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Montevideo, February 22nd 2019 - 06:17 UTC
Argentina’s central bank auctioned a total of US$ 200 million of its reserves in two separate currency auctions on Tuesday after the peso hit new lows, the monetary authority said in a statement. Read full article
Just like the orchestra of the Titanic, Mauricio Macri and his gang continue to smile while Argentina begins to crumble all around them.
No sooner a taped TV address of Macri to the Argentines ended, the peso began to drop in spite of U$S 300 million auctioned by the central bank.
Three hours later, the peso had lost 7.5 per cent against the dollar, which ended up reaching an all-time record: 34.50 pesos in sales to the public.
Not even the hardest opponents to the Macri government anticipated such a quick deterioration of the economy.
In spite of the obvious failure of the measures it has taken so far, the government does not blink, and keeps the same strategies that have led Argentina to the current fiasco.
While Nestor Kirchner rescued the Argentine economy and paid off the debt to the IMF in two and a half years, Macri will go down in history as the president who destroyed the same economy in pretty much the same length of time.
And the world markets, which Macri so much cajoled, will be the unceremonious executioner dealing the final blow to this sorry comedy of errors.
What a difference 24 hours make.
Whatever one may have thought yesterday of Argentine's president Mauricio Macri and his much-touted best team of the last 50 years is now out of whack.
One day after Macri addressed the country (actually the dozen or so players who steer the market), the national currency plunged to a record 40 pesos in just one hour after operations started. The government responded by hiking the reference interest rate to 60 per cent, bringing the currency up to 38 pesos.
This horrendous devaluation will have immediate effects on consumer prices, while the new interest rates will bring the country's economic activity to a halt, deepening ongoing recession.
As former Kirchnerist official Guillermo Moreno said, the current crisis contains elements of both the hyperinflation of Alfonsin's last days in government in 1989 combined with the bank panic known as corralito, debt crisis and deep recession of the Fernando de la Rua government in 2001.
Which was to be expected when looking at the mediocrity and denial oozing out of the Aug. 29 Macri TV address to Argentines.
Capitalism - to the extent that it could ever be instituted - might not function all that well in rg given the rg's aversion to productivity.
Communism has never worked anywhere.
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