Argentines HATE Austerity Measures: Argentina has yet another currency crisis, shrinking the size of Government not an option in Argentina – July 3, 2023,

 

Before you go bashing Argentina, you should be aware that Argentina does a lot of what you’ll see Western nations do; the real problem with Argentina is that their currency is not respected, they have a PRO-LABOR-UNION top heavy, BIG government, that for the most part, they’re UNWILLING to shrink.

 

Argentina is a government regulations NIGHTMARE, and although you’ll find a lot of national pride amongst the Argentines, their attempt to FORCE their Argentine ideals on their trading partners equates to their trading partners dumping the Argentine Peso as soon as they’re forced to transact in it.

As an example, let’s say I, the foreigner, am doing some business in Argentina that requires me to use their currency, well, I will likely buy just enough Argentine Pesos to complete the transaction, and then I’m dumping their currency, why? Because the operating costs of Argentina’s government far exceed their ability to pay their PUBLIC SECTOR bills.

Meaning that in order to pay off all the Argentine government bureaucrats, their central bank will have to print money. Now, you might argue, well, isn’t that what the U.S. is doing? Yes, however, the United States still has a flood of buyers for its debts.

I also like to point out that the U.S. military equates to a lot of countries buying U.S. debt to offset their country’s sometimes nonexistent military budget. Why would Finland or Sweden want to join NATO? The answer is simple, so the public sector can avoid financing its own military.

 

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This is just ONE preview as to why people and nations hoard U.S. dollars; now ask yourself, what does Argentina offer the forex markets? If you answered NOTHING! You’d be right. Any reader, I got these Argentine Pesos for sale? Are you interested?

How often do you hear people say I’m going on an Argentinian vacation? At the very least, people travel to Mexico all the time, so you can see why the Mexican Peso is not as volatile as the Argentine Peso.

You have to provide the MARKET incentive to hoard your currency. The Dominican Republic comes to mind; sure, the Dominican Republic has its share of problems, but I rarely hear about the Dominican Republic having a currency crisis; why? Because the D.R. is not shy about its reliance on travel and tourism, which incentivizes more people to hoard Dominican Pesos.

Personally, I think the Foreign Exchange Markets (Forex Markets), as created now, should be abolished; however, even if they were, I think Argentina would still find herself in the same or even worse economic situation.

Policies matter, and Argentine Nationalism, as currently designed, is an economic disaster waiting to happen. I’ve listened to Argentines, and this hatred for Small Government is embedded in their culture as they view capitalism or freer markets as an attack on their identity.

The problem is so bad that I’m hearing the Chinese Yuan is being used for its STABILITY, which is hilarious because the Yuan/Renembi has capital controls; Chinese citizens are forced to use the Renimbi and have to get really creative to get their money out of China, so to me, if Argentina is using the Yuan, this is something to monitor carefully.

For people imagining Bitcoin or some cryptocurrency would be a solution, well, you clearly don’t understand how these socialists operate; first of all, big governments will usually go after the point of sale and make Bitcoin transactions more expensive for the VENDORS who LEGALLY accept it.

Argentines want their big government to work, and whatever way they can EXTRACT/Steal wealth and resources from others, they’ll do it. Most people doing business in Argentina are used to this by now.

Argentina even allowed U.S. dollars to be stored in Argentine banks, but in their last currency crisis, they forced U.S. digital dollar hoarders to sell their U.S. dollars in Argentine Banks into Argentine Pesos.

Now, you might say, well, they can’t do that in Bitcoin, you’d be partially right, but if you legally accept Bitcoin in Argentina, their government can come after you for doing it; if you know anything about the tax structure, even if you treat Bitcoin like an investment, most governments already have a tax structure for it.

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If you’re merely a consumer, not a problem, the problem would be for the VENDORS, and this, ofcourse deflationary for the economy and a general economic disaster. Argentina is the perfect example of what happens in a democratic country in which the VOTERS do not want to shrink the size of their government. Constant Currency Crises!

 

Interesting times ahead!