I don't think Argentina is strong enough to survive in an autarky as their key exports are agricultural products which rely on heavy equipment and diesel to be competitive worldwide with e.g. Africa or India. Capturing added value (e.g. moving away from agri exports to processed food and tools/products) requires infrastructure that is privately managed (for profit) and therefore is reliant on imports of tech and equipment from countries that produce said tech.

Ultimately as you said this indeed comes down to trust issues as nobody is willing to lend Argentina due to their history of defaults and their unwise economic policies. I have read that Economist interivew with the Milei and I do not understand how he plans to position Argentina in the global economy. They are too far removed to be interesting as a key trading partner with the US and are not geopolitically located to be used against China/Russia/Middle East.

From what little I understand about their economy and society they have played too much with socialism which has eroded their industrial competitiveness and most importantly they have lost their institutions (independence of courts and what not) that are key to economic prosperity.

I want to see Milei try as he, on the face it of it, is an educated man, however I struggle to get behind his abrasive public persona.

This post was edited by Malopox on Nov 20 2023 12:48pm

all fair points

imo their biggest problem is the domestic market, i have heard plenty of stories from argentina

argentinians living in neighbor countries were like "wait, this stuff cost like half of this a year ago?" when they visited

you are not fixing in the place in 1 or 2 years and also not in one presidential term

but there is some serious action required to stop the explosion of poverty

the financial markets are supporting all kinds of nonsense, that is way worse than perma broke argentina

You can only replace your own currency with another countries currency if you for sure know you will have the supply for that currency. For a small country maybe that's achievable, for a massive country like Argentina how are they going to magically come up with hundreds of billions in dollars to circulate within their system? It's an immensely difficult issue. They would basically have to ask the US to come in and inject hundreds of billions. Why would we do this? Surely not out of goodwill, if anything you'd have the BlackRock's swooping in and privatizing everything, which I'm not sure would be a positive per se, it'd basically be asking the vultures to come in and create value out of the dying carcass, except they'd only do it if they can get something out of it.




I read parts of that interview. I flip flop sometimes with sympathy to libertarian ideals but at the end of the day, many of them if really applied in true form would basically collapse a state. Some anarcho capitalists would say well that's what we want, but in reality there's a lot of things like hospitals, police, etc that you can't have functioning in that type of system nor can you expect some benevolent private entity to sprout that would take on that responsibility without some direct personal gain.

To me, him getting voted in shows more how desperate and out of options people are. Feels like a protest vote. Half the things he talks about sound good in theory but would face plant out of the gate when applied in real life. Even if he implements something positive, the people of Argentina need to understand that there will be a fair amount of short term pain (probably several years) before some benefit can be seen on the horizon. I think one of the first things first is, how do we attract as much foreign investment in the country which can bring in FX and give people jobs as fast as possible. Deregulation, lower taxes should help with this probably.

Idk, they can look to Asia, but China won't bother investing in Argentina unless they are getting something out of it.

This post was edited by ofthevoid on Nov 20 2023 01:16pm

By this I specifically meant the default part.
They borrowed alot and didn't pay it back. Many times.

How Libertarian are his views? I don't know much of anything about him, or Argentina. Will have to learn more on my own as well.

The WSJ estimates the price tag of dollarization at $30 billion, largely because the peso today is close to worthless. If it were to fall further, the cost would be less.

I think they should do it, but they need to assuage the IMF and other parties that they're serious about reform in order to receive funding. If I were President, I would do it for the influence and goodwill alone. Sometimes it has to be about the long game.

Imo that number wouldn’t work, at least I don’t think. Their GDP is 650 billion. Simply replacing the paper currency in peoples pockets wouldn’t work. You need large numbers of zeros on screens denominated and backed by actual USD to transact in high business, real estate and so on.

You would need basically all assets, houses, cars, etc to be able to be transacted in a liquid way in USD and only way to do that is with ample liquidity. If it really was only 30 billion, I agree we can easily do something about it. I mean we could literally buy some of their agri products and make it fair for both sides.

For a continent being a major distributor of cocaine and coffee you would think they would be doing better

Js