By Michael Every of Rabobank
Milei-nnials and no Gen Zzz
As noted yesterday, the weekend saw “another political earthquake” as radical conservative libertarian Javier Milei, who dresses as a superhero, publicly attacks “leftards”, and wants to “burn down” the central bank and shut down most government ministries, was elected president of Argentina. Milei also wants to dollarize – with no dollars. Where one could once argue Argentina is a radical economic and political outlier, it now looks like a potential precursor: now, DM = EM.
Yes, it’s no surprise that in a two-horse presidential race, the incumbent who saw inflation hit 143% y-o-y lost, and it’s no shock Argentina continued a LatAm tradition of political swings from one extreme to the other in the hope that it might help the public live slightly better. Yes, given Milei doesn’t have a Congressional majority, he may not be able to achieve what he wants to do.
Yet the extreme policy being embraced –dollarization, massive austerity, and “burning down” the central bank, so ceding monetary and most fiscal sovereignty– is remarkable. It speaks to fury, desperation, and a recognition that nothing…
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