I just am beginning to understand why and what was the reason for Trump, actually it was Scott Bessant's idea to bail out Argentina, although he does not want to call that a bailout. USA is basically using US$ to buy Argentina's worthless Peso, a move that defies logic. But there is an agenda behind the move hatched by Scott Bessant. Scott Bessant may be a billionaire, but greed has no glass ceiling.
Scott Bessant is discreetly helping his old acquaintances, like George Soros and other hedge fund owners that have invested heavily in Argentina bonds that are slipping into the sewers. This move is supposed to stabilize the Argentina Peso as well, but the nitty gritty of the move is beyond my comprehension.
Scott Bessant is no humanitarian, having tried to cripple countries during his term as hedge fund manager with George Soros. George Soros, probably through Scott Bessant, lost his pants trying to upend the Hong Kong economy in 1998, by attacking Hong Kong's financial system. Many also could not fathom how Scott Bessant could lose a couple of billions managing his own hedge fund. The man is no Warren Buffet for sure.
You have to believe that Scott Bessant is not helping to save Argentina but trying to save other interest groups. The money was to be drawn from the USA Exchange Equalization Fund, of which Scott Bessant has full authority, Argentina is a basket case and giving bailouts is more like throwing good money after bad.
At this juncture after the bailout, and mid-term election, which the bailout is supposed to do, the Argentina Peso and bond market are in jubilant mood, but the underlying economic condition is still mired in quicksand. Argentina had been given bailouts galore by the IMF in the past but still failed to extricate itself from its economic woes. This will again be just temporary relief.
Argentina owes the most money to the IMF and has been called a 'serial defaulter' over its loans many times, with bailouts galore. Argentina could be called a classic case of a country falling into a debt trap. Therefore, the interest of the IMF also figured in the current US$40 billion bailout, otherwise the IMF will have to suffer massive losses if Argentina collapse totally. Remember that Argentina is a hardcore supporter of dollarization, not de-dollarization, so it figures.
Anonymous
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Scott Bessent is now telling China that its curb of rare earth is a 'big mistake'. The USA itself has been making all kinds of big mistakes over the past decade. That so-called rare earth 'big mistake' is crippling the USA's Military Industrial Complex and giving China breathing space, knowing that the USA needs more weapons that depends on rare earth elements, in order to start a war with China. Let me elaborate further on other big mistakes made by the USA.
The USA started a proxy war against Russia, and in the unintended consequence was pushing Russia into the orbit of China. It was a huge geopolitical mistake. What the USA did not foresee, despite all the touted geopolitical advisors in the White House, was that Russia and China are now complementing each other in ways never envisaged and supporting each other to the chagrin of the USA and the Europeans. Russia's cheap discounted energy is helping China to be even more competitive, while Chinese companies are investing in Russia, taking over the logistics left behind by Western companies. Now the USA and the Europeans are trying very hard to pry them apart. It is not going to happen. The USA and the Europeans now have to deal with two nuclear powers, not to mention North Korea as well. Which is why starting a war with China is not a sure win bet for the USA and the Europeans, although they are nevertheless keen to try their luck to try to save the empire. What do we call that? Not a big mistake I suppose.
The second big mistake was underestimating the resolve of China over the last three or more decades, when China was busy mopping up rare earth resources, essential metals, essential minerals, setting up refining logistics, building bridges with countries for resources and building infrastructures for them in exchange, launching the BRI and most of all the formation of BRICS, all done under the nose of the West. Just a couple of years ago the USA was nonchalant when talking about BRICS, brushing it aside as a threat and claiming that it is just an irritant against the mighty US$. After all, what can chefs, laundrymen and peasants hope to achieve, or so they thought. Now, it is too little too late to try to curb the rise of BRICS. Sure, de-dollarization will take time, maybe decades, but the writing is on the wall and Trump is desperately attempting to counter BRICS with all kinds of threats. Is this not another big mistake as well?
The third big mistake was starting the trade war. We are used to the saying and should heed the saying that people in glass houses should not throw stones. Trump ignited the trade war, China retaliated and USA farmers are suffering the consequences or collateral damage. Now, Trump is begging China to help USA farmers. China did not start the trade war that led to the farmer's plight. Trump himself started that. Was that trade war against China by Trump not another big mistake?
Finally, the tariff war is turning into another big mistake made by the USA. China's trade with the USA is going downhill fast, so any threat of tariff increases is not going to rattle Xi. Trump can now raise tariffs to 1,000%, which China will just look upon as academic. That 10% drop in tariffs by Trump after his meeting with Xi in Seoul means nothing and Xi is not even interested in hearing about it. Less Chinese goods for the USA means less tariff collection for Trump, maybe good for USA consumers as they are the ones paying it. But on the flipside, USA consumers still have to contend with more money chasing fewer goods, which still means leading to higher inflation. That in my thinking, is another big mistake down the road.
When your enemy is shooting itself in the foot, do not tell them it is going to be painful. Just watch, leverage your bets and benefit from the opportunity.
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