Enter the third phase of the crisis

We warned of this column that the macroeconomic crisis self-inflicted by the national government, Unleashed last April, I was going through three clbadic phases of this type of event, which would become more potentiated by reinforcing each other.

The first phase is given by the stock market price, with the decline in the price of stocks and bonds. This fact can be corroborated by the decrease in the MERVAL index, which since the beginning of the year, it has gone from 32,308 to 28,617 as of 9th September, down 11.4% in pesos. Calculated in dollars, the decrease represents 40%, with the resulting depreciation of the real private and public badets of all Argentineans. This phase is accompanied by an increase in country risk of 732 basis points at the beginning of the year, reaching 2,102 PB as of September 9, an increase of 187%.

The second phase, together with the first, would be expressed in an exchange. Wholesale price in dollars Since January, it has risen from 37.9 to 55.9 dollars, registering a devaluation of 47.4%.

We also believe that if these variables were not stabilized, which did not happen despite the incredible multilateral support of $ 45,000 million provided by the IMF, the third phase of this type of crisis would begin: the bank run, which follows the unleashing of the first two.

The current month of September began with a major regime change in the external sector, consisting of a limitation of access to the foreign exchange market for the purchase of Treasury dollars and a forward liquidation obligation for currencies originating from sales in US dollars. the outside (theme developed in the last column). At the same time, the month of September also marked the beginning of the exit of deposits in pesos and dollars of banks. The following table, with the latest official figures, illustrates this situation:

The decline in private sector term deposits denominated in pesos is 4.3% since September. If we add the accumulation corresponding to the average interest rate with which this portfolio is remunerated, the real decline is close to 9%.

The most compromised situation occurs in the dollar-denominated segment of the private sector deposits, where there is a collapse of 24% of the portfolios in a few days.

Fortunately, macrismo respected the changes made to the banking system after the collapse of 2001, differentiating the brokerage segments into pesos and dollars. Deposits in pesos are applied to transactions agreed in national currency, while deposits received in dollars have a high percentage of fixed badets in banksThis is why they were able to respond quickly to the demand of savers. Loan capacity has been allocated to export activities that reimburse dollars, eliminating any risk of monetary confusion.

Once the above precision has been made, in order to avoid erroneous diagnoses and / or unnecessary alarms, two central issues remain of concern. On the one hand, the growing demonetization of the Argentine economy, understood as the decrease in the amount of the total pesos constituting the monetary aggregates. In the previous columns, we indicated how, from a historical average monetization of about 24% of GDP, this coefficient had been reduced to 19% at the beginning of this year. This happened as a result of an extremely restrictive monetary policy accompanied by a collapse of the real activity that disarmed the demand for pesos.

The second central issue is the disarmament of dollar positions deposited in banks and his retirement from the economic circuit. This greatly restricts the supply of export credit in a country that needs real currency inflows.

The delimited scenario, which we define as the third phase of the crisis, has once again put forward proposals to severely restrict the supply of the national currency or to abolish it directly by replacing it with the dollar.

We hear more and more voices claim a new convertibility system, further reduce the monetization of our economy by replacing the LeLiq stock with a long-term dollar bond that mimics the so-called 1989 "Bonex Plan" and then with the adjustment of the monetary base volume to the stock of reserves at a certain fixed exchange rate.

The editorial also surprised this week in the Wall Street Journal which directly recommends to the Cambie government to abolish the peso and completely dollarize the Argentine economy.

Those who caused the crisis now come with solutions.

Notable, no?