In a difficult economic context Argentina has registered the highest amount of money in the past 30 years. This was stated in an article by Infobae Economico, signed by Matías Barbería.
According to this article, lThe reasons for this gigantic spending of Fiat funds are: “The decrease in debt collection, the lack of access to the debt market and the increase in expenditure that was necessary to counter the economic effects of the coronavirus pandemic COVID-19“” According to the publication, data collected so far this year show that For every new Argentine peso deficit, the central bank issues a new peso to finance the Ministry of Finance.
On the other hand, Barbería cited a report by the Argentine Institute for Financial Analysis (IARAF) signed by Nadín Argañaraz and Bruno Panighel, where they found:
“”From March 2020, isolation led to a rapid decline in economic activity, which had two major effects on public finances. Firstly, the need to increase social and health expenditure to feed a large part of the population without their own income, and secondly, a sharp decline in the collection, which is linked to the level of activity and depends on the collection. of excise duties ”.
In addition, Barbería stressed that so far this year The Central Bank of the Argentine Republic (BCRA) spent over a trillion pesos on public sector funding. Of course, this is a nominal record of all time, but in countries with more than 50 points of annual inflation and more than a decade of high inflation, nominal records say little. The numbers are constantly breaking records, ”said Barbería. Still, he admitted that this year’s monetary expansion is rare.
Argañaraz and Panighel compared to annual GDP to get a better perspective of the scenario. And they found that this was the most important monetary expansion in the past three decades. They specified the following: “In the sum accumulated up to May 2020, the BCRA distributed a total of 740,000 million for profits and a total of 312,000 million for temporary advances. These two components represent a so-called direct support from the central bank for the Ministry of Finance and represent an unsupported (wrong) money issue. The direct support from the BCRA of 1,052,000 million implies an emission of 3.5% of the GDP estimated for 2020 and is the highest number in the past 30 years. “
Cryptocurrencies as an option to devalue the peso
Cryptocurrencies could be an option in the event of a possible devaluation of some fiat currencies. This was recently reported by Cointelegraph in Spanish based on an article by Ámbito published on May 22nd. And because of the situation in Argentina, this could also be an alternative for the citizens of this country.
The Ámbito publication stated that multilateral organizations such as the International Monetary Fund, the World Bank and dozens of central banks around the world have shown that the impending economic crisis is serious. “So far, the global economy is expected to decline by 3%,” the article says.
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