Dollar: the “perfect storm” and the two possible paths

AN OVERWHELMING HERITAGE

Remember the daily destruction and the end of “the 1064 dramatic days”: devaluation of 600%, Lebacs bicycle with profits of 70% in dollars in two years, 3 years of deep recession, final inflation of 54%, drop in GDP per accumulated capita of 11%, strong total fiscal deficit of the consolidated public sector and the provinces, evaporation of reserves, doubling of the debt/GDP ratio, 86,000 million dollars in foreign currency flight, 106,000 million dollars of new indebtedness, imminent huge maturities, default of the debt in pesos or “reprofiling” just for when Fernández took office, 50% more unemployment than in 2015, 40% of final poverty, 24,000 fewer companies, rate of Leliqs benefited at 80%. Double monetary base built in only 15 months and “remunerated”, jeopardizing its renewals since then, Compounding With Panel Tragedy Dec 28, 2017 (when the Lebacs together with the passes already represented the equivalent of 70,000 million dollars). The systematic breach of the goals agreed with the IMF from “day one”, the imminence of default of the private debt contracted at rates of 7 and 8% per year, the low institutional quality and worst of all: widespread corruption. Remember the report broadcast by the CBS network (USA), a key reference that placed the Macri government among the three most corrupt governments in the world. “The ring of corruption” (Walter C. Medina, October 27, 2017 (10:13 a.m.). https://www.nuevatribuna.es/articulo/america-latina/macri-in-the-ring-of-corruption/20171027094838144743.html .

All this without counting the naturalization of lies, cynicism and hypocrisy, exclusive dismissals and presumption of guilt of opponents and owners of unrelated media, embarrassment of emblematic businessmen with photocopies of notebooks, systematization of espionage for coercion of enemies and friends, Union Gestapo, judicial table directed by a fugitive from justice-friend of a member of the Court. At the zenith of impunity, an attempt to appoint two judges of the Court by decree, jubilee of own debts and those of friends, increase in rates prior to the sale of shares, handover of wind farms, eclipse and death of Maldonado, explosion of the submarine , and so on.

Could we Argentines get out of THIS?

Remember, the Government of Alberto Fernández took over the white room of the IMF and BlackRock (the world’s largest investment company in asset management, estimated at 10 trillion dollars, 43.5% of US GDP). The debt with the private sector was restructured with an estimated saving of 37 billion dollars and the agreement with the IMF was the preferable within the feasible, with the least demanding conditionalities of the 23 agreements in history. Assuming that the agreements with the IMF are usually adhesion contracts to a previous large devaluation with recession, there were negative rates all the time, monetary expansion and fiscal deficit. There was no acceptance of structural reforms, there were no folds or kisses.

Until the labyrinth became more acute, the economy took on appearances of rehabilitation, with the 2021 recovery and the data for the first half of 2022, which helped. Friendly fire pierced the minister’s management throughout the negotiation process with the IMF, intensifying considerably between 01/31/22 and 07/02/22.

If one listened to the “Hurricane Macri” cronies, the storm could be classified as a category 2 (damage to roofs, doors and windows; uproots trees and signs). But reality elevated it to category 5 (the deadliest type of hurricane, leaving devastation in its wake, unleashing catastrophic storm surges, causing tsunami-like flooding).

Not even Alberto and Cristina Fernández had an effective dimension of the terrifying destiny they were heading for in March 2020, therefore, the coalition that won the elections could not agree on a correct strategic decision to face bankruptcy. Nor were some successes of what was done between 2020 and 2021 punctually reflected and appreciated. However, the most controversial came with the IMF agreement. Some groups gave a simplifying interpretation of the facts such as: “there was no good negotiation with the IMF”, that conduct would trigger irreparable losses.

SIN OF DIVISION

One of the most painful and cruel experiences that a friendship, a love, a political expression can suffer, iscleavage. The discontent of one of the parties demanded and pressed without margin or pause. And that since before the agreement with the IMF 2022, in clear contrast to the passivity exhibited in 2018 (IMF agreement), the right time to unify positions and express them to whom it belonged (the fathers of the plot).

The partition of the FDT is a feeling that cannot be compared to anything for those who supported the hope of consolidating an approach in defense of national and popular interests. When a division occurs, it happens like when a war breaks out. It does not matter if it is reasoned that it was inevitable or just; the suffering and wear and tear are so great that in the end everyone will regret not having done enough to avoid it. With more or less hospitality, Mauricio Macri is already walking through the province of Buenos Aires.

The divisive spirit is not constructive, because without wanting or wanting, it conspires to tear down and destroy, never to strengthen a space or an organization. In the end it weakens only to dominate the meagerness. The dividing element distorted and even denigrated the executives chosen by the president and vice president. Today some will understand thatThere are only two things more serious than suffering a division: provoking it and accompanying it.

Hit Guzman

Despite the external context BANI (English acronym that means: a brittle, anxious, non-linear and incomprehensible world) a part of the official space, all the opposition and the hegemonic media did not record it. “There was no COVID and there is no war.” The image given by the protagonists of the disturbance, contributedeither for the spectator on foot to experience a distressing and dangerous journey. There was a before and after Guzmán’s departure, and although the minister’s untimely resignation is not justified, even today he helps as a scapegoat. The incendiary suggestion against the IMF, the adolescent-typical epic of those who do not know the international financial operation, inexperienced in the private sector and the public sector as well, were functional to the devil. hell tomeither the collection that they provided and converted iteither in a coven

ALL ROADS LEAD TO THE “BLUE DOLLAR”

Currency speculators received the investment with wide approval (they gained 82% in pesos in 20 days-from July 2 to July 22).

The rise of the blue dollar was due to a confluence of national and international political and economic issues, objective and subjective. On the one hand, a rowdy ruling party in which Estela de Carlotto had to balance a situation gloomy. On the other hand, a Dantesque anti-democratic opposition, which “believes” and just for “believing”, urges the resignation of the president and sends the vice president to jail-at any cost, to ban his 2023 candidacy. A traced delirium of Brazil with Dilma Rousseff and Lula Da Silva. Also keep in mind the overthrow and attempted murder of Evo Morales, the soft coup in Honduras and the persecution of Correa.

Economically and financially, there were cognitions for the blue dollar to skyrocket.First of all, because the “between peaks” lasted 21 months: ($195 and $220 =12.82%) against an accumulated inflation in the same period of around 80%. Can’t ignore either low level of reserves, the lack of international credit, the importation of 100 million dollars a day in energy, due to the high prices emerging from the war. The lack of liquidation of the agricultural sector that stores silo-bags for values ​​between 14,000 and 23,000 million dollars.

If what was explained had been the fiction of a horror movie, several Oscar nominations would have been made by simple contingency, not because it had been planned: best sound (noise) and visual effects, best actor, best male performance, best actress and, fortuitously better script.

WHAT’S COMING

As for a potential escape from this indecisive situation, the government has two paths: an orthodox adjustment that harms 99% of society, confronting its support base, and another heterodox that receives the support of the people, renegotiating goals, or simply letting what has to happen from 2018 happen, and the IMF take its part. In this scenario, simultaneously, the Government will have to face the big companies and oligopolies that have raised prices extravagantly, as well as the big silo bag condensers.

In both cases: orthodoxy and heterodoxy, the fiscal balance is forced. Because there is no margin or desire for “dependence on Peronism”, nobody wants to ask for new loans and issuing currency is only possible to pay dollars from exports.

The discussion will be resolved by a political decision, never technocratic. We citizens elect a president, we do not delegate authority to finance ministers, corporations or associations. economists they must learn that the budget is balanced in two ways; that of income, and that of expenses; namely, theirs is to consider surplus or deficit and propose measures or sources of financing. The decision to determine the levels of expenses and revenues are of political concern. And for that, having exhausted the dialogue, only the pen remains.