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Joined 11 months ago
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Cake day: August 6th, 2023

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  • 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.”


  • I think in his bigbrain libertarian mind, the money market pricing of the peso to usd is what defined the value previously and he decided that the market’s pricing is not correct for that of the Argentinian currency.

    By devaluing the currency, it makes Argentinian labor and goods comparatively cheaper on the international market. This is a similar move to how China grew at such a tremendous rate in the 90’s - they intentionally devalued their currency in order to use foreign investment in their relatively cheap labor pool to fund the creation of their manufacturing industries.

    That solution probably won’t work here, though. Corporations are scared of investing in countries with unstable political leadership that performs brash actions like his. (Libertarian economics cannot account for such beliefs though since everyone must be a perfectly rational actor that chooses price above all). They are afraid that he may unilaterally nationalize certain industries and claim all assets for the state. Or he may rugpull outside investments and say that all profits must go to the state for some amount of time. Whatever flavor of stupid chainsaw wielding antics he comes up with one day is what they will see and use as a justifiable rationalization for not investing in the devalued market of Argentina.