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submitted 1 year ago by zephyreks@lemmy.ml to c/worldnews@lemmy.ml
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[-] LufyCZ@lemmy.world 9 points 1 year ago

Makes sense, if stuff is subsidized, the government has to pay for it. If the government doesn't have money to pay for it, they'll just print it out of thin air, devaluing the currency (and thus taxing the working class).

There's gonna be a lot of pain for Argentinians in the months and years to come, hopefully it'll all be worth it...

[-] nekandro@lemmy.ml 64 points 1 year ago

Austerity measures and privatization are basically never worth it.

[-] davel@lemmy.ml 56 points 1 year ago

It’s worth it for the capitalist class that is buying the country’s commons at fire sale prices.

[-] davel@lemmy.ml 19 points 1 year ago

Neoliberalism is a zombie ideology. Read a book: The Shock Doctrine

Printing money only devalues a currency when there’s no taxation to subsequently shred the money.
Second Thought: Why the Government has Infinite Money

[-] LufyCZ@lemmy.world 1 points 1 year ago

Printing money is like borrowing it from the taxpayers.

If there's hyperinflation, it means that said loan isn't being paid back, far from it actually.

[-] davel@lemmy.ml 8 points 1 year ago

There wouldn’t be any money for taxpayers to pay if the government hadn’t first printed it and spent it on goods and services, eventually ending up in the paychecks of taxpayers .

Hyperinflation is now well understood, and printing money is not, on its own, the cause.
PEGS Institute: What Caused Hyperinflation In Weimar, Zimbabwe And Venezuela?

[-] LufyCZ@lemmy.world 3 points 1 year ago

Of course it wouldn't be there, I'm not saying that the government spending money at all is bad.

What is bad is the government spending too much money, so much that they introduce way too much money into the economy, making the rest worthless.

Obviously it's a combination of factors, but printing (and then introducing) a shitton of money will have very direct effects on the value of the currency.

[-] WetBeardHairs@lemmy.ml 15 points 1 year ago

That is not the idea that he had in mind when devaluing the currency. Instead of respecting the international money market exchange rates for USD to the Peso, he has unilaterally declared a new value which is about half of what it was before. The idea is to make Argentinian goods and labor competitive on the international market so the country can vacuum up huge sums of money from greedy investors.

That idea is dumb though because investors tend to want some kind of political stability. They will not just say "Oh I can build my widget for 30% cheaper in Argentina because of this money woo" - they will say "Oh, Argentina will probably seize my assets if we invest there because they're being run by a nutjob dictator."

[-] LufyCZ@lemmy.world 12 points 1 year ago

The black market rate was around 1000 pesos per dollar and the official was 400. They devalued it to bring it closer to the black market one.

If the official rate meant anything, the black market one wouldn't be so drastically different.

[-] BraveSirZaphod@kbin.social 8 points 1 year ago

Instead of respecting the international money market exchange rates for USD to the Peso

You're completely ignoring the black market Peso : USD conversion rate, which is even lower than what Millei has shifted things to at about 1000 pesos per dollar. The aim is to try to get the rate to actually reflect reality.

this post was submitted on 25 Dec 2023
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