Meanwhile, Treasury Secretary Janet Yellen says “all responsible members of Congress must agree to raise the debt ceiling”.

Bank of America is bracing for a potential US debt default, says chief executive Brian Moynihan. He is not in favor of completely eliminating the debt ceiling as some lawmakers have proposed.

Bank of America CEO Brian Moynihan on the Possible US Debt Default

Bank of America CEO Brian Moynihan discussed the possibility of the US defaulting on its debt in an interview with CNN on Monday, as Congress is in conflict over raising the debt ceiling again.

While emphasizing that he hopes lawmakers will solve their problems, the Bank of America executive warned that the country’s debt default remains a possibility that cannot be ignored. He was quoted as saying the following:

“We have to be prepared for that, not only in this country but in other countries around the world … You hope it doesn’t happen, but hope is not a strategy — so you prepare for it.”

The CEO of the second largest banking firm in the United States warns that the Democratic government is not undertaking austere fiscal measures, quite the opposite, and refuses to allow a constructive negotiation with the political opposition.

Congress Urged to Raise the US Debt Ceiling

Several lawmakers have proposed legislation that would remove the US debt ceiling altogether. Moynihan is not a fan of the idea. Asked if the US should remove its debt ceiling, the Bank of America chief said: “There’s got to be an argument about how we make sure we live within our means as a country … I think we should leave it alone and make sure it operates correctly.”

President Joe Biden’s administration is pressing for a rapid lifting of the public debt ceiling, which has already reached the limit set at US$ 31.4 trillion (or trillion for its English translation), but at the same time proposes adding an amount additional US$ 4.8 trillion to the fiscal deficit until the year 2031.

The Republican opposition both in the Senate, led by Mitch McConnell, and in the House of Representatives, led by Kevin McCarthy, offers a constructive negotiation with the ruling party: approving the lifting of the public debt ceiling is proposed, in exchange for allowing the adjustment of public spending, just as it happened in the Clinton administration. The democrats still resist the negotiation, and jeopardize the credibility of the federal government.

Treasury Secretary Janet Yellen warned Monday that the US government risks “economic and financial catastrophe” if Congress fails to pass a bill to increase the $31.4 trillion debt limit.”

 Yellen believes that the US economy is not going to fall into recession. “Last month we created more than 500,000 jobs, more than 12 million since the president took office, and inflation is coming down,” she claimed.

By Audy Castaneda

The bill is already being criticized as an insufficient measure.

The Central Bank of Argentina announced the issuance of a new 2,000-peso bill, with the aim of easing the burden of using cash for payments in the country. The bill, which will be worth just over $5 blue dollars (the informal exchange rate), is already being criticized as an insufficient measure.

The new 2,000-peso bill was announced after the country suffered its worst price rise since 1991 last year, with inflation close to 95%. It was the fourth highest inflation rate in the world after Venezuela, Zimbabwe and Lebanon.

Argentine Central Bank Announces 2,000 Peso Bill

The Central Bank of Argentina has taken a new measure in its search to ensure the usability of cash as a means of payment in the country. The bank has announced the issuance of a new 2,000-peso bill, which simplifies the task of paying for goods and services in the country in cash.

The new note, which doubles the value of the current highest value note, is designed to be a stopgap while the central bank increases the use of digital payment rails in a highly inflationary environment. In a press release issued on February 2, the central bank stated the following:

“As the process of digitizing payments progresses, this higher denomination note will improve the operation of ATMs and at the same time optimize the transfer of cash.”

The bill, whose issuance date was not announced, was designed to commemorate the development of science and medicine in the country.

An Insufficient Measure

While this measure is aimed at alleviating some of the problems of cash-paying citizens in Argentina, the measure has already been criticized as insufficient by some local analysts, who forecast that it will quickly lose its usefulness due to rising inflation and devaluation in Argentina.

Juan Pablo Albornoz, an economist at Invecq, a local consultancy, stated that “issuing a 2,000 [peso] bill indicates that the maximum denomination is still ridiculously low, it doesn’t even reach 6 dollars. It does not solve the problems and possibly soon we will see the 5,000 [peso bill] go into circulation.”

Although Argentina has made progress in digitizing its payment system, with QR payments reaching record numbers last year, a significant part of the economy is still cash-based, affecting Argentines who have to accumulate large amounts of tickets to carry out transactions. According to Statista, in 2021, almost 45% of all payments made at POS (point of sale) terminals were in cash.

Additionally, a survey conducted by global security firm Prosegur in December found that two out of three Argentines prefer to receive payments in cash due to the fees and delays associated with other payment methods, such as digital transfers and debit or credit cards.

By Audy Castaneda