Good Morning Everyone,
Hope you have all had a great week. Before i get into a few content suggestions for the weekend, i couldn’t leave you for the week without briefly discussing a recent development between the IMF and the Argentinian Government.
The short version is that Argentina are in debt to the IMF, and have had a long and contentious relationship since joining in 1956. In this time Argentina have sought and agreed to 21 emergency financial-support programs, most of them lasting fewer than 24 months.
The perspective from inside the country vs outside is very different as Arturo C. Porzecanski explained in a noteworthy article regarding the relationship between the two back in late 2021:
“Outside Argentina, that record is evidence of the country’s frequent economic mismanagement. Inside Argentina, it is the rescue programs, rather than the fiscal, monetary and political causes of the country’s financial emergencies, that have come under most criticism, roundly disparaged as ill-conceived, excessively harsh and overall disappointing.”
Back in 2018 Argentina borrowed more than $40b from the IMF. These funds were due to be paid back, however Argentina is seeking an extension.
In a statement on the IMF website, they outline the agreement to extend repayments:
“IMF staff and the Argentine authorities have reached a staff-level agreement on the economic and financial policies to be supported by a 30-month Extended Fund Facility (EFF) Arrangement. The EFF, with requested access of SDR 31.914 billion (equivalent to US$ 45 billion or 1000 percent of quota), aims to provide Argentina with balance of payments and budget support to address the country’s most pressing economic challenges and to enhance the prospects of all Argentines by implementing measures designed to promote growth and protect essential social programs.”
As part of the extension included in the letter of intent was a clause to “discourage” the use of crypto-currencies. The exact language was under the heading “strengthening financial resilience” and reads:
“While commercial banks remain liquid and well-capitalized, strong bank oversight will continue, especially following the unwinding of pandemic-related regulatory forbearance. To further safeguard financial stability, we are taking important steps to (i) discourage the use of crypto-currencies with a view to preventing money laundering, informality and disintermediation; (ii) further support the current process of digitization of payments to improve the efficiency and costs of payments systems and cash management; and (iii) safeguard financial consumer protection.”
Basically in order for the IMF to agree to extending repayment of the loan they have slid in the need for Argentina to “discourage” the use of bitcoin and cryptocurrencies. The IMF are making a strong anti-competitive play here. They are making a play to limit the proliferation of bitcoin, while they attempt to support the proliferation of CBDCs (Read: Centrally-Binding Digital Chains). Bitcoin and crypto adoption is massive in Argentina - according to chainalysis the country is top10 for global adoption. Is it any wonder with 50+% inflation absolutely decimating the people of the country?!
The IMF do not want the free market to have any say on money. But this is how money works. They are wanting to prevent the proliferation of a decentralized and open-source alternative to their centralized slave coin. They do not want countries like Argentina to be able to get out from under their heel. They want them to be debt slaves forever.
While there is no doubt they can make things more difficult for the people of the country, trying to stop an open permissionless protocol like bitcoin, is no different to trying to ban free speech or ban certain numbers. The notion of it is simply preposterous. But this clearly will not stop them.
Thankfully, while there is no doubt they are clearly trying - ultimately they will fail. It seems obvious that they are attempting to prevent another country following El Salvador’s lead and creating a snowball effect within South America which at this point seems inevitable. Once other countries see the profound changes within El Salvador others will rush to implement a similar playbook.
Imagine trying to prevent the proliferation of the internet? Well, certain entities and governments tried, in many ways they are still trying to limit its power. But in the exact same way as they failed with the internet, they will fail with bitcoin. I’d anticipate that any action against the citizens ability to interact with this new technology will only act as a further marketing campaign as to why we need bitcoin and will trigger a huge demand for the asset.
We may have to demote Justin Trudeau from the role of CMO (Chief Marketing Officer) and appoint the IMF if they keep this up.
With all that said, lets get into a few powerful options for the weekend to expand your mind and deepen your knowledge.
Hope you have a great weekend. I’m doing a paragliding course all next week, so I will speak to you the following Monday.
AK
⚡️ Bitcoin For The Weekend ⚡️
Article: What Is Money - Lyn Alden
Pod: What Bitcoin Did w/ Nic Carter
Book: Bitcoin Is Venice: Essays On The Past & Future Of Capitalism - Allen Farrington & Sacha Meyers
