The worst of it is that the money will not be used to improve infrastructure, no road, no school, no bridge will be built with that money.
The money will not be used to reactivate the economy, it’s not going to be spent on things made here by argentinian workers.
The money will not be used even to buy food for the people who are starving, is not going to be used to raise the ridiculous wages of retirees, it’s not going to be used to pay for school equipment.
All that money, 30 billion dollars will be used to keep the market value of the dollar stable for a while and to pay loans taken by the previous right wing government without congressional approval.
And when these bastards are gone, we the people are going end up holding the bag.
And we’ll have to repay the fucking 30 billion dollars and the fucking interest on that debt, and the interest on the debt taken to pay the interests and so on.
When the dust settles (and this has happened before) we discover that for those 30 billion dollar loan we end up paying back 60.
And for nothing, except of course the juicy “commissions” that the functionaries who took the debt get paid.
I just read a bunch of American news articles and do not see this. Here is a center-left example.
As far as I can tell, the US$20 billion is to buy that much in pesos. Because, in the short to medium term, U.S. inflation is sure to be less than in Argentina, this looks like a gift of money from the U.S. to Argentina.
If I understand correctly, there is an additional unstated amount, sometimes mentioned as being up to second US$20 billion, that could be used to buy dollar-denominated Argentine bonds in the primary or secondary market. If in the secondary market, that would not have any direct impact on the amount your government owes to bondholders (except for the effect on interest rates you, as an Argentine taxpayer, pay – that would now be, in the short-term, a bit less). If in the primary market, I’m not sure. There’s an auction, and the idea of an auction implies that the amount of bonds being sold is limited, although I’m not sure it really is true.
Trump might change this tomorrow, but, as stated in my link (“no conditions or quid pro quos”,), I see nothing Argentina has to give us in return. It looks at the moment like a plain old gift, the motive for which is to election interference. It could be compared to the CIA making a covert contribution to Partido Libertario, except that I’m thinking the CIA is more economical with my tax dollars..
That first part is a currency swap, but a currency swap has to be returned after a certain time and there are interests (At least that’s what the article I read about them said, I don’t quite get why if it’s not a loan)
The other part is in bonds and those are certainly a loan.
And if you believe that Trump ever in his life gave money with “no conditions or quid pro quos” I have a bridge to sell you pretty cheap.
It’s a gift of money from the U.S. to Milei.
The dollars are going to be sold to keep the dollar stable and stop the inevitable devaluation.
Once the election is past, win or lose, they are going to devaluate but the dollars will be gone.
Seriously, it is not Donald Trump’s money – not one bit – and he knows it. He does not pay our income tax because, at his personal insistence, he offsets the amount paid against business losses that are sometimes real, sometimes supposed..
If I was talking to a pro-Milei Argentinian, I wouldn’t predict that Trump is going to steal Argentina’s rare earths. It’s more likely that Trump will turn off the money spigot the day after the election.
I hope you are right and it doesn’t saddle us with so much debt.
Some sources say that the money will be made available after the election, and if the results are not favorable…
Other sources write that they have seen it all before, and it did not end well:
Ha! I just read that article and was thinking the same thing, in fact the opposition has been saying that this was the “Tablita” all over again since it began.
After the tablita came the corralito, right?
Much much much after (about 30 years).
The eternal Argentinian problem is the lack of hard currency, I’ve recently learned that until the late 70’s this caused a phenomenon called “stop an go” where the economy will grow until the lack of dollars caused a recession, then start again, then fall to the same lack of dollars, and so on.
In the 70’s neoliberal economists thought they had the solution to that, and thus invented the “tablita” and other, les convoluted, ways of getting dollars (borrowing them basically).
Turns out that it solved the “stop an go” problem by replacing it by the “crash and boom” problem.
In the 90’s they resorted to selling national assets to peg the dollar to the peso and it worked for a good 10 years… until they ran out of assets to sell.
THEN came the “corralito” (“the little fence”: a restriction on the amount of money people could retire from their bank accounts, because there was not enough money for everybody) and the economic meltdown of 2001.
I found a good description of what exactly this currency swap is:
A currency swap is a mechanism by which two agents—governments, banks, or companies—agree to exchange currencies or money on certain dates .
The transaction is not carried out immediately, but rather in installments that are predetermined with their corresponding disbursement dates.
under the agreement, one country can request the other to activate the swap, which allows it to use a certain amount of currency to carry out transactions .
In this case, once the agreement is terminated, the bank that requested the activation must return the amount used plus interest to its counterparty.
One of the main differences with a conventional line of credit is that it’s a currency exchange, not a unilateral loan, and because it’s an agreement between central banks, the interest rates are lower than those of debt.
However, one of the likely drawbacks for the Milei government is that this swap will not be used to intervene in the market, but only for bilateral trade.
So it ends up being sort of a loan but with less interest and more circumscribed uses for the money.
It seems that when Argentina is in the news, it is only good when the news are related to football. If it’s the economy, it becomes stupid:
PS: I can’t stand to see this thumbs up gesture anymore. It puts a Monthy Python’s song in my head with slightly changes lyrics, it’s an unbearable ear worm. And NSFW, of course
Sit on my thumb and tell me that you love me
I’ll sit on your thumb and tell you I love you, too
I love to hear you analyse
When you trumpet your farts
You blow me away
Hehe, I was just reading that.
In this case Krugman is not telling me anything I didn’t already knew and his lack of cynicism is frankly so cute from our perspective. OFF COURSE they are going to use the money to keep the peso overvalued while they finish getting their dollars out of the country, it’s what Caputo and company, with different foreign partners ALWAYS do.
Meanwhile there’s been a lot of dismal developments for the runfla de pelotudos in the Pink House, but I’m trying not get my expectations up (Re: the October legislative elections) to avoid mufa. (Hey! it worked for the world cup!)
So, one of Milei’s sycophants tweeted that¨, now that the U.S. holds large reserves of Pesos, if the next presidential election (in a couple of years) goes against Milei the U.S. will simply sell all those Pesos and force a devaluation that will topple the new government and give us no alternative other than to call Milei back.
And Milei liked and retweeted it
For years I thought that the left saying that the right wanted us to be a colony of the U.S. was just far-left clap trap, but these bastards are hell-bent on trying to prove it.
What do you do with people like that?
Excuse me, as I will be smashing my face into the wall for an hour or so (or more likely drinking) due to the insane plausibility of the offending statement.
I’ll be at the next No Kings rally October 18 so I’ll be standing up to be counted for doing my non-violent part at least.
I was at the first No Kings. Ny adult son is visiting, so he will get to protest in the city where he went to college. It has been peaceful enough so far here. Our mayor is at least a Democrat. College town thing.
As far as the losing country bit, I do have a back up country. Always keep two countries if you can. A bit of a cost to move…
And off to the dent in the wall!
“If he wins, we’re staying with him,” Trump said in the Cabinet Room, betraying little concern about blowback for the infusion of cash his officials insist is not a bailout. “And if he doesn’t win, we’re gone.”
Oh just be gone now and fuck off forever you fascist piece of shit!
Your lips to God’s ears.
This article basically sums up the results of Milei’s visit to the U.S. and Trump blabberings: