Today’s video article discusses the anatomy of an hyperinflation of a currency and the visible signs that would have warned investors and savers ahead of time.
Per CNBC, Argentina’s President will be hastening implementation of the IMF’s largest ever credit line of $50 billion for the country.
In a televised address on Wednesday, Argentine President Mauricio Macri said: “We have agreed with the IMF to advance all the necessary funds to guarantee compliance with the financial program next year.”
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When Argentina’s government agreed the terms of the loan with the IMF in May, Macri said he anticipated his country’s economy would recover and so they did not plan to use the money.
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Nonetheless, some analysts have criticized the decision to speed up the IMF bailout, saying it smacks of desperation.
In the video, I look at the currency and bond markets and discuss the signs that were present before the currency crashed late this year. I further discuss how savers are hastily taking out their savings in Argentine banks, which will worsen the banking solvency issue. Lastly, I discuss how the bailouts may be like pouring gasoline on the fire without the country restructuring the economy and addressing the debt issue.
(Video length 00:10:29)
