Milei meets MAGAMilei and his MAGA-friendly government are the biggest winners by far. He has effusively praised Trump and taken cues from him, unlike most other heads of state. The Argentine president was the first foreign leader to meet Trump after his election victory. Milei also attended Trump’s inauguration and the pair met at the Conservative Political Action Conference in February. Now Milei has landed his first White House visit with Trump on Oct. 14, per the Argentine government.
Milei earned many admirers on the right for undertaking a blitz of free-market reforms. Those included slashing government subsidies and regulations, in addition to thinning public sector ranks by 50,000 employees. In return, Trump has referred to Milei as his “favorite president” and offered an endorsement for his re-election.
A Truth Social post from Trump is certainly prized currency in Republican politics. But it won’t carry the same value among voters in Buenos Aires and in neighboring provinces.
Those voters strongly rebuffed Milei’s party in Buenos Aires
provincial elections in early September. It unnerved investors who sharply sold off the Argentine peso in tandem with government bonds, setting off a familiar stretch of volatility in the country’s financial markets. The Argentine central bank had to embark on a $1 billion spending spree over three days to prop up the peso, depleting scarce foreign currency reserves in the process.
News of the U.S. bailout prompted a 10% rally for the peso. But that boost might be short-lived since the currency once again slumped this week, underscoring the unpredictable cycle that the U.S. is stepping into.
Investors prefer Milei over his
Peronist-led opposition, since they’re fearful of a restoration of the unrestrained spending policies that contributed to Argentina’s chaotic economy. Argentina is rich in strategic resources
like lithium, holding the world’s third-largest reserves, in addition to shale oil and copper. Despite that enormous natural resource wealth, foreign investment has been slow to ramp up even under Milei.
“Argentine assets are far more valuable with Milei in power than under Peronist or Kirchnerist leadership,” said Taylor Selden, a U.S. investor living in Buenos Aires. “A $100 asset in a normal country might be worth $40–50 under the Peronists and
closer to $20 under hard-left Kirchnerists.” ‘Trump gets a two-fer’Several U.S. investment firms including Fidelity, Pimco, and Discovery Capital Management
could come out ahead amid the recent turbulence, per Bloomberg. That has caught the attention of Democrats like Sen. Elizabeth Warren of
Massachusetts. She already sent a letter to Treasury demanding more information about the bailout.
“Evidently, the hedge fund that will benefit is the one that has Treasury Secretary Bessent’s good friend managing it,” Warren told me, referring to Rob Citrone, the co-founder of Discovery Capital Management. Citrone and Bessent were once professional associates in the investment world. In the years since, Citrone has bet big on Argentine bonds and Milei, though he hasn’t added to his portfolio since September’s Argentine elections.
“Donald Trump gets a two-fer here,” Warren said. “He gets to bail out his political ally in Argentina, who is very unpopular and in big trouble, and his treasury
secretary apparently gets to help his hedge fund buddies.” Citrone’s Discovery Capital Management declined to comment.
Anger at the bailout extends to the Republican side as well. In particular, it upset GOP Sen. Chuck Grassley of Iowa after China secured a deal to snap up Argentine soybeans. The surprise agreement further shut out American soybean farmers who haven’t sold a single bushel to China since May, a casualty of Trump’s ongoing trade wars. ‘This gives China more leverage’Signs of dissent are bubbling up within the Trump administration. In an Associated Press photo, Bessent was pictured in the midst of an apparent text exchange with Agriculture Secretary Brooke Rollins about the bailout. She raised alarm about Beijing buying Argentine soybeans: “This gives China more leverage on us,” the message said.
The Treasury Department and Agriculture Department did not respond to Quartz’s request for comment.
Trump is trying to solve a riddle that no one has cracked by wading into the Argentine economy. The International Monetary Fund has provided 23 loan packages to Argentina since 1958, but its economy never fully developed into a mature one. What it developed instead was a reputation as a serial defaulter. Argentina is the largest debtor nation in the IMF, far outpacing even the second on the list: war-torn Ukraine. The IMF extended its latest $20 billion loan to Argentina only five months ago.
Monica de Bolle, an ex-IMF economist now at the Peterson Institute for International
Economics, compared the Argentine economy to a sphinx that has devoured macroeconomists for decades. Now the U.S. is in the same position as the IMF: a lender of last resort.
“It's risky,” de Bolle told me, “just from the fact that the U.S. is giving Argentina a lot of money without any guarantee that it's going to get repaid.”
—Joseph Zeballos-Roig
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