Argentina’s Rampant Inflation, Explained (in One Chart) (Jon Miltimore, December 5, 2023, AIER)

The New York Times, which recently interviewed Capobianco, reported on the inflation that “has convulsed Argentina” and led to the rise of Javier Milei, who last week became Argentina’s first libertarian president (and arguably the first libertarian president in the world in modern history).

Prior to Milei’s stunning victory, inflation in Argentina hit 143 percent. Triple-digit inflation has helped push 40 percent of Argentines into poverty and has led to a surge in demand for US dollars.

An estimated $200 billion in US currency has gravitated toward Argentina’s $487 billion economy, the Times estimates, nearly 10 percent of all US dollars in circulation (more than any other country in the world except for the USA).

The appeal of US dollars in Argentina should come as little surprise. The purchasing power of the peso is depreciating so fast that people continually swap them out for dollars, which are hoarded.

“You’re constantly gathering up money quickly in order to buy dollars,” a 30-year-old supermarket worker told the newspaper, “because the next day, it’s devalued again.”