Javier Milei
speaker
426 appearances
7 recordings
3 series
first heard Nov 2024
last heard 22 Jan
Javier Milei’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 6 in all, peaking in Jan 2026 with 6.
Appearances
If you allow me, I will first give you a description of the situation we received. And based on that, I will tell you each of the things we did when we first took office. Basically, what we found was that in the first week of December, inflation was rising at a rate of 1% per day, which means 3,700% annually. In the first half of December, it had accelerated to 7,500% annually.
When you look at wholesale inflation in December of last year, it was 54%, which if annualized would equate to an inflation rate of 17,000% per year. And in addition, Argentina, for the previous 10 years, had not been growing. with a drop in GDP per capita of approximately 15%. And the reality was that nearly 50% were living in poverty. Now, later I will get deeper into that discussion.
And the reality is that we had a fiscal deficit which amounted to 15% of GDP Five points were in the treasury, 10 points were in the central bank, which was endogenous monetary issuance. And the reality is that we also had interest-bearing liabilities at the central bank equivalent to four monetary bases maturing in one day, meaning we could have quintupled the amount of money in one day.
We had peso-denominated maturities amounting to the equivalent of $90 billion. The central bank had negative net currency foreign reserves, minus $12 billion. We had commercial debts in the central bank equivalent to $50 billion. There were company dividends held back amounting to $10 billion. Therefore, if we... If we had instantly opened up, you see, I say we are liberal libertarians.
We are not liberal fools. That's what some anarchist liberals suggested, meaning that we basically open everything on the first day. So in that context, of course, if we had done that, we would have encountered hyperinflation. Therefore, that would have led to the number of poor people being around 95%.
And probably, and by December, the Peronist party would have organized supermarket lootings and would have done all sorts of things and would have probably been ousted. And by the first part of the year, the Peronists would have gone back to office. So to us, it was crucial to end fiscal deficit. One of the things we promised during the campaign had been to reduce the number of ministries.
And indeed we reduced to less than half the number of ministries because we went to nine ministries. Today we have eight. We have also laid off a large number of civil employees. Today I can say that we've already dismissed about 50,000 of them. And we practically don't renew any contracts unless the positions are absolutely necessary.
At the same time, we have stopped public works and we have eliminated discretionary transfers to the provinces. We have also diluted public sector wages. Also, we have eliminated economic subsidies. by restoring utility rates to the right levels. And well, and in that, let's say in this context, we achieved fiscal balance as far as the treasury is concerned.
This is very important because in the last 123 years, Argentina had a deficit for 113 of them. And in the 10 years, it did not have a deficit because it was not paying the debt. So that was absolutely false. And they told us it would be impossible to do that. We had planned to do so within a year. And they said it wasn't possible to adjust by more than one percentage point
and we achieved fiscal balance in the month of January, that is the first month of administration. At the same time, we also cut social plans linked to intermediation. This is very important because we knew we were going to make a very tough adjustment and we knew that this was going to have A court in social terms.
And we knew that we had to offer support during the first month, I mean the first quarter and second quarter in office. One of the things we did was to eliminate what are known as poverty managers, that is intermediaries. Basically, people have a card through which they receive assistance
But it happens that they had to provide a counter service and that counter service was verified by a group called the piqueteros. So in that context, when they were going to sign, the counter service took away half of the money. So by removing that payoff, they stopped extorting them, stopped stealing their money. And with the same amount of money, they received double the resources.
And of course, we also provided an additional boost. So, let's say that this is related to the five adjustment points in the Treasury. Now, what happens? As we began to achieve fiscal balance and no longer needed to issue money to finance ourselves, and as we also met interest payments and some capital repayments, One of the things that happened is that the debt market began to be recreated.
So we were able to take debt out of the central bank and transfer it to the treasury, where it should have always been. And that meant an adjustment of approximately 10% of GDP. Everyone said this would be impossible and couldn't be fixed. Essentially, what we did was implement a fiscal adjustment at the central bank amounting to 10% of GDP.
So if you ask me, it's clear that we have not only made the biggest fiscal adjustment in the history of humanity because we made a fiscal adjustment of 15 points of the GDP, but also... Most of that went back to the people as less seniorage, as a lower inflation rate. It's true that we temporarily raised the country tax, but we lowered it in September.
And now in December, we're going to eliminate it. Today, for example, we also announced that in December, we are eliminating import taxes. In fact, in that regard, what you have... is that we return to the people 13.5 points of GDP because the real tax burden is the size of the state. So while back in December we were discussing hyperinflation, Today, we are discussing 30-year loans.
In other words, all those resources that the national government used to take are now back in the private sector. And that's what has allowed it to be very dynamic. And this has two very strong impacts. The first one is that if you look at wholesale inflation, it went down from 54% to 2%, so it went down by 27 times.
It was divided into 27, so we had inflation at a rate of 17,000% annually, and it's now close to about 28% a year. But it's not only that. You could consider consumer inflation. The latest consumer inflation rate was 2.7%.
Now, it happens that we essentially, due to a matter that is related to the central bank's balance sheets and also due to the debt stocks, we still have controls in place and we are eliminating restrictions day by day. Now, the interesting thing is that we have a 2% monthly devaluation standard and there's international inflation, of course,
which means that you then have to subtract 2.5 points from the inflation observed by the consumer. This indicates that inflation in Argentina, the true inflation, not the induced one, but the actual monetary inflation, is 0.2% per month. At 0.2% per month, this equates to 2.4% annually. What I'm saying is, the original discussion was about whether inflation could reach 17,000%.
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