One week before the legislative elections, there is an obvious fact: the population cannot be subjected to four consecutive months of permanent campaigning. It runs out. It gets saturated. And when saturation is maximum, people vote without reasoning.
In April 2024 I warned that releasing the price of yerba mate was going to trigger a crisis. It happened: a half kilo that was $700 today costs close to $4,000. That is an increase of 570% when inflation for the period was 200%. It was not magic: it was the release to export and seek an international price, rewarding the main player in the sector – who ended up politically aligned with LLA in Misiones – and then led to an improvised sports candidate when criminal problems broke out in that environment.
After the election, it became known how much the United States earned by purchasing Argentine pesos and bonds: about US$290 million. And since the bonds rose 10% post-election, the intervention figure that we had been pointing out was confirmed: US$ 2,853 million from the North American Treasury.
The week had three key events since October 29:
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The alleged tariff agreement between the United States and China. Practical translation: the US ended up placing 180 ships of immediate soybeans by getting Argentina out of the way. Minimum potential loss: US$20 million. And on top of that, they offer us an international credit for that same amount. Result: they take us out of the market and then put us in debt for the shortfall.
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On the same Wednesday, the Ministry of Finance decided to renew only $6.1 billion of $11.4 billion of internal bills. It freed up $5 billion to the banks for “cheap credit” that—we already know—can end up going to the dollar. Potential impact: US$3.3 billion.
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Between Thursday and Friday the exchange market operated depressed—with negative volumes of US$150 million daily—and even so the dollar rose $5 on Thursday and $10 on Friday. It is the typical pre-run test starting Monday, when Scott Bessent could begin selling part of the $4 billion he bought between October 9 and 24. As we anticipated a month ago, and as Morgan Stanley confirmed, the exchange rate can go to $1,800 without obstacles. That is assured future inflation.
And on Friday the second plate of this movie was activated: the Chief of Staff resigned. The political crisis in the Government is ignited. Milei once again snubbed who could be his main partner, Mauricio Macri, emboldened by a victory that was, ultimately, pyrrhic.
