Espert expressed that the government is making zero effort to reach an agreement with the IMF. If an agreement does not get reached with the International Monetary Fund (IMF), it will cause an acceleration in prices that can lead to almost 3-digit [year-on-year] inflation.
In a radio dialogue, a representative of the Province of Buenos Aires for the block Avanza Libertad explained that, in case of reaching an agreement with the IMF, the inflation numbers would not be very encouraging either.
The liberal economist expressed with regret that the agreement with the IMF is not at the top of the agenda of the Argentine government. The deputy added that they better start doing things differently from what they are doing because there is no room for more shortcuts.
The agreement that José Luis Espert mentioned connects with the issue of external debt. Argentina made a request to the international organization for more time to return the more than USD 40 billion it owes for the loan requested in 2018.
The IMF needs the Argentine State to reduce its fiscal deficit and suggests an economic adjustment program. According to the government, doing so would hamper growth. For this reason, the negotiations got stalled.
Inflation: A Monetary Phenomenon
Espert said there is a constant growth of liberal ideas in Argentina, and it has a presence in legislative areas. On that occasion, the also deputy Javier Milei (from the La Libertad Avanza bloc), explained in Congress that “inflation is always a monetary phenomenon,” as expressed by Milton Friedman, a personality from the economic school of Chicago.
The president of Argentina does not think the same way. The president maintains that inflation is a multicausal phenomenon that includes psychological factors. The truth is that living in Argentina is now more and more expensive. According to official studies, the consumer price index (CPI) had an interannual increase of 50.9%. The National Institute of Statistics and Censuses (INDEC) highlighted that inflation will be around 55% this year.
Alternatives to Flee from the Argentine Peso
In this scenario in which a prosperous future is not in sight, Argentines with savings capacity (a minority sector in a country with more than 40% poverty) are looking for ways to escape the constant decay of the peso.
On the other hand, the purchase of dollars got restricted by government impediments. In the South American country, it got forbidden to acquire more than USD 200 per month in the Single Exchange Market (and, in addition, you have to pay taxes to do so).
Within the stock market, CEDEARs got positioned as the preferred option. These are shares of other countries listed “wrapped” in the Argentine stock market as national shares. Although they get valued in pesos, their value follows the original value in dollars.
The defined monetary policy of Bitcoin, with a limited maximum currency (unlike fiat money that can get printed indefinitely) and an issue that got reduced every four years, makes many users think that the upward trend in its price will keep having the same fluctuation.
By: Jenson Nuñez
