Javier Milei One Year Assessment

Everyone excited about an Argentina economic miracle is basing it on all sorts of government statistics except the most important statistics: money supply measures and public debt growth.

Under its new supposedly free-market Rothbardian president, Argentina's money supply in 2024 has increased at these astonishing rates:

M0: 209%
M1: 133%
M2: 93%
M3: 123%

To put these numbers in perspective, note that they dwarf the rates during the preceding years, during which Argentina thoroughly earned its reputation as one of the most dysfunctional fiat monetary basket cases in the world.

In the four years of 2020-2023, Argentina’s money supply measures grew at a compound annual growth rate of:

M0: 50%
M1: 77%
M2: 90%
M3: 86%

In Milei’s first six months in office, public debt grew from $370 billion to $442 billion, a staggering increase of 19.4%. Borrowing $72 billion in 6 months can make any economic statistics look good, but the problem of course is in the long-term consequences. It is possible to make short-term growth, poverty, unemployment, or inflation numbers look good by printing and borrowing money, thus transferring the cost of a short-term glow up to the future, where they are paid with exorbitant interest. Those of us who thought things could not possibly get worse might need to reconsider.

Remember that in his election campaign, Milei specifically campaigned on a platform of abolishing the central bank, even saying that that was non-negotiable. Yet as soon as he went into office, all such talk was ignored, and replaced with elaborate stories about how shutting down the central bank would be very politically unpopular. In this, Milei has fully adopted the same statist rhetoric that is always used to justify inflation by governments: the short-term pain of stopping inflation would be so bad, that it's better to continue down the path of inflation and ignore the long-term consequences. The reality is that the Argentine central bank is bankrupt, and the sooner this reality is acknowledged, the quicker it can be overcome. Trying to save the central bank can only be done by piling up debt obligations that will make the future problems even worse. In this, Milei is no different from all his predecessors who sought short-term relief at the expense of the future.

Milei has also refused to default on the public debt, which would have been the Rothbardian solution to finally free his countrymen from eternal debt slavery to pay for the consumption binges of their previous presidents. A default on foreign debt, and a shuttering of the central bank would have caused a few months of painful adjustment, after which the Argentine economy would recover on a solid footing, without even the possibility of a government being able to create inflation or saddle the population with debt. Foreign currency and bitcoin would likely dominate such an economy, and the state would necessarily be limited by the fact that it cannot print money.

By not shutting down the central bank and letting it ramp up its money printing, Milei is sowing the seeds for currency crises in Argentina’s future. By not defaulting and hiring the same bankers who brought calamity to the country in the previous administrations, it seems Milei is eager to get another IMF bailout, which will saddle Argentinians with generational debt slavery and more fiscal crises in the future. Unsurprisingly, he is raising taxes significantly, illustrating that his understanding of Austrian economics is no deeper than the regurgitation of cliches on TV. To increase taxes in order to facilitate more government borrowing is a crime against the people of Argentina to benefit the international banking cartels and the IMF criminals. It is a tyrannical recipe advanced by the Keynesians at the IMF, and has no relation whatsoever to what any real economist worth his salt would advocate.

A lot has been made about Milei reducing the budget deficit, but this is not that important. Argentina’s problem was not that it had a big budget deficit, as its budget deficit has usually been pretty low, under 4% of GDP, the same range as European countries with no major inflation and fiscal problems. The problems have always been in money supply increase and in public debt, both of which have accelerated under Milei in an unprecedented way.

The cherry on top is that Milei has shipped off the little remaining gold Argentina has to London, in search of some yield. Pawning off a politically neutral monetary asset free of counterparty risk in search of a few quick bucks does not inspire confidence. In his book The Ascent of Money, historian Niall Ferguson details how Argentina’s economic problems began when president General Juan Domingo Peron visited the central bank in 1946 and was astonished at how much gold was sitting there. Argentina had more than 1,000 tons of gold at that time, and Peron and his successors would not resist the temptation to finance their spending by running down the gold reserves that should have been backing the people’s money. The past 8 decades of calamity were the predictable consequence. After billions of percentage points in inflation and countless defaults, Argentina’s gold reserves today are no more than 61 tons. By shipping off the last monetary reserve of the future in exchange for a quick buck to allow him to keep paying off debt so he can get another IMF loan, Milei has completed Peron’s inflationary legacy to its logical end. Argentina now has no money of its own, only an ever-growing pile of liabilities from foreign banks replete with political and economic risks. Rothbard must be turning in his grave every time this Peronist invokes him to justify his actions.

This data is astonishing and flies in the face of the hype. But unless someone can show me why this data is wrong, then, for all of his libertarian and free market rhetoric, Milei is a vintage Latin American populist inflationist, buying short-term popularity with long-term inflation and debt, essentially no different from every Argentine leader since Peron. All that his free market rhetoric seems to have achieved is to trick poor Argentines into trusting their broken central bank again instead of trying to find a working alternative like Bitcoin. His anti-socialist rhetoric is nice to listen to, and his hysterical antics, relentless emotional crying, and triumphant theatrics may be amusing to some, but fate usually serves its cruelest dishes to those who celebrate before victory.

On a personal note, I found Milei’s recent attacks on Hans-Hermann Hoppe to be ridiculous. Hoppe was absolutely correct: Milei has not shut down the central bank or defaulted, which would have been the correct course of action for anyone who understands economics and is interested in the wellbeing of the Argentine people, rather than power. Milei simply insulted Hoppe and called him an idiot who doesn’t understand economics. And yet, rather than offer an actual economic argument for keeping the central bank, Milei offered a political argument, straight from the Keynesian textbook--the same argument used by every socialist and Keynesian political leader in history: inflation is needed now, in the short term, because the political costs of stopping it would be too devastating.

To pretend that this is some deep insight into economics is ridiculous; it’s simply a political strategy argument for Milei to remain in power. Putting aside the matter of whether Milei and his fellow socialists and Keynesians are correct, it is ridiculous for Milei to call Hoppe ignorant of economics for not understanding the most elementary and moronic political argument for central banking. The insinuation that Hoppe doesn’t understand economics because he’s an academic whereas Milei is a real world leader achieving results on the ground is also nonsensical. Hoppe--or any random 16 year old--could also achieve everything Milei has achieved in Argentina if allowed to saddle the country with $72 billion of debt in six months and double the money supply in a year.

It would have been far more instructive for Milei to explain why he himself spent his entire electoral campaign saying that closing the central bank was essential and non-negotiable. Was Milei also an idiot who didn't understand economics then? Or is he just another lying opportunist inflationist politician like the ones he made his name attacking?

x.com/InMilei/status…

Israel is too PR savvy to just kill 2 million Gazans. Instead, they're systematically destroying all essential infrastructure to create a humanitarian crisis where disease & starvation will kill many of them & force neighboring countries to take the rest as refugees
#GazaGenocide It will only take a few terror attacks or false flags from the West Bank to do the same thing to the 3m Palestinians there. This has been Zionism from day 1: PR-optimized ethnic cleansing to acquire as much land as possible with as few Arabs as possible.

When was the last time you found yourself supporting the complete destruction of the lives of 2.2 million people because you've been manipulated into believing in collective guilt like a criminal moron?

"Gaza will eventually turn into a city of tents. There will be no buildings"

https://twitter.com/bokeralmog/status/1711788685169926651

You have to be a complete retard if you think the systematic destruction of Gaza is about targeting Hamas, which this Israeli government has worked hard to support over the years. This is just Israel's national sport: ethnic cleansing

https://twitter.com/scotthortonshow/status/1711706174351917401

This serves as an excellent introduction to one of the most interesting and original recent works in political philosophy: Prince Hans-Adam of Liechtenstein's The State in the Third Millennium. Prince Hans-Adam proposes self-determination & the right of secession as the basis for political organization, as opposed to the fiction of popular managerial oversight over government.

The former is how Apple works; the latter is how democracies fail
amazon.com/State-Third-Mi…

Bitcoin fixes renewables by bankrupting all fiat governments that subsidize electricity from intermittent sources, forcing TV-watching virtue-signallers to come to terms with thermodynamic reality: a choice of hydrocarbons vs cold, darkness, poverty, primitiveness, & early death Wind & solar are unpredictable & intermittent, so no sane engineer would ever connect them to an electric grid, whose entire point is to provide reliable power regardless of weather. Only fiat makes this insanity possible.

There is no inflation if you accept you are poorer!

#TheFiatStandard
"British households and businesses “need to accept” they are poorer and stop seeking pay increases and pushing prices higher, the Bank of England’s chief economist, Huw Pill, has said."
theguardian.com/business/2023/… See #TheFiatStandard hashtag for countless stories leading to the BoE's conclusion that you can fix inflation by learning to have fun staying poor

https://twitter.com/saifedean/status/1581618201880055809

Fractional reserve banking would not survive in a real free market. It currently only exists because the Fed is a cartel with a monopoly on banking & currency, which effectively taxes full reserve banks to subsidize fractional reserve banking scams. Currently, the fiat cartel rejects applications of any banks that want to offer full reserve banking, because if they did not, then the slightest problem in the banking system would result in a run on all fractional reserve banks to the full reserve banks

https://twitter.com/saifedean/status/1634429734883926017

Promoters of the fractional reserve banking scam insist it's the inherent & inevitable form of banking. They fail to see how the fiat cartel makes it illegal for anyone to build a bank that's not fractionally reserved to protect their cartel from competition from solvent banks

https://twitter.com/custodiabank/status/1639311542104498179

"The free market chooses fractional reserve banking" takes the form of a private cartel with government monopoly protection telling honest bankers they would go to jail if they open a solvent bank that doesn't engage in counterfeiting.

https://twitter.com/federalreserve/status/1639311289804636182?t=fpiPSCSCFgslSQ-h0zW1rA&s=19

I feel dirty sounding bearish on bitcoin, but I do not think bitcoin will hit $1m in 90 days & and I do not think the dollar can possibly hyperinflate this quickly.

My reasoning follows

https://twitter.com/balajis/status/1636797265317867520

1- Even if @balajis is right on the extent of the banking crisis, a banking crisis is deflationary. When a bank goes bankrupt, the money supply is reduced. If ~all banks go bankrupt, then a majority of the money supply is destroyed & that would make hyperinflation less likely,… twitter.com/i/web/status/1…

If a bridge collapses, do you blame the pedestrians for not having enough confidence in the bridge? What about a bank collapsing?

The only reason you could think banks are different is that you consume bank propaganda universities, TV, and newspapers. All of the world's humans could decide to panic about a solvent bank & all its clients could ask to withdraw all their funds, and the bank would be able to stay solvent and satisfy all claims because of one simple trick: don't promise to hold the same thing to two people.

It's been more than a century of fiat people getting bamboozled into believing that central banks destroying their currency to bail out banks is not theft but a necessity for the functioning of a modern economy. These fiat people actually go to university & read books & serious magazines to learn that if central banks didn't destroy money to enrich bankers we wouldn't have a functioning modern economy & we'd all be living in mud huts.

David thinks the purpose of the fiat banking cartel is to serve customers, when it's there to rob customers to the benefit of the cartel. That's why the Fed won't license a 100% reserve bank & will try to stop you in every way from trying to save your money away from them

https://twitter.com/DavidSacks/status/1634363393498038273

This bit from @thefiatstandard is relevant here. If the Fed simply licensed basic safe 100% reserve banking, it would destroy the fractional reserve banking model of the fiat cartel.

Psychiatry is a pseudoscience that pretends to be useful to humanity when all it does is enrich pharmaceutical companies. Read Thomas Szasz to find out why.

https://twitter.com/owenbroadcast/status/1630003172608471041

At no point in its history did psychiatry ever produce a useful invention or make a scientific breakthrough in the true sense of the term, with replicable falsifiable conclusions. It simply pretended to be useful & scientific to drug the planet with profitable poison.

10 years ago, someone retired & their financial advisor recommended bonds as a safe haven asset for the long term.

$10,000 invested in the Treasury shitcoin then are now $10,877.60.

These are the kind of morons who tell you bitcoin is a scam🤣 Even by the completely garbage CPI metric, specifically designed to understate inflation, you lost 16% of your purchasing power in a decade by financing the US government in its endless rape & theft of the planet.

But tell me more about how Bitcoin is a scam🤣

Have you ever wondered how much of the moronic criminal garbage that is modern nutrition science is just big food & big pharma marketing talking points?

The latest podcast hosts @calleymeans to give us an insider's take on this very question! Calley spent many years working as a marketing consultant for big food, helping craft the marketing talking points branded as "science' to promote highly profitable poison to gullible TV & university consumers!

His is a very informative perspective!

Alex @Gladstein joins the latest podcast to discuss the misery industry: the global fiat-powered debt slavery scam run by the World Bank and IMF, claiming billions of victims.

saifedean.com/podcast/155-im… Thanks to fiat, IMF & World Bank always have money to lend to the worst borrowers: perpetually defaulting governments.

This has been catastrophic for the citizens of these countries who have to pay back the loans, but highly lucrative to the fiat cartel!

The latest Bitcoin Standard Podcast hosts historian Niall Ferguson @nfergus to discuss the history of fiat, its relation to war, its development over the past century, the gold standard, and the prospects for bitcoin!

saifedean.com/podcast/154-fi… Why did Britain join World War I, and was it a wise choice? How eager were the British to join war? We discuss Professor Ferguson's early work on this topic and more recent evidence on how Britain financed war!

What is ESG and why is it such a dangerous scam?

We host @VivekGRamaswamy, an entrepreneur in the healthcare and technology sectors and bestselling author who has made fighting ESG his mission!

saifedean.com/podcast/151-th… You might think ESG is just silly corporate virtue-signalling, but Vivek will explain to you in detail why you are very wrong and what its long-term economic, social, and political implications are.

The latest Bitcoin Standard podcast hosts @Sam_Apple1 to discuss his controversial and remarkable science history book:

Ravenous: Otto Warburg, the Nazis, and the Search for the Cancer-Diet Connection

saifedean.com/podcast/150-th… We discuss the compelling evidence for a connection between diet and cancer, the Warburg Effect, which states that cancer thrive on dietary glucose, and why Sam thinks it's not entirely accurate because it ignores the role of insulin resistance.

Is humanity running out of resources?

The latest podcast is a seminar with Professor
@gpooley, the coauthor of Superabundance, a fascinating and optimistic exploration of how economic progress has made life better for humanity.

saifedean.com/podcast/149-su… We discuss: why goods continue to become more abundant

Why fears of overpopulation and resource depletion continue to be refuted forcefully by reality

Why human time keeps getting more valuable

The latest podcast episode is the final lecture of The Fiat Standard online course just concluded, which looks closely at whether & how bitcoin can coexist with fiat!

saifedean.com/podcast/148-th… After having studied the bitcoin & fiat monetary systems extensively in The Bitcoin Standard & The Fiat Standard, this lecture analyzes how bitcoin can continue to rise in a fiat world. Can central banks adopt bitcoin? Will bitcoin lead to hyperinflation?