Argentina’s libertarian president, Javier Milei, is the lucky winner of $40 billion that Donald Trump managed to conjure from thin air. Less lucky are the Americans who rely on the government programs Trump has gutted to be able to “save” that sum.

Argentina’s libertarian president, Javier Milei, is the lucky winner of $40 billion that Donald Trump managed to conjure from thin air. Less lucky are the Americans who rely on the government programs Trump has gutted to be able to “save” that sum.

  • starrysonics@lemmy.todayEnglish
    11·
    12 hours ago

    So, I haven’t been getting any answer here myself but in general here’s what has been happening.

    Aregentina’s…idk president? Has been cutting their social program funding and regulation for the last year or two. It’s wildly unpopular in his country.

    Those cuts in regulation inflated their currency value for a bit but it was temporary.

    Now, Aregentina is coming up on an election and the president is at risk of loosing and having his policies reversed.

    So this money…it’s not actually going anywhere or for anything specific. It’s a currency swap. We are kind of giving them a loan. Just giving them money.

    Because. Again. The Argentinian President cut tons of stuff and artificially inflated his currency with deregulation.

    So Trump sending him money is like a bandaid to get him through his election.

    He can point to this influx to show that “his policies are working.” They’re not. Argentina has had unstable currency for ages.

    He’s stealing from Peter to pay Paul.

    But this is complicated money science and I can’t explain in technical terms but that is the jist of it.

    I mean, it could work. Javier Milei, The Argentinian President, is trying to get external investors to pump money into he economy so, if nothing else Trump giving him this money signals that he has America’s support.

    Argentinia also just had a big win with soybean contracts and China.

    But in the short term he’s essentially doubling down using a loan from his American pal.

    • venusaur@lemmy.worldEnglish
      2·
      12 hours ago

      Thanks for the details but as I understand it it’s swapping US for Argentinian currency that then needs to be paid back? So I guess it’s technically giving money in the sense that Argentinian currency is trash?

      • starrysonics@lemmy.todayEnglish
        4·
        12 hours ago

        Yeah pretty much. See this is where it starts getting into money theory and I’m a few years out of my economics and finance classes.

        But much like stocks and bonds currency swap also deals with interest and growth rates. It’s a high-scale ‘loan.’ (But not technically a loan.) Loan-like.

        It doesn’t need paid back exactly but if one parties money becomes garbage then it does start to feel like a loan.

        We are getting pesos in exchange, but again. The peso is risky. If it grows then you can argue we didn’t loose any money. But we have to hold the pesos to help stabilize it’s value.