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Reasons For The Weakness Of The Argentine Economy

Argentina has been “printing money for the people” MMT-style for many years. Its wrongly-called “inclusive monetary policy” of the past – print money to finance massive government spending – has driven the country to massive inflation and depression. This is the main reason why a country with an excellent education, human capital, and high economic potential has third-world inflation rates. Argentina inflation rose to 54% annualized this week. Bonds spreads soared to 854 Bps, the two-year…

Will Argentina’s Troubled Economy Recover Next Year?

This year, Argentina’s economy unexpectedly experienced a currency rout and financial market distress that forced the government of President Mauricio Macri to seek a massive and unpopular $57 billion backstop from the International Monetary Fund, ushering in a period of fiscal austerity and sky-high interest rates. What happened? Will 2019 bring calmer waters for Argentina, or are new surprises around the bend?  What is the outlook for Argentina’s key economic indicators in the year ahead, and what factors…

The world’s leading inflation expert believes the current Argentine monetary policy changes are very positive

The American John Taylor is making reference to the inflationary goals and forecast interest rates. Taylor highlighted the planned application of zero growth in the monetary base and “first level transparency” of the local monetary authority. For the creator of one of the most important monetary policy principles of the last decades, “an inflation goal is not enough, a policy strategy is needed to follow” when establishing and complying with the inflation targeting scheme. John Taylor…

💰 Should Investors worry about Argentina’s Dollar Crisis?

The late MIT economist Rüdiger Dornbusch used to tell his students in the 1980s that there are four kinds of countries: rich, poor, Japan, and Argentina. No one frets anymore about Japan buying its way to world domination. But the world is worrying again about Argentina. The country has just suffered another textbook attack on its currency. On April 24, the yield on ten-year US Treasury bonds broke 3% for the first time since 2014. On the same day, investors began dumping Argentine pesos and seeking the security…
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