It has been nearly half a year since Miley, the "chainsaw maniac", took office. However, his "shock therapy" not only failed to improve Argentina's economy, but also triggered strikes again and again. In the face of this situation, Millai "blazed a new trail" and immediately announced that it would print hundreds of millions of new banknotes. Even this would depend on China.
President Mile of Argentina
Recently, the Bank of Argentina officially issued a new banknote with a face value of 10000 pesos and has begun to circulate. This is the currency unit with the largest denomination in circulation in Argentina, exceeding the previous maximum denomination of 2000 pesos. According to the official exchange rate, 10000 pesos is only equivalent to 11 dollars.
In a statement, the Argentine Central Bank said that the 10000 peso notes would simplify cash transaction procedures, improve transaction convenience and efficiency of the financial system, and further reduce the cost of currency circulation. Therefore, the Argentine Central Bank plans to realize the full circulation of 10000 peso notes in June. At the same time, at the end of this year, 20000 peso notes will gradually enter the market, so as to further adapt to the changes in the economic situation of Argentina.
In recent years, Argentina has faced serious economic challenges, with high inflation and currency devaluation. The high inflation rate has led to a rapid decline in the value of money and a sharp decline in the real purchasing power of residents. The Argentine Central Bank can only issue more banknotes to adapt to changes in the economic environment and market demand.
As time went by, the face value of notes issued by Argentina continued to increase, from 500 pesos in 2016 to 1000 pesos in 2017, and then to 2000 pesos last year. During the process of increasing the face value, the exchange rate of the peso against the US dollar also changed dramatically, which directly affected the purchasing power of the peso.
10000 peso banknotes issued by the Argentine Central Bank
For example, when it was first printed in 2017, a 1000 peso note was worth $58 on the black market. Now, it's only worth one dollar. This trend not only affects people's daily life and savings, but also challenges enterprise operation, investment decision-making and overall economic stability.
It is worth noting that printing money is not a simple task. It is a highly complex and technology intensive work, involving multiple key links and strict security measures. For example, the anti-counterfeiting technology in the process of banknote printing. Modern banknote design must include a variety of complex anti-counterfeiting features to ensure that each banknote is difficult to copy, which is also the primary task in banknote printing technology.
In addition, no mistakes are allowed in the paper materials, safety management, quality control and other links of banknotes. At the same time, manufacturers must also try to control production costs while ensuring quality and safety, because large-scale printing of banknotes is also a heavy burden on national finance. For this reason, banknote printing is not only a demonstration of technology and process, but also a comprehensive embodiment of national security, economic management and scientific and technological progress.
For the current Argentina, these technologies are obviously out of reach. Therefore, the first batch of 770 million new peso banknotes in Argentina was ordered from China Mint and Banknote Printing Group Co., Ltd., which had just arrived in Argentina a few days ago.
Previously, during the period of the former President Fernandez of Argentina, the Argentine Central Bank also entrusted Chinese enterprises to print 2000 peso notes. In order to cope with the growing demand for large denomination banknotes in Argentina, the Mint of the Argentine Central Bank has also launched an international bidding to purchase high-quality banknote paper to ensure the stability and security of the money supply.
But Mirai's choice of Chinese companies as partners is undoubtedly a slap in the face. After all, Millet had vowed that he would never seek further cooperation with China.
Miley declared no cooperation with China when he took office
However, this behavior of blindly increasing the face value of banknotes may alleviate the inconvenience of cash transactions caused by high inflation in the short term, but if it is not accompanied by other effective macroeconomic policies and structural reforms, it will not ease the crisis in Argentina, but will bring more hidden dangers.
In the short term, this kind of behavior will deepen the public's expectation of continuous devaluation of the currency, prompting people to consume faster or convert their savings into foreign currencies, physical assets, etc., thus accelerating inflation. In the long run, excessive reliance on the issuance of large banknotes may damage the credibility of the currency, reduce the trust in the peso at home and abroad, and affect investment and international trade. To some extent, this practice can only be regarded as drinking poison to quench thirst.
It is worth noting that the crisis faced by the Mile government is far more than that. Less than two days after the announcement of the Argentine Central Bank, Argentina ushered in the second national strike since Mille took office. The strike was initiated by the General Confederation of Labor, Argentina's largest trade union organization, and was supported by several trade unions, left-wing organizations and private economic institutions. It formed a wide range of opposition forces and directly challenged the reform measures of the Mile government.
The strike led to the suspension of public transport system, port operation, supermarket business, banking services and other key economic fields in Argentina, seriously affecting daily economic activities and people's lives. Argentina Airlines cancelled a large number of flights, affecting tens of thousands of passengers, further aggravating traffic chaos and economic losses.
The strike resulted in the suspension of trains
The last time such a large-scale strike occurred was in January this year, the 46th day of Mile's coming to power, and it was also the fastest strike in Argentina since 1983.
The US media pointed out that compared with the first national strike in January, the national strike had a higher risk and a greater subsequent impact, which again caused a major blow to the economy of Argentina.
Since taking office in December last year, Mile has proposed a series of measures with "shock therapy" as the core. However, in the implementation process, these measures have not only shrunk repeatedly, but also failed to bring favorable changes to Argentina. Many people have paid a heavy price for this. At present, the proportion of poor people in the country is nearly 60%.
Now, whether it is large-scale printing of new banknotes or frequent strikes, it means that Mile's so-called "ruling plan" has not ushered in the situation he expected, let alone won the support of the Argentine people.
Now, even when Argentina prints money, it has to turn to China, which it once "boycotted". This has completely exposed the sense of powerlessness of the Mile government to the current situation. If this continues, it may become a real unknown where Argentina will go in the future.
