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0 sats \ 5 replies \ @didiplaywell 11 Dec \ parent \ on: Two Years of Milei: The Reform Agenda Moves Forward in Argentina econ
Yes Sr.
About the money supply, you had already asked me about it, and I pointed to the section in the post in this answer.
I'm pasting the same excerpt here again:
With which you can find the respective original paragraph in the original post, which has the wikilinks to the sources.
About the case of Libra, there are no good excuses, he plainly messed up. While both cases where inconsequential, to the point even the local crypto ecosystem dismissed it, it was a severe pitfall. I do know that Milei got acquainted to both shitcoin cases through friends he trusted, and when he considers you a friend and trusts you, he makes no questions. That attitude has caused him shortcomings within the political landscape as well. All in all, bad actors keep getting filtered out, and that trust and confidence do pays off to him, as his best men in his cabinet are doing wonders. So, I expect and I'm willing to accept more such pitfalls, as long as the balance remains positive.
What on earth does this even mean? It sounds like meaningless word salad.
how such a brutal increment didn't cause an instant increment in inflation?... oh yes! Debt payoffs! There's indeed no new money nor new debt, the "monetary expansion" simply being the result of operations that cause existing money to be accounted for, as in this case, existing debt monetization
So...he's printing money to pay off debt, and it somehow doesn't matter?
The below is from Saifedean Ammous: https://x.com/saifedean/status/1987485531715019087
The most amazing testament to the power of propaganda is the number of people responding to this by insisting Milei isn't printing money or increasing debt, when his own government stats show that all money supply measures have tripled or quadrupled in under 4 years; and what's even more astonishing is that the debt is up even as the peso's official rate has decline by around 75% in under 2 years, which has massively discounted the dollar value of his peso debt. But not enough to offset the massive increased borrowing.
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What on earth does this even mean? It sounds like meaningless word salad.
Well, it's not. It's the actual technical name for the operation in question. if you don't know what it refers to, you can ask. You don't have to know what it means, but that do not entitles you to believe that because you don't know what it means then it must mean what you want it to mean.
Debt Monetization: when the central bank transfers money to the government treasury to pay for debts.
That's it. That's what you are seeing. Existing money that wasn't being accounted for in that one graph, being accounted for in that one graph. That's why inflation kept going down firmly despite that apparent surge in that one graph. Because there wasn't, and there hasn't being any more money emission.
This once again showcases Saifedean's prodigious ignorance on the absolute most basic economics, once again, erasing his credibility for any judgement of his on the matter.
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Debt monetization IS money printing.
Debt monetization is a process where a government finances its spending or budget deficits by having its central bank purchase government debt (like treasury bonds) and effectively creating new money to cover those obligations.
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I'm unsure if you read your source complete or just stopped at the point you saw something that sounded like what you wanted to hear. But in any case, if you read about the subject in its completeness, you will see that in the context of debt monetization, "creating new money" is an euphemism, as it do not necessarily involves money emission, but the potential injection of existing money into the economy. The key term here is the word potential, i.e., it's possible to avoid. And that's what happened. If you read the links in the original post, you will see that the money was moved, to ensure liquidity, to an account of the Treasury in the same Central Bank, resulting in a net zero monetary increment. Then that money was gradually used to pay for debts in sync with with real money demand as the economy recovered, and other contracting measures like selling bonds, thus having no effect on inflation. Which is an actual thing, if you look it up, you will see inflation is down dramatically respect to the initial spike the previous regime left. You may then rightfully ask "why did they had to make such a level of financial juggling?", and the answer is that the previous regimes, in their reckless attempt to keep up their populist agenda to remain in power at any cost, committed infinite financial atrocities that had to be untangled and deactivated with the nerve and meticulousness of a bomb disposal expert.
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