A crisis for those who come and also for those who leave

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Then, his main concepts:

• he
  dollar already crossed the barrier of
  60 pesoswho since Sunday
  STEP Argentina's currency has devalued just over 30%. Not only the currency: the work, wealth and savings of Argentineans leads to a devaluation of 30%. Even worse, the collapse of bonds and the value of the shares of Argentine companies.
• All an exaggeration. Undoubtedly an excessive reaction of the financial operators and the big local investors for the results, the surprise, the impact and the error of having bet as much in favor of the investigations. But, the truth is that deterioration can continue.
  The rising dollar for now is not stopping.
• Can you reach a
  hyperinflation? Are bank deposits threatened? The majority of specialists believe that no, and in fact, Argentina in 2019 has nothing to do with that of the late 1980s or with the situation experienced in 2001. Today, there is a crop estimated between 40 and 50,000 million dollars a year there is
  Dead cow which is generating more and more export dollars and many reserves to support dollar deposits. The budget deficit is still cumbersome today, but it bears no resemblance to the collapse of the end of the Alfonsin era, when pesos were issued every month to pay wages.
• What is really happening? The currency and tax bomb explodes that
  Cristina Kirchner left hidden at
  Mauricio Macri end of 2015. The bomb that the current president has indexed and nurtured with the so-called gradualism, increasing spending and deficit, financing the imbalance by debt, a backlog of exchange rates and strongly positive rates to curb the Inflation and anchor the exchange rate.
• The whole inflationary process, which began 10 years ago in 2008 and was exacerbated by Cristina's second term of office and in particular by the Macri administration, was marked by a build-up of money. monetary issues due to budget deficits or inflows of capital to finance the deficit. A tsunami of pesos, the bomb that Cristina left to Macri and, in turn, to the president, multiplied by the failure of gradualism. And it explodes again, as in 2018.
• The numbers do not lie: Cristina left Macri with a Lebac stock of 300 billion pesos and the real dollar at 14 pesos. Today, the stock of Leliqs exceeds 1.2 billion. It has been multiplied by 4, identical to the price of the dollar.
• The bomb began to explode last year when the dollar rose from 20 to 40 pesos, but this explosion was stopped by a new series of debts to pay the installments and rebuild the reserves. Again, exorbitant rates to curb the dollar, as well as the brutal support of the world via the IMF to re-elect the current president. The monetary pump of the Leliqs, as well as the tariff gap, lead to a larger deficit due to an increased need for subsidies and the sincerity of the dollar after the elections is a chapter that everyone knows about economics and finance.
• Macri managed to reduce the primary deficit and multiply the financial deficit by the debt he had to contract to manage gradualism and win the 2017 elections by creating risky populism, as warned by independent economists. .
• The interest burden for the state and the effects of the devaluation on dollar debts have increased. More and more pesos are needed to pay the debt. And more and more pesos are needed to cover the devaluation subsidies and the dollar costs of transportation and energy. And all public spending is indexed by inflation, while rates are indexed in dollars.
• The company was keen to continue deferring the problem for the second term, with the certainty that Macri would have new support from the financial world to reopen the credit and refinance the 2020 commitments. Also with some adjustment to the devaluation, it was badumed , although minor with Macri reelected.
• As reported in this column last week, the government did not anticipate a defeat as categorical as it was placing it at the gates of power surrender. Now, the fear of future currency and capital controls, the fear of a foreign exchange market and the uncertainty about whether the future government of Alberto Fernández will look more like that of Nestor Kirchner or radical radicalization de Cristina sparked panic between investors
• The economic and political presidency is divided between those who believe that the government has the obligation to end the race by fully utilizing the reserves of the Central Bank, the argument that the worst is to release the danger from an uncontrolled inflationary spiral.
• At the same time, others believe that, to avoid hyperinflation, the government should take care of the reserves as much as possible, even to the point of possibly imposing some exchange control until the process is completed. . Elections to ensure that the political transition to December 10 ends without fear.
• Help the president called for peace. In addition, they spoke to Alberto Fernández by telephone and the almost-elected candidate remembers, as he did yesterday, that his leadership alongside Néstor Kirchner was characterized by a fiscal and commercial surplus and by the payment. of all debt commitments. However, he forgot that surpluses had also been made at the time, as the country came from the failure of De la Rua-Rodríguez Saá.
• But the currency crisis that is rife among Argentines with the dollar is not solved with gestures and good intentions. Money problems are solved with money. And the only thing that could now stabilize the dollar is to agree between the government and the OSP winners of an emergency exchange regime that is trying to freeze the situation until the end of the day. Arrival of a new government. If possible, with an economic team that coordinates the transition measures with the team of winners.
• Whatever it is, none of this seems possible for the moment. That's why the dollar will likely continue to rise, just like country risk. Establishing an emergency price for the dollar and starting to think about how to refinance the Leliqs bomb without affecting savers is now Mauricio Macri 's obligation. Alberto Fernández could help him, but he could also choose to leave him alone, to collapse and continue to blow up the dollar until the end of the term.
• But what will the elected virtual president do? It might be useful to begin to know if the one who will govern will be the sensitive and capitalist Alberto Fernández, as he presents himself and we all know him; or if it will be the mask of the most radicalized version of Cristina, the ghost of chauvinism and the violation of property rights. All the monstrous image that the government itself has also nurtured from its adversary and which is now so complicated.
• It is true that the crisis of confidence responds to fear for those who come. And for the context on how they ruled. But it's also a consequence of what those who seem to have done have done.

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