We've got a live one here

[_Os_]

Calculator, I would be a bit weary of Zeihan's analysis.

He's good if viewed more as entertainment about something you want to know more about, but there's systemic failings in his thinking. He said Ukraine would be a cake walk for Russia, but importantly he wasn't just some mouth saying that he backed it up with some thought through analysis, that turned out to be totally wrong. He massively underestimates human agency/will and massively over estimates impersonal non-human forces (resources, geography, etc), which is why he got Ukraine very wrong. Anyone watching the early vids out of Ukraine knew whatever it was it wouldn't be easy for Russia, Ukrainians were willing to fight so always had a chance even if the odds were impossible, it was never looking like a cake walk for Russia.

In that video he says Argentina will do well because of it's "geography and demographics". He knows technology means geography matters less than it did a century ago, technology has made the world smaller, but just ignores that and insists geography has the same weight it did (does it actually matter if Argentina has good agri land or even if it has no agri at all? if it matters then how much does it matter? Zeihan says "Argentina will do fairly well in the future not because of it's government but because of its geography ...", try telling a Zimbabwean the government doesn't matter and having agri land ensures success). On demographics he over estimates the importance of a younger population (but not as much as he over estimates geography, he thinks Africa's geography outweighs having the youngest populations), he basically thinks with an older population you cannot have a dynamic and/or consumption led economy, because old people don't spend according to him, meanwhile back in the real world in a developed economy earning power increases through someone's life. Old boomers are having foreign holidays every single year and sometimes two a year, go to a decent restaurant in London and see who the customers are it's not people in their 20s/30s (when Zeihan's analysis is that it is). The developed economy with older demographics can also attract immigrants more easily.

He states the "problem has always been Peronism and the government", in other words what the population of Argentina think. Well no shit, will/agency matters. The problem is he never includes what people think in his analysis because he regards it as irrelevant, when it's the most crucial thing. In that vid and in his wider work he states the world will deglobalise and stop trading, but that's not what anyone who matters is thinking or wants. He says in that vid instead there will be a world of blocs, but this is a sneaky move because he knows it's already a world of blocs and that's what globalisation always was.

If you take the opposite view to him, that what people think matters most and nothing is inevitable. Then it becomes harder to dismiss the Argie Refrys.

[Calculon]

Oh i take his analysis with a large pinch of salt, especially for his non usa stuff. a lot of his statements are very clickbaity and contradictory. i would also agree he tends to underestimates human agency but what i got from that video is him saying despite the Argies having great demographics, amazing agricultural lands and an educated workforce, they keep fucking it up by electing some of the worst politicians. hard to disagree with that.

he does bang about deglobalisation a fair bit, saying the current trend will not only continue but accelerate massively. i'm also skeptical about the last part

[Insane_Homer]

he does bang about deglobalisation a fair bit, saying the current trend will not only continue but accelerate massively. i'm also skeptical about the last part

by adopting the US dollar as currency

[Calculon]

he does bang about deglobalisation a fair bit, saying the current trend will not only continue but accelerate massively. i'm also skeptical about the last part

by adopting the US dollar as currency

we're talking about Peter Zeihan, a popular and entertaining global analyst/doomsterist who's prone to hyperbole

[Calculon]

He's not doing so badly

[Kiwias]

He has achieved what I considered impossible: makes the Orange Buffoon seem almost normal.

[Calculon]

He's a bit of an oddball but if he manages to fix the Argentine economy he really would have achieved the impossible

[David in Gwent]

https://www.eiu.com/n/greece-argentina- ... ironments/

Some potentially valuable investment opportunities in Argentina now the commies have been kicked out.

[David in Gwent]

Argentina declare a budget surplus for the first time in almost 2 decades

https://www.france24.com/en/live-news/2 ... n-16-years

Who would have thought that running your country like a business, instead of some kind of nanny state would actually reap benefits?

El Salvador are ripping up trees too.

REJECT SOCIALISM!

[petej]

Argentina declare a budget surplus for the first time in almost 2 decades

https://www.france24.com/en/live-news/2 ... n-16-years

Who would have thought that running your country like a business, instead of some kind of nanny state would actually reap benefits?

El Salvador are ripping up trees too.

REJECT SOCIALISM!

The rest of that article is a bit less positive. I wouldn't be overjoyed about losing so much spending power. Argentina is a basket case. If it all goes to shit I guess he might fancy Las malvinas as he pledged he would gain sovereignty over them.

[Calculon]

He's still doing well

[_Os_]

He's still doing well

Because we're friends I gave it a watch, Calculator. I'll use this site for all the numbers: https://tradingeconomics.com/argentina/exports

1
Trade: That video is suspicious in how it presents trade from around 4 minutes on. There's no proper historic analysis of trade volume and balance, it briefly flashes a graph on balance of trade that's scaled oddly and only goes back to somewhere in 2021. Basically are exports really increasing. Exports are up on 2023 as that video states, but down on 2022, and 2021 is a bit hard to judge as the start of that year was still Covid impacted but by mid year when Argentina's export peak (not everything is exported all year round) it was down compared to that year too. Overall the value of Argentina's exports are trending downwards over the last 3 years. This matters when the goal is structurally changing the economy around export led growth (the video makes the same claim Zeihan did, that basically just having natural resources means you're all good).

The important aspect isn't trade balance, because imports are going to be suppressed by Argentina's currency devaluation (foreign goods become more expensive) and cutting investment (less demand for foreign machinery etc). Imports are down on 2023 and 2022, but if the goal is export led growth and your economy doesn't produce everything required to make the investments to achieve that, then imports falling isn't good. Taking a longer view Argentina's exports/imports just look to be in their usual pattern. It's a protectionist economy, trade volumes are far below a peer nation with a more open economy like South Africa.

2.
Investment: The leading indicator in increasing productivity (and so exports) is investment. That video talks about mines and fracking, which all requires immense investment. FDI is down on where it was in 2023, and generally has been down on where it was pre-Covid. Gross fixed capital formation (value added that is invested rather than consumed, ie businesses/government/households buying fixed assets), is down on 2023 and 2022, the chart basically shows a collapse in 2024 (chainsaw) and 2020 (Covid) and 2008 (GFC). The foreigners aren't investing. Argie private sector aren't investing. Chainsaw guy has done what he was elected to do and cut government spending (ie the government aren't investing).

Video mentions the Argentina stock market rocketing. Money is flowing into emerging markets because US markets are now overvalued. Argentina still outperforming that, could be that Argies are seeing massive inflation and currency devaluation and fleeing to anything which can retain some value.

3.
Chainsaw: As the video mentions, poverty has increased from 40% of the population to 50% over the last year. The video oddly uses a month over month calculation to show inflation and states inflation is at 3% MoM. It briefly says year over year inflation reached some massive number. MoM and YoY measure the same thing but present it in a completely different way. YoY is the more common method of reporting (it's how CPI in the UK is calculated), the current Argie YoY inflation rate is 166% and it peaked at 292%, the video looks a bit misleading on this because those huge numbers are the ones directly comparable to how most people watching understand inflation being reported. All these numbers are insane, they're not at the levels we've seen Zim and Venezuela in the last 10 years but they're approaching it. As the video says the Argie Peso has devalued through the floor, it's now over 1000 to US$1. Basically the currency was devalued and moved towards its market rate and this pumped inflation. This also pumps the real terms value/cost of external debt, US$290bn in external debt.

These numbers are so crazy it's difficult to fully grasp how bad they are. It opens up the risk of more political instability and further populism (likely a swing to the left given its Argentina) and makes for a tougher investment environment. Mining is mentioned in the video, it requires huge capital investment over long periods of time, average time from discovery to production is 18 years, for a Lithium mine (mentioned in the video) it's 17 years, for a mine in Argentina it's 14 and a half years. If there's anything not right in the investing environment (and the list of factors is long, including government investment in infrastructure and skills), there's no largescale mining investment.

[Calculon]

Ok, but after a year his popularity is +36 percent despite slashing government spending, he must be doing something right

[_Os_]

Ok, but after a year his popularity is +36 percent despite slashing government spending, he must be doing something right

Populist sugar rush and the promise of jam tomorrow. Possible anyone with money has US$ under the bed or invested in US$ assets to insulate themselves, whilst blaming those who rely on the government (the poorest). Slashing government spending (aka austerity) in the UK was supported by those least impacted too.

Problem with a small protectionist economy is a lot of what it produces isn't competitive, it hasn't opened up yet (imports aren't up, unemployment isn't up as uncompetitive sectors go under). Argentina has had 60 years of import substitution, this leads to focusing on sectors Argentina has little comparative advantage in. Trying to do everything in Argentina decreases the available investment for sectors which could be world beating (definitely agri, maybe some natural resources). Some Argies get fat in the protected parts of the economy serving the Argie market, limited competition, limited innovation, Argies pay more for lower quality goods. Protecting what they're average/poor at, means trade deals provide less market access for what they could do well. Argentina isn't in the top 10 agri exporters by value, isn't in the top 3 producers of that many agri commodities (including beef production). Countries with less and/or worse agri land are more competitive and outperform Argentina in agri.

The opposite happened in East Asia, which has protectionism and state intervention. But they focus on human capital intensive sectors they have a comparative advantage in (industry/manufacturing), and on exports not producing for their internal market. They're cutthroat competitive in what they're good at.

Argentina needs to do something. Not convinced closing libraries or cutting the amount of road sweepers will work. So far the numbers are terrible.