Milei’s milieu

Whoever walks with the wise becomes wise, but he who walks with fools will fare badly. (Proverbs 13:20)

Whoever walks with the wise will become wise. Whoever walks with socialists will lose his shirt. (My personal 21st century adaptation)

Many of you already know that last Sunday there were elections in Argentina. I went to the polls and fulfilled my duty knowing very well that my vote was practically irrelevant. In my opinion —may God forbid my being right about this— voting in this election was an exercise in futility. Allow me to explain.

There are two actors in this struggle, Mr. Sergio Massa (Peronist) and Mr. Javier Milei (Libertarian). None of them seem to me up to the challenging times ahead.

Before I continue with the main subject I will attempt to define the largest force at play. Peronism is kind of a viscous and slippery animal, not very easy to hold for long as far as definitions go. It has held many shapes in the past: Fascist, Leftist Revolutionary, Right Wing Democratic, Left Wing Democratic, Progressive, and finally … Demonic Oppressive according to some. Currently it is a mix of Venezuelan Chavez Socialism and 1930’s Mussolinian Fascism.

There is an unholy association of and enormous Leviathan composed by an all-controlling State apparatus, worker’s unions, and a Central Bank. State is mainly responsible for recklessly mismanage everything in such a way that a number of white glove criminals can feed on multiple corruption rackets. The labor unions are basically extortion schemes that focus on detecting productive enterprises and apply pressure on them, eventually sucking them dry, or forcing them to leave the country. Imagine Nabisco, Procter & Gamble, Archer-Daniels-Midland leaving the US to relocate to Canada or Mexico due to State and labor unions pressure, leaving behind many thousands jobless and forcing the country to import what previously was produced at home.

Sounds familiar? I will insist that Argentina is a warning call to all countries and particularly to the US. Reckless monetary policy has consequences.

The party of Mr. Milei (meaning ‘thousands’ in the original Italian or perhaps Romanian) has proposed to do away with the battered Argentine Peso by closing Argentina’s Central bank. The objective of that move is to end the State’s capacity of printing more and more paper money. The reckless printing of more paper money destroys the value of the currency through the hidden pseudo-tax of inflation.

See, productive Argentines are under extreme taxation pressure. Say you have a plot of land that yields one million per year in soybeans. In order to export the soybeans you will have to pay a retention of about 70%. You will be paid your 30% in overvalued pesos and there your official foreign exchange rate will take a significant part of your earnings, currently about 66%. Once you go home with your money you must pay taxes on your earnings but do not hold on to that measly pile of pesos because here comes inflation that presently will take 10% monthly. That is a byproduct of printing currency galore.

Many countries around the world have dollarized their economies basically because they lack the capacity to make their institutions work properly. Basically, a country of thieving institutions cannot last long. Some countries have gotten quite close to the precipice and found that it was better to surrender currency sovereignty than to collapse into nightmares similar to the Weimar Republic or Chavist Venezuela. Mr. Milei has proposed dollarization as a rapid way to stabilize the shifting sands of the Argentine economy.

To do that, the State has to recover all the money in circulation by exchanging it for US dollars and that, at the current exchange rate, will require a lot of US dollars. The government will have to “sincere” the foreign exchange rate by brutally devaluing the Peso to its real exchange rate that is currently very low. Such a move will trigger hyperinflation in most realistic scenarios.

A number of very disciplined, very fine-tuned, very harsh measures will have to be stringed one after the other for the economy to emerge back to normality. To do that without a Central Bank (as Mr. Milei proposed at one point) will be a daunting task. See, the Central Bank is not there only to print money, it is also the main currency regulator and the lender of last resort. Knowing the gigantic body of corrupt functionaries (and the well known Argentine vocation for disorder) the task requires a turn around in repentance of apocalyptic proportions.

Presumably Mr. Massa is the candidate of the status quo who will continue to do the same, thus deepening the chasm between Argentina and the rest of the world. Under such circumstances hyperinflation will also ensue.

“The rich rule over the poor, and the borrower is slave to the lender.” (Proverbs 22:7)

This is not a prophecy, not even a prediction but an attempt to guess the future using what God has graciously let us know through a saint and true prophet, St. Luigi Orione. Back in the 1930’s, St. Luigi Orione was living in Argentina. He predicted the arrival of Juan Perón, and the deleterious effect of his ideas. Orione warned us of the string of inefficient administrations that would cause corruption to reach a point of complete putrefaction. He also predicted that from that putrid base “a flower will grow“… He predicted this about one year after the Eucharistic Congress of 1934:

“1. I see a dramatic persecution of the Church.
2. Profanation and destruction of the temples in [Buenos Aires].
3. One day the blood will run (a tragic day for the whole country.)
4. Death of the [Archbishop of Buenos Aires], priests, nuns, and religious assassinated.
5. Fall of the worshiped mud idols (the President persecutor will be hanged along with several of his ilk.)
6. Salvation will come like a flash from the center of the Argentine Republic,

and from all that blood and putrefaction a flower will grow. ‘A thriving Christian Argentina — Peace and happiness will be reborn for a feast of the Virgin Most Holy, and a Catholic civilian man will govern the country brilliantly while an excelsior Bishop will reign over the souls for many years, because the Lord has remembered this country where one night the International Eucharistic Congress of 1934 was celebrated.”

Argentina owes about 400 billion US dollars, a staggering amount of debt per capita for a country inhabited by 40 million. Every living Argentine owes $10,000 if my math is good. The pressure the knaves apply on the decent part of the population through outright criminality, and government oppression is currently reaching a limit. That makes the scenario described by St. Orione quite likely. Chaos seems to lurk behind every curve of the road.

What can we do? What else is left but pray? I for one can sense the wickedness on the streets where common people, out of desperation or sheer lack of any morals, prey on each other for pitiful, petty amounts. Every inch of the way is a struggle to gain advantage over the neighbor. A country cannot last long that way. From the borders, countries like Uruguay, Brazil, Chile, Paraguay, Bolivia look upon Argentina and remember the pre-1916 old country: prosperous, organized, free, productive, full of hope and willing to receive the …

“tired, poor, huddled masses yearning to breathe free, the wretched refuse of Europe’s teeming shore; the homeless, tempest-tossed.. “

to use the words of the poem affixed to the Statue of Liberty.

A word of caution: all of Argentina’s current ills began when the “liberators” came. More than a century of leaders promising “liberation” have resulted in a decline unknown to the modern world, never suffered by any other nation.

Pray for the good people of Argentina and for the conversion of all that curse her every day by their mere existence.