Exploring Argentina's Bold Financial Frontier and Unraveling US-China Relations | Weekly Business Briefs w/ Martin Perdomo

Strap in and prepare to explore the bold financial frontier Argentina is embarking on under their new president, Javier Milei. We're dissecting his daring plan for dollarization and what this could mean for both Argentina and the global economy. We unravel the complexities of this thrilling endeavor, diving into the possible roadblocks and the scarcity of dollars needed to replace all circulating pesos. It's a rollercoaster ride of economic intrigue, and we guarantee you'll walk away with a fresh understanding of Argentina's inflation crisis and the radical steps being taken to combat it.

Then, we shift gears to the powerful meeting between US president Joe Biden and Chinese president Xi Jinping. We unravel the significance of this meeting that could reshape relations between these two superpowers. Analysts are hopeful and we'll delve into why, discussing their cooperation pledge on AI, climate change, and curbing fentanyl shipments. Layered into this are the political implications of this meeting, with both countries gearing up for crucial elections. So whether you're a geopolitical junkie or just curious about the world, this episode promises a feast of expert analysis and thought-provoking discussion. Don't miss out!

Transcript

Speaker 0: 0:00

Argentina's president-elect is thirsty for greenbacks. Very significant Biden and Xi's meet could help lower tensions, says analysts, and open AI investors are considering suing the board after CEO Altman's firing. These are the top three headlines in this week's weekly business brief. First up, javier Milay won the Argentinian presidential election. His next task is dollarizing the nation's economy, and boy do they need it. According to the morning brew, argentina's newly elected president and chainsaw enthusiast, javier Milay, ran on a platform that prioritized dollarization, or switching out the local currency for the US dollar. With the election in the rearview, milay is eager to ditch pesos and make it rain. Benjamin baby, it's all about the Benjamin. Argentina's central bank would purchase all pesos in circulation and exchange them for dollars. In theory, this would, one, reduce a country's historic inflation and, two, eliminate the power of the central bank and prevent it from printing even more money, a main cause of Argentina's inflation crisis. In addition to dollarizing, milay wants to open up the country's largely closed economy and cut spending. Pulling off dollarization requires Argentina's central bank to have enough dollars to buy all the pesos in circulation and like anyone under 30 trying to buy a house. Right now, experts estimate that it's roughly $50 billion short, and that's just the start. The country's courts and divided Congress could add additional obstacles. Emilio Ocampo, the economist appointed by Milay to overseas a dollarization process, is bullish. He argues that Argentina could have over $200 billion in circulation that the central bank doesn't include in its out of dollars, but he also considers the economy de facto dollarized. Dollarization is the economy equivalent of Hail Mary Pass. There's no guarantee it'll work, but with 143% inflation, argentina has to try something. They got to try something. 143% inflation. Can you imagine, guys here in the US, 143% inflation? We'd be freaking, pulling our hairs off. Other countries that have dollarized, like Ecuador and Panama, have seen mixed results. So we'll have to wait and see. Argentina's had a freaking issue with inflation for years and years and years and years. I think this is a wise move, but we'll see what happens. Time will tell. This is what happens when over printing of money occurs, inflation goes what we call runaway inflation and you have inflation to those kinds of levels and this is what you see Next up.

Speaker 0: 2:53

China and the US will want to manage their differences as they each battle other challenges. According to the analysts Reported by Al Jazeera, the first meeting between Chinese, the Chinese president Xi Jinping and the United States president, joey B Joe Biden this year is a positive signal that the two superpowers want to improve their working relationship. Analysts have said we'll have to see about that. I have my thoughts on this. Xi and Biden met Wednesday on the sidelines of the APEC summit in San Francisco with a promise to cooperate on issues like artificial intelligence, climate change and curbing federal shipment to the US, which is killing us here in the US. We have a fentanyl crisis here in our country, all, by the way, spurred by China. This drug is coming from China, to be clear. They also pledged to restore military communications that were cut off Following the visit of then-US speaker of the House, nancy Pelosi, to Taiwan last year, a self-ruled democracy that China regards at its own territory.

Speaker 0: 3:56

While none of the outcomes were surprising, analysts said they represent a move in the right direction. What this meeting achieves? It helps regenerate a little bit of political capital as the two sides enter into a year that will be filled with a number of events that could see tensions flare up Again. Cetamanda Casio, a Taipei-based senior China analyst at the crisis group. Taiwan will hold presidential elections on January 13, while the US is poised for its own presidential vote Next November, relations with China will keep figure prominently in both campaigns.

Speaker 0: 4:33

While the US and China were never expected to fully put aside their differences, biden and Xi still have made many reasons to tone down their rivalry-set leisure. Besides running for re-election, the already tumultuous US presidential election, biden has to worry about two wars, in the Ukraine and in the Middle East. He's got a lot on his plate, man. China's economy, meanwhile, is struggling on multiple fronts, including its housing market. Let me tell you, china's housing market has been a crapper since 2021. I mean, it has been just a big problem for them. The US export controls and outbound investment restrictions on advanced tech like semiconductors are fighting. So, guys, this article is a great, great article.

Speaker 0: 5:20

This whole presidential visit from Mr Xi Jinping. If you guys seen anything on the news in San Francisco, when this guy arrived, when the president of China arrived here, they cleaned up the streets. Okay, guys, we have a tremendous homeless issue. They cleaned up the streets when this guy's coming to our country, but they don't clean up the. The government doesn't clean up the streets for us, for the people that live there. This is some bullshit. Excuse my language, this is some bull crap, man. They clean it up for this guy to come first of all. Then, second of all, this is our direct competitor.

Speaker 0: 5:54

This guy has made it really clear in many of his speeches that he would want to see America take second place a direct competitor. Now, I completely understand that we should by the way, we should have open lines of communication and we should diplomatically play this game. But let's not be fooled, guys. Let's not be fooled. China does not want us to be number one. I'm a competitor and if you're a competitor, you understand that the number two always wants to be number one, and we need to be aware of that. We need to be on point of that.

Speaker 0: 6:30

China is not playing for our best interests. Yes, do we need to be politically correct? Do we need to have working relationships? Absolutely. That doesn't mean we're fools and that we don't pay attention to what this guy really is up to. He wants to take America down. He joined BRICS to bring down the dollar. This guy is not about us. This is all a political move and I don't trust this guy. I don't trust China. It might take, do what you want with it. That's just my personal take. This guy is not about us.

Speaker 0: 7:07

The fact that we as a country, cleaned up our own streets because this guy's coming. That is a shame and I'm embarrassed about that. We should be cleaning up our country for our own people, our own taxpayers. That's a message for you, governor Newsom. You should have cleaned up your streets in California for your people, for us Americans, not for this guy coming out of China because we want to impress him. That's just bull crap, man. Your priorities are out of line. Our loyalty should be to the American people first. That's leadership. It's your home front first. I take care of my home first before I take care of anyone else. Get it right, guys.

Speaker 0: 7:47

Lastly, investors reportedly concerned they could lose hundreds of millions of dollars they invested in the tech startup. This is a big deal. What's happening here with the chat GPT? Some investors on open AI, the creator of chat GPT, are exploring legal recourse against the company's board. Sources familiar with the matter have told Rutgers news agency after the directors removed Sam Altman and sparked a potential max exodus of employees, sources said investors are working with legal advisor to study their options. It was not immediately clear if these investors will sue open AI. Investors worry they could lose hundreds of millions of dollars they've invested in open AI a crown jewel in some of their portfolio, with the potential collapse of the hottest startup in the rapidly growing, generative AI sector.

Speaker 0: 8:35

Microsoft owns 49% of the for-profit operating company. According to sources familiar with the matter, other investors and employees control 49%, with 2% owned by open AI's non-profit parent. Open AI's board fired Altman on Friday after a breakdown of communications. According to the internal memo seen by Rutgers, by Monday, most of open AI's more than 700 employees threatened to resign unless the company replaces the board. Venture capital investors usually hold board seats or voting power in the portfolio companies, but open AI is controlled by its non-profit parent company, open AI Non-Profit, which, according to open AI's website, was created to benefit humanity, not open AI investors Interesting. So there's a lot of issues and challenges with this one. I know that Microsoft offered this guy a job and now they want to take him back, so we'll see where this land. Will this be the end of open AI's chat GPT project? Share your thoughts down in the comments and let's discuss. And this has been your weekly business brief. I'll see you guys next week. Thanks for watching. Thanks for listening. No-transcript.