World News @beehaw.org alyaza [they/she] @beehaw.org 11 mo. ago

Prices soar in Argentina after Milei’s currency devaluation

english.elpais.com Prices soar in Argentina after Milei’s currency devaluation

Unions are meeting to discuss their response to an adjustment plan whose burden, they warn, will fall on the working class: ‘A total social tsunami is coming’

23 comments

Haha the 'chainsaw the central bank' guy turns out to be unhinged, who knew
- You can't say we didn't know what was on the package, this is entirely self-inflicted.
  
  I’m sad for the common folk who will be hurt here, even the ones that voted for him because they desperately needed relief. I fear they’ve jumped from the frying pan into the fire.
  
  We'll only in the same way Trump was self-inflicted, that is to say that millions of people didn't vote for him and are still impacted by this.
Anarcho-capitalism means that the rich can exploit the poor without any limits or protection. Whoever thought this was a good idea deserves to live with the consequences. The others have my sympathy.
- TBF there's a reason for the devaluation. In countries like Argentina the government sets the price of the dollar, but that doesn't affect the real price, so in the end the government pays the difference. In the case of Argentina the government basically made the dollar half its real value, so say for every 100 dollars an Argentinian bought the government needed to pay 50.
  
  It's a bad situation all around and there are no good solutions, but just leaving it be is unsustainable.
  
  Having the currency be free-floating is the best policy. The transition might be a bit too rapid, though
You thought having a leftist as leader was bad, Argentina, good luck dealing with this douche in power.
surprised_pikachu_face.jpeg
That's helpful, but why declare a 50% devaluation? Isn't that just determined once you peg to the dollar and float your currency?
- Yearly inflation for December 2023 has been 160% (stuff that used to cost 100, now costs 260)
  
  A 50% devaluation, is the same as a 100% inflation: stuff that used to cost 100, now costs 200.
  
  Milei has promised a reduction in inflation for the next year, from the 160% to just 60% (stuff that used to cost 100, plus through the 50% devaluation now costs 200, will end up costing just another 60% more, or ~~320~~ "160").
  
  Meaning: instead of having to anounce a 220% inflation for 2024, he's split it into "50% devaluation, plus 60% inflation".
  
  ...see? He promised to reduce inflation, and he did! 🎉🤡 /s
- He said he would do something abrupt to literally kill the Argentinian peso as he wants to "dollarize" the country
What does he say this achieves? What is his endgame with respect to the devaluation?
- apparently abolishing the central bank and switching to the dollar
  
  So having US cemtral bank controlling the own currency.
  
  Very well tgought through
  
  The US$?

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