1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,080 --> 00:00:10,239 Speaker 2: Javier Malay is now just over one hundred days into 3 00:00:10,280 --> 00:00:13,239 Speaker 2: his presidency and also into one of the world's most 4 00:00:13,320 --> 00:00:18,720 Speaker 2: dramatic economic experiments. Inspired by his free market heroes like 5 00:00:18,760 --> 00:00:21,680 Speaker 2: Milton Friedman, after whom he's named one of his dogs, 6 00:00:22,160 --> 00:00:25,560 Speaker 2: Milay has devalued the peso and taken a chainsaw to 7 00:00:25,640 --> 00:00:28,960 Speaker 2: government spending, and there have been signs of progress for 8 00:00:29,000 --> 00:00:33,640 Speaker 2: this self styled anarcho capitalist. The official peso is closer 9 00:00:33,680 --> 00:00:36,760 Speaker 2: to its black market value, inflation is down to thirteen 10 00:00:36,760 --> 00:00:40,280 Speaker 2: percent a month, and voters are supporting Mila for now. 11 00:00:41,240 --> 00:00:44,600 Speaker 2: But Argentina has been home to countless full storms for 12 00:00:44,640 --> 00:00:47,519 Speaker 2: one hundred years. The first time I came here to 13 00:00:47,560 --> 00:00:50,280 Speaker 2: the Cassa Razada, who is back in the nineteen nineties, 14 00:00:50,320 --> 00:00:54,880 Speaker 2: to interview Carlos Menem, another reforming president who had managed 15 00:00:54,920 --> 00:00:58,840 Speaker 2: to bring down inflation. He also had magnificent side burns 16 00:01:00,120 --> 00:01:03,800 Speaker 2: stawn ended in riots and default in two thousand and one. 17 00:01:04,840 --> 00:01:08,000 Speaker 2: In this interview, we went through all the challenges Millay 18 00:01:08,080 --> 00:01:12,800 Speaker 2: faces inflation, foreign policy, debt, China, as well as his 19 00:01:12,880 --> 00:01:17,039 Speaker 2: relationships with Donald Trump and Elon Musk. But I began 20 00:01:17,200 --> 00:01:21,200 Speaker 2: by asking him about the currency. President Millay, thank you 21 00:01:21,280 --> 00:01:25,319 Speaker 2: for talking to Bloomberg. We will find time to discuss 22 00:01:25,560 --> 00:01:29,640 Speaker 2: plenty of things, inflation, foreign policy, debt, and whether you 23 00:01:29,720 --> 00:01:34,839 Speaker 2: get to wield your chainsaw. But let's begin with the currency. 24 00:01:35,160 --> 00:01:40,639 Speaker 2: On the campaign, you talked about taking up dollarization, getting 25 00:01:40,720 --> 00:01:43,800 Speaker 2: rid of the central bank, exchanging the peso for the dollar. 26 00:01:44,920 --> 00:01:48,080 Speaker 2: Now you're in power, you've said you will wait until 27 00:01:48,120 --> 00:01:52,880 Speaker 2: after the midterm elections in October twenty twenty five, but 28 00:01:52,960 --> 00:01:57,080 Speaker 2: you do want to lift currency controls, and you have 29 00:01:57,240 --> 00:02:01,440 Speaker 2: narrowed the gap between the unofficial rate and the parallel rate. 30 00:02:02,240 --> 00:02:05,520 Speaker 2: So I wondered, will we get a proper free floating 31 00:02:05,720 --> 00:02:07,600 Speaker 2: exchange rate this year? 32 00:02:11,120 --> 00:02:19,120 Speaker 1: So the ultimate goal of doing away with a central 33 00:02:19,320 --> 00:02:28,200 Speaker 1: bank still stands. The discussion regarding the central bank is 34 00:02:28,400 --> 00:02:34,079 Speaker 1: primarily moral in nature, and to me, stealing is wrong, 35 00:02:34,200 --> 00:02:37,239 Speaker 1: and what the central bank does when it prints money 36 00:02:38,240 --> 00:02:39,720 Speaker 1: is actually counterfeit. 37 00:02:40,000 --> 00:02:40,920 Speaker 3: It's fraud. 38 00:02:41,400 --> 00:02:48,160 Speaker 1: So from that point of view, that long term goal remains. 39 00:02:48,840 --> 00:02:57,919 Speaker 1: That goal remains unchanged. The point is there is also 40 00:02:58,000 --> 00:03:02,480 Speaker 1: the technical discussion as to what it means to be dollarized, 41 00:03:04,160 --> 00:03:09,280 Speaker 1: and we have strictly speaking always referred to our currency 42 00:03:09,360 --> 00:03:13,720 Speaker 1: competition and then there's the implementation issue. The thing is 43 00:03:13,800 --> 00:03:20,119 Speaker 1: we inherited a bankrupt central bank. Net foreign currency reserves 44 00:03:20,120 --> 00:03:25,440 Speaker 1: were negative eleven point five billion dollars. 45 00:03:25,960 --> 00:03:27,320 Speaker 3: Not only did we have. 46 00:03:27,200 --> 00:03:32,000 Speaker 1: That problem, but also we had the equivalent of free 47 00:03:32,360 --> 00:03:38,240 Speaker 1: monetary bases in interest bearing liabilities which were or had 48 00:03:38,440 --> 00:03:47,640 Speaker 1: one day maturities. And also when December started, inflation was 49 00:03:47,800 --> 00:03:53,360 Speaker 1: traveling at three thousand, seven hundred a year. That was 50 00:03:53,400 --> 00:03:55,640 Speaker 1: the first week in December. It then went up to 51 00:03:55,880 --> 00:04:01,880 Speaker 1: seveny five hundred annually, and December ended with wholesale inflation 52 00:04:01,920 --> 00:04:06,840 Speaker 1: at fifty four percent, which if annualized, amounts to seventeen percent, 53 00:04:06,920 --> 00:04:16,680 Speaker 1: which means that Argentina was facing a runaway monetary situation. 54 00:04:17,000 --> 00:04:21,560 Speaker 1: In order to give an idea of magnitude, Argentina was 55 00:04:21,640 --> 00:04:30,200 Speaker 1: facing seventeen percent of GDP in twin fiscal deficit. Five 56 00:04:30,480 --> 00:04:36,000 Speaker 1: was the treasury ten the Central Bank. Argentina had a fiscal, 57 00:04:36,279 --> 00:04:42,280 Speaker 1: monetary and currency disaster of extravagant proportions, and that required, 58 00:04:43,240 --> 00:04:46,479 Speaker 1: first of all, that we clean up the balance sheets 59 00:04:46,480 --> 00:04:52,200 Speaker 1: of the central bank. We had a strategy with a 60 00:04:52,279 --> 00:04:56,280 Speaker 1: view to dollarization, which was basically about taking the liabilities 61 00:04:56,279 --> 00:05:01,160 Speaker 1: of the assets rather of the central Bank visa the 62 00:05:02,360 --> 00:05:08,640 Speaker 1: federal government. In fact, the top creditor of the Argentine 63 00:05:09,080 --> 00:05:10,279 Speaker 1: system is the central Bank. 64 00:05:10,320 --> 00:05:13,080 Speaker 3: The idea was to take those securities. 65 00:05:12,560 --> 00:05:18,280 Speaker 1: To the market and then to basically be able to 66 00:05:18,560 --> 00:05:22,760 Speaker 1: get dollars by selling off these securities, and that strategy 67 00:05:22,920 --> 00:05:27,200 Speaker 1: would have worked perfectly because when we took office, Argentine's 68 00:05:27,200 --> 00:05:30,440 Speaker 1: securities were around eighteen dollars and now they're around fifty 69 00:05:30,480 --> 00:05:35,760 Speaker 1: four dollars. So it would have been a highly successful 70 00:05:35,839 --> 00:05:37,680 Speaker 1: approach and we would have been in a position to 71 00:05:37,720 --> 00:05:44,200 Speaker 1: do that. But given the structure of Argentina's political system, 72 00:05:45,920 --> 00:05:50,240 Speaker 1: and considering how intellectually dishonest politicians and economists sign Argentina, 73 00:05:50,440 --> 00:05:53,960 Speaker 1: it's very likely that if we had actually engaged in 74 00:05:54,040 --> 00:05:57,840 Speaker 1: that sort of transaction at market prices, of course would 75 00:05:57,839 --> 00:06:02,159 Speaker 1: have been at fair value. Politics would have probably said 76 00:06:02,360 --> 00:06:05,040 Speaker 1: that was fraud because the securities, which at the time 77 00:06:05,080 --> 00:06:10,039 Speaker 1: were worth eighteen and now are worth fifty four. They 78 00:06:10,040 --> 00:06:14,400 Speaker 1: would have probably accused us of some monkey, shady business 79 00:06:14,480 --> 00:06:17,880 Speaker 1: and would have sent us to prison. So it's not 80 00:06:17,920 --> 00:06:20,760 Speaker 1: that it wouldn't have been feasible to do that in 81 00:06:20,839 --> 00:06:27,320 Speaker 1: technical terms, but we did infer that in political terms. 82 00:06:27,400 --> 00:06:30,400 Speaker 1: Politics was going to play dirty, which is what it 83 00:06:30,440 --> 00:06:37,960 Speaker 1: actually does. Consider this, it's not that politics does not 84 00:06:38,600 --> 00:06:42,600 Speaker 1: accompany us or support us. It tries to block us. 85 00:06:42,440 --> 00:06:43,159 Speaker 3: All the time. 86 00:06:44,279 --> 00:06:50,560 Speaker 1: So that kind of maneuver would have been something that 87 00:06:50,600 --> 00:06:55,400 Speaker 1: the opposition, with all of its intellectual dishonesty, they would 88 00:06:55,400 --> 00:06:59,400 Speaker 1: have tried to pursue impeachment and it would be a 89 00:06:59,400 --> 00:07:06,360 Speaker 1: different story now. So face with this scenario, we undertook 90 00:07:06,720 --> 00:07:09,800 Speaker 1: an unprecedented fiscal adjustment. 91 00:07:09,320 --> 00:07:10,920 Speaker 3: In the history of humanity. 92 00:07:11,400 --> 00:07:15,560 Speaker 1: We basically undertook an adjustment in the treasury amounted to 93 00:07:15,640 --> 00:07:19,560 Speaker 1: six percent of GDP, and this we did during our 94 00:07:19,600 --> 00:07:20,679 Speaker 1: first month in office. 95 00:07:20,760 --> 00:07:21,880 Speaker 3: And not just that. 96 00:07:22,800 --> 00:07:25,440 Speaker 1: After the deficit we had at the Central Bank, which 97 00:07:25,480 --> 00:07:27,640 Speaker 1: was ten percent of GDP, we brought it down to 98 00:07:27,680 --> 00:07:31,080 Speaker 1: four so that the adjustment we have carried out is 99 00:07:31,320 --> 00:07:35,360 Speaker 1: twelve percent of GDP in three months time. This is 100 00:07:35,400 --> 00:07:39,600 Speaker 1: unprecedented in history, and you can check this with the 101 00:07:39,960 --> 00:07:44,040 Speaker 1: IMF officials. There's no historical precedent of anything like this 102 00:07:44,240 --> 00:07:47,920 Speaker 1: ever before. And this not only averted in hyperinflation, but 103 00:07:47,960 --> 00:07:53,480 Speaker 1: also inflation has been decreasing systematically. In December, consumer inflation 104 00:07:53,640 --> 00:07:57,840 Speaker 1: was twenty five percent in January twenty in February it. 105 00:07:57,880 --> 00:08:01,320 Speaker 3: Was thirteen percent. And if you loose. 106 00:08:03,200 --> 00:08:06,200 Speaker 1: Remove the transient factors. 107 00:08:05,840 --> 00:08:09,400 Speaker 2: Like mister President, you've I completely agree you have. You've 108 00:08:09,400 --> 00:08:11,400 Speaker 2: done a lot to change the fiscal position. But the 109 00:08:11,480 --> 00:08:14,080 Speaker 2: question I asked you was are we going to move 110 00:08:14,160 --> 00:08:18,600 Speaker 2: to a floating rate currency this year? Which you are you? 111 00:08:19,040 --> 00:08:20,320 Speaker 2: That was a precise question. 112 00:08:21,480 --> 00:08:25,720 Speaker 1: Well, in fact, you do have a floating exchange rate, 113 00:08:25,800 --> 00:08:28,840 Speaker 1: which is the parallel exchange rate. It's free and the 114 00:08:28,880 --> 00:08:35,360 Speaker 1: gap relative to the official rate corrected for the police tax, 115 00:08:36,040 --> 00:08:39,480 Speaker 1: the gap is zero, and we do have a free 116 00:08:40,040 --> 00:08:44,240 Speaker 1: exchange rate which matches the market exchange rate. What we 117 00:08:44,320 --> 00:08:48,480 Speaker 1: do every day is lift restrictions on the currency market. 118 00:08:48,760 --> 00:08:55,280 Speaker 1: And in fact, we are going to finally clean up 119 00:08:55,400 --> 00:08:58,000 Speaker 1: the central bank balance sheets and get rid of the 120 00:08:58,200 --> 00:09:01,040 Speaker 1: interest banged liabilities. And once we're done with the financial reform, 121 00:09:01,040 --> 00:09:05,520 Speaker 1: which is very important, we will be sending a bill 122 00:09:06,280 --> 00:09:12,599 Speaker 1: that forbids issuing money, and if money is issued, the 123 00:09:12,640 --> 00:09:14,000 Speaker 1: President of the Central Bank. 124 00:09:13,840 --> 00:09:16,720 Speaker 3: Would go to jail. The Board of the Central. 125 00:09:16,440 --> 00:09:20,560 Speaker 1: Bank, the President, the Economy Minister, and the members of 126 00:09:20,600 --> 00:09:24,320 Speaker 1: Congress and senators that approve budgets with a deficit and 127 00:09:25,760 --> 00:09:29,720 Speaker 1: in order for the amount of money not to change. 128 00:09:29,720 --> 00:09:32,320 Speaker 1: You need three conditions. You need to stop the three 129 00:09:32,880 --> 00:09:37,120 Speaker 1: issuing mechanisms through the external sector. You buy nor more dollars, 130 00:09:37,200 --> 00:09:40,200 Speaker 1: the exchange rate will be flexible. The second point is 131 00:09:40,520 --> 00:09:44,440 Speaker 1: you don't want to finance facial deficit. You need to 132 00:09:44,480 --> 00:09:47,640 Speaker 1: have well balanced public accounts. And the third element is 133 00:09:47,679 --> 00:09:50,840 Speaker 1: you need to have an anti bank run system so 134 00:09:50,880 --> 00:09:56,480 Speaker 1: that there are no there's no rediscounting. So first you 135 00:09:56,800 --> 00:09:59,240 Speaker 1: need to reform the financial system, which is what we 136 00:09:59,280 --> 00:10:02,920 Speaker 1: are working on. And in that context, it's not just 137 00:10:03,000 --> 00:10:06,480 Speaker 1: that the exchange rate is flexible, but also the money 138 00:10:06,559 --> 00:10:11,080 Speaker 1: amount never varies. And as the economy recovers and grows 139 00:10:11,200 --> 00:10:16,280 Speaker 1: and the money demand increases, as the amount of pissiness, 140 00:10:16,280 --> 00:10:20,800 Speaker 1: will order be a given endogenously will have a dollarization 141 00:10:20,960 --> 00:10:25,280 Speaker 1: process relating to the monetization performed by individuals in the economy. 142 00:10:26,760 --> 00:10:28,840 Speaker 2: I know that you are doing this thing with the 143 00:10:28,920 --> 00:10:33,000 Speaker 2: floating exchange rate, where you've been deprecating or depreciating the 144 00:10:33,040 --> 00:10:37,400 Speaker 2: official rate by two percent each month, and the IMF 145 00:10:37,440 --> 00:10:39,880 Speaker 2: and various people have said, you know you must speed up, 146 00:10:40,000 --> 00:10:43,480 Speaker 2: you must go quicker. Will you proceed? I know you 147 00:10:43,520 --> 00:10:45,719 Speaker 2: are doing these other things, but will you speed up 148 00:10:47,240 --> 00:10:48,960 Speaker 2: that rate of depreciation. 149 00:10:50,480 --> 00:10:56,800 Speaker 1: No, because it makes no sense. It makes no sense 150 00:10:56,840 --> 00:10:59,560 Speaker 1: to do that, and this is also something that some 151 00:10:59,640 --> 00:11:03,760 Speaker 1: local economists say, and they are wrong. The first question 152 00:11:03,880 --> 00:11:07,560 Speaker 1: is why should I make the exchange rate take a 153 00:11:07,640 --> 00:11:10,360 Speaker 1: jump today? If the parallel exchange rate, the free exchange 154 00:11:10,400 --> 00:11:14,679 Speaker 1: rate today matches the official rate. It's stupid to have 155 00:11:14,800 --> 00:11:17,800 Speaker 1: to make the exchange rate jump when in fact the 156 00:11:17,880 --> 00:11:21,160 Speaker 1: exchange rate is aligned with the market rate. So that's 157 00:11:21,160 --> 00:11:25,040 Speaker 1: the first thing. They should be more respectful of the 158 00:11:25,080 --> 00:11:29,079 Speaker 1: decisions of individuals rather than be so arrogant, as Hyak says, 159 00:11:29,400 --> 00:11:34,400 Speaker 1: fatal arrogance, because underlying this there is a fatal arrogance issue, 160 00:11:34,720 --> 00:11:37,320 Speaker 1: which has to do with thinking that you know what 161 00:11:37,360 --> 00:11:39,640 Speaker 1: the real balance exchange rate is. 162 00:11:41,679 --> 00:11:43,679 Speaker 2: I think Hyak. I think Hyek was a fan of 163 00:11:43,720 --> 00:11:47,280 Speaker 2: floating exchange rates. He believed in letting things free, and 164 00:11:47,320 --> 00:11:48,760 Speaker 2: you are not doing that at the moment. 165 00:11:52,720 --> 00:11:58,400 Speaker 1: Well, what he proposes is currency competition, right, Yes, it's 166 00:11:58,440 --> 00:12:01,840 Speaker 1: not fully free. We are moving towards that. We're on 167 00:12:01,920 --> 00:12:06,160 Speaker 1: the way. We found a mountain of regulations and we 168 00:12:06,280 --> 00:12:10,480 Speaker 1: are removing a whole lot of regulations every day. But 169 00:12:10,520 --> 00:12:14,839 Speaker 1: the other important thing is that in addition, the dollar 170 00:12:14,880 --> 00:12:18,240 Speaker 1: futures curve is mapped visa vis the Montreal policy proposed 171 00:12:18,240 --> 00:12:20,520 Speaker 1: by a central bank. So the question is why should 172 00:12:20,520 --> 00:12:24,719 Speaker 1: I modify the exchange policy it both the present as 173 00:12:24,720 --> 00:12:28,200 Speaker 1: well as future exchange rate are aligned with the central 174 00:12:28,440 --> 00:12:33,640 Speaker 1: banks Montreal policy. I think economists find it hard to 175 00:12:34,920 --> 00:12:38,960 Speaker 1: shed some mental models that they carry in the heads, 176 00:12:39,320 --> 00:12:41,559 Speaker 1: and as we say, they just don't get it. 177 00:12:42,080 --> 00:12:43,920 Speaker 2: So I think I can read from that that it's 178 00:12:44,000 --> 00:12:46,680 Speaker 2: unlikely to go to what outsiders would see as a 179 00:12:46,679 --> 00:12:50,120 Speaker 2: fully floating rate till maybe next year or after that. 180 00:12:56,400 --> 00:12:59,120 Speaker 1: As soon as we finally clean up the balance each 181 00:12:59,160 --> 00:13:02,320 Speaker 1: of the central bank and complete the financial reform, will 182 00:13:02,360 --> 00:13:03,480 Speaker 1: automatically move to a. 183 00:13:03,400 --> 00:13:06,000 Speaker 3: Fully free exchange rate. The thing is. 184 00:13:08,000 --> 00:13:12,160 Speaker 1: When you do that through market mechanisms that will be 185 00:13:12,160 --> 00:13:17,560 Speaker 1: decided by individuals who want to get the instruments that 186 00:13:17,600 --> 00:13:21,720 Speaker 1: you use for these changes. So you can't define time 187 00:13:21,920 --> 00:13:25,199 Speaker 1: because if you define time, it means that you are 188 00:13:25,240 --> 00:13:28,400 Speaker 1: doing this forcibly. And as this depends on the will 189 00:13:28,440 --> 00:13:34,199 Speaker 1: of individuals, we need for individuals to switch the portfolios 190 00:13:34,240 --> 00:13:39,560 Speaker 1: towards a new structure that will allow for the central 191 00:13:39,559 --> 00:13:41,880 Speaker 1: bank no longer to have these interest bearing liabilities. 192 00:13:41,920 --> 00:13:43,440 Speaker 3: This is something that can't be known. 193 00:13:45,600 --> 00:13:50,800 Speaker 1: Unless you do it forcibly. But many people find it 194 00:13:50,840 --> 00:13:52,480 Speaker 1: hard to think in terms of freedom. 195 00:13:52,840 --> 00:13:56,160 Speaker 2: On subject freedom, you came out, came in, you talked 196 00:13:56,200 --> 00:14:01,559 Speaker 2: about taking a chainsaw to the blue Argentine state. And 197 00:14:01,800 --> 00:14:05,000 Speaker 2: as you've already said, you managed to achieve these fiscal 198 00:14:05,040 --> 00:14:09,040 Speaker 2: surpluses in January and February. That's well done, and you 199 00:14:09,120 --> 00:14:12,280 Speaker 2: did that in part by changing the pensions and things 200 00:14:12,360 --> 00:14:15,960 Speaker 2: like that. But everyone would say, in the end, you 201 00:14:16,080 --> 00:14:20,520 Speaker 2: have to tackle government jobs and subsidies. And yes, you've 202 00:14:20,560 --> 00:14:25,320 Speaker 2: begun to tackle seventy thousand government jobs are going. But 203 00:14:26,240 --> 00:14:27,960 Speaker 2: my question for you is when are you going to 204 00:14:28,040 --> 00:14:32,400 Speaker 2: deal with subsidies. At the moment, energy and transport, these 205 00:14:32,400 --> 00:14:36,280 Speaker 2: are areas where Argentines get a fantastic deal from the state. 206 00:14:36,840 --> 00:14:39,880 Speaker 2: If I use the subway here, the cost I think 207 00:14:40,040 --> 00:14:43,480 Speaker 2: is fifty one hundred and twenty five pesos or ten cents. 208 00:14:43,720 --> 00:14:47,840 Speaker 2: When all the people you admire Builton, Friedman, Hiech, etc. 209 00:14:48,200 --> 00:14:51,280 Speaker 2: They would say, the real cost of that is around 210 00:14:51,280 --> 00:14:54,440 Speaker 2: seven hundred and fifty pesos. So when are you going 211 00:14:54,480 --> 00:14:57,760 Speaker 2: to change the subsidy system so that people pay what 212 00:14:57,800 --> 00:14:58,480 Speaker 2: they're supposed to. 213 00:15:02,720 --> 00:15:12,000 Speaker 3: So when you. 214 00:15:08,240 --> 00:15:13,840 Speaker 1: Work on these regulated services, there is one key element, 215 00:15:14,240 --> 00:15:24,920 Speaker 1: which is when you recalibrate rates. Traditionally, many analysts clumsily 216 00:15:25,200 --> 00:15:30,000 Speaker 1: recalibrated the financial economic equation of contracts consistent with the 217 00:15:30,040 --> 00:15:38,480 Speaker 1: capital base, essentially by uploading all of the price upfront 218 00:15:38,560 --> 00:15:40,840 Speaker 1: at the beginning, which is not necessarily right because there's 219 00:15:40,840 --> 00:15:42,120 Speaker 1: an intertemporary equation. 220 00:15:42,160 --> 00:15:47,120 Speaker 3: And therefore you can work on the different. 221 00:15:46,760 --> 00:15:52,200 Speaker 1: Components in the financial and economic equation of the contract, 222 00:15:52,200 --> 00:15:57,680 Speaker 1: which is basically the flow of funds rewritten otherwise, and 223 00:15:59,080 --> 00:16:05,400 Speaker 1: you seek the price that makes the ir are equal 224 00:16:05,520 --> 00:16:08,840 Speaker 1: to the weighted average cost of capital, which means that 225 00:16:08,920 --> 00:16:13,840 Speaker 1: this hardly no quas rent. This creates a competitive balance 226 00:16:14,000 --> 00:16:20,080 Speaker 1: and in that context you can fix rate pathways. Now 227 00:16:20,200 --> 00:16:25,200 Speaker 1: one important thing that, of course you can do right 228 00:16:25,240 --> 00:16:29,480 Speaker 1: away or spread that over time. If we were to 229 00:16:29,480 --> 00:16:32,560 Speaker 1: do that clumsily as some recommend all of that upfront, 230 00:16:32,880 --> 00:16:36,160 Speaker 1: the problem is that that will be stopped by the 231 00:16:36,200 --> 00:16:40,280 Speaker 1: Supreme Court, which is what the Supreme Court did with 232 00:16:40,400 --> 00:16:43,920 Speaker 1: the Government of Macri. So what we have done is 233 00:16:44,440 --> 00:16:50,760 Speaker 1: include as a restriction the Supreme Court decision. So we 234 00:16:50,920 --> 00:16:55,840 Speaker 1: ended up re building or reconstituting the financial economic equation 235 00:16:55,880 --> 00:16:58,280 Speaker 1: of a contract over a three year term, and what 236 00:16:58,320 --> 00:17:01,320 Speaker 1: you can see is that there are increases in rates, 237 00:17:01,480 --> 00:17:05,800 Speaker 1: but the rates include different components, among. 238 00:17:05,520 --> 00:17:07,760 Speaker 3: Which is salaries or wages. 239 00:17:07,920 --> 00:17:13,880 Speaker 1: Because when Argentina manages to turn the corner and recover salaries, 240 00:17:13,920 --> 00:17:16,800 Speaker 1: it'll be a lot easier to rebuild rates without that 241 00:17:16,880 --> 00:17:19,600 Speaker 1: being a problem for individuals who will be able to 242 00:17:19,720 --> 00:17:21,919 Speaker 1: pay for them, because of course you can take care 243 00:17:21,960 --> 00:17:25,240 Speaker 1: of the rates, but if the demand doesn't follow suit, 244 00:17:25,280 --> 00:17:27,200 Speaker 1: because no one can pay for that, their problem is 245 00:17:27,200 --> 00:17:29,760 Speaker 1: even greater. So we are going to do that, but 246 00:17:30,040 --> 00:17:32,520 Speaker 1: we're going to do that in such a way that 247 00:17:32,640 --> 00:17:35,720 Speaker 1: the Supreme Court will not hold this. So the idea 248 00:17:35,760 --> 00:17:37,160 Speaker 1: is over a three year term. 249 00:17:37,480 --> 00:17:40,000 Speaker 2: It's quite interesting you bring up the Supreme Court. When 250 00:17:40,000 --> 00:17:43,120 Speaker 2: I've spoken to people here, they say, your biggest obstacle 251 00:17:43,160 --> 00:17:46,800 Speaker 2: at the moment is politics, because, as you said, the 252 00:17:46,880 --> 00:17:50,600 Speaker 2: Congress is not controlled by you. You only have fourteen 253 00:17:50,640 --> 00:17:53,160 Speaker 2: percent of the seats in Congress. I remember coming here 254 00:17:53,560 --> 00:17:57,000 Speaker 2: to inter first, Senior Menem Alost Menem had a majority 255 00:17:57,040 --> 00:18:01,359 Speaker 2: in Congress. You could push through reforms, and you failed 256 00:18:01,400 --> 00:18:05,280 Speaker 2: to get your Omnibus bill through the first time. And 257 00:18:05,359 --> 00:18:09,000 Speaker 2: now you are talking to the governors about a plan 258 00:18:09,160 --> 00:18:12,760 Speaker 2: to reduce the state spending from thirty seven percent of 259 00:18:12,800 --> 00:18:15,600 Speaker 2: GDP to twenty two percent. That would be a very 260 00:18:15,640 --> 00:18:19,760 Speaker 2: big deal. And there are twenty four twenty three governors 261 00:18:20,200 --> 00:18:24,200 Speaker 2: in Argentina and the mayor of Buenos Aires. So my 262 00:18:24,520 --> 00:18:27,560 Speaker 2: simple question to you, how many have said that they 263 00:18:27,640 --> 00:18:31,080 Speaker 2: will sign the deal with you or May the twenty fifth, 264 00:18:31,119 --> 00:18:33,920 Speaker 2: because that seems a crucial part of what you want 265 00:18:33,960 --> 00:18:34,439 Speaker 2: to achieve. 266 00:18:34,480 --> 00:18:43,639 Speaker 1: Now, we should separate these short term issues from the 267 00:18:43,760 --> 00:18:47,040 Speaker 1: long term issues, so those that have to do with 268 00:18:47,119 --> 00:18:51,040 Speaker 1: the particular situation in the here. Now, what is structural 269 00:18:51,080 --> 00:18:57,280 Speaker 1: in nature. Both the emergency decree which still stands yes, 270 00:18:58,320 --> 00:19:02,520 Speaker 1: as well as the so called Omnibus bill which we 271 00:19:02,600 --> 00:19:06,840 Speaker 1: are reformulating and will be res sending to Congress, and 272 00:19:07,040 --> 00:19:12,400 Speaker 1: also the May twenty fifth agreement. Well, those are instruments 273 00:19:12,520 --> 00:19:17,440 Speaker 1: that have to do with the long term dynamics. So 274 00:19:17,560 --> 00:19:21,199 Speaker 1: whether they do come out or not, they will not 275 00:19:21,359 --> 00:19:26,600 Speaker 1: affect the short term dynamic, which is dominated by fiscal adjustment, 276 00:19:28,359 --> 00:19:35,200 Speaker 1: the cleaning up of the central bank, liberalizing the currency market, 277 00:19:35,280 --> 00:19:39,760 Speaker 1: the exchange market, and the financial reform that we can 278 00:19:39,920 --> 00:19:44,600 Speaker 1: pursue through the Central Bank and the decisions that will 279 00:19:44,640 --> 00:19:48,720 Speaker 1: bring down inflation and help economic activity recover. In fact, 280 00:19:48,760 --> 00:19:52,000 Speaker 1: there are already indicators today that show that activity in 281 00:19:52,040 --> 00:19:57,359 Speaker 1: the agricultural sector, in the oil and gas sector, in mining, well, 282 00:19:57,520 --> 00:20:01,560 Speaker 1: the economy is recovering strongly those departments. There are indicators 283 00:20:01,600 --> 00:20:03,760 Speaker 1: that point to the fact that Argentina could really make 284 00:20:03,760 --> 00:20:05,320 Speaker 1: a strong comeback. 285 00:20:05,440 --> 00:20:08,040 Speaker 3: And if we can also rebuild. 286 00:20:07,600 --> 00:20:11,119 Speaker 1: The demand for money and bring down even faster the 287 00:20:11,359 --> 00:20:14,520 Speaker 1: issue of the interest bearing liabilities, the lifting of exchange 288 00:20:14,840 --> 00:20:18,840 Speaker 1: restrictions will be much closer and the economy will speed 289 00:20:18,920 --> 00:20:23,320 Speaker 1: up its expansion rate much faster. And as our genious 290 00:20:23,359 --> 00:20:28,080 Speaker 1: economy has been decapitalized after twenty years of savage populism. 291 00:20:27,680 --> 00:20:30,080 Speaker 3: This means that we will be able to achieve. 292 00:20:29,840 --> 00:20:34,240 Speaker 1: Genuine growth even without the reforms. So by twenty twenty 293 00:20:34,280 --> 00:20:37,640 Speaker 1: five would be able to have a very low inflation 294 00:20:37,760 --> 00:20:43,840 Speaker 1: rate with an economy expanding very significantly, which would allow 295 00:20:43,920 --> 00:20:50,520 Speaker 1: us to have truly impressive election results that would allow 296 00:20:50,600 --> 00:20:53,479 Speaker 1: us to have a Congress that would support these reforms. 297 00:20:53,520 --> 00:20:54,240 Speaker 3: And one more thing. 298 00:20:54,880 --> 00:20:58,600 Speaker 1: On December eleventh, twenty twenty five, not only will I 299 00:20:58,680 --> 00:21:03,680 Speaker 1: be sending the reforms that they won't let me push through, 300 00:21:03,680 --> 00:21:06,000 Speaker 1: now because we are talking about ten thousand reforms, the 301 00:21:06,160 --> 00:21:09,760 Speaker 1: most ambitious program in the history of humanity, and I'll 302 00:21:09,760 --> 00:21:14,520 Speaker 1: be sending the remaining three thousand. We are going to 303 00:21:14,560 --> 00:21:20,280 Speaker 1: transform Argentina's economy. With the first one thousand structural reforms 304 00:21:20,320 --> 00:21:23,720 Speaker 1: we have sent, in terms of economic freedom, Argentina would 305 00:21:23,760 --> 00:21:26,639 Speaker 1: have become a country like Germany and we would have 306 00:21:27,760 --> 00:21:31,760 Speaker 1: joined that path, which would have allowed us to become 307 00:21:31,920 --> 00:21:34,760 Speaker 1: an economy similar to that of Germany in twenty years time. 308 00:21:35,000 --> 00:21:39,159 Speaker 1: But that's not my final objective. My ultimate goal is 309 00:21:39,200 --> 00:21:42,479 Speaker 1: to have economic freedom levels like those of Ireland and 310 00:21:42,520 --> 00:21:44,960 Speaker 1: be a country that can have. 311 00:21:45,119 --> 00:21:46,640 Speaker 3: A GDP. 312 00:21:48,200 --> 00:21:50,920 Speaker 1: Fifty percent higher than that of the States. And any 313 00:21:50,960 --> 00:21:53,720 Speaker 1: reforms that I can't push through today, I will push 314 00:21:53,800 --> 00:21:57,560 Speaker 1: through after December twenty thiry five, and the remain three 315 00:21:57,640 --> 00:21:59,480 Speaker 1: thousand after. 316 00:21:59,600 --> 00:22:03,440 Speaker 2: So really the biggest reforms could come after you get 317 00:22:03,600 --> 00:22:04,720 Speaker 2: a majority in the mid. 318 00:22:04,720 --> 00:22:12,200 Speaker 1: Terms, exactly so that politics won't be able to block 319 00:22:12,359 --> 00:22:15,520 Speaker 1: the structural reforms. And this is very important. It's two 320 00:22:15,600 --> 00:22:22,320 Speaker 1: dimensions to it. If we talk about the emergency degree, 321 00:22:22,359 --> 00:22:30,480 Speaker 1: it's the very first time this was rejected, even though 322 00:22:30,480 --> 00:22:34,320 Speaker 1: we had cases in the past where the decrees curtained 323 00:22:34,320 --> 00:22:39,679 Speaker 1: individual freedoms and undermine private property and other horrible things. 324 00:22:41,119 --> 00:22:47,680 Speaker 1: Both the emergency Decree and the Omnibus Bill are instruments 325 00:22:47,680 --> 00:22:51,040 Speaker 1: that give more freedom to citizens, make the market structures 326 00:22:51,119 --> 00:22:55,440 Speaker 1: more competitive and pro market. And this also does a 327 00:22:55,560 --> 00:23:00,359 Speaker 1: way with political thieving, which is very serious. Politics didn't 328 00:23:00,359 --> 00:23:05,119 Speaker 1: want to stop stealing. Politics puts its own caste interests 329 00:23:05,800 --> 00:23:09,800 Speaker 1: above the needs of the country. So in a democratic system, 330 00:23:09,840 --> 00:23:17,840 Speaker 1: the system recycles itself. And the beauty of what politics 331 00:23:19,040 --> 00:23:24,960 Speaker 1: has done with the Omnimous Law is that they have 332 00:23:25,200 --> 00:23:30,160 Speaker 1: actually been exposed. Now people know what the true colors are. 333 00:23:30,240 --> 00:23:33,920 Speaker 1: Now people know that trust funds are used for stealing, 334 00:23:34,040 --> 00:23:37,879 Speaker 1: and senators who voted against have been exposed. 335 00:23:37,400 --> 00:23:38,200 Speaker 3: In the face of sight. 336 00:23:38,320 --> 00:23:41,360 Speaker 1: I think that's great because if I had said beforehand 337 00:23:41,800 --> 00:23:46,680 Speaker 1: that when I was two months in office we would 338 00:23:46,760 --> 00:23:50,719 Speaker 1: be able to coordinate the whole political spectrum and have 339 00:23:50,800 --> 00:23:54,680 Speaker 1: an ideological separation, you would have told it was impossible, 340 00:23:54,680 --> 00:23:56,399 Speaker 1: and still were doing that. And they also told me 341 00:23:56,440 --> 00:23:59,600 Speaker 1: would be impossible to pursue an adjustment like the one 342 00:23:59,640 --> 00:24:05,639 Speaker 1: we are pursuing. We actually got to six percent and 343 00:24:05,760 --> 00:24:09,560 Speaker 1: six percent in the Center Bank. And while some start brooding, 344 00:24:09,560 --> 00:24:11,199 Speaker 1: and say the things that impossible, I just do them. 345 00:24:11,400 --> 00:24:14,400 Speaker 2: Can I ask you about inflation, because it strikes me yes, 346 00:24:14,520 --> 00:24:16,960 Speaker 2: you are in a position where your politics you may 347 00:24:17,000 --> 00:24:19,600 Speaker 2: have to wait to twenty twenty five, but you have 348 00:24:19,720 --> 00:24:23,760 Speaker 2: this issue with inflation that it went up to twenty 349 00:24:23,800 --> 00:24:25,560 Speaker 2: six percent, as you said, and now it's down to 350 00:24:25,600 --> 00:24:30,120 Speaker 2: thirteen percent a month. One issue for you is that 351 00:24:30,160 --> 00:24:33,119 Speaker 2: if you do things like release capital controls, if you 352 00:24:33,200 --> 00:24:36,320 Speaker 2: get rid of those subsidies, then inflation may go up 353 00:24:36,359 --> 00:24:39,760 Speaker 2: in the short term. You may be doing the right 354 00:24:39,800 --> 00:24:41,879 Speaker 2: thing in the long term, but inflation would go up 355 00:24:41,920 --> 00:24:44,760 Speaker 2: in the short term. And inflation is the thing that 356 00:24:44,840 --> 00:24:47,760 Speaker 2: you have promised Argentine's you will keep low. Is that 357 00:24:48,480 --> 00:24:50,000 Speaker 2: another reason for delaying. 358 00:24:55,720 --> 00:25:03,200 Speaker 1: I don't see why opening up the markets. Actually what 359 00:25:03,680 --> 00:25:06,439 Speaker 1: generates inflation is the fact that I haven't yet fully 360 00:25:06,520 --> 00:25:08,000 Speaker 1: cleansed the central bank. 361 00:25:08,720 --> 00:25:11,720 Speaker 3: That's the point. 362 00:25:11,800 --> 00:25:14,159 Speaker 1: If I haven't cleaned up the balance sheets of the 363 00:25:14,200 --> 00:25:18,960 Speaker 1: central bank, it means that I am not sold. 364 00:25:19,040 --> 00:25:21,000 Speaker 2: If you got rid of controls, there will be a 365 00:25:21,080 --> 00:25:23,680 Speaker 2: rush to get dollars, there would be inflation would go up. 366 00:25:23,720 --> 00:25:25,640 Speaker 2: Everyone I think would say that. 367 00:25:26,640 --> 00:25:31,880 Speaker 1: Well, that's not necessarily what's going on, right, But the 368 00:25:31,880 --> 00:25:34,200 Speaker 1: thing is this. In order to do that, I first 369 00:25:34,280 --> 00:25:37,120 Speaker 1: need to clean up the central bank balance sheets. It's 370 00:25:37,119 --> 00:25:43,760 Speaker 1: important to understand this because when you've got the central 371 00:25:43,800 --> 00:25:51,320 Speaker 1: bank bankrupt in a situation which the monetary liabilities exceed 372 00:25:51,320 --> 00:25:55,600 Speaker 1: the assets held by the central bank, that is corrected 373 00:25:56,160 --> 00:26:00,880 Speaker 1: through a higher price level, so that you dilute your monitarilabilities. 374 00:26:01,040 --> 00:26:04,120 Speaker 1: The more bankrupt you are, so to speak, the long 375 00:26:04,200 --> 00:26:09,320 Speaker 1: term price level is higher. Therefore, given today's price level, 376 00:26:10,119 --> 00:26:14,280 Speaker 1: the link between those two prices is the implicit inflation rate. 377 00:26:14,359 --> 00:26:16,720 Speaker 1: As you rebuild the solvency of the central bank, which 378 00:26:16,720 --> 00:26:21,600 Speaker 1: is what we're doing. Consider that the money base has 379 00:26:21,880 --> 00:26:25,000 Speaker 1: remained virtually unchanged ever since we took office. But still 380 00:26:25,880 --> 00:26:31,320 Speaker 1: and despite the put options and the interesting liabilities what 381 00:26:31,440 --> 00:26:35,080 Speaker 1: we inherited from the previous government, and after having bought 382 00:26:35,280 --> 00:26:39,600 Speaker 1: almost twelve billion dollars what we have sterilized to the 383 00:26:39,640 --> 00:26:45,240 Speaker 1: purchase of the bopreal and as regards the fiscal surplus, 384 00:26:45,680 --> 00:26:49,479 Speaker 1: the money base hasn't changed. So we are cleaning up 385 00:26:49,680 --> 00:26:52,879 Speaker 1: the balance seats of the central Bank and instill doing 386 00:26:53,040 --> 00:26:57,960 Speaker 1: the long term price level shrinks because we are shrinking 387 00:26:58,000 --> 00:27:01,719 Speaker 1: the nominal scale in the economy. The slope is reduced 388 00:27:01,720 --> 00:27:05,520 Speaker 1: and the inflation rate comes down. This is why it 389 00:27:05,560 --> 00:27:07,639 Speaker 1: is so important to clean up the balance seats of 390 00:27:07,680 --> 00:27:08,840 Speaker 1: the central bank. 391 00:27:08,960 --> 00:27:11,159 Speaker 3: To get rid of that pressure. 392 00:27:11,359 --> 00:27:15,520 Speaker 1: Once we achieve that and are able to undertake the 393 00:27:15,560 --> 00:27:19,720 Speaker 1: financial reform in order for them no longer to be 394 00:27:19,840 --> 00:27:24,080 Speaker 1: the possibility of issuing, re discounting, the financial reform actually 395 00:27:24,080 --> 00:27:27,359 Speaker 1: has to move towards a free banking system integrated with 396 00:27:27,520 --> 00:27:30,040 Speaker 1: the capital markets, so that there are no runs and 397 00:27:30,119 --> 00:27:35,720 Speaker 1: all the imbalances are cleaned up through prices. In that context, 398 00:27:35,840 --> 00:27:40,320 Speaker 1: if you also have your public accounts government accounts in order, 399 00:27:40,400 --> 00:27:43,320 Speaker 1: and you don't use the central bank to finance deficit, 400 00:27:43,920 --> 00:27:51,440 Speaker 1: and if you also lift the currency restrictions, well the 401 00:27:51,480 --> 00:27:53,960 Speaker 1: first thing you need to do is clean up the 402 00:27:53,960 --> 00:27:55,080 Speaker 1: central bank balance seats. 403 00:27:55,080 --> 00:27:56,080 Speaker 3: Once we have done that. 404 00:27:56,680 --> 00:28:03,119 Speaker 1: There's the anti issuing law, one very key attribute of 405 00:28:03,160 --> 00:28:07,480 Speaker 1: which is that this will make it a crime against 406 00:28:07,560 --> 00:28:12,200 Speaker 1: humanity and not time bard if you issue money. It 407 00:28:12,240 --> 00:28:14,520 Speaker 1: may well be the case that once we leave office, 408 00:28:14,520 --> 00:28:17,120 Speaker 1: someone may come along and want to change that. They 409 00:28:17,119 --> 00:28:19,680 Speaker 1: may do that, but then someone else might come back 410 00:28:19,760 --> 00:28:21,720 Speaker 1: and lock them up in prison for doing that. 411 00:28:22,480 --> 00:28:26,399 Speaker 2: But these these might all be very admirable reforms. But 412 00:28:26,600 --> 00:28:30,280 Speaker 2: at the moment, if you are in an Argentine living here, 413 00:28:30,320 --> 00:28:33,280 Speaker 2: at the moment, there is short term pain in the 414 00:28:33,320 --> 00:28:36,359 Speaker 2: same way as there was with Margaret Thatcher, with all 415 00:28:36,400 --> 00:28:39,080 Speaker 2: the people who you admire. And I just looked at 416 00:28:39,080 --> 00:28:42,280 Speaker 2: the statistics. They're quite frightening. The average salary in Argentina 417 00:28:42,400 --> 00:28:44,880 Speaker 2: is at its lowest level since two thousand and three. 418 00:28:45,080 --> 00:28:49,040 Speaker 2: Fifty seven percent of Argentine's live in poverty. Consumer spending 419 00:28:49,120 --> 00:28:53,360 Speaker 2: dropped twenty three percent in February so far. The interesting 420 00:28:53,400 --> 00:28:57,480 Speaker 2: thing is your support has stayed high at fifty percent, 421 00:28:58,240 --> 00:29:01,520 Speaker 2: But do you accept that there is a time limit 422 00:29:01,600 --> 00:29:06,600 Speaker 2: on how much pain Argentines can keep can take to 423 00:29:06,680 --> 00:29:10,000 Speaker 2: take these reforms. 424 00:29:13,840 --> 00:29:15,520 Speaker 3: The first thing is the way we see it. 425 00:29:15,560 --> 00:29:22,160 Speaker 1: There has been a cultural change in Argentina, and most 426 00:29:22,480 --> 00:29:30,040 Speaker 1: Argentines have understood that the solution is not populism. Today 427 00:29:30,880 --> 00:29:39,120 Speaker 1: wages are miserable, not through our own fault, that is 428 00:29:39,360 --> 00:29:42,760 Speaker 1: due to twenty years of populism. When you take the 429 00:29:43,080 --> 00:29:47,320 Speaker 1: average wage of Argentines back in the nineteen nineties and 430 00:29:47,840 --> 00:29:52,920 Speaker 1: updated to today's currency, that would be three thousand dollars. 431 00:29:53,800 --> 00:29:57,200 Speaker 1: If we're round it up now six hundred. 432 00:29:58,560 --> 00:30:01,479 Speaker 2: I don't think anyone disagrees the idea that argenty I 433 00:30:01,520 --> 00:30:04,560 Speaker 2: came here in the nineteen nineties, it was it's had disasters, 434 00:30:06,320 --> 00:30:08,200 Speaker 2: but it's your medicine. 435 00:30:09,520 --> 00:30:09,880 Speaker 3: Indos. 436 00:30:12,120 --> 00:30:15,720 Speaker 1: But if we don't understand what happened, it will be 437 00:30:15,760 --> 00:30:16,520 Speaker 1: hard to fix it. 438 00:30:16,840 --> 00:30:20,880 Speaker 3: So all of this matter, you know. 439 00:30:21,040 --> 00:30:26,360 Speaker 1: Tampering with the prices in the economy creates a mismatch 440 00:30:26,400 --> 00:30:30,960 Speaker 1: between savings and investments, and it makes investment go into 441 00:30:31,080 --> 00:30:34,720 Speaker 1: places it shouldn't be going because the prices are distorted, 442 00:30:34,800 --> 00:30:39,200 Speaker 1: and saving is punished for the benefit of consumption, so 443 00:30:39,320 --> 00:30:43,960 Speaker 1: present consumption is given priority over future saving. So in 444 00:30:44,000 --> 00:30:46,000 Speaker 1: the short term it means that you have more consumption 445 00:30:46,200 --> 00:30:49,800 Speaker 1: and investment than you would have in normal circumstances because 446 00:30:49,800 --> 00:30:52,720 Speaker 1: you are actually falsifying the price signals, which means that 447 00:30:52,800 --> 00:30:58,880 Speaker 1: the economy temporarily operates beyond its means, not only because 448 00:30:58,920 --> 00:31:01,640 Speaker 1: it's lying as far as prices are concerned, because but 449 00:31:01,680 --> 00:31:04,480 Speaker 1: also because you're eating away at the capitol in between. 450 00:31:06,200 --> 00:31:13,080 Speaker 1: The longer you keep that sort of situation, when the 451 00:31:13,160 --> 00:31:16,360 Speaker 1: turnaround takes place, it's a lot more violid. Argenta has 452 00:31:16,400 --> 00:31:19,680 Speaker 1: been doing this for twenty years and the cost of 453 00:31:19,720 --> 00:31:22,760 Speaker 1: this is fifty percent pole over ten percent extreme pole. 454 00:31:23,800 --> 00:31:27,840 Speaker 1: That is the consequence of having had twenty years populism. 455 00:31:28,320 --> 00:31:31,120 Speaker 1: We have per capita GDP which is fifteen lower than 456 00:31:31,160 --> 00:31:34,040 Speaker 1: what we had in twenty eleven. So when you look 457 00:31:34,200 --> 00:31:39,400 Speaker 1: at the figures in dollars, it's hopeless. But when we 458 00:31:39,480 --> 00:31:43,400 Speaker 1: took office and inherited the economy, the monetary balance was 459 00:31:43,640 --> 00:31:46,960 Speaker 1: worse than we had prior to the crisis in nineteen 460 00:31:47,000 --> 00:31:50,800 Speaker 1: seventy five called RODRIGASO. We had the central bank balance 461 00:31:50,840 --> 00:31:56,800 Speaker 1: sheets bankrupt, even worse than before the nineteen eighty nine hyperinflation. 462 00:31:56,840 --> 00:32:00,000 Speaker 1: Our social nicketives were worse than under present de LaRue 463 00:32:00,080 --> 00:32:02,720 Speaker 1: in two thousand and one, before the end of convertibility. 464 00:32:02,960 --> 00:32:05,080 Speaker 1: It was the sum of all evils. So what we 465 00:32:05,120 --> 00:32:09,480 Speaker 1: did was explain to society, to the people, what the 466 00:32:09,600 --> 00:32:12,240 Speaker 1: state of affairs was and what the measures would be, 467 00:32:12,400 --> 00:32:15,320 Speaker 1: And there were some matters that couldn't be fixed. Just 468 00:32:15,800 --> 00:32:19,560 Speaker 1: like that, if inflation is traveling at between seven five 469 00:32:19,640 --> 00:32:22,440 Speaker 1: hundred and fifteen thousand a year, do you think there's 470 00:32:22,600 --> 00:32:27,320 Speaker 1: any gradual solution to fix that? Can there be some 471 00:32:27,480 --> 00:32:30,320 Speaker 1: solution like saying okay, I can continue to issue money 472 00:32:30,560 --> 00:32:33,320 Speaker 1: or keep the fiscal deference there's no such solution. The 473 00:32:33,480 --> 00:32:37,360 Speaker 1: solution was a hyper orthodox one, and as there was 474 00:32:37,440 --> 00:32:40,760 Speaker 1: no kind of financing, it had to be shot treatment too. 475 00:32:41,040 --> 00:32:43,120 Speaker 1: So you need for it to be shot treatment and 476 00:32:43,280 --> 00:32:47,080 Speaker 1: nice and powerful in order to cut off and uproot 477 00:32:47,160 --> 00:32:47,480 Speaker 1: all of this. 478 00:32:47,600 --> 00:32:49,160 Speaker 3: Because you can quote all of. 479 00:32:49,080 --> 00:32:52,840 Speaker 1: The indicators that may look bad in today's economy, okay, 480 00:32:53,120 --> 00:32:58,000 Speaker 1: but the alternative scenario, if we had done things like 481 00:32:58,040 --> 00:33:01,400 Speaker 1: the ones done by the previous administration, would have ninety 482 00:33:01,400 --> 00:33:04,520 Speaker 1: five percent poor and sixty percent extreme port today and 483 00:33:04,600 --> 00:33:08,600 Speaker 1: this would be a true mess. It would be impossible 484 00:33:08,920 --> 00:33:13,720 Speaker 1: to live here. So that's the sort of world we 485 00:33:13,960 --> 00:33:20,000 Speaker 1: are facing. The thing is that many fall into the 486 00:33:20,160 --> 00:33:26,719 Speaker 1: nirvana fallacy. They compare things visa via world that doesn't exist. 487 00:33:26,720 --> 00:33:29,959 Speaker 1: What we have done is tell people the truth. Another 488 00:33:29,960 --> 00:33:34,720 Speaker 1: important thing is we don't just say what we think 489 00:33:34,840 --> 00:33:37,600 Speaker 1: and do what we say we're going to do. But 490 00:33:37,680 --> 00:33:41,760 Speaker 1: we said this during our campaign. This wasn't just campaign promises. 491 00:33:42,480 --> 00:33:45,120 Speaker 1: I did this when we took office, and if you 492 00:33:45,200 --> 00:33:48,680 Speaker 1: look at the facts, we've been one hundred percent consistent. 493 00:33:49,040 --> 00:33:53,600 Speaker 1: The solution is complex and requires very strong medicine. In 494 00:33:53,680 --> 00:33:56,200 Speaker 1: the short term we will have suffering, but after that 495 00:33:56,720 --> 00:33:59,680 Speaker 1: we will emerge. And the truth is that people are 496 00:34:00,080 --> 00:34:04,280 Speaker 1: able to see this because now seventy percent of people 497 00:34:04,320 --> 00:34:05,720 Speaker 1: admit that they're worse off. 498 00:34:06,000 --> 00:34:07,240 Speaker 3: What you're described is true. 499 00:34:08,000 --> 00:34:13,280 Speaker 1: But consider this, When we took office, only twenty percent 500 00:34:13,760 --> 00:34:17,279 Speaker 1: of Argentines thought there would be better off in six 501 00:34:17,320 --> 00:34:23,720 Speaker 1: months time. In January the percentage went up to thirty, 502 00:34:23,840 --> 00:34:28,359 Speaker 1: then in February it went up to forty two, and 503 00:34:29,440 --> 00:34:33,520 Speaker 1: today it is over fifty, which means that over half 504 00:34:34,040 --> 00:34:36,759 Speaker 1: of the Argentine people see light at the end of 505 00:34:36,760 --> 00:34:40,520 Speaker 1: the tunnel. Not just that, when you ask about inflation, 506 00:34:40,719 --> 00:34:44,759 Speaker 1: seventy percent of Argentines are convinced that we are going 507 00:34:44,800 --> 00:34:48,640 Speaker 1: to bring inflation down. This fifty percent who believe we'll 508 00:34:48,680 --> 00:34:51,560 Speaker 1: do this within the first year, and twenty believe we're 509 00:34:51,560 --> 00:34:54,399 Speaker 1: going to do this in two years time. But when 510 00:34:54,400 --> 00:34:58,440 Speaker 1: you also ask around for the word that reflects the 511 00:34:58,480 --> 00:35:07,640 Speaker 1: sentiment of Argentine's now you know what it is, hopes. 512 00:35:08,080 --> 00:35:13,080 Speaker 1: What I find fascinating about all this is that Argentines 513 00:35:13,120 --> 00:35:17,000 Speaker 1: have understood that populism is no solution and that the 514 00:35:17,400 --> 00:35:22,200 Speaker 1: quick fixes they sold to them during the last hundred years, 515 00:35:22,239 --> 00:35:26,640 Speaker 1: both the criminal politicians and criminal economists, they were all 516 00:35:26,680 --> 00:35:32,120 Speaker 1: false and we need to opt for a pure orthodox, 517 00:35:32,200 --> 00:35:36,960 Speaker 1: market based solutions, and that's what's going to make us succeed. 518 00:35:37,000 --> 00:35:40,560 Speaker 1: And that's what's underway. Even though we are undertaking the 519 00:35:40,640 --> 00:35:44,000 Speaker 1: largest adjustment in the history of humanity. My approval ratings 520 00:35:44,040 --> 00:35:46,520 Speaker 1: are on the rise because people know that I'm telling 521 00:35:46,560 --> 00:35:47,080 Speaker 1: them the truth. 522 00:35:47,400 --> 00:35:51,840 Speaker 2: Can we look at foreign relations? Last year you called 523 00:35:51,840 --> 00:35:56,799 Speaker 2: the Chinese government an assassin. Now you're in government, do 524 00:35:56,840 --> 00:36:01,280 Speaker 2: you still see China that way? 525 00:36:05,360 --> 00:36:09,080 Speaker 1: As for the Chinese government, what we've always said is 526 00:36:09,080 --> 00:36:11,880 Speaker 1: that we are libertarians, and if people want to do 527 00:36:12,000 --> 00:36:15,720 Speaker 1: business with China, they can carry on business as usual. 528 00:36:15,880 --> 00:36:19,000 Speaker 1: What I said was that I wouldn't be aligning with communists, 529 00:36:20,800 --> 00:36:24,279 Speaker 1: and that's precisely one of the things. Who did I 530 00:36:24,280 --> 00:36:27,000 Speaker 1: say I was going to align with the United States 531 00:36:27,000 --> 00:36:30,480 Speaker 1: and Israel? Do you have any doubt that that's my 532 00:36:30,640 --> 00:36:32,320 Speaker 1: alignment the United States and Israel? 533 00:36:32,800 --> 00:36:32,960 Speaker 3: No? 534 00:36:33,080 --> 00:36:34,960 Speaker 2: But in fact you have a very good example, very 535 00:36:34,960 --> 00:36:36,920 Speaker 2: good example at the moment. And I'll come back to 536 00:36:36,960 --> 00:36:39,600 Speaker 2: Israel in the United States later. But now, as you know, 537 00:36:39,719 --> 00:36:43,520 Speaker 2: in Argentina, the focus is on a Chinese space station 538 00:36:44,160 --> 00:36:48,520 Speaker 2: in Patagonia that your predecessor allowed to get built. The 539 00:36:48,640 --> 00:36:53,799 Speaker 2: US says that the space station has military purposes, will 540 00:36:53,840 --> 00:36:54,640 Speaker 2: you close it down? 541 00:36:56,200 --> 00:37:06,560 Speaker 1: Well, the point is this, negotiations are beginning to audit 542 00:37:06,800 --> 00:37:09,680 Speaker 1: and inspect that because the Chinese say that is. 543 00:37:09,640 --> 00:37:10,200 Speaker 3: Not the case. 544 00:37:10,719 --> 00:37:15,360 Speaker 1: So we will move towards the situation. We will be 545 00:37:15,440 --> 00:37:17,919 Speaker 1: looking at that. So that is not a problem either. 546 00:37:18,360 --> 00:37:20,640 Speaker 2: Is a factor in this the fact that you have 547 00:37:20,800 --> 00:37:26,000 Speaker 2: that eighteen billion dollar currency swap line with China, which 548 00:37:26,080 --> 00:37:28,480 Speaker 2: you do need. You need it for the reserves at 549 00:37:28,520 --> 00:37:32,400 Speaker 2: the central bank. It's a big portion. Does that influence 550 00:37:32,440 --> 00:37:33,400 Speaker 2: your thinking on China? 551 00:37:37,080 --> 00:37:39,520 Speaker 1: That situation has to do with an agreement that was 552 00:37:39,640 --> 00:37:42,680 Speaker 1: entered into and which has to do with the trade 553 00:37:42,680 --> 00:37:48,440 Speaker 1: exchanges between countries. I won't modify trade exchanges because I 554 00:37:48,440 --> 00:37:53,480 Speaker 1: think there are trade exchanges between privates, just as we 555 00:37:53,600 --> 00:37:58,839 Speaker 1: have a part in our central bank. They have, of 556 00:37:58,880 --> 00:38:03,240 Speaker 1: course their central bank counter But I don't see a problem. 557 00:38:03,640 --> 00:38:07,920 Speaker 1: And honestly, the trade relations haven't changed, not a problem. 558 00:38:08,040 --> 00:38:09,640 Speaker 2: So it's a problem. Would be if I was the 559 00:38:09,719 --> 00:38:12,759 Speaker 2: Chinese government tonight and you called me an assassin, I 560 00:38:12,800 --> 00:38:19,800 Speaker 2: might be less keen to renew the currency line. 561 00:38:22,280 --> 00:38:27,160 Speaker 1: Have trade relations changed? They haven't, not one bit, So 562 00:38:27,560 --> 00:38:29,680 Speaker 1: that is actually counter factual. 563 00:38:29,760 --> 00:38:32,120 Speaker 3: There's no truth. 564 00:38:32,200 --> 00:38:34,560 Speaker 2: What about other sources of capital because you've I know 565 00:38:34,600 --> 00:38:38,320 Speaker 2: you've begun discussions again with the IMF. Your Economy minister 566 00:38:38,400 --> 00:38:41,240 Speaker 2: talked about it. You have a facility there of forty 567 00:38:41,280 --> 00:38:45,319 Speaker 2: four billion dollars. How much money would you like to 568 00:38:45,360 --> 00:38:47,640 Speaker 2: get from the IMF and when do you think you 569 00:38:47,640 --> 00:38:50,560 Speaker 2: would get it? You would obviously imply that they were 570 00:38:50,880 --> 00:39:01,719 Speaker 2: approving of your reforms. 571 00:38:58,320 --> 00:39:02,399 Speaker 1: So they made the may be approving of our reforms. 572 00:39:02,480 --> 00:39:05,560 Speaker 1: And it does necessarily have to be all of the 573 00:39:05,760 --> 00:39:11,759 Speaker 1: money I'm after in order to speed up the end 574 00:39:12,080 --> 00:39:15,520 Speaker 1: of the currency restrictions, for which if we wanted to 575 00:39:15,560 --> 00:39:17,680 Speaker 1: accelerate that, if we wanted to do that today, we 576 00:39:17,880 --> 00:39:28,239 Speaker 1: need fifteen billion dollars. Now, if you go over the 577 00:39:28,320 --> 00:39:32,200 Speaker 1: IMF press releases, you'll see that we are facing an 578 00:39:32,280 --> 00:39:35,759 Speaker 1: unusual situation even in the IMF sistor. We're only the 579 00:39:36,120 --> 00:39:41,319 Speaker 1: only country that has exceeded all of the targets and 580 00:39:41,440 --> 00:39:48,279 Speaker 1: in record time, and that greatly facilitates the space there 581 00:39:48,320 --> 00:39:54,080 Speaker 1: is for a new program and also enhances But the 582 00:39:54,160 --> 00:39:56,800 Speaker 1: possibility of there being fresh funds or not also depends 583 00:39:56,920 --> 00:40:02,640 Speaker 1: on the financial position of the IMF. Exploring different paths. 584 00:40:03,160 --> 00:40:07,160 Speaker 1: One thing could be for the IMF to serve as 585 00:40:07,200 --> 00:40:09,920 Speaker 1: an auditor and to contribute part of the funds, and 586 00:40:10,040 --> 00:40:14,400 Speaker 1: other funds could come from other countries that Argentina also 587 00:40:15,560 --> 00:40:19,920 Speaker 1: smoothly trades with, and another share could come from investment 588 00:40:19,960 --> 00:40:23,400 Speaker 1: funds to make it easy. Five thousand, five thousand, five thousand. 589 00:40:24,640 --> 00:40:28,040 Speaker 2: There's some you've talked before about private investment funds coming 590 00:40:28,080 --> 00:40:31,120 Speaker 2: in and backing Argentina. Can you give us any names 591 00:40:31,160 --> 00:40:34,080 Speaker 2: of funds which are out there that want to come here. 592 00:40:37,520 --> 00:40:43,560 Speaker 1: Well, that will be known when the time comes. 593 00:40:44,080 --> 00:40:44,799 Speaker 3: There wouldn't be. 594 00:40:44,960 --> 00:40:48,600 Speaker 1: Much point in doing that today. The option of deferral 595 00:40:48,880 --> 00:40:49,880 Speaker 1: has value to it. 596 00:40:49,880 --> 00:40:53,880 Speaker 2: On the subject. On the subject of foreign investors, you 597 00:40:53,960 --> 00:40:56,840 Speaker 2: have Elon Musk as one of your great supporters. Is 598 00:40:57,560 --> 00:41:00,800 Speaker 2: he going to come and invest in Argentina. 599 00:41:00,960 --> 00:41:08,319 Speaker 1: Well, in fact, Starlink is already entering Argentina and by 600 00:41:08,400 --> 00:41:14,680 Speaker 1: way of promotion, they have given thirty three pieces of 601 00:41:14,760 --> 00:41:19,560 Speaker 1: equipment to rural schools as a donation, and we will 602 00:41:20,080 --> 00:41:23,239 Speaker 1: soon have a meeting with Elon Musk. I have no 603 00:41:23,360 --> 00:41:28,520 Speaker 1: doubt that Elon Musk will be an active player and 604 00:41:28,560 --> 00:41:32,799 Speaker 1: he will have a major role in the new Argentina 605 00:41:33,360 --> 00:41:37,279 Speaker 1: that is leaving behind the decadence of one hundred years 606 00:41:37,320 --> 00:41:41,240 Speaker 1: of populism to get on the path towards a world power. 607 00:41:41,000 --> 00:41:44,560 Speaker 2: Again, do you think this year we might be able 608 00:41:44,600 --> 00:41:48,680 Speaker 2: to see Argentina returning to the public debt markets. Is 609 00:41:49,719 --> 00:41:51,719 Speaker 2: that a hope a plan for this year at all? 610 00:41:52,080 --> 00:41:54,880 Speaker 1: Well, in order to be able to go back to 611 00:41:55,360 --> 00:42:00,480 Speaker 1: the debt markets would have to bring its to risk 612 00:42:00,560 --> 00:42:06,040 Speaker 1: levels to one thousand basic points, and today Argentina has 613 00:42:06,200 --> 00:42:11,400 Speaker 1: already got past fourteen hundred. So the country risk level 614 00:42:11,880 --> 00:42:14,640 Speaker 1: was around twenty nine hundred when we took office and 615 00:42:14,719 --> 00:42:19,080 Speaker 1: now it is in the thirteen hundred range. So if 616 00:42:19,360 --> 00:42:24,719 Speaker 1: we stick to this harsh fiscal policy, we will achieve that. 617 00:42:24,840 --> 00:42:25,759 Speaker 3: And let me tell you why. 618 00:42:26,080 --> 00:42:30,800 Speaker 1: When we talk about zero deficit, we mean zero deficit 619 00:42:31,640 --> 00:42:34,200 Speaker 1: as far as the financial leans concerned after the payment 620 00:42:34,239 --> 00:42:34,760 Speaker 1: of interest. 621 00:42:34,920 --> 00:42:36,440 Speaker 3: So if financial. 622 00:42:36,000 --> 00:42:40,160 Speaker 1: Deficit is zero, that means that debt doesn't grow, and 623 00:42:40,239 --> 00:42:43,680 Speaker 1: if debt doesn't grow, the debt to GDP ratio is 624 00:42:44,120 --> 00:42:45,160 Speaker 1: non growing, so to speak. 625 00:42:45,200 --> 00:42:47,480 Speaker 3: So you're solvent. So in that. 626 00:42:47,440 --> 00:42:53,520 Speaker 1: Context, which is obviously very strict in terms of FASCAL solvency, 627 00:42:53,719 --> 00:42:55,680 Speaker 1: it means that you're able to repay your debt. And 628 00:42:55,719 --> 00:42:58,080 Speaker 1: if you're able to repay your debt, the price of 629 00:42:58,200 --> 00:43:00,719 Speaker 1: bonds goes up. This is why have gone up the 630 00:43:00,760 --> 00:43:03,719 Speaker 1: way they have, from eighteen to fifty four dollars, so 631 00:43:05,000 --> 00:43:06,280 Speaker 1: this has increased threefold. 632 00:43:06,280 --> 00:43:08,680 Speaker 3: Do you think that's a minor game. 633 00:43:10,440 --> 00:43:12,759 Speaker 2: You talked earlier about your support of Israel, and you've 634 00:43:12,800 --> 00:43:16,040 Speaker 2: been an outspoken supporter of Israel. I wonder do you 635 00:43:16,160 --> 00:43:19,600 Speaker 2: now support to cease fire in Gaza? You have Joe 636 00:43:19,640 --> 00:43:27,359 Speaker 2: Biden pushing for that. Well. 637 00:43:27,440 --> 00:43:31,080 Speaker 1: I support the actions being undertaken by the government of. 638 00:43:31,040 --> 00:43:35,280 Speaker 2: Israel, even including I mean you've said that before, but today, 639 00:43:35,480 --> 00:43:38,280 Speaker 2: yesterday we had the terrible tragedy of the aid workers 640 00:43:38,320 --> 00:43:42,719 Speaker 2: being killed, which even letiyahoo Is apologized and said that 641 00:43:42,880 --> 00:43:45,440 Speaker 2: was a mistake. Do you accept that Israel can do 642 00:43:46,000 --> 00:43:47,600 Speaker 2: has made some mistakes in Gaza? 643 00:43:53,320 --> 00:43:58,080 Speaker 1: Again, from my point of view, the strategy being pursued 644 00:43:58,160 --> 00:44:02,880 Speaker 1: by the government of Israel is the right one, and 645 00:44:03,000 --> 00:44:07,080 Speaker 1: my position has always been the same. I've always said 646 00:44:07,480 --> 00:44:12,320 Speaker 1: that I condemned the terrorists acts committed by terrorist group Hamas, 647 00:44:12,360 --> 00:44:17,440 Speaker 1: and not just that, I also express my full solidarity 648 00:44:18,360 --> 00:44:21,360 Speaker 1: vis a vis the people of Israel, and I'm also 649 00:44:22,280 --> 00:44:26,239 Speaker 1: for the legitimate right to self defense and the strategy 650 00:44:26,280 --> 00:44:31,240 Speaker 1: being pursued by Israel is the right one, so I 651 00:44:31,280 --> 00:44:38,000 Speaker 1: openly support the actions undertaken by Israel. Well, there can 652 00:44:38,080 --> 00:44:41,600 Speaker 1: be mistakes, that's life, but Israel is trying to do 653 00:44:41,680 --> 00:44:48,560 Speaker 1: things within the international framework for dealing with these issues. 654 00:44:48,960 --> 00:44:51,160 Speaker 1: So I support Israel on this. 655 00:44:51,640 --> 00:44:53,920 Speaker 2: Ask you two very quick last questions, both to do 656 00:44:54,000 --> 00:44:57,919 Speaker 2: with your your your kind of your ideology. The first 657 00:44:57,960 --> 00:45:00,280 Speaker 2: one is you you know you are liberty marian. 658 00:45:00,360 --> 00:45:01,160 Speaker 3: You're an admirer. 659 00:45:01,200 --> 00:45:04,759 Speaker 2: I mentioned Margaret Thatcher earlier, Milton Friedman, you named one 660 00:45:04,800 --> 00:45:08,080 Speaker 2: of your dogs after. And yet at the same time 661 00:45:08,840 --> 00:45:11,960 Speaker 2: you're you're a big supporter of Donald Trump. You know, 662 00:45:12,040 --> 00:45:15,760 Speaker 2: Milton Friedman was about free trade, free markets. Donald Trump 663 00:45:15,840 --> 00:45:21,319 Speaker 2: is possibly somebody who's pushed protectionism. He's someone who takes 664 00:45:21,560 --> 00:45:24,560 Speaker 2: a warmer view of Vladimir Putin than you do. He 665 00:45:24,680 --> 00:45:26,759 Speaker 2: tends to be that much less supportive of the kind 666 00:45:26,800 --> 00:45:29,960 Speaker 2: of liberal economics that you do. And I wondered whether 667 00:45:30,760 --> 00:45:33,440 Speaker 2: you know what has changed, Has liberal economics changed or 668 00:45:34,200 --> 00:45:37,800 Speaker 2: is Trump really not that? Do you really support Donald 669 00:45:37,800 --> 00:45:44,800 Speaker 2: Trump in that way? 670 00:45:44,840 --> 00:45:55,360 Speaker 1: Well, first, within the libertarian lines, you have subsets. You 671 00:45:55,480 --> 00:45:59,040 Speaker 1: have the classic you have the minarchists, you have the 672 00:45:59,080 --> 00:46:03,440 Speaker 1: anarchists now as to how to go about things in 673 00:46:03,480 --> 00:46:09,560 Speaker 1: their life. Murray Rothbart has provided some got guidance as 674 00:46:09,600 --> 00:46:14,719 Speaker 1: to what political action should be when it comes to 675 00:46:14,920 --> 00:46:17,120 Speaker 1: libertarian So the first thing we need to do is 676 00:46:17,960 --> 00:46:25,040 Speaker 1: compare visa Viva line. You know, we need to be consistent. 677 00:46:25,160 --> 00:46:31,600 Speaker 1: I may strongly at mine Hamilton Friedman, but my top 678 00:46:31,640 --> 00:46:38,720 Speaker 1: authority is Murray Rothbart and the capitalist exactly. 679 00:46:40,880 --> 00:46:41,279 Speaker 3: It's true. 680 00:46:41,280 --> 00:46:45,160 Speaker 1: One of my dogs was named after Milton Friedman, but 681 00:46:45,239 --> 00:46:46,280 Speaker 1: another one is called Murray. 682 00:46:46,840 --> 00:46:50,440 Speaker 2: Presumably the Milton dog barks every time you mentioned Trump. 683 00:46:55,920 --> 00:47:00,200 Speaker 1: Not really, Milton has a very peculiar personality, his very 684 00:47:00,280 --> 00:47:03,120 Speaker 1: keen on being around women. It's amazing. He's the one 685 00:47:03,600 --> 00:47:11,359 Speaker 1: that is particularly close to the ladies. But aside from 686 00:47:11,400 --> 00:47:16,640 Speaker 1: the personality of my four legged children, because there's another two. 687 00:47:16,800 --> 00:47:21,880 Speaker 1: There's Robert and Lucas right, named after Robin Lucas. But 688 00:47:21,960 --> 00:47:27,520 Speaker 1: I also somehow started dropping names and they wouldn't come close. 689 00:47:27,600 --> 00:47:31,680 Speaker 1: So they got the names that they liked and came 690 00:47:31,680 --> 00:47:35,160 Speaker 1: close to. When I said Ludwig, none of them came close. 691 00:47:35,200 --> 00:47:38,000 Speaker 1: When I said Frederick, none of them. You know, Misus 692 00:47:38,000 --> 00:47:43,600 Speaker 1: and hik. But aside from this acute colorful detail. And 693 00:47:43,440 --> 00:47:47,600 Speaker 1: and Conan, by the way, was the father. Obviously we're 694 00:47:47,600 --> 00:47:51,200 Speaker 1: talking about the barbarian warrior. The important thing. 695 00:47:51,040 --> 00:48:00,640 Speaker 4: Here is this the greatest value of Donald Trump's policies, 696 00:48:00,719 --> 00:48:03,520 Speaker 4: that he has rightly identified the enemy, and the enemy socialism. 697 00:48:03,680 --> 00:48:08,480 Speaker 1: If you want to put that in terms closer to 698 00:48:09,719 --> 00:48:13,319 Speaker 1: the Austrian school of economics, we could talk about those 699 00:48:13,360 --> 00:48:23,920 Speaker 1: who support statism in my actually defined socialism based on 700 00:48:24,000 --> 00:48:25,960 Speaker 1: different interpretations of reading. 701 00:48:26,000 --> 00:48:29,960 Speaker 3: So what what might classify as statism? 702 00:48:31,280 --> 00:48:35,839 Speaker 1: You know, in that regard, Donald Trump has rightly identified 703 00:48:35,880 --> 00:48:42,360 Speaker 1: the enemy very well with meridian clarity. And as regards trade, 704 00:48:48,600 --> 00:48:51,960 Speaker 1: iss are evaluated without taking to consideration where the world 705 00:48:52,040 --> 00:48:55,319 Speaker 1: was coming from the discussion of global imbalances which led 706 00:48:55,360 --> 00:49:00,480 Speaker 1: to the subcrime mortgage crisis, or the problems in US 707 00:49:00,600 --> 00:49:02,960 Speaker 1: monetary policy design as a result of the fact that 708 00:49:03,040 --> 00:49:05,920 Speaker 1: China didn't want to free up the change rate, and 709 00:49:05,960 --> 00:49:10,240 Speaker 1: how in that context, in order to correct the global imbalances, 710 00:49:10,440 --> 00:49:13,120 Speaker 1: one of the things China needed to do was free 711 00:49:13,160 --> 00:49:15,799 Speaker 1: applic change rate, and as I wouldn't want to do that, 712 00:49:15,840 --> 00:49:19,280 Speaker 1: Trump's response was to erect trade barriers. 713 00:49:20,680 --> 00:49:22,160 Speaker 3: So you see. 714 00:49:24,840 --> 00:49:29,080 Speaker 1: The economy and politics, you can be as pro trade 715 00:49:29,239 --> 00:49:32,960 Speaker 1: as you want, but if at the other end they 716 00:49:33,000 --> 00:49:36,600 Speaker 1: don't play by the rules of free trade. If you 717 00:49:36,640 --> 00:49:39,560 Speaker 1: want to play by the rules of capitalism and big 718 00:49:39,600 --> 00:49:41,680 Speaker 1: countries free opplic stange right now. If you don't want 719 00:49:41,680 --> 00:49:45,320 Speaker 1: to do that, then you will be met with a response. 720 00:49:45,360 --> 00:49:48,920 Speaker 1: But you can't evaluate politics in a vacuum or policies 721 00:49:48,960 --> 00:49:51,799 Speaker 1: in a vacuum, because that would be tantamount to not 722 00:49:51,880 --> 00:49:57,280 Speaker 1: understanding the rationale of economic policy. This is like anarcho 723 00:49:57,360 --> 00:50:02,719 Speaker 1: capitalists coming along and making economic policy recommendations that when 724 00:50:02,960 --> 00:50:06,719 Speaker 1: you look at that against the backdrops of the constraints 725 00:50:06,719 --> 00:50:09,960 Speaker 1: of the real world, it's like being all dressed up 726 00:50:10,000 --> 00:50:14,480 Speaker 1: and nowhere to go. So measuring Trump or evaluating his 727 00:50:15,239 --> 00:50:19,719 Speaker 1: trade policy by that, Yardstak is a mistake because he 728 00:50:19,800 --> 00:50:25,359 Speaker 1: acted in response. Should the US forego the possibility of 729 00:50:25,400 --> 00:50:28,799 Speaker 1: having its monetary policy because China decides to have a 730 00:50:28,840 --> 00:50:31,560 Speaker 1: fixed exchange rate policy? Would you recommend to the president 731 00:50:31,640 --> 00:50:33,680 Speaker 1: of the United States that they no longer have a 732 00:50:33,760 --> 00:50:34,560 Speaker 1: monetary policy? 733 00:50:34,800 --> 00:50:35,400 Speaker 3: I don't think so. 734 00:50:35,520 --> 00:50:37,320 Speaker 2: Can I ask you one very last question. It's a 735 00:50:37,360 --> 00:50:41,440 Speaker 2: simple yes, no question. You've now been president for one 736 00:50:41,520 --> 00:50:45,759 Speaker 2: hundred days. You appear to be enjoying it, but it 737 00:50:45,880 --> 00:50:49,520 Speaker 2: is pretty evident you're not going to get everything done quickly. 738 00:50:50,280 --> 00:50:52,920 Speaker 2: So I suppose my question you've talked about the October 739 00:50:53,000 --> 00:50:56,440 Speaker 2: the elections next year. A simple question is do you 740 00:50:56,480 --> 00:50:59,280 Speaker 2: want to get re elected? Do you want to serve 741 00:50:59,320 --> 00:51:00,560 Speaker 2: another term as president? 742 00:51:01,480 --> 00:51:01,680 Speaker 3: Yes? 743 00:51:01,800 --> 00:51:02,000 Speaker 2: Or no? 744 00:51:05,520 --> 00:51:09,640 Speaker 1: That depends on whether the results are favorable. So to 745 00:51:09,640 --> 00:51:17,320 Speaker 1: the extent the results support us, that might be a chance, 746 00:51:18,120 --> 00:51:20,400 Speaker 1: and if not, it will be up to the people 747 00:51:20,520 --> 00:51:22,880 Speaker 1: to decide. The people will decide. 748 00:51:23,080 --> 00:51:23,279 Speaker 3: Now. 749 00:51:23,400 --> 00:51:29,399 Speaker 1: If you know, if you look at the surveys when 750 00:51:29,440 --> 00:51:32,640 Speaker 1: you ask people, if there were a run of today, 751 00:51:32,760 --> 00:51:36,200 Speaker 1: we would win fifty eight to forty two, would win 752 00:51:36,480 --> 00:51:40,759 Speaker 1: with a sixteen point margin. And one more thing, if 753 00:51:40,800 --> 00:51:43,960 Speaker 1: this was the first round, we would get forty eight percent, 754 00:51:44,480 --> 00:51:46,880 Speaker 1: with which we would be able to win the first round, 755 00:51:46,960 --> 00:51:53,200 Speaker 1: because you know, that would give us enough of an advantage, 756 00:51:53,239 --> 00:52:01,279 Speaker 1: but we could still get even more. Even though we 757 00:52:01,360 --> 00:52:06,160 Speaker 1: are pursuing the greatest Montreal and fiscal adjustment in history, 758 00:52:06,360 --> 00:52:08,080 Speaker 1: we would still be able to win in the first 759 00:52:08,200 --> 00:52:10,200 Speaker 1: round with fifty three percent of the vote. 760 00:52:10,680 --> 00:52:12,160 Speaker 3: Hey, why should I change? 761 00:52:12,360 --> 00:52:15,439 Speaker 2: I think I'll take that as yes. President Millay, Thank 762 00:52:15,440 --> 00:52:17,440 Speaker 2: you very much for talking to Bloomberg. 763 00:52:20,520 --> 00:52:22,640 Speaker 3: It's been my pleasure. Thank you very much, thank you