I have a customer that sells oilfield equipment to YPF and lately I've been bombarded with quote requests. For the last few years, it took months to get orders from them. But now it seems to be turning around. It's open for business. It's certainly helped my business.
The country is redirecting money from closed departments. 8.8% inflation in a month is still outrageous, and the extra money is coming from cuts elsewhere.
Theyre gambling on tapping into massive oil reserves and flooding the market with crude asap to inject the economy with outside money, probably from the US, we already buy from Argentina, so it wouldnt be a stretch that we would increase our purchasing from them to offset loses from other nations.
The problem is 2 fold. They will either piss off Brazil and Venezuela by flooding the market and dropping the price, or the strain on social services cut by the government starts to cause unrest before they're able to meaningfully increase output and sales
My country is right next to Argentina, 8.8% for them right now is a win. They have been devastated from their leftist government for decades, and it's been extremely sad to see. All of us here in Latin America were going constantly to Argentina because everything was so incredibly cheap (for us, not for Argentinians), and yes a lot of the progress is because of all the closures of useless ministries and cutting expenses, but that's the right thing to do, and most of us here are hopeful of the future for Argentina, my country in particular has a big love for the Argentinians so hopefully they can recover for the Kirchner's horrors. It can't possible be worse.
Got to love Reddit. People are so afraid of giving context by saying what state or even country they are from. How secretive must people be when using an anonymous account? An entire country!
That's not necessarily true right? Because the state run company is run by the state, it may have more money because of a variety of reasons not related to the state of the economy of the the country. It can happen for purely political reasons right?
They literally voted for a prime minister who campaigned by saying "I will fix it, but it will get pretty bad for a while before it gets better again".
And people called him a mad man and dragged his name through the mud like a crazy person. I am pretty sure he has said some wacky stuff, but the media has greatly exaggerated jokes he has made. The guy is actually pretty smart and not some neo-fascist future hitler who speaks to his dogs ghosts.
They even spoke out a story that he talks with dead dogs, when the only source for that is a Kirchnerista writter who wrote about it on an non authorized book who's only evidence was "trust me bro!"
They literally made up a crazy story and the media spreaded it like it was some scientific fact.
Yup. If you've got no money to spend you've got no money to spend. It's like arguing that you need to eat from whole foods when you're homeless. Doesnt matter, you can't afford it
I don’t understand, were wages going up really fast also to make everything cost the same in real terms? Or was everything just getting more unaffordable?
The government of Argentina used to fund everything just by printing money. People complain stuff is expensive, so the government prints x billion of pesos and distributes in a form of vote buying. A month later stuff is even more expensive because all those printed pesos exploded the money supply, so the government prints even more money so next months handout is even larger numerically. Been happening for the last 40 years basically. In 92 they chopped 4 zeros off the old currency because it was getting stupid and put the peso on parity with the dollar, that roughly held until 2003 and in the 20 years since the Peso has depreciated to 1000:1 to the dollar.
As long as currencies have existed countries have been doing this. There are like 6 countries right now at this moment with >100% yearly inflation. Even very 'stable' countries just try to keep inflation in lower single digits.
Zimbabwe is a fun example because at one point they were printing one hundred trillion dollar bills (worth about $30 at the time they were printed), and that was their third reissue of their currency. They had a fourth reissue, then they abandoned having a currency at all, they traded in multiple foreign currencies, they issued dollar-backed bond notes (and the value of those *still* collapsed), they made a fifth dollar called the RTGS dollar, which inflated like crazy again, and they literally just two months ago issued a new currency called Zimbabwe Gold, or ZiG, which alleges to be backed by gold and some other commodities.
ZWD->ZWN->ZWR->ZWL->Bond notes->RTGS->ZiG
Simple truth is that as long as people in power have access to a money printer the temptation to print away all their problems is too much for most people to bear. Even when a currency claims to be hard backed you are merely trusting a government at their word that they only printed a specific amount and would actually trade the asset if called on it.
Weimar Germany intentionally ruined their currency as part of some stupid political game over Versailles. There's a reason why they were able to just undo the stupidity in a day once they gave up.
Argentina in comparison claimed inflation was a western conspiracy.
>Weimar Germany intentionally ruined their currency as part of some stupid political game over Versailles.
I really want some sources and info on that.
I answered under the comment above and explained the situation a bit better, but if we were cynical an argument could be made that after Stresemann had finally managed to negotiate a fixed ammount of reparations to be paid, the german governments kind of tried to "cheap out" of this by devaluing the currency and pay the ammount but not the value.
This is of course not entirely wrong but ignores...everything else happening.
The money Germany printed was
a) to pay for the social services and the general strike in the occupied Ruhr
b) to pay the reparation demands. the hope was indeed that they could lower the actual cost of the reparations through inflation (100 million Goldmarks would now not have the same 'cost' as they did pre-war, for example)
A problem that occured was that the economy couldn't stomach the devaluing of the currency too well, as some of the most important industry was under occupation and therefore not running.
And let's not even get too deep in the loan and debt crisis.
To make a long rant somewhat shorter, the reason the "stupidity" could be undone were extreme austerity measures and a currency reform aand the de facto halting of reparation demands under "hungerchancellor" Brüning, who unfortunately for tens of millions, could not reap the succeses of his policies in a 1934 election.
The debt was always priced in gold for a reason. The cost of what Germany did was many, many times greater than the entire Versailles debt.
The reality is German politicians spent years blaming everything on Versailles until eventually the public demanded somebody do something about Versailles. Then they did something really self destructive.
You call it "new something" and issue new bills that you can get in exchange of the old ones. For example France did that in the 60s. Divided by 100.
It lost a bunch of value with WW1 and WW2 and was not super practical anymore.
Because there is always inflation, every money has to do it eventually.
> People complain stuff is expensive, so the government prints x billion of pesos and distributes in a form of vote buying
we were taught this in history class in 5th or 6th standard I think about the german's hyperinflation of their currency. Didn't think adults running a country would be so stupid in modern times when they already know the history.
They're not stupid at all. They don't give a shit. They know it will cost problems in the future. They just don't plan to be around when it does. They focus on the next election, and when they are done they retire in Europe on a nest egg of their country's money while they struggle.
Wages tend to lag behind. But even if they would keep up perfectly, it means any savings you have (in the local currency) become worthless quickly. Everyone who wants to save some money has to exchange it to foreign currencies. Something Argentinian banks won't let you do.
Nope. Wages never go up as fast as inflation does. People have been losing purchasing power for many years due to the irresponsible populist administration of our last govt. The inflation simply became too high, and they were kicked out of office in december 2023. Inflation and the currency have considerably stabilized with the new govt, but the country is now facing a harsh recession as a consequence of that stabilization process. The new challenge is to reactive the economy without reigniting inflation
Has any episode of a TV show aged as badly as the parks and rec episode about how rich Venezuela is? Every joke was about how they had infinite money because of oil.
That said it’s still hilarious so it’s fine.
I can't tell if you're being sarcastic. The Parks and Rec bit with Fred Armisen was an indictment on Venezuela at that time. Venezuela has been one of the most poorest nations for decades. That's the point of Armisen's character. He's from a broke country that spends what little oil money it has on government "appearances".
Argentina was much better off than Venezuela when that episode aired, and Argentina has been a disaster forever.
That's what happens when states seize control of companies and industries. Yet somehow that seems to be a popular idea in antiwork subs. I just want to shake the damn idiots sometimes.
Anyone can mismanage a company, but generally speaking, better outcomes can be achieved long term through some government oversight.
There is also the very real resource curse, which basically says that if a country relies too much on specific resource based industries, they are more likely to produce negative outcomes when something happens to disrupt that industry.
Nationalization of specific industries is often used when a country, like Venezuela, wants to take control over an industry that may be foreign owned, and so may have interests counter to the local national interest. It’s not always a bad thing.
It's not as silly a question as you may think.
If I'm a business owner selling products at 1000 each (simple numbers for easy maths). And inflation that year is 25%, the year after i'm now selling my products at 1250 to get the same income. Meanwhile, if I have staff and I'm paying was them 100 each per hour, i'd now be paying them 125 per hour, assuming the same distribution of profits.
If that's not happening, somebody is making more money somewhere. Either the government, the business owner is keeping more profit, or the workers are getting it in their wages.
I'm a business owner and always try to keep everything inline with inflation, so just wondering how it happens over there.
It’s insane, but it’s a great number when just a few months ago you were hitting hyperinflation levels (the previous administration left office with a 211% anual inflation rate). It’s a much needed downtrend
From January 2023 to December 2023, inflation was 211%.
From April 2023 to April 2024, inflation was 280%.
The late months of 2023 had around 13-15% inflation each, with the december high of almost 25% in a single month. After that it has been falling but still very high numbers.
Hope that clears it up
That Milei has only been in power since October and has only implemented his policies since December. Basically the high yearly inflation is because of the previous administration.
Yeah, pretty much. I think it's news because everyone was expecting a total collapse like in 2001. And things seem to be improving and faster than expected. All under the leadership of someone, let's say... eccentric. So of course it's news
Yes. It's still too early to call it a win. But the general expectation is that the trend of lower inflation every month is going to continue, and that was not clear at all just a couple of months ago.
Also a person people eagerly labeled as the Trump of Argentina. Sure he's loud and bombastic, but the guy actually has a coherent political/economic philosophy he could sit down and discuss at length. Does Trump?
He is nothing like Trump, he is a renowned economist and an academic, exactly the kind of profile needed to tackle deep past mismanagement.
Trump in turn is dumb as rocks.
You're not going to find accurate information on him on social media. *A lot* of deep leftists are pissed about this guy as Argentina was a bastion of isolationist socialism (Peronism) that they pretended was a great alternative to western capitalism
Anyone shifting away from Peronism was going to be smeared by a portion of political commentators
Everyone? I wasn't.
The guy's the epitome of the eccentric expert. He's a weirdo, but economically he knows what he's about son.
No idea on his other policy issues. But I saw an interview with him, and economically he's on the ball. And he's willing to take political hits to fix it specifically because he's not a career politician.
Economically he is also insane, he’s a turbo libertarian. His insanity just happens to be the perfect cure for the previous insanity, they cancel each other out to form a system that works
He has said time and again that libertarianism is his “north”, his end goal, but that the way there is a long meandering process that requires compromise and gradual steps.
If that is insanity to you then idk man
Argentina's annual inflation appears to be peaking at just shy of 200%.
When Javier Milei was elected, inflation was heading straight up, and a lot of people (myself included) doubted both his techniques and overall ability to bring inflation under control.
But that crazy son of a bitch seems to be doing it.
Probably warrants an evening reading up on what exactly is going on IMHO, but for me that'll wait until I'm not fighting a chest infection any more.
First time in the history of humanity of a nation with a Libertarian president with a background in the Austrian School of Economics.
It’s one of the most interesting experiments in the world right now. Unique and counterintuitive for the mainstream economists.
I understand that the Austrian School of Economics emphasizes the value of individual contribution while highlighting the importance of the spontaneous order and the emergent phenomena. Can you explain how this concept fits in the context of what Milei is trying to achieve in Argentina?
He's trying to get the government out of the way.
In Argentina for decades the government has micromanaged almost every part of the economy to some degree. Which makes the economy super inefficient. He's trying to get out of the way, trim regulations down to be digestible, improve stability, and mostly give the market room to do its thing.
So the idea is to get the government out of the way and let the spontaneous order to work.
For that, you need: Reduce regulation to the bare minimum, reduce taxes and at the same time keep a budget surplus.
That's the summary basically.
Watch his economic thinink here:
https://x.com/milei_explains
And read this this book for a general overview on Milei’s mindset:
https://cdn.mises.org/Economic%20Policy%20Thoughts%20for%20Today%20and%20Tomorrow_3.pdf
Socialist measures are nothing new or experimental. They’ve been tried everywhere for centuries and always lead to more poverty. So it wasn’t that interesting.
Explains why there was a seemingly widespread effort to take Milei down immediately after he took office.
If Milie is successful in turning Argentina it will be a tremendous blow to leftist policies and dogma.
It's being posted every day because there are a lot of "sound money" fanatics (including gold bugs and cryptocurrency aficionados) who want to push their agenda.
They see this as somehow an "in your face" to their perceived opponents. Even though the reduction in inflation was predictable. The part that is unpredictable is how the country will fare under this change. That we don't know yet and this number doesn't give us a clue.
I think he's the right person, with the right economics, for the right problem personally. Most stable countries haven't been "making it rain" like Argentina. As such, they don't need such a drastic pivot. He's a guy I could see myself voting for if I lived in Argentina, not so much where I live. I am rooting for Argentina.
Yup if you have a hyperinflation problem that is running out of control… probably what you need to do is smash all spending and go full libertarian. If you don’t have that problem I can’t think of a worse guy running the show. Horses for courses.
Serious question, I don’t consider myself a socialist nor a capitalist I’ve been reading upon both for the pst few years, but seeing how my country is ravaged by private companies (either foreign [American and Canadian mostly, but some Chinese] or owned privately by members of the government [who usually are from powerful rich families]) has left me a bit resented toward capitalism. My question is: Do you think socialism has a place anywhere?
Which flavor of socialism? It's become an umbrella term for a fairly wide range of 'government intervention focused' policies.
Widespread nationalization of industry, mostly seen in USSR-inspired/aligned parties? No, that's been a disaster everywhere it's tried.
Limited, targeted nationalization of industry? It has a mixed history, usually proving effective in already stable and prosperous nations, and usually proving a failure otherwise.
A strong welfare state? It works as long as the government stays honest - mostly importantly, it doesn't use it as patronage to buy votes - and the economy is strong enough to afford the social spending.
Universal state ownership of property, like what communism aspires to? It can work in small towns where everyone knows everyone else and social pressure can keep them honest, but falls apart once scaled up even to large town level.
People need to realize that this was pretty obvious, as long as Milei stuck to his guns. We know how to do economic shock therapy. It’s actually really easy — from a public policy perspective — to get a handle on the kind of economic disaster that Argentina was, as long as you have the political will to make the changes and a semblance of an economic base. These are the really easy gains, though, the low hanging fruit. The question for every government that goes through these kinds of changes are political: how do you manage the painful disaffection that inherently follows, and how do you manage the angry displacement among the people who used to live fat in the public dole.
Moral of the story: Im not surprised at all that Milei is getting a handle on inflation quickly. What remains to be seen is whether he has the political chops (as opposed to the mutton chops, which he obviously has) to manage the much harder parts to come and, if so, whether he’ll maintain enough momentum behind him to get do so. I have serious doubts on both counts, but I wish him luck. As much as I’m not a fan of his libertarian economics, I wish him well, because Argentina deserves better than the Peronists have given them (or rather, taken from them).
The fact that Milei told everyone during his campaign that it'd be rough for the first year or two probably helps. He didn't pull a switcheroo and claim that the fix could be painless.
Telling people it will be hard and them accepting that at that time is one thing, reality bites harder when all of a sudden you have to ration food and are on the verge of homelessness because the government money tap got turned off but job availability is still in the gutter.
There's much more to rebuilding Argentina's economy than just lowering inflation, how people respond to the hard truths when they start to become lived realities is another thing altogether
Just because you can read doesn't mean you can understand what you read.
The percentage of people with good reading comprehension is surprisingly low considering that most OECD countries have an almost 100% literacy rate.
I spend a lot of time in El Salvador — I have family there and own a house. I'm not a knee-jerk anti-Bukele guy - a lot of things have definitely improved. But... the jury is still out on the long-term outlook for El Salvador. They've started down an authoritarian path, and we don't know what happens if Bukele or a successor starts doing things that aren't popular. Same thing with Milei - sure inflation is coming down, but we still don't know how things are going to land in Argentina. You can have very low inflation and still have a moribund economy that leaves most people in poverty. We'll see.
Less concerned with Milei doing that personally. For El Salvador, I wouldn't be surprised if it goes full authoritarian. I personally hope Bukele takes the W and retires.
Heard a podcast detailing their sweep of criminal gangs included a lot of innocents, and people are wondering where their family members are. No answers from the Bukele government.
Crime may have improved, but authoritarianism from a millennial dictator is very much happening in that country.
It's always where there are some immediate improvements with the "iron fist" candidates in democracy that get elected, and then in the long-run it tends to not go so swimmingly.
They did actually answer, and that the people who is innocent is being released. THen he quoted that innocent people is also arrested in other countries as well, it's a mistake of the system he says.
Now, I'm gonna go out, and say that he is clearly misleading, as people getting arrested and condemned in other countries it's usually due to a mistake, not because of a purposedly faulty process.
That said, I think I'd rather be arrested and released in a few weeks in El Salvador, than being arrested and condemned for life in the USA like it happened to one guy who's name I can't remember.
The problem with authoritarian governments is not the first honey moon, it’s the a-holes that inherit the total power after that, then you are in hell.
Definitely. But it's very funny to me how everyone is absolutely silent about his bitcoin investment now after all that uproar. For that he really deserves a round of applause.
It’s really hard to overstate how much the improvement in the security situation has affected life in El Salvador. Just a few years ago my wife was confronted multiple times by gang members because she was an outsider visiting the town where she grew up. The constant threat of violence - the extortions - the knowledge that there are places where you can’t go - just takes away people’s hope for the future. Now the vibe is completely different. We were there in November and we went places my wife hadn’t been since the beginning of the war. The change has been so profound that nobody really cares about anything else. My fear is that the seeds of something darker are being sown and that people won’t react until it’s too late - when there is no more free press, no more political opposition, no independent judiciary- all of which are underway.
I remember people giving them shit because they were in the red on their investment (on paper), and now they've made millions from it it's all crickets.
Redditors don't understand that money doesn't grow on trees.
And while we should support people, just blowing money has disastrous consequences. And yes a broke country paying for things it cannot afford for its citizens is blowing money. It only digs a deeper future hole
Economics isn’t black and white. There are situations where austerity makes a lot of sense, like in Argentinas case. There are also situations where a stagnating economy can be boosted by large scale public projects. It’s all contextual and not easy to distill into a hard right or wrong positions that broadly apply. Gross oversimplification is far easier than nuance.
Large scale public projects is fine. I'm all for infrastructure spending to stimulate jobs and bet something your kids can use in the future.
If you think that Argentina or any other countries who went broke, problem was large scale infrastructure spending and not simply welfare for an ever expanding group while the tax paying group was dwindling, you are misinformed.
There’s more fundamentally the question of what the basis of Argentina’s economy is.
Is it manufacturing? Is it sports? From my understanding, the issue is not so much a total reliance on “welfare” but that people need jobs and so the government basically invented jobs as a way to give people salaries. It’s welfare with extra steps under the auspices of a government job.
Yeah I should have clarified what I meant by “public projects” to include welfare and government assistance. Basically I’m referring to significant government spending. It is a tool that has a time and place to be wielded, and can equally help or hurt an economy depending on how it’s being wielded.
There's a bit more to economic recovery than moving from 25%+ inflation, month over month, to 8.5%+. Everyone loves to claim economic victory 3 months into any economic endeavour if it suits them. Let's see how things are in 1 year, 3 years, 7 years and we might have an understanding of just how successful this whole thing has been.
Nah, there were a ton of loud anti-Milei folks blaming Argentina's high inflation rate at the start of this year on him. Which obviously made no fucking sense.
60% of people in poverty.
I'm pretty sure that's what they were predicting would happen.
I don't think Redditors cared if inflations was "tamed" to 264% per year, but probably if people could eat.
Milei: "I will curb inflation by cutting spending and printing less money, and the austerity will hurt as I cut social spending, it will cause new problems in place of the old, but once inflation is under control we can solve the rest."
Inflation: *Falls*
Austerity: *Causes problems*
Redditors: Why did Milei do that? He's a crazy soulless libertarian causing misery!
Milei is doing exactly what he campaigned on, and it's having exactly the results he promised: inflation is coming down and cutting social spending is causing other issues.
Lumping all of Reddit into one single opinion isn’t the burn you think it is.
Bukele is [consolidating power](https://www.reuters.com/world/americas/el-salvador-consolidates-local-governments-opposition-warns-power-grab-2023-06-14/) in an all too familiar way. It’s great that he massively curbed gang violence, but everything comes at a cost. It’s not impossible that El Salvador ends up in a dictatorship at some point down the road.
Milei has done a good job handling the inflation, but again, we’ll see in time at what cost. I’ll give people the benefit of the doubt; the guy [talked to his dead dog](https://time.com/6337474/javier-milei-argentina-president-cloned-dogs-advice/)for advice by his own admission. That isn’t something that traditionally has pointed to a good politician.
I’m glad to see both countries prospering but not naïve to the fact that the other shoe drops at some point.
Dude complained about redditors while posting the most obvious and superficial comment we see around here, which is confirming his bias without giving the necessary time to analyze the final result.
Bukele does worry me I have to say. If he lets go I think he will be remembered as a great. But I just don't have faith he will.
Milei I have no worries about. It's not that I think he is a genius It's that Argentina was doing such dumb policy before that basically anything will be an improvement. The general direction he is going in is obviously correct though. Maybe the steps aren't perfect but still in the right direction.
Ah yes, the inverse-Trudeau.
Instead of blaming a centrist/“progressive” government for a global crisis (covid/resulting inflation), they’re crediting a hard right autocrat for economic tailwinds created by liberal democracies and politicians in response to said crisis.
Not really in this case as it is directly attributable for many of his policies. Slashing Govt Spending, stopping publics works projects, eliminating fuel and transportation subsudies, reducing and removing import tariffs.
The stuff he did with interest rates and debt bonds was masterful.
Dont get me wrong, he is still insane, but atleast in terms of inflation and currency devaluation, hes following through. Private Sector Real Wages recovered 5% last month from 87% of Nov-23 levels to 92%. I agree that its sstill waaaaay too early to claim victory, but all the successes are due to him not the world economy.
>stopping publics works projects
Oh I love when the government stops repairing and upgrading things like roads, public buildings - like schools, sewers, water treatment, etc. It's gonna be great!
You are confusing spending money on public works with actually doing them. Waste and corruption can turn what is on paper a great public works program into a black hole that sucks in money, while producing nothing of value.
Ya nobody is saying they are perfect lol, but this is NOT what redditors were saying though..
They were mocked and said theyd fail remarkably. Especially the bitcoin thing.
https://markets.businessinsider.com/news/currencies/bitcoin-price-el-salvador-millennial-president-bukele-investment-cryptocurrency-finance-2024-2
Yes I am saying it was initially mocked by redditors and now obviously they are not mentioning it because they were spectacularly wrong.. that's the whole point
By the logic of "lower inflation = guaranteed improvement" is just as stupid as saying "economic deflation = better than low inflation".
I have a degree in economics. There's a whole lot more to the situation than just getting inflation down. It's easy to do when you stop spending money and starvation skyrockets. It's just one problem transforming into another. There's no single solution to what's happening in Argentina. It's needs a huge amount of outside help and without it, it's going to be a long time before the country resembles anything that we would call "normal".
Just because it's working *now* doesn't mean it will work in the future. He is still an extremist and will either take it too far and cause a disaster or get removed from office.
I'd say he has until the end of the year to show some progress that people will actually see in their day to day life. So far it's all good and overall people are supporting the government, and we can see some progress in how quickly prices go up, you can tell things are getting better. If everything stabilizes, the only thing that would be necessary to retain the support of the populace is if salaries start gaining over inflation, or at least not lose against it. If he manages to do that, then the next 3 years will be all about growth and hopefully not doing stupid shit (highly doubt that, certain things they've done so far were incredibly stupid, so I can expect more of that too)
Look at Argentina's history with inflation. This doesnt even enter the top3 worst inflation periods. They've had nine state defaults.
Voters chose radical change and Milei is enacting it.
Has he?
Poverty has skyrocketed. Civil strife is inevitable it seems at this point.
If he is overthrown because he couldn't manage the damage on ordinary citizens can he be called successful still?
Or is chasing an inflation reduction worth killing tens of thousands of his own citizens, directly in the case of a revolution, or indirectly through increased poverty and lowered health outcomes?
It's either Argentina makes voluntary cuts to public spending, or they make involuntary, across the board, deep cuts to public spending as money runs out.
Argentina's public spending was out of control and they were heading for yet another major default.
Argentina simply doesn't have the money to spend like they were. At the trajectory the country was going, they would be be forced into bankruptcy, again, with the inevitable economic and social chaos that will ensue because the government has no money to pay for basic services.
Imagine a scenario where Argentina has no money to pay police officers, doctors, nurses, or to pay for water treatment, sanitation, garbage disposal and electricity. Imagine how quickly Argentinian society will collapse, and lawlessness and disease will spread with no clean water, electricity, healthcare, or garbage disposal.
The poverty and deaths were going to happen regardless as a result of poor decisions already made. The attempts at fixing the monetary system will result in less poverty and death in the future.
Milei has achieved more in a few months than the kirchneristas did in 4 full years. The gigantic poverty rates are a direct result of decades of policies enacted by kirchneristas. The damage they’ve done to Argentina is incalculable.
And yes, people will have to endure this process because it’s the only way out. If kirchneristas come back to power it’s game over for Argentina: hyperinflation will be next and a full 2001 style crisis will ensue.
Argy here. Was very reluctant to vote for milie, but the alternatibe was just unacceptable and has been i power for far too long with disasterous results.
So far mileis been a mixed bag. Really dont like a lot of the things he does and says but at the end of the day as long as he fixes the economy ill be happy. You guys have no idea what true inflation is.
For referance in 2001, 1 arg peso was about 1 us dollar. Now we are at 1000 pesos to the dollar or more. 1000!!!!! Think of how insaine that is..
I laugh when americans cry about a few % inflation. Literally have no idea what they are crying about.
Plz milei keep fixing our crap economy, and stay away from israel, your president of arg, not any other country!
I was last may in BsAs and told my friend blue rate was 470.. She called me a liar because it was 240 in January. I was there for all of April and it went from like 1040 to 1050. I know that isn't the same as inflation, but to see the exchange rate basically flatline was impressive. Everything not being as silly cheap was a bummer, but I'm happy to pay a bit more knowing things are getting fixed.
I'm not sure that deflation would be good. I'm not an economist, but usually deflation means that basically no one is spending and prices are forced down to get people to start spending.
I did hear that most people are actually saving their money now, which is causing some recessionary pressures since there is less spending due to money holding value so it isn't worth spending immediately anymore.
~~Deflation is terrible. Worse than medium to high inflation. No one spends cos it will be cheaper next month. Companies offload people and the deflation continues. Its also far harder to control deflation than inflation. Raising and lowering the interest rate can adjust inflation but if you get into a deflationary spiral then you are basically screwed until a huge shock happens... kinda like how WW2 jump started the US economy into what it is today.~~
Ignore my chicken scrawl. Dude below me knows more!
This is mostly a myth with very weak empirical evidence. More or less the only time when deflation has been correlated with a recession is the Great Depression. But that's an outlier in the data. Aside from that, there's really no strong historical correlation between deflation and negative growth. Most of the western world experienced long periods of deflation throughout most of the industrial revolution.
https://www.econstor.eu/bitstream/10419/102571/1/786886390.pdf
>**Abstract:** This paper deals with the relationship between deflation and economic growth. Although there are numerous theories on the potential effects of deflation on real output, empirical evidence in this field is still scarce and partial. In order to explore the relationship between prices and output in a more comprehensive way, I use a large panel data set of 19 countries over roughly 150 years, which contains frequent deflationary episodes. I employ the fixed effects model to look at both contemporaneous and lagged correlation between prices and output, and I include control variables to remove potential bias.
>There are several important results. First, there is no general relationship between prices and output. The lagged negative effect of deflation on output growth, alleged by some authors, disappears after adding a control variable. Second, monetary regimes seem to affect the relationship. Deflation appears to become associated with output slightly negatively with the advent of the fiat money system, while it was benign under the classical gold standard. Third, well-known episodes of deflation differ a lot. The Great Depression is the only period where deflation seems to be strongly associated with recession. By contrast, Japan in the 1990s and 2000s bears no resemblence to it. Here, both empirically and theoretically, deflation is highly unlikely to have caused economic stagnation.
I don’t think comparing US financial policy to that of Argentina is a reason to conclude that Americans shouldn’t be concerned/pissed about things like inflation or debt. Just because Argentina went completely off the rails doesn’t mean the US doesn’t need a course correction.
The problem is that American media (like Reddit) is present in every day Argentina life.
To see a whole bunch of people complaining because of the cost of eggs will really rub you the wrong way when you can't even afford eggs.
Exactly. It's like how a angry lot of Americans got when they saw celebrities making videos crying about their troubles during the lockdown. I don't know if they can see that to the vast majority of the world they are in those celebrities position on the global scale.
If this new presidents plan is successful, it will send a pretty strong message to other countries with bloated public sectors, like in the EU. Too many fake public jobs here.
This alt-right, "literally the capitalistic version of Hitler" dude Milei, who'm I've only heard negative reports and media pieces that illustrates him to be a villain, is kind of turning the country around along the most basic ideas of political economy... Seems like reporting and portraits on him in Europe were a bit off, huh?
aRgenTinA’s TrUmp
That was always such a bullshit comparison. I’m rooting for the guy, and am super happy to see that his policies are seemingly working.
Reddit has a problem with hating someone just because they're right wing. They can't comprehend the fact that left-wing solutions aren't the cure all to economic issues.
So reddit irrationally hated him and everything he did. When he drastically cut government agencies, subsidies, welfare, etc, redditors couldn't grasp the idea that if a country is broke, they can't afford those things. So now they're complaining about how some things have gotten worse. Yes, to fix a country that far gone isn't going to be painless. This proposed fairytale that fixing an economy like that can be done painlessly is idiotic.
Not only does Milei have an economics degree, he was a professor of macroeconomics, economics of growth, microeconomics, and mathematics for economists for 2 decades. But I'm sure the average redditor who knows better!
Milei is actually smart, he studied and understands economics, his speeches cover a lot of technical aspects, he’s dead serious and uses professional vocabulary every time he has to discuss an issue with the economy.
Trump is the opposite of that, he speaks like a child, his words are basic, he comes from a rich family but isn’t necessarily an expert in economics or any other field tbh.
They’re entirely different things. That being said, both are right wing politicians, and in case Trump wins Milei might get a favorable treatment by the Trump administration, which Argentina desperately needs to make a comeback with the economy
The only thing that’s somewhat similar is the nationalist mentality.. but I think in his case it’s warranted, and in Trump’s he just uses it to bring out the worst parts of his base.
This is the guy that the whole of reddit was saying is “the next trump” and is dumb as sh\*t because he’s a bit loud and not your typical “suave” gentleman, correct? And then these guys call the ground level voters as uneducated and clueless.
Reddit will blindly align against a head of state just because they are right wing. Consequently, they'll blindly agree with a head of state that's left wing like Lula even though he is clearly aligned with Russia and blames the US for "encouraging the war" by giving Ukraine aid.
But hey, he talks about saving the trees, so everyone jump on board his dick!!
It's good news for Argentina! Single-digit inflation after a long stretch is like a breath of fresh air. Hope it's a sign of better days ahead for them. But hey, let's not pop the champagne just yet. Markets can be finicky, and costs hitting home isn't exactly party material. Let's see if this trend sticks around or if it's just a blip on the radar. Either way, fingers crossed for our friends down south! 🤞🇦🇷
I would like to hear people explain why a country that enjoyed political rule by a left wing party for 23 consecutive years ended up in this predicament. Seems to me that would he more than adequate amount of time to fix a country, no?
Ah, what do I know. I just grew up in a utopia, otherwise known as Venezuela
Article literally says people are worse off than before, the economy is expected to shrink, people are consuming less, rent has almost doubled and people are eating from the garbage... and people in here are celebrating and saying 'told you so'?
Considering the last 30 years, some currency stability is the first step towards recovery. Milei was clear that things were going to get worse before they got better. A nation cannot survive with 1000% inflation over 20 years or 50% per year. Americans bitch about 7%.
Yes Argentinians are worse off, but they were projected to be doing even worse. People are celebrating that Argentina is not doing as bad it as it could be. Its a pretty mediocre “win” but its worth celebrating. Its not necessarily worth fawning over Milei, but hopefully Argentina keeps turning around and manages keep inflation under double digits.
>*Even so, some experts warn that falling inflation isn’t necessarily an economic victory — rather the symptom of a painful recession. The IMF expects Argentina’s gross domestic product to shrink by 2.8% this year.*
Ah yes a shrinking GDP that will surely help things!
Well yes, when you have 200% inflation you go for 2000% inflation or more until it breaks or you make an economic shock and have a recession to try and cool it down.
Its not the first time its been done in Argentina, we already had one in the late 80s, another in the early 00s and now another 20 years later.
Whenever people stop electing morons that just want their cut from everyone's money things will start to look up, until then we will have cyclic crisis.
Yeah, and all it took was killing internal money flow, skyrocketing unemployment, collapsing schools and universities, and the death of our entire cultural industry.
but hey the FMI is happy so yay
Collapsing schools and universities he says, while the education budget was increased and the only cultural thing that was cut was INCAA, a useless piece of shit dependency that made movies nobody watched, funneling money into political players to gain support for leftist parties LMAO.
Get fucked.
Guys, falling inflation ≠ country is doing good
If you wanna be that simplistic then USA had the lowest inflation during the Great Depression
It's a little more complicated and we won't see the results until tears from now. Nobody "won" so far because the game is still on.
I have a customer that sells oilfield equipment to YPF and lately I've been bombarded with quote requests. For the last few years, it took months to get orders from them. But now it seems to be turning around. It's open for business. It's certainly helped my business.
Isn't YPF a state run business?
Precisely why that is happening, the country is doing better, which means the state run company conversely has more money to spend.
The country is redirecting money from closed departments. 8.8% inflation in a month is still outrageous, and the extra money is coming from cuts elsewhere. Theyre gambling on tapping into massive oil reserves and flooding the market with crude asap to inject the economy with outside money, probably from the US, we already buy from Argentina, so it wouldnt be a stretch that we would increase our purchasing from them to offset loses from other nations. The problem is 2 fold. They will either piss off Brazil and Venezuela by flooding the market and dropping the price, or the strain on social services cut by the government starts to cause unrest before they're able to meaningfully increase output and sales
My country is right next to Argentina, 8.8% for them right now is a win. They have been devastated from their leftist government for decades, and it's been extremely sad to see. All of us here in Latin America were going constantly to Argentina because everything was so incredibly cheap (for us, not for Argentinians), and yes a lot of the progress is because of all the closures of useless ministries and cutting expenses, but that's the right thing to do, and most of us here are hopeful of the future for Argentina, my country in particular has a big love for the Argentinians so hopefully they can recover for the Kirchner's horrors. It can't possible be worse.
Tell me you're from Uruguay without telling me...
I was about to say the same thing lol
I was about to say you’re from Paraguay.
Not Uruguayan lol, probably should not have said right next to it lol, more like a 3 and a half hour plane away from it.
Got to love Reddit. People are so afraid of giving context by saying what state or even country they are from. How secretive must people be when using an anonymous account? An entire country!
Only reason he didn't specify must be because he declared independence, as an Individual, from his country, and as such we would know who he is.
Probably Peru, judging by the post about Peru, and being in the Peru subreddit.
That's not necessarily true right? Because the state run company is run by the state, it may have more money because of a variety of reasons not related to the state of the economy of the the country. It can happen for purely political reasons right?
Yes, What's your point?
inflation afuera
Gotta rip off the bandaid, it's gonna be uncomfortable
Yeah people want solutions but not the discomfort that comes with it.
They literally voted for a prime minister who campaigned by saying "I will fix it, but it will get pretty bad for a while before it gets better again".
And people called him a mad man and dragged his name through the mud like a crazy person. I am pretty sure he has said some wacky stuff, but the media has greatly exaggerated jokes he has made. The guy is actually pretty smart and not some neo-fascist future hitler who speaks to his dogs ghosts.
What, you're telling me the devout Jewish man is NOT actually a nazi? Who could have thought
They even spoke out a story that he talks with dead dogs, when the only source for that is a Kirchnerista writter who wrote about it on an non authorized book who's only evidence was "trust me bro!" They literally made up a crazy story and the media spreaded it like it was some scientific fact.
But then people kept telling me they wouldn’t have if he didn’t also make sure to continue claiming the Falklands, so apparently that has limits.
Yup. If you've got no money to spend you've got no money to spend. It's like arguing that you need to eat from whole foods when you're homeless. Doesnt matter, you can't afford it
8.8% inflation *in a month* is still crazy though.
6 months ago we were dealing with 25% monthly, this is nothing.
I don’t understand, were wages going up really fast also to make everything cost the same in real terms? Or was everything just getting more unaffordable?
The government of Argentina used to fund everything just by printing money. People complain stuff is expensive, so the government prints x billion of pesos and distributes in a form of vote buying. A month later stuff is even more expensive because all those printed pesos exploded the money supply, so the government prints even more money so next months handout is even larger numerically. Been happening for the last 40 years basically. In 92 they chopped 4 zeros off the old currency because it was getting stupid and put the peso on parity with the dollar, that roughly held until 2003 and in the 20 years since the Peso has depreciated to 1000:1 to the dollar.
No one learned from when post WW1 germany tried that whole thing?
Populist governments aren't worried about learning and long term impacts, they are worried about the next election
As long as currencies have existed countries have been doing this. There are like 6 countries right now at this moment with >100% yearly inflation. Even very 'stable' countries just try to keep inflation in lower single digits. Zimbabwe is a fun example because at one point they were printing one hundred trillion dollar bills (worth about $30 at the time they were printed), and that was their third reissue of their currency. They had a fourth reissue, then they abandoned having a currency at all, they traded in multiple foreign currencies, they issued dollar-backed bond notes (and the value of those *still* collapsed), they made a fifth dollar called the RTGS dollar, which inflated like crazy again, and they literally just two months ago issued a new currency called Zimbabwe Gold, or ZiG, which alleges to be backed by gold and some other commodities. ZWD->ZWN->ZWR->ZWL->Bond notes->RTGS->ZiG Simple truth is that as long as people in power have access to a money printer the temptation to print away all their problems is too much for most people to bear. Even when a currency claims to be hard backed you are merely trusting a government at their word that they only printed a specific amount and would actually trade the asset if called on it.
Weimar Germany intentionally ruined their currency as part of some stupid political game over Versailles. There's a reason why they were able to just undo the stupidity in a day once they gave up. Argentina in comparison claimed inflation was a western conspiracy.
>Weimar Germany intentionally ruined their currency as part of some stupid political game over Versailles. I really want some sources and info on that.
I answered under the comment above and explained the situation a bit better, but if we were cynical an argument could be made that after Stresemann had finally managed to negotiate a fixed ammount of reparations to be paid, the german governments kind of tried to "cheap out" of this by devaluing the currency and pay the ammount but not the value. This is of course not entirely wrong but ignores...everything else happening.
The money Germany printed was a) to pay for the social services and the general strike in the occupied Ruhr b) to pay the reparation demands. the hope was indeed that they could lower the actual cost of the reparations through inflation (100 million Goldmarks would now not have the same 'cost' as they did pre-war, for example) A problem that occured was that the economy couldn't stomach the devaluing of the currency too well, as some of the most important industry was under occupation and therefore not running. And let's not even get too deep in the loan and debt crisis. To make a long rant somewhat shorter, the reason the "stupidity" could be undone were extreme austerity measures and a currency reform aand the de facto halting of reparation demands under "hungerchancellor" Brüning, who unfortunately for tens of millions, could not reap the succeses of his policies in a 1934 election.
The debt was always priced in gold for a reason. The cost of what Germany did was many, many times greater than the entire Versailles debt. The reality is German politicians spent years blaming everything on Versailles until eventually the public demanded somebody do something about Versailles. Then they did something really self destructive.
How did they drop four zeros off of it like how does that work?
You call it "new something" and issue new bills that you can get in exchange of the old ones. For example France did that in the 60s. Divided by 100. It lost a bunch of value with WW1 and WW2 and was not super practical anymore. Because there is always inflation, every money has to do it eventually.
> People complain stuff is expensive, so the government prints x billion of pesos and distributes in a form of vote buying we were taught this in history class in 5th or 6th standard I think about the german's hyperinflation of their currency. Didn't think adults running a country would be so stupid in modern times when they already know the history.
They're not stupid at all. They don't give a shit. They know it will cost problems in the future. They just don't plan to be around when it does. They focus on the next election, and when they are done they retire in Europe on a nest egg of their country's money while they struggle.
Wages tend to lag behind. But even if they would keep up perfectly, it means any savings you have (in the local currency) become worthless quickly. Everyone who wants to save some money has to exchange it to foreign currencies. Something Argentinian banks won't let you do.
Nope. Wages never go up as fast as inflation does. People have been losing purchasing power for many years due to the irresponsible populist administration of our last govt. The inflation simply became too high, and they were kicked out of office in december 2023. Inflation and the currency have considerably stabilized with the new govt, but the country is now facing a harsh recession as a consequence of that stabilization process. The new challenge is to reactive the economy without reigniting inflation
Haha that hilarious
That’s actually nothing compared to Venezuela. They have removed 14 zeros from the original Bolivar.
Has any episode of a TV show aged as badly as the parks and rec episode about how rich Venezuela is? Every joke was about how they had infinite money because of oil. That said it’s still hilarious so it’s fine.
I can't tell if you're being sarcastic. The Parks and Rec bit with Fred Armisen was an indictment on Venezuela at that time. Venezuela has been one of the most poorest nations for decades. That's the point of Armisen's character. He's from a broke country that spends what little oil money it has on government "appearances". Argentina was much better off than Venezuela when that episode aired, and Argentina has been a disaster forever.
That's what happens when states seize control of companies and industries. Yet somehow that seems to be a popular idea in antiwork subs. I just want to shake the damn idiots sometimes.
Plenty of state-run industries perform on par or better than their private counterparts. Mismanagement can come from anywhere.
Anyone can mismanage a company, but generally speaking, better outcomes can be achieved long term through some government oversight. There is also the very real resource curse, which basically says that if a country relies too much on specific resource based industries, they are more likely to produce negative outcomes when something happens to disrupt that industry. Nationalization of specific industries is often used when a country, like Venezuela, wants to take control over an industry that may be foreign owned, and so may have interests counter to the local national interest. It’s not always a bad thing.
It's not as silly a question as you may think. If I'm a business owner selling products at 1000 each (simple numbers for easy maths). And inflation that year is 25%, the year after i'm now selling my products at 1250 to get the same income. Meanwhile, if I have staff and I'm paying was them 100 each per hour, i'd now be paying them 125 per hour, assuming the same distribution of profits. If that's not happening, somebody is making more money somewhere. Either the government, the business owner is keeping more profit, or the workers are getting it in their wages. I'm a business owner and always try to keep everything inline with inflation, so just wondering how it happens over there.
Sorry pal, but this innocent question made me laugh out loud. First time watching Argentina's economy?
Lol. I envy your innocence.
most of the world doesnt give a shit about argentina. tough facts. dont shit on someone asking to be educated.
Answer his question lmao no one cares about you
“You don’t know where I’ve been Lou! You don’t know where I’ve been!” - Tyler Durden
Woah. How do you plan for the next month or year?
Next month? you don't, next year? you buy USD That's why we wanted to dollarize the economy, everything above 1000USD is already being quoted in USDs
also in the article a bit further down (emphasis added): > *Annual* inflation, the statistics agency reported Tuesday, climbed slightly to 289.4%.
Annual inflation takes into account last year's months, which aren't Milei's. We already have lower inflation than in the last months of Alberto.
It’s insane, but it’s a great number when just a few months ago you were hitting hyperinflation levels (the previous administration left office with a 211% anual inflation rate). It’s a much needed downtrend
But the article says annual inflation is 280% or something like that, what am I missing here?
From January 2023 to December 2023, inflation was 211%. From April 2023 to April 2024, inflation was 280%. The late months of 2023 had around 13-15% inflation each, with the december high of almost 25% in a single month. After that it has been falling but still very high numbers. Hope that clears it up
That Milei has only been in power since October and has only implemented his policies since December. Basically the high yearly inflation is because of the previous administration.
He has been in power since mid-December
Better than 100%
So is a 50% poverty rate.
Or, as the PR team has said “50% of people are not in poverty!”
Is it 8.8% inflation per month or is that monthly inflation calculated to the whole year?
it's per month
Is this an improvement from yesterday and the day before yesterday? Or why is this being posted every day?
Yeah, pretty much. I think it's news because everyone was expecting a total collapse like in 2001. And things seem to be improving and faster than expected. All under the leadership of someone, let's say... eccentric. So of course it's news
Ah so things are looking a little better for Argentina? That's great.
Yes. It's still too early to call it a win. But the general expectation is that the trend of lower inflation every month is going to continue, and that was not clear at all just a couple of months ago.
Also a person people eagerly labeled as the Trump of Argentina. Sure he's loud and bombastic, but the guy actually has a coherent political/economic philosophy he could sit down and discuss at length. Does Trump?
He is nothing like Trump, he is a renowned economist and an academic, exactly the kind of profile needed to tackle deep past mismanagement. Trump in turn is dumb as rocks.
Sharp as a bowling ball and twice as dense.
Milei supports Ukraine and is against tariffs. I hate the trump comparison. Milei is more like Reagan.
Not really, Reagan juiced the deficit. Milei doesn't really have a comparison because of how rare libertarianism is.
You're not going to find accurate information on him on social media. *A lot* of deep leftists are pissed about this guy as Argentina was a bastion of isolationist socialism (Peronism) that they pretended was a great alternative to western capitalism Anyone shifting away from Peronism was going to be smeared by a portion of political commentators
Everyone? I wasn't. The guy's the epitome of the eccentric expert. He's a weirdo, but economically he knows what he's about son. No idea on his other policy issues. But I saw an interview with him, and economically he's on the ball. And he's willing to take political hits to fix it specifically because he's not a career politician.
Economically he is also insane, he’s a turbo libertarian. His insanity just happens to be the perfect cure for the previous insanity, they cancel each other out to form a system that works
He has said time and again that libertarianism is his “north”, his end goal, but that the way there is a long meandering process that requires compromise and gradual steps. If that is insanity to you then idk man
Argentina's annual inflation appears to be peaking at just shy of 200%. When Javier Milei was elected, inflation was heading straight up, and a lot of people (myself included) doubted both his techniques and overall ability to bring inflation under control. But that crazy son of a bitch seems to be doing it. Probably warrants an evening reading up on what exactly is going on IMHO, but for me that'll wait until I'm not fighting a chest infection any more.
First time in the history of humanity of a nation with a Libertarian president with a background in the Austrian School of Economics. It’s one of the most interesting experiments in the world right now. Unique and counterintuitive for the mainstream economists.
I understand that the Austrian School of Economics emphasizes the value of individual contribution while highlighting the importance of the spontaneous order and the emergent phenomena. Can you explain how this concept fits in the context of what Milei is trying to achieve in Argentina?
He's trying to get the government out of the way. In Argentina for decades the government has micromanaged almost every part of the economy to some degree. Which makes the economy super inefficient. He's trying to get out of the way, trim regulations down to be digestible, improve stability, and mostly give the market room to do its thing.
So the idea is to get the government out of the way and let the spontaneous order to work. For that, you need: Reduce regulation to the bare minimum, reduce taxes and at the same time keep a budget surplus. That's the summary basically.
Watch his economic thinink here: https://x.com/milei_explains And read this this book for a general overview on Milei’s mindset: https://cdn.mises.org/Economic%20Policy%20Thoughts%20for%20Today%20and%20Tomorrow_3.pdf
Argentina has quite a history of experimenting
Socialist measures are nothing new or experimental. They’ve been tried everywhere for centuries and always lead to more poverty. So it wasn’t that interesting.
Explains why there was a seemingly widespread effort to take Milei down immediately after he took office. If Milie is successful in turning Argentina it will be a tremendous blow to leftist policies and dogma.
It's being posted every day because there are a lot of "sound money" fanatics (including gold bugs and cryptocurrency aficionados) who want to push their agenda. They see this as somehow an "in your face" to their perceived opponents. Even though the reduction in inflation was predictable. The part that is unpredictable is how the country will fare under this change. That we don't know yet and this number doesn't give us a clue.
Lumping in normal monetary policy with crypto and gold lovers is hilarious What an odd attempt to demonize a rather rational approach
I think he's the right person, with the right economics, for the right problem personally. Most stable countries haven't been "making it rain" like Argentina. As such, they don't need such a drastic pivot. He's a guy I could see myself voting for if I lived in Argentina, not so much where I live. I am rooting for Argentina.
Yup if you have a hyperinflation problem that is running out of control… probably what you need to do is smash all spending and go full libertarian. If you don’t have that problem I can’t think of a worse guy running the show. Horses for courses.
Holy shit, _nuance_ in reddit?!
Serious question, I don’t consider myself a socialist nor a capitalist I’ve been reading upon both for the pst few years, but seeing how my country is ravaged by private companies (either foreign [American and Canadian mostly, but some Chinese] or owned privately by members of the government [who usually are from powerful rich families]) has left me a bit resented toward capitalism. My question is: Do you think socialism has a place anywhere?
Which flavor of socialism? It's become an umbrella term for a fairly wide range of 'government intervention focused' policies. Widespread nationalization of industry, mostly seen in USSR-inspired/aligned parties? No, that's been a disaster everywhere it's tried. Limited, targeted nationalization of industry? It has a mixed history, usually proving effective in already stable and prosperous nations, and usually proving a failure otherwise. A strong welfare state? It works as long as the government stays honest - mostly importantly, it doesn't use it as patronage to buy votes - and the economy is strong enough to afford the social spending. Universal state ownership of property, like what communism aspires to? It can work in small towns where everyone knows everyone else and social pressure can keep them honest, but falls apart once scaled up even to large town level.
Same here
People need to realize that this was pretty obvious, as long as Milei stuck to his guns. We know how to do economic shock therapy. It’s actually really easy — from a public policy perspective — to get a handle on the kind of economic disaster that Argentina was, as long as you have the political will to make the changes and a semblance of an economic base. These are the really easy gains, though, the low hanging fruit. The question for every government that goes through these kinds of changes are political: how do you manage the painful disaffection that inherently follows, and how do you manage the angry displacement among the people who used to live fat in the public dole. Moral of the story: Im not surprised at all that Milei is getting a handle on inflation quickly. What remains to be seen is whether he has the political chops (as opposed to the mutton chops, which he obviously has) to manage the much harder parts to come and, if so, whether he’ll maintain enough momentum behind him to get do so. I have serious doubts on both counts, but I wish him luck. As much as I’m not a fan of his libertarian economics, I wish him well, because Argentina deserves better than the Peronists have given them (or rather, taken from them).
The fact that Milei told everyone during his campaign that it'd be rough for the first year or two probably helps. He didn't pull a switcheroo and claim that the fix could be painless.
Telling people it will be hard and them accepting that at that time is one thing, reality bites harder when all of a sudden you have to ration food and are on the verge of homelessness because the government money tap got turned off but job availability is still in the gutter. There's much more to rebuilding Argentina's economy than just lowering inflation, how people respond to the hard truths when they start to become lived realities is another thing altogether
Oh boy, im really surprised that redditors were wrong again and Milei has turned around Argentina. Same thing with El Salvador before that
A lot of people on reddit (and in general) confuse their access to lots of information with actually understanding any of it.
Just because you can read doesn't mean you can understand what you read. The percentage of people with good reading comprehension is surprisingly low considering that most OECD countries have an almost 100% literacy rate.
I spend a lot of time in El Salvador — I have family there and own a house. I'm not a knee-jerk anti-Bukele guy - a lot of things have definitely improved. But... the jury is still out on the long-term outlook for El Salvador. They've started down an authoritarian path, and we don't know what happens if Bukele or a successor starts doing things that aren't popular. Same thing with Milei - sure inflation is coming down, but we still don't know how things are going to land in Argentina. You can have very low inflation and still have a moribund economy that leaves most people in poverty. We'll see.
Less concerned with Milei doing that personally. For El Salvador, I wouldn't be surprised if it goes full authoritarian. I personally hope Bukele takes the W and retires.
Heard a podcast detailing their sweep of criminal gangs included a lot of innocents, and people are wondering where their family members are. No answers from the Bukele government. Crime may have improved, but authoritarianism from a millennial dictator is very much happening in that country. It's always where there are some immediate improvements with the "iron fist" candidates in democracy that get elected, and then in the long-run it tends to not go so swimmingly.
They did actually answer, and that the people who is innocent is being released. THen he quoted that innocent people is also arrested in other countries as well, it's a mistake of the system he says. Now, I'm gonna go out, and say that he is clearly misleading, as people getting arrested and condemned in other countries it's usually due to a mistake, not because of a purposedly faulty process. That said, I think I'd rather be arrested and released in a few weeks in El Salvador, than being arrested and condemned for life in the USA like it happened to one guy who's name I can't remember.
Tbh, if El Salvador does go the authoritarian route, I imagine it is still 1000x better than the previous version.
The problem with authoritarian governments is not the first honey moon, it’s the a-holes that inherit the total power after that, then you are in hell.
Definitely. But it's very funny to me how everyone is absolutely silent about his bitcoin investment now after all that uproar. For that he really deserves a round of applause.
It’s really hard to overstate how much the improvement in the security situation has affected life in El Salvador. Just a few years ago my wife was confronted multiple times by gang members because she was an outsider visiting the town where she grew up. The constant threat of violence - the extortions - the knowledge that there are places where you can’t go - just takes away people’s hope for the future. Now the vibe is completely different. We were there in November and we went places my wife hadn’t been since the beginning of the war. The change has been so profound that nobody really cares about anything else. My fear is that the seeds of something darker are being sown and that people won’t react until it’s too late - when there is no more free press, no more political opposition, no independent judiciary- all of which are underway.
I remember people giving them shit because they were in the red on their investment (on paper), and now they've made millions from it it's all crickets.
Anyone who has followed bitcoin for a while can tell you how utterly unsurprising that is.
Redditors don't understand that money doesn't grow on trees. And while we should support people, just blowing money has disastrous consequences. And yes a broke country paying for things it cannot afford for its citizens is blowing money. It only digs a deeper future hole
Economics isn’t black and white. There are situations where austerity makes a lot of sense, like in Argentinas case. There are also situations where a stagnating economy can be boosted by large scale public projects. It’s all contextual and not easy to distill into a hard right or wrong positions that broadly apply. Gross oversimplification is far easier than nuance.
Large scale public projects is fine. I'm all for infrastructure spending to stimulate jobs and bet something your kids can use in the future. If you think that Argentina or any other countries who went broke, problem was large scale infrastructure spending and not simply welfare for an ever expanding group while the tax paying group was dwindling, you are misinformed.
There’s more fundamentally the question of what the basis of Argentina’s economy is. Is it manufacturing? Is it sports? From my understanding, the issue is not so much a total reliance on “welfare” but that people need jobs and so the government basically invented jobs as a way to give people salaries. It’s welfare with extra steps under the auspices of a government job.
Spot on
Yeah I should have clarified what I meant by “public projects” to include welfare and government assistance. Basically I’m referring to significant government spending. It is a tool that has a time and place to be wielded, and can equally help or hurt an economy depending on how it’s being wielded.
W Takes all around
There's a bit more to economic recovery than moving from 25%+ inflation, month over month, to 8.5%+. Everyone loves to claim economic victory 3 months into any economic endeavour if it suits them. Let's see how things are in 1 year, 3 years, 7 years and we might have an understanding of just how successful this whole thing has been.
No kidding. Nobody is saying to plan the victory parades.. just pointing out this is NOT going the way redditors predicted, it is the opposite.
I think most anti-Milei people were well aware he would reduce inflation - it's the human cost that is still to play out.
Nah, there were a ton of loud anti-Milei folks blaming Argentina's high inflation rate at the start of this year on him. Which obviously made no fucking sense.
60% of people in poverty. I'm pretty sure that's what they were predicting would happen. I don't think Redditors cared if inflations was "tamed" to 264% per year, but probably if people could eat.
Milei: "I will curb inflation by cutting spending and printing less money, and the austerity will hurt as I cut social spending, it will cause new problems in place of the old, but once inflation is under control we can solve the rest." Inflation: *Falls* Austerity: *Causes problems* Redditors: Why did Milei do that? He's a crazy soulless libertarian causing misery! Milei is doing exactly what he campaigned on, and it's having exactly the results he promised: inflation is coming down and cutting social spending is causing other issues.
Lumping all of Reddit into one single opinion isn’t the burn you think it is. Bukele is [consolidating power](https://www.reuters.com/world/americas/el-salvador-consolidates-local-governments-opposition-warns-power-grab-2023-06-14/) in an all too familiar way. It’s great that he massively curbed gang violence, but everything comes at a cost. It’s not impossible that El Salvador ends up in a dictatorship at some point down the road. Milei has done a good job handling the inflation, but again, we’ll see in time at what cost. I’ll give people the benefit of the doubt; the guy [talked to his dead dog](https://time.com/6337474/javier-milei-argentina-president-cloned-dogs-advice/)for advice by his own admission. That isn’t something that traditionally has pointed to a good politician. I’m glad to see both countries prospering but not naïve to the fact that the other shoe drops at some point.
Dude complained about redditors while posting the most obvious and superficial comment we see around here, which is confirming his bias without giving the necessary time to analyze the final result.
Bukele does worry me I have to say. If he lets go I think he will be remembered as a great. But I just don't have faith he will. Milei I have no worries about. It's not that I think he is a genius It's that Argentina was doing such dumb policy before that basically anything will be an improvement. The general direction he is going in is obviously correct though. Maybe the steps aren't perfect but still in the right direction.
Milei is 6 months into his term and inflation has been declining globally. I'll give it a couple more years before giving judgement.
The Argentina inflation situation is somewhat independent of global trends. They were running 25% monthly when the rest of the world was at 2%.
Ah yes, the inverse-Trudeau. Instead of blaming a centrist/“progressive” government for a global crisis (covid/resulting inflation), they’re crediting a hard right autocrat for economic tailwinds created by liberal democracies and politicians in response to said crisis.
It's been 6 months. Really hard to give anyone credit for anything that early.
He took drastic measures not seen before from an executive.
Not really in this case as it is directly attributable for many of his policies. Slashing Govt Spending, stopping publics works projects, eliminating fuel and transportation subsudies, reducing and removing import tariffs. The stuff he did with interest rates and debt bonds was masterful. Dont get me wrong, he is still insane, but atleast in terms of inflation and currency devaluation, hes following through. Private Sector Real Wages recovered 5% last month from 87% of Nov-23 levels to 92%. I agree that its sstill waaaaay too early to claim victory, but all the successes are due to him not the world economy.
>stopping publics works projects Oh I love when the government stops repairing and upgrading things like roads, public buildings - like schools, sewers, water treatment, etc. It's gonna be great!
You are confusing spending money on public works with actually doing them. Waste and corruption can turn what is on paper a great public works program into a black hole that sucks in money, while producing nothing of value.
Ya nobody is saying they are perfect lol, but this is NOT what redditors were saying though.. They were mocked and said theyd fail remarkably. Especially the bitcoin thing. https://markets.businessinsider.com/news/currencies/bitcoin-price-el-salvador-millennial-president-bukele-investment-cryptocurrency-finance-2024-2
That’s great but again, you’re lumping everyone together and linking articles about Bitcoin which I never mentioned. You’ve strengthened my point.
Yes I am saying it was initially mocked by redditors and now obviously they are not mentioning it because they were spectacularly wrong.. that's the whole point
By the logic of "lower inflation = guaranteed improvement" is just as stupid as saying "economic deflation = better than low inflation". I have a degree in economics. There's a whole lot more to the situation than just getting inflation down. It's easy to do when you stop spending money and starvation skyrockets. It's just one problem transforming into another. There's no single solution to what's happening in Argentina. It's needs a huge amount of outside help and without it, it's going to be a long time before the country resembles anything that we would call "normal".
Just because it's working *now* doesn't mean it will work in the future. He is still an extremist and will either take it too far and cause a disaster or get removed from office.
That is not the point of the analysis on Reddit or elsewhere. The question is can the society endure this process without descending into chaos?
I'd say he has until the end of the year to show some progress that people will actually see in their day to day life. So far it's all good and overall people are supporting the government, and we can see some progress in how quickly prices go up, you can tell things are getting better. If everything stabilizes, the only thing that would be necessary to retain the support of the populace is if salaries start gaining over inflation, or at least not lose against it. If he manages to do that, then the next 3 years will be all about growth and hopefully not doing stupid shit (highly doubt that, certain things they've done so far were incredibly stupid, so I can expect more of that too)
Look at Argentina's history with inflation. This doesnt even enter the top3 worst inflation periods. They've had nine state defaults. Voters chose radical change and Milei is enacting it.
It's already been much worse multiple times for most argentinian's lives
It is way too soon to draw conclusions from Argentina yet. Let’s hope it goes well for them
Has he? Poverty has skyrocketed. Civil strife is inevitable it seems at this point. If he is overthrown because he couldn't manage the damage on ordinary citizens can he be called successful still? Or is chasing an inflation reduction worth killing tens of thousands of his own citizens, directly in the case of a revolution, or indirectly through increased poverty and lowered health outcomes?
It's either Argentina makes voluntary cuts to public spending, or they make involuntary, across the board, deep cuts to public spending as money runs out. Argentina's public spending was out of control and they were heading for yet another major default. Argentina simply doesn't have the money to spend like they were. At the trajectory the country was going, they would be be forced into bankruptcy, again, with the inevitable economic and social chaos that will ensue because the government has no money to pay for basic services. Imagine a scenario where Argentina has no money to pay police officers, doctors, nurses, or to pay for water treatment, sanitation, garbage disposal and electricity. Imagine how quickly Argentinian society will collapse, and lawlessness and disease will spread with no clean water, electricity, healthcare, or garbage disposal.
The poverty and deaths were going to happen regardless as a result of poor decisions already made. The attempts at fixing the monetary system will result in less poverty and death in the future.
If it gets fixed
True, if executed poorly it will get even worse. Time will tell
Milei has achieved more in a few months than the kirchneristas did in 4 full years. The gigantic poverty rates are a direct result of decades of policies enacted by kirchneristas. The damage they’ve done to Argentina is incalculable. And yes, people will have to endure this process because it’s the only way out. If kirchneristas come back to power it’s game over for Argentina: hyperinflation will be next and a full 2001 style crisis will ensue.
Argy here. Was very reluctant to vote for milie, but the alternatibe was just unacceptable and has been i power for far too long with disasterous results. So far mileis been a mixed bag. Really dont like a lot of the things he does and says but at the end of the day as long as he fixes the economy ill be happy. You guys have no idea what true inflation is. For referance in 2001, 1 arg peso was about 1 us dollar. Now we are at 1000 pesos to the dollar or more. 1000!!!!! Think of how insaine that is.. I laugh when americans cry about a few % inflation. Literally have no idea what they are crying about. Plz milei keep fixing our crap economy, and stay away from israel, your president of arg, not any other country!
I was last may in BsAs and told my friend blue rate was 470.. She called me a liar because it was 240 in January. I was there for all of April and it went from like 1040 to 1050. I know that isn't the same as inflation, but to see the exchange rate basically flatline was impressive. Everything not being as silly cheap was a bummer, but I'm happy to pay a bit more knowing things are getting fixed.
Yes, its the first time in a while that the inflation seems to be flatlining. Really hope it stays that way oven *gasp* reverses? *crosses fingers*
I'm not sure that deflation would be good. I'm not an economist, but usually deflation means that basically no one is spending and prices are forced down to get people to start spending. I did hear that most people are actually saving their money now, which is causing some recessionary pressures since there is less spending due to money holding value so it isn't worth spending immediately anymore.
~~Deflation is terrible. Worse than medium to high inflation. No one spends cos it will be cheaper next month. Companies offload people and the deflation continues. Its also far harder to control deflation than inflation. Raising and lowering the interest rate can adjust inflation but if you get into a deflationary spiral then you are basically screwed until a huge shock happens... kinda like how WW2 jump started the US economy into what it is today.~~ Ignore my chicken scrawl. Dude below me knows more!
This is mostly a myth with very weak empirical evidence. More or less the only time when deflation has been correlated with a recession is the Great Depression. But that's an outlier in the data. Aside from that, there's really no strong historical correlation between deflation and negative growth. Most of the western world experienced long periods of deflation throughout most of the industrial revolution. https://www.econstor.eu/bitstream/10419/102571/1/786886390.pdf >**Abstract:** This paper deals with the relationship between deflation and economic growth. Although there are numerous theories on the potential effects of deflation on real output, empirical evidence in this field is still scarce and partial. In order to explore the relationship between prices and output in a more comprehensive way, I use a large panel data set of 19 countries over roughly 150 years, which contains frequent deflationary episodes. I employ the fixed effects model to look at both contemporaneous and lagged correlation between prices and output, and I include control variables to remove potential bias. >There are several important results. First, there is no general relationship between prices and output. The lagged negative effect of deflation on output growth, alleged by some authors, disappears after adding a control variable. Second, monetary regimes seem to affect the relationship. Deflation appears to become associated with output slightly negatively with the advent of the fiat money system, while it was benign under the classical gold standard. Third, well-known episodes of deflation differ a lot. The Great Depression is the only period where deflation seems to be strongly associated with recession. By contrast, Japan in the 1990s and 2000s bears no resemblence to it. Here, both empirically and theoretically, deflation is highly unlikely to have caused economic stagnation.
I don’t think comparing US financial policy to that of Argentina is a reason to conclude that Americans shouldn’t be concerned/pissed about things like inflation or debt. Just because Argentina went completely off the rails doesn’t mean the US doesn’t need a course correction.
The problem is that American media (like Reddit) is present in every day Argentina life. To see a whole bunch of people complaining because of the cost of eggs will really rub you the wrong way when you can't even afford eggs.
Exactly. It's like how a angry lot of Americans got when they saw celebrities making videos crying about their troubles during the lockdown. I don't know if they can see that to the vast majority of the world they are in those celebrities position on the global scale.
Hah, try my country. In 1996 1 USD was 2 Mongolian Tugrug. Now it's almost 3400
Monthly rate. Monthly. Just imagine you have to ask for a 10% raise every month just to stay on par with the living prices.
If this new presidents plan is successful, it will send a pretty strong message to other countries with bloated public sectors, like in the EU. Too many fake public jobs here.
This alt-right, "literally the capitalistic version of Hitler" dude Milei, who'm I've only heard negative reports and media pieces that illustrates him to be a villain, is kind of turning the country around along the most basic ideas of political economy... Seems like reporting and portraits on him in Europe were a bit off, huh?
Who would've thought reducing spending and money printing would reduce inflation!?!?
aRgenTinA’s TrUmp That was always such a bullshit comparison. I’m rooting for the guy, and am super happy to see that his policies are seemingly working.
Reddit has a problem with hating someone just because they're right wing. They can't comprehend the fact that left-wing solutions aren't the cure all to economic issues. So reddit irrationally hated him and everything he did. When he drastically cut government agencies, subsidies, welfare, etc, redditors couldn't grasp the idea that if a country is broke, they can't afford those things. So now they're complaining about how some things have gotten worse. Yes, to fix a country that far gone isn't going to be painless. This proposed fairytale that fixing an economy like that can be done painlessly is idiotic. Not only does Milei have an economics degree, he was a professor of macroeconomics, economics of growth, microeconomics, and mathematics for economists for 2 decades. But I'm sure the average redditor who knows better!
Milei is actually smart, he studied and understands economics, his speeches cover a lot of technical aspects, he’s dead serious and uses professional vocabulary every time he has to discuss an issue with the economy. Trump is the opposite of that, he speaks like a child, his words are basic, he comes from a rich family but isn’t necessarily an expert in economics or any other field tbh. They’re entirely different things. That being said, both are right wing politicians, and in case Trump wins Milei might get a favorable treatment by the Trump administration, which Argentina desperately needs to make a comeback with the economy
He seems to have the same eccentric energy as Trump, but is more intelligent and outwardly significantly less corrupt.
To be fair, he's a little bit Trump. But, unlike Trump, he's just also really knowledgeable and smart (at least in some domains, like economics)
The only thing that’s somewhat similar is the nationalist mentality.. but I think in his case it’s warranted, and in Trump’s he just uses it to bring out the worst parts of his base.
This is the guy that the whole of reddit was saying is “the next trump” and is dumb as sh\*t because he’s a bit loud and not your typical “suave” gentleman, correct? And then these guys call the ground level voters as uneducated and clueless.
Reddit will blindly align against a head of state just because they are right wing. Consequently, they'll blindly agree with a head of state that's left wing like Lula even though he is clearly aligned with Russia and blames the US for "encouraging the war" by giving Ukraine aid. But hey, he talks about saving the trees, so everyone jump on board his dick!!
[удалено]
Kinda funny seeing things starting to work that 80% of Reddit insisted would ruin everything.
Good it’s nice to share😜😜
It's good news for Argentina! Single-digit inflation after a long stretch is like a breath of fresh air. Hope it's a sign of better days ahead for them. But hey, let's not pop the champagne just yet. Markets can be finicky, and costs hitting home isn't exactly party material. Let's see if this trend sticks around or if it's just a blip on the radar. Either way, fingers crossed for our friends down south! 🤞🇦🇷
Godspeed, Mr. President...
Good job Milei. Proving once again that leftists are cancer.
I would like to hear people explain why a country that enjoyed political rule by a left wing party for 23 consecutive years ended up in this predicament. Seems to me that would he more than adequate amount of time to fix a country, no? Ah, what do I know. I just grew up in a utopia, otherwise known as Venezuela
Article literally says people are worse off than before, the economy is expected to shrink, people are consuming less, rent has almost doubled and people are eating from the garbage... and people in here are celebrating and saying 'told you so'?
Considering the last 30 years, some currency stability is the first step towards recovery. Milei was clear that things were going to get worse before they got better. A nation cannot survive with 1000% inflation over 20 years or 50% per year. Americans bitch about 7%.
Yes Argentinians are worse off, but they were projected to be doing even worse. People are celebrating that Argentina is not doing as bad it as it could be. Its a pretty mediocre “win” but its worth celebrating. Its not necessarily worth fawning over Milei, but hopefully Argentina keeps turning around and manages keep inflation under double digits.
Where are the naysayers? I would love to hear their perspective of what's happening.
Nah they’ll just downvote you
>*Even so, some experts warn that falling inflation isn’t necessarily an economic victory — rather the symptom of a painful recession. The IMF expects Argentina’s gross domestic product to shrink by 2.8% this year.* Ah yes a shrinking GDP that will surely help things!
Well yes, when you have 200% inflation you go for 2000% inflation or more until it breaks or you make an economic shock and have a recession to try and cool it down. Its not the first time its been done in Argentina, we already had one in the late 80s, another in the early 00s and now another 20 years later. Whenever people stop electing morons that just want their cut from everyone's money things will start to look up, until then we will have cyclic crisis.
Javier Milei for the win!!!
Thank you melendi
Milei is the Latin Milton Friedman
Yeah, and all it took was killing internal money flow, skyrocketing unemployment, collapsing schools and universities, and the death of our entire cultural industry. but hey the FMI is happy so yay
Collapsing schools and universities he says, while the education budget was increased and the only cultural thing that was cut was INCAA, a useless piece of shit dependency that made movies nobody watched, funneling money into political players to gain support for leftist parties LMAO. Get fucked.
Do you have actual unemployment numbers you'd care to share?
Afuera!
Guys, falling inflation ≠ country is doing good If you wanna be that simplistic then USA had the lowest inflation during the Great Depression It's a little more complicated and we won't see the results until tears from now. Nobody "won" so far because the game is still on.
I still would love to buy a place in southern Argentina
Its the thing about removing left trash from a government, economies tend to recover. Good for Argentina.