

Here is a chart I saw this morning. I am not sure how accurate it is but good arguments are being made.

 

[Cardiac Arrest]

I have also started seeing more posts from people talking about the overvaluation of the peso because of the government paying interest on holdings. Seems like the rich will get richer and many will be at risk.

Here is a chart I saw this morning. I am not sure how accurate it is but good arguments are being made.


View attachment 7743

Saw that. It almost sounds like one big Ponzi scheme.

In 2024, Argentina's public debt is expected to grow more than ever before in history. Under the policies of Milei/Caputo, Argentina will probably owe $125+ billion more by the end of the year than it did at the end of 2023. This huge increase in debt is happening because of these things:

• The government is borrowing money to cover its regular spending, pretending there's no budget deficit when there actually is one.
• They are encouraging financial speculation where people can make up to 70% profit in dollars each year.

This means Argentina will spend almost double its yearly budget just on paying off this debt. This situation is considered worse than previous economic policies under Macri-Caputo in 2016-2018 and Videla-Martínez de Hoz in 1979-1981.

The actions of Caputo and Milei are intentional, with the goal of benefiting a few at the expense of the whole country, which goes against the principles of liberalism and looks more like the economic control seen in socialist or communist systems.

I hope this isn't the case but it sounds like you're right they are going to owe quite a bit more.

Presupuesto 2025: el Gobierno prevé emitir deuda por u$s144.204 millones

De acuerdo con la propuesta del Ejecutivo para el año próximo, se tomarían netos unos u$s2.100 millones para pagar vencimientos de BOPREAL.

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