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In these years we devalue ourselves more than in a decade of Peronism.
In these years we devalue ourselves more than in a decade of Peronism. But all of a sudden, everything seems so stable that it scares.
The idea, as it was said, was to achieve a competitive value of the currency, which in Creole means that, in dollars, it costs you the same to buy a Coke here or in the United States. And that was not only important because coca is rich, but because a manufacturer could cost less to settle in our country by taking advantage of that kind of change.
As the silver from the 2008 record harvests was not used to encourage investment but was used to finance the stocks and corruption, half of the reserves were spent in four years. The vulture funds, which have money but not hurry, bet that when that lie was not sustainable, they could take away the little that was left. That is why, by force of borrowing (again) they took the reserves to levels higher than last decade to scare away those speculative funds.
In parallel, the fiscal deficit was adjusted (little) by eliminating subsidies to public services, to begin to attack inflation that was assumed was carried by the issuance of money (printing of banknotes so that we can pay our bills).
Now people share their pesos between paying services and filling the refrigerator, the vulture investors left and left a few who already with a “cheap” dollar bet on the interest rate in pesos for their fixed terms, and there will be a few who - in short - will be encouraged to set up some business that yield in dollars (hopefully). What has been achieved is that it does not yield to buy and sell dollars, but now to win you have to invest.
While 2018 seems to have been the debacle and the IMF the big monster that pushed us into a vacuum, inflation against the dollar grew in the same proportion as at the time of the stocks. Then, it could be said that the only thing that had been achieved was to pause the economy to make us believe that we were doing well because it was cheap to go to Miami, when what was done was to sustain that by spending what we had generated with a good harvest. That's how important this economic activity is in Argentina.
With this combination, it was to be assumed that by 2019 (coincidentally the electoral year) there would be exchange rate stability. The good thing would be if it is not delayed again and accompanied by unstoppable inflation. Because it has already been proven that the economy does not wait for politics, although the latter can put a brake on it.
Capable the best thing was to have let the previous model follow and empirically demonstrate where we were going. But for that we better watch a documentary from Venezuela and imagine it with blue and white flags.
Publication Date: 03/03/2019
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