As soon as Argentina's new ** Milley took office, he wrote a letter to China in a free and easy manner, which roughly meant that he wanted to carry out a local currency swap with China, and pay attention to it, it was a local currency swap instead of borrowing from us, and one of the purposes of the currency swap was to repay the World Bank's loan to Argentina with yuan.
Milley was full of ambition when he took office, and in just a few days, he encountered a dilemma after taking office, because he was in a mess.
Argentina's economic structure is too simple, is based on traditional agriculture and animal husbandry, heavily dependent on exports and dependent on the needs of the international market, Argentina's grain and beef are world-renowned, but because of the backward level of industrialization, its economy is very vulnerable to external shocks, the international market has a wind and grass Argentina will immediately catch a cold, there has been a precedent of debt default in history, coupled with Argentina's ** fiscal deficit and the vicious depreciation of the local currency peso, Argentina's debt to GDP ratio has exceeded 130% , the inflation rate was as high as 113 in a year4%, more than half, that is, the money that could buy a loaf of bread last year can only buy less than half a loaf of bread this year. As a last resort, on October 23 this year, the Argentine Central Bank announced its decision to increase interest rates to maintain financial stability, and its benchmark interest rate has been increased from 1075% increased to 15%.
However, inflation in Argentina is still climbing at a rate of nearly 10% per month.
In order to win the support of voters, Argentina's political parties competed to make a large number of promises, to fulfill the promise to ensure the high welfare of the people and even did not hesitate to use external loans to maintain, just like drinking to quench thirst, and the loan needs to be repaid, Argentina finally reached the time when it could not be maintained, the debt snowballed bigger and bigger, and now the Argentine economy is facing serious inflation, so the new ** Milley has come up with his own big move to govern the country's economy.
In fact, Milley's tricks are no different from those of his predecessors, except to cut public spending and plan to borrow new debts to pay off old debts.
By the way, Milley does have a point that is different, that is, he completely abandoned Argentina's financial management from scratch and completely abandoned the Argentine local currency, the peso, and replaced it with the US dollar, intending to avoid inflation.
Milley also took more than 300 radical economic reforms, which immediately exacerbated Argentina's financial turmoil, causing prices to skyrocket, and 11 provinces declared a "state of emergency" and people took to the streets to express their voices**.
Because the new measures have exacerbated the economic turmoil, the latest news is that Milley intends to abandon the policy of switching to the dollar, but the idea of borrowing money from the Chinese has not changed.
Who is Milley going to borrow money from?No, not to borrow money, but to exchange, that is, Milley plans to exchange the peso to be abolished to China for yuan, as a special medicine to save Argentina's finance, if China can continue to provide RMB support, Argentina can not only ensure that the sovereign debt does not default, but also stabilize the financial order and save Argentina's economy.
In today's world, the only country that can help Argentina is China, because the United States and the West are also in economic recession and are dragged down by the Russian-Ukrainian war.
It is reported that in the letter, Milley put forward two demands to the Chinese side: First, he hopes to sign a currency swap agreement with the Chinese side, and also demands a substantial increase in the amount of currency swapsSecond, China is required to provide timely appropriations to Argentina to repay Argentina's emergency debts.
Milley exchanged the peso waste paper that Argentina was going to abolish in exchange for China's yuan, is this preparing to treat China as a savior or as a wronged man?
The Chinese spokesman has made it clear that in business, the economy of all countries should be built on the basis of equality and mutual benefit. The meaning of this sentence is already clear, that is, to solve your own problems.
I don't know if Milley is pretending to be crazy or really stupid, completely forgetting the bad words he used during the election campaign, and even shouting slogans to draw a line with China and Brazil, he visited the United States non-stop from the beginning of his presidency, although he ate a closed door in the United States and Biden avoided him.
Now you are embarrassed to write to us seriously and make requests, all of which you learned from the Americans?