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#12 | Posted by Zed at 2024-03-01 02:21 PM
The man recently devalued the local currency by 50%, if memory serves.
IOW, he finally adjusted the value of the "local currency" (Argentinian peso) to actual market rates - due to triple-digit inflation in Argentina [which he / his new government had nothing to do with but many consecutive cycles of socialist / Peronist governments did] people were hoarding and in many cases only accepting as payment USDollars which retained or often increased in value daily relative to "local currency" due to inflation which made payments in "local currency" more expensive.
|--- "Argentina's Inflation Rate increased to 254.20% annual in January 2024 from 211.40% in December of 2023 and declined to 20.60% from 25.50% month over month, respectively. It is projected to reach 315.00 percent by the end of 2024Q1, according to econometric models and analysts expectations. Inflation Rate in Argentina is projected to trend around 30.00%.
... Average LatAm region annual inflation rate is 8.4%
- Argentina never fully recovered from an economic crisis in 2018 when its peso lost nearly half of its value against the US dollar.
- The IMF responded by loaning Argentina a record $57 billion. The loan failed to stabilize the economy, and the country later defaulted on it and on its own government loans. Annual inflation has stayed above 50% ever since.
- During the pandemic, the government printed money and implemented currency controls and price freezes, laying the groundwork for inflation to soar.
- In 2023 the economy has been crippled by low GDP growth, high prices, reduced consumer spending, and droughts destroying key agricultural exports." ---|
Inflation Rate in Argentina averaged 189.87% from 1944 until 2024, reaching an all time high of 20262.80% in March of 1990.
Year Argentina - USA Inflation Rates
2021 ... 48.41% ... 4.70%
2020 ... 42.02% ... 1.23%
2019 ... 53.55% ... 1.81%
2018 ... 34.28% ... 2.44%
What do you think that does to the poverty rate?
Absolutely nothing - prices paid adjusted as well, that's how "planned government devaluation" works everywhere. This is supposed to make currency more competitive in international goods trade. But, in and of itself, it doesn't change the rate of inflation, however, because it doesn't address the causes (spending, money supply and shortages) - that would need execution of policy changes, which he clearly had no time to implement yet. Judge him and/or his economic policies after a year or so.
I understand that one of his plans was to eventually "dollarize" the economy, i.e., peg the AP to USD ratio (or within USD range), which is not a bad solution - it works for many countries, including Singapore and China.
https://socialism.com/the-roots-of-inflation-in-argentina-debt-plunder-and-capitalist-super-profits/ - Maria Alvarez of the Argentina's Freedom Socialist Party
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