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No billionaire overlords. No capitulation. No BS.
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UPDATE: Taxpayer bailout of Argentina may grow to $40 billion
The bailout, which Trump admitted is of little benefit to Americans, keeps getting bigger.
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On September 24, Treasury Secretary Scott Bessent announced a $20 billion bailout for Argentina. Under that plan, Bessent will swap taxpayer dollars for Argentine pesos. President Trump admitted that the bailout, even if it succeeds, will provide little benefit to Americans. But as Popular Information first revealed, the bailout is critical to the economic fortune of hedge fund billionaire Robert Citrone, a personal friend and former colleague of Bessent, who has invested heavily in Argentine assets.
Weeks later, the cost of the Argentine bailout to United States taxpayers may grow to $40 billion.
Javier Milei, the President of Argentina, desperately needs an influx of dollars to prevent a rapid devaluation of the peso. Controlling the peso’s value is key to Milei’s plan to reduce inflation, which reached 200% in Argentina in 2023.
Milei’s policy is to keep the peso’s exchange rate with the dollar within a certain range. At present, the floor is 1,491 pesos to the dollar. If the peso exchange rate threatens to drop below the band’s floor, the Argentine central bank needs to buy pesos with dollars to protect the exchange rate. The U.S. announced the $20 billion swap as the Argentine government ran out of foreign currency.
The problem with this approach is that Argentina cannot borrow enough foreign currency to stabilize the peso at an inflated exchange rate. A recent Morgan Stanley analysis found that, even in the most favorable scenario, the Argentine peso will not stabilize below 1,700 pesos to the dollar.
So long as the Argentine government is willing to buy pesos with dollars at an inflated rate, demand will be insatiable.
