2023-09-07 04:55:00
The chief economic adviser Javier Miley, carlos rodriguezspread this Wednesday on social networks a step by step to implement a “medium-term” dollarization scheme. The plan would consist of a first stage, focused on the dollars already existing in bank accounts, and a second stage of laundering, called “People’s Pardon from the Market”, which would allow to the financial system around 300,000 million dollars which, according to estimates, belong to Argentines but currently remain outside the financial system.
One of the proposals analyzed by the economic staff that accompanies Milei consists of effect the laundering of dollarswhich would presuppose in the first place the abolition of wealth taxes and the creation of a market for “vouchers” designed to externalize foreign currency.
In an extensive message in X, the economist Rodríguez maintained that “the only quick possibility of dollarizing (a little) is allow existing white dollars to circulate unhindered“, which would rule out dollarization from day one, as had been previously conjectured.
At the same time, Domingo Cavallo’s former vice minister maintained that “the only feasible proposal to de-pesify quickly is a hyper or a Bonex”Therefore, immediately, he focused on the fact that the only thing that is necessary so that “the economy does not explode” is to implement a “strong adjustment in public spending and regulations that hinder the markets”.
Something in which all the political forces seem to agree, since even the Minister of Economy, Sergio Massapromised to send to Congress a bill of 2024 budget with fiscal surplus.
However, moving forward with a strong adjustment in public spending can be complex given the social framework, according to the perspective raised by Rodríguez.
“Restore trust will be a process that will require verifiable facts, pain and time”warned one of the Libertarian candidate’s economic bishops.
‘Popular Pardon from Mercado’, the proposal of the former Vice Minister of Economy of Carlos Menem
The starting point would consist, according to the economist who advises Milei, that the dollars already existing in bank deposits be enabled for free circulation.
The CEMA economist spoke with infobae and calculated that said figure would oscillate between 15 billion and 17 billion dollarswhich are currently subject to “fetters and regulations”, according to its definition.
Before proceeding with an ‘extensive bleaching’, the peso and the dollar would coexist within a scheme of “free currency competition”which would not necessarily imply -according to the forecasts of Javier Milei’s adviser- that all citizens part with the national currency to retain dollars.
“All the regulations were made so that the dollar does not circulate, but is only deposited. A first stage of dollarization is that the targets circulate. Later, when there is trust, when they believe you, you can do what I call a Popular Market Pardon“, Carlos Rodríguez explained in said medium.
He also stated that from this stage might be appealed “to full integration into the international capital, goods and technology markets”, as detailed by the news agency THAT.
That would be the ideal context indicated by Rodríguez to “choose an institutional framework for a new monetary system that can be discussed in a context of stability and outside of electoral passions”.
The statements are in line with what was stated by Milei himself in his presentation at the closing of the 9th Latam Economic Forumwhere he maintained that “if we manage to dollarize before the mid-term elections, we will have overwhelming majorities that will allow us to lead Argentina to be a power in the next 35 years.”
Rodríguez asked “to let the Argentines freely use the legal dollars they already have, in competition with the peso“.
In this direction, he proposed that “part of the program might even be advanced with the condition that it reaches all individuals and not only the few who have dollars to launder (coupon transferable by DNI).”
He also pointed out that “when confidence is restored and all the dollars that Argentines have circulate, there will be many more dollars than pesos. That would be an argument in favor of dollarizing.”
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