Which Country Wanted Donald Trump’s Win The Most ? : Part 2
(Feat. Argentina’s Javier Milei, 2024 Presidential Election, South America, BRICs, China, IMF, inflation, Currency, Trade Balance, Deficit, Policy, Stock Market)
54. Argentina could appear clueless about economics if President Javier Milei fully follows through with his extreme promises.
55. Born in 1970, Javier Milei is the son of a bus driver.
56. He studied economics in college, spent 21 years as a professor of macroeconomics, and served as a chief economic advisor at HSBC.
57. His views may be extreme, but he isn’t inexperienced when it comes to economics.
58. Out of the past 123 years, Argentina has run a deficit for 113 of them. To cover its fiscal shortfalls, the central bank has continuously printed pesos.
59. When something is too common, its value falls; when scarce, its value rises.
60. With the central bank printing pesos excessively, it’s natural for the peso to lose value. But the government has tried to prop it up through a fixed exchange rate.
61. When the peso loses value, the cost of imports doubles.
62. In December 2023 alone, prices for basic goods, domestic flights, and fuel surged—up to double in some cases.
63. While people suffer from inflation, aligning the black market and official exchange rates allows the market to function more freely.
64. A devalued peso means pricier imports but cheaper exports, likely boosting the export economy.
65. If exports rise, foreign currency flows back into the central bank, and tax revenues help reduce the fiscal deficit.
66. The peso’s devaluation means people face higher prices, but the trade balance is improving as expected.
67. Since January 2024, Argentina’s trade balance turned positive and remains in surplus.
68. Argentina was required to start repaying its $44 billion (about 57 trillion won) IMF loan in September 2024.
69. The IMF, impressed with Milei’s austerity measures, approved an additional $43 billion loan in May 2024.
70. The IMF noted that Argentina achieved a budget surplus for the first time in 16 years, with monthly inflation dropping from 25% to 11%.
71. Annual inflation still runs high at around 100%, but it’s now less than half of what it was last year.
72. As inflation appears to be easing, Argentina’s central bank began cutting its key interest rate.
73. The rate, which had peaked at 133%, is now down to 35% within a year.
74. Not all of Milei’s extreme policies have been put into action.
75. His proposal to dissolve the central bank and switch to the U.S. dollar as Argentina’s currency has been dropped.
76. Lacking sufficient U.S. dollars to support dollarization, he appointed Minister Caputo, a known opponent of the dollar switch, as his finance minister.
77. For the first time in a decade, Argentina’s stock market is rising sharply.
78. China, however, seems upset.
79. China had backed Sergio Massa, the former economy minister, in Argentina’s presidential race, and even promised to extend a currency swap through him in October.
80. Massa, China’s preferred candidate, lost by a wide margin to Milei, who criticized China throughout his campaign.
81. Just 10 days after Milei’s inauguration, China suspended its $6.5 billion (around 8.5 trillion won) currency swap with Argentina.
82. Throughout his campaign, Milei voiced strong “anti-China” sentiments.
83. He pledged not to engage with “communist countries,” aiming instead to partner only with “civilized nations” and cutting ties with China.
84. In response to China suspending the swap, Milei withdrew Argentina’s membership in BRICS, a coalition led by China.
85. This disrupted China’s plan to expand BRICS by including resource-rich nations like Russia, Brazil, Saudi Arabia, and Argentina.
86. Milei canceled Argentina’s planned purchase of Chinese fighter jets, opting instead, with U.S. support, to buy second-hand F-16 jets from Denmark.
87. Among Latin American nations, Argentina is currently the strongest U.S. ally.
88. Some believed that if Trump wins a second term, he may heavily support Argentina, the region’s main pro-U.S. government.
89. Milei has often been called “South America’s Trump.”
90. He has openly praised Trump and, when they met, told him, “Next time we meet, we’ll both be presidents.”
91. Milei and top officials have posted photos wearing red ties, showing support for the U.S. Republican Party.
92. Argentina’s government has made its support for Trump clear.
93. After Trump’s victory, Milei posted around 60 congratulatory messages on social media.
94. On November 14–15, Milei is scheduled to visit the United States.
95. He’s set to speak at a Conservative Political Action Conference (CPAC) event in Florida, where he is expected to meet with Trump.
96. For Trump, Milei’s reforms in Argentina could be seen as a useful example of policy success to back his own agenda.
97. Given Trump’s personal style, he’s likely to embrace Milei and his pro-U.S. stance, further strengthening ties with Argentina.
Alphazen Insights
If Elon Musk is all-in on Trump as an individual, then Argentina’s Milei government is all-in as a nation. It feels like Milei has slid right into the “Abe Shinzo” position of the past—Argentina style.
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