Chapter 1: How did Argentina repay the U.S. for the currency swap deal?
Argentina, folks, has repaid U.S. for currency swap deal. If you remember when this was first taking place, everybody was saying, you guys got behind Millet. You thought this was a good idea. It's a horrible idea. There's no way this is going to work. Where Millet came out...
and repaid the united states for currency swap framework it provided to the south american country last year to stabilize the economy the u.s treasury scott besant and argentina central bank said on friday rob is that the tweet that you have i am pleased to announce
that reflecting its strengthened financial position argentina has both quickly and fully repaid its limit limited draw on the swap facility with the u.s such that the exchange stabilization stabilization fund currently does not hold any pesos besant said in a post on x we look forward to continuing our enthusiastic support of president mile and argentina he added Again, this is Scott Besant.
Chapter 2: What were the initial criticisms of Javier Milei's economic strategies?
In a separate post, Argentina's central bank added that it had settled the swap line in December, two months after it was announced. According to local newspaper La Nacion, $2.5 billion of a possible $20 billion had been used in that time. A source with knowledge of the matter told Reuters that the agreement remained in force under the agreed terms. Tom, what happened here?
Why is it such a big deal?
Well, this is a big deal because do you remember when all the banks were being asked, oh, yeah, would you like to do this deal with Argentina? And Trump opened it up to the U.S. banks. And all the U.S. banks says, well, we would want a backstop. Well, what a backstop is, is someone's going to stand good for the loan. And so all these U.S. banks were really asking you, us U.S.
taxpayer in the form of the U.S. government to be the backstop for this $20 billion for Argentina. Meanwhile, Millet was down there, got inflation under control. You remember him with the chainsaw and the whole thing running? Well, he went from the chainsaw to the pen, and it was afuera, which I think means— Kill it off. Take it off.
And it was like, okay, Department of Nothingness and Trees, afuera. Remember, he took all those— Those labels off the board and said, this is the government we need. We need defense. We need police. We need fire. We need pension for our people. We need a working government. All the rest of this stuff, afuera. Well, then he went to the U.S.
government and says, hey, getting this under control to float the peso, you know, we need a little bit of liquidity. We need several billion dollars of liquidity. So this was a currency support line that the U.S. banks didn't want to do. And so instead, it got done through IMF and the U.S. government. And guess what? They only needed $2.5 billion of the $20 billion line, number one.
And number two, they stabilized the peso with the IMF, International Monetary Fund. And now Besant comes out and says, by the way, all of you who doubted, it's working. So Besant is really saying it's working. Inflation is down. They've stabilized the peso. They want to make a fund where the peso will peg with the dollar on a more consistent basis.
And Besson is saying, and by the way, ladies and gentlemen, the American taxpayer made tens of millions of dollars in interest on the $2.5 billion over the amount of time that the loan was dating back to the election they had end of last year in Argentina. So this is a big deal. Pat, this is the kind of intervention that's good. You're not your intervention.
Hey, I need a loan to help myself and I need this. And you find great leaders with a reliable risk and you do it and then the taxpayer gets paid back. So this isn't just foreign aid going into a bucket somewhere and never to be seen again.
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Chapter 3: What steps did Milei take to stabilize Argentina's economy?
And so this is no less than Scott Besant saying, hey, It worked. It worked for Argentina. It worked for Malay. And it's worked for the American taxpayer. And we've been paid back.
Let me tell you why I think this is a big deal. And, Mark, I'm going to come to you. I want to hear your thoughts on this. You know why this is a big deal when I looked into it is imagine you go to a guy. Do you have that one person that every time they borrow money from you, they've never paid? Think about that person. Everybody has that friend, right?
You may be that friend to somebody, but we all have somebody that never pays back the debt, right? You're watching to say, man, I'm kind of that person. Or... It's Johnny, my cousin, my brother, whatever. Argentina was that person. They came, they got that, 82, they never paid it back, they defaulted. 89, defaulted, never paid back. 01, defaulted, didn't pay back. And it happened two more times.
So the entire world looks at Argentina and says, this is the one country that if you give them money, guess what? Never expect it back. And then all of a sudden, boom, here's your money back. Wait, what? to pay it back, the $2.5 billion portion of it, and to do it this fast, their credibility went to the roof. He gets in. Inflation, I think, is at 200%. Now it's at 31.5%.
He's telling the entire country we're not going to be printing money. I think... As an operator, the world is now looking around, looking at countries that if you can lend them some money to make interest and expect that money to be back, I think Argentina officially moved from one bucket that nobody trusted to give money over here.
And I think that's a very, very big thing that's happening to Mille. Mark, your thoughts on this?
Yeah, I can see the initial pushback on this with it's just more government intervention. And so there's a knee jerk reaction to that. And I understand that. But to the point that you made about Millet and what he's done in Argentina, I mean, a complete turnaround. I mean, what he's been able to do in a short period of time is nothing short of a miracle.
But really, what I think is when I look at this is I just look at the absolute competence in the Trump administration. Scott Besant is. is a complete surgeon. He understands rates. He understands currencies. He understands swaps. And think about the competence that we have in the administration compared to previous administrations that we've had.
And for him to be able, with his expertise, right, helping George Soros break currencies. He understands currencies. He was able to help a country out, a country that needs the help, benefit the United States taxpayer, the United States citizen. And so, you know, all in all, I think it's a really good deal.
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Chapter 4: Why is the $2.5 billion repayment significant for U.S. taxpayers?
It's an emergency situation. We don't know what they're going to do with it. It's like a credit line for a business. There's a reason that most businesses will take out a line of credit so they could operate and then pay their expenses, and then they'll make enough money to pay it back quickly.
So it's like the concept of taking out a line of credit to do something productive rather than taking out a loan where you don't know what's going to happen. if it's going to be used for something productive. So, yeah, no, I'm all for it. That's what the swap lines were created for in the first place, I believe.
Like, after 2008, we set up those swap lines so we could inject money into Europe or other places around the world if need be. So, yeah, I think it's really important that we keep this anti- or counter-socialism movement going in South America. Like, so, you know, we got Argentina now. It's so important. Venezuela, right? So one by one, hopefully, we de-socialize or de-socialism South America.
Yeah, you know what's crazy? when you think about this, taxes were supposed to be this way. In 1860 something, 1861, when Civil War comes to an end and Lincoln needs money, we're in debt, we're in debt a lot. He goes to the American people and says, listen, guys, we need to create a tax. You guys got to pay us and help us out. So he creates a progressive tax.
Rob, can you pull up, was it a flat tax? I thought it was three tiers or something like that. The 1861 tax was a flat tax, 3% on incomes over $800, and then the later modified, okay, there you go, later modified to a progressive tax. You know what happened with this? They said, we need to pay this off, and we're going to put this tax until we pay off the debt.
How long do you think that tax lasted? seven years seven years later after was paid off they eliminated the taxes this is how taxes were before today god forbid they launch a new tax it is never going away they're just going to raise it this is why a lot of billionaires from california are escaping knowing california just wants to tax people to death. Let me go to the next one here.
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