Argentina Finally Did Something Right

Argentina may have finally done something right.

Last week, the chronically mismanaged country elected a new anarcho-capitalist president, Javier Milei. As I mention in today’s Global Macro Update interview, Milei is a pretty weird guy. He’s known for hoisting up a chainsaw at political rallies as a symbol of the cuts he plans to make to Argentina’s bloated bureaucracy and extreme easy money policies.

Source: AP News

I’ve had the opportunity to visit Argentina, and when you travel into the countryside, you’re struck by a gnawing sense that it should be one of the wealthiest countries in the world. And a century ago it was.

Then, starting in the 1940s, Juan Perón and his predecessors began wiping out much of that wealth through misguided socialist policies, including nationalizing railroads and other critical operations. Decades of military, political, and economic turmoil followed, including an extreme economic depression running from 1998 to 2002 when over half the country lived below the poverty line.

Today, the economic situation remains pretty miserable. Here in the US, the price of eggs and gas continues to aggravate consumers. But it’s nothing compared to an inflation rate topping 142%.

Argentina’s poverty rate rose from 36.5% in the first half of 2022 to 40.1% in the first half of 2023. This is how you wind up electing a libertarian with a chainsaw—a guy who has promised to eradicate Argentina’s central bank, sell state-owned companies, and replace the Argentine peso with the US dollar.

The Global X MSCI Argentina ETF (ARGT) has surged 29% in the past month.

The questions now are…

Will Argentina finally turn its economy around in a sustainable way? And if it does, will that success help lift other major Latin American economies like Brazil and Mexico?

These are some of the questions I cover with my friend Jared Dillian today in our Global Macro Update interview. For most of you, Jared needs no introduction. You know him from his weekly letter The 10th Man, from his personal finance podcast Be Smart, and from The Daily Dirtnap, his letter for investment professionals, where he’s been covering the opportunities in Argentina for months.

Somehow Jared has found time to author several books, including No Worries: How to Live A Stress-Free Financial Life, which comes out on January 23.

In our interview, you’ll also hear:

  • How Milei is part of a global shift to various flavors of the political right

  • More reasons to steer clear of investing in China

  • How Jared recommends building a “life hedge” into your portfolio

You can watch my full interview with Jared Dillian on YouTube by clicking the image below.

A full transcript of our conversation is available here.

Best regards,

Ed D’Agostino
Publisher & COO

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