Shock therapy!

Argentina's desperate measures might save their economy.

Hello Financial Healers,

Argentina’s new president, Javier Milei, has started his fiery economic plan. Among the new proposals, Milei aims to gut government subsidies, devalue the peso, and increase taxes for certain members of the population. The Associated Press writes:

Milei proposes to balance the budget by the end of 2024… by slashing spending and imposing some tax hikes. [He also aims] to devalue the peso from 400 to 800 per $1 U.S. dollar and then by an additional 2% each month. [His] goal is to make Argentina’s exports less expensive — and thus more competitive — overseas and reduce the country's gaping trade deficit.

Milei’s strategy seems aggressive and logical, but there are fears that his policies will grind away at Argentine support. The AP warns:

Milei's plan seems certain to make people's lives worse long before they get better. Reduced government subsidies mean that Argentinians will pay more for electricity and transportation. A devalued peso will make imports more expensive. The annual inflation rate… could roughly double to 300%.

The question is, will the Argentine people, who gave Milei a chance, continue to support him once the economic pain sets in?

We’ll have to wait and see.

Prayers for Argentina,
Cory De Silva

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About: Cory De Silva is an American poet, singer/songwriter, screenwriter, actor, and filmmaker. He has released two studio albums, acted in three feature-length films, and published a small book of poetry. He is a graduate of CSU Long Beach, and lives in Northern California with his wife, Colleen, and their son, Bryght.