The US has declared itself ready to offer more than rhetorical support to the chainsaw-wielding Argentinian president in the coming days, as Buenos Aires stands on the brink of a fresh financial crisis.
It might do so too.
But the places which are currently reporting, with such glee, the problems with a fixed FX rate are those that ignored the collapse in rents – and vast increase in supply – when rent control was abolished.
And, presumably, if fixed FX doesn’t work then this will all morph into killing rent control kills the currency, see?
The obvious intent is that we cannot allow anyone to see anything good in deregulation. Because that would lead people to think that there might be something good in deregulation, see?
No, I don’t know how it’s going to turn out either. But here’s a guess. If FX causes real problems then libertarianism will be mocked because, see, it didn’t work! And if there’s aid and FX is a problem averted then it will be libertarianism only works with vast support, see! Because the very idea that just freeing up the economy is a good thing for growth, inflation, rental availability and all that cannot be allowed to take hold, see?
I was under the impression that the FX markets were more scared of Millei losing power ( or some grip on it eg via local elections ) thus causing this run on the currency.
Yep. They fear, not unreasonably, that the Argies are too thick* to spot progress and too weak to cope with short-term hardship in return for longer-term prosperity**.
*not all thick of course, I am sure much of the noise comes from recently-sacked public sector parasites
** I’m not picking on the Argies, Britain is exactly the same.
That reminds me of somebody I knew who was adamant: “but it’s my house, why should I have to pay mortgage payments?”
They can’t really complain about it though – its not like the secret to the success of the socialism they keep pushing isn’t ‘other people’s money’.