**: Zhan Hao.
What does Argentina want to do if it refuses to join the BRICS?
At the BRICS summit in South Africa in August this year, member states approved six countries to join the BRICS, namely Argentina in Latin America, Egypt and Ethiopia in Africa, and Iran, Saudi Arabia and the United Arab Emirates in the Middle East, and the membership of these six countries will take effect on January 1, 2024. However, at this time, Argentina changed, and Milley, known as Argentina's "Trump", became Argentina's new **.
Milley really has a bit of Trump's style, and when he came up, he began to "break the agreement and withdraw from the group", throwing away the hard-won BRICS status and refusing to join the BRICS. According to the Argentine newspaper "Page 12" on December 29, Argentina officially announced that the country has decided not to join the BRICS.
So, what exactly does Milley want to do?He just wants money, and he wants to give up the opportunity to join the BRICS and get financing from the United States from the International Monetary Organization or private investors, so as to maintain the best operation and solve Argentina's economic problems.
Frankly, Milley's approach is very short-sighted, which means that Argentina has given up on the future, and he is not really getting valuable financing from the United States or the IMF, from private investors. Why?There are two root causes:
The first reason: the Argentine state is bankrupt
At the end of November this year, Argentina declared bankruptcy again, which is the ninth bankruptcy of Argentina, the most bankruptcies in the world. How miserable is the Argentine economy?Inflation is expected to reach around 200% in 2023, its external debt is more than $330 billion, and its foreign exchange reserves are only about $30 billion, which means that its foreign exchange cannot even pay a fraction of its external debt. Just ask, in this case, who will lend him money again?What price does Argentina have to pay if it wants to borrow money?
The second reason: the "landlord" family has no surplus food
At this stage, the United States and the West's own capital chains are already very tight. In the United States, for example, due to the insufficient flow of funds back to the United States during the interest rate hike cycle, this has led to a series of bank failures in the United States, although the American financial system later used its strong technical capabilities to temporarily stabilize the banking system, but the problem is that the United States has no extra money in hand to lend Argentina.
Next, although the Fed will have abundant funds after entering the interest rate cut cycle, to borrow money from Argentina, Argentina must always have enough assets, future income expectations or products in exchange, otherwise the money lent by the United States to Argentina will be used for consumption, which is equivalent to the United States providing for Argentina. In such a situation, the United States is not a fool, how can it be crazy to fill the bottomless pit with money?
Before Milley came to power, he made a lot of nonsense about China, but after he came to power, he once showed "friendship" to China and actively contacted China, but in the end he chose to withdraw from joining the BRICS. Why did he choose it that way?It is because he opened his mouth to the Chinese lion and hoped to get a lot of money from China to maintain the operation. However, China suspended its currency swap arrangement with Argentina immediately after he came to power, because it knew that Milley would not do well.
Why did China stop the currency swap arrangement between the two sides?Mainly for two reasons:
First, Milley did not reflect the stability of the policy, and a series of extreme policies made it impossible for China to trust immediately, and his campaign rhetoric also made China believe that there was a political risk in cooperation with Milley.
The second is the lack of sincerity of Milley**. The currency swap between China and Argentina, although the final borrowing is interest-bearing, is to some extent China helping Argentina, but Milley immediately abolished the central bank and devalued the currency by more than 50% after taking office. Although there is an agreement between the two sides, the exchange rate of the currency swap is according to the exchange rate at the time of signing, and Argentina also needs to pay interest to the Chinese side when it borrows RMB, but the Argentine currency it has pledged has decreased after all, which is still objectively a risk
In this case, Argentina obviously could not get a lot of money from China at once, which made the short-sighted new ** want to get money from the United States, so he curried favor with the United States by withdrawing from joining the BRICS.
Milley's mistake is making Argentina doomed!
Joining the BRICS is undoubtedly a major long-term benefit for Argentina, because China has the world's largest demand market, the BRICS is the market with the largest global incremental space in the future, the BRICS countries have strong financial resources, and their market demand for food, energy and minerals is structural and long-term. If Argentina does this in a down-to-earth and conscientious manner, it will be possible to repay its foreign debts and turn it around in time.
However, when he came to Milley, he wasted the opportunity to join the BRICS that he had won in the past few sessions. It is no exaggeration to say that Argentina withdrew from the opportunity to join the BRICS, and if it wants to join in the future, this time period is very long, and I am afraid that it may not be feasible in ten years. However, in ten years' time, the opportunity that Argentina missed would be enormous. Why do the BRICS countries buy from Argentina if they can meet each other's needs?Argentina has a foreign debt of more than $300 billion, and how can it repay it if it does not rely on exports?How can the country develop if it is not yet off?
Therefore, the consequence of Argentina's abandonment of joining the BRICS is that it gives up future opportunities. Mo said that it was difficult for him to borrow money from the United States and the International Monetary Organization, and even if he borrowed, one was a drop in the bucket, and the other was debt on debt, and there was no chance to turn over in the future.
And what about this country?It seems that there are only two options: one is to fall apart, ** into a bunch of small countries, the country does not exist, the foreign debt is gone, and the countries will find a new point of interest in the new small country;The second is a national revolution, to get rid of the debt, but at the cost of a long-term economic blockade, which requires a high degree of internal unity, which Argentina does not yet have.
So, looking at it now, it looks like the Argentina led by Milley is going to lead the country to a catastrophe!Jorge Carrera, former president of the Bank of Argentina, believes that this decision is disrespectful to the countries that are pushing for Argentina's accession to the BRICS, and that "it is a big mistake to over-ideologize international relations and thus put Argentina's national interests on the back burner".
Argentina was tossed to the point of no avail by Milley, which is also reflected in the following aspects:
1. Milley instantly reduced the number of Argentine ** departments from 18 to 9 and dissolved the central bank
It is a "miracle" that on the first day of his tenure, Milley abolished nine state ministries. The formation of state departments is not formed in a day, but is a functional department formed over a long period of time, and if we want to make adjustments, we must not adjust them too much, and we need to study them in depth. However, Milley was very radical and came up to abolish these functions. In these abolished ministries, some functions were merged, but the most terrible thing was the direct dissolution of the central bank, and the entire country transitioned to dollarization, which means that in the future, Argentina will not issue its own currency, but will directly trade in dollars.
In fact, there is indeed a lot of dollar trading in the Argentine market, because Argentina's own currency is depreciating too quickly and inflation is too high. However, the reality is that you can't dollarize it if you want to, and trying to use dollarization to solve the problem of inflation and external debt is also a recipe for money. The dollar is the currency issued by the Federal Reserve, not Argentina, and you already owe more than $300 billion in foreign debt, and dollarization cannot offset it. After dollarization, if you want to get the best commodities in dollars, Argentina can sell the assets of the goods, including land, what does Argentina rely on to get dollars?What do the people of Argentina rely on to get dollars?
Second, Milley is crazy ** state-owned assets
Argentina's state-owned assets, let's list them casually: Argentina's National Bank, Argentina's oil and gas company, Argentina's national airline, Argentina's national ** American News Agency, Argentina's water company, Argentina's post, Argentina's railways, Argentina's national radio and television company, Argentina's state-owned coal mining enterprises, Argentina's state-owned telecommunications industry, Argentina's national port administration, Argentina's nuclear power, Argentina's state-owned arsenal, Argentina's state-owned service enterprises... In short, everything that can be sold is sold, and even the arsenal and the State Port Administration can sell it, so I almost sold it.
Let's ask, if you sell all this, what else can you do in addition to raising some money in the short term?Isn't this a typical killing of chickens and eggs?If this can be good, does Putin still need to take back the assets of oil and gas from the chaebols?
3. Ideologization of diplomacy and madness
The question is, the United States is now unable to protect itself, can he save Argentina?Moreover, the United States does not need related industries in Argentina at all. Argentina is insanely pro-China and can also get some long-term benefits, and madness will not have any long-term value other than some short-term benefits. And the damage to Argentine diplomacy such as his refusal to join the BRICS may take more than ten years to repair, and the country of Argentina will have to fall further into the abyss after more than ten years.
Let's ask, such a country, the future is in the **??Look at it now, there is no future, let's just wait for the Argentines to drive Milley after a chicken feather!
For China, it is only necessary to be patient, because Argentina is so tossed that a pro-China regime will have to come to power in the future, and then there will be more in-depth cooperation, and then Argentina will only have more benefits to concede. There is no way, the international community is so realistic, there is no profit and it is not early, Milley wants to get a life-saving straw from the United States and the West, that is, he is dreaming!
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