The Argentine mid-term elections are in 11 days, and U.S. Treasury Secretary Scott Bessent is teasing the possibility of doubling US investment in a country marked with “financial risks from debt obligations, rapid inflation, and reduced investor appetites (CIA).”
Bessent called this a “private-sector” endeavor, one he has been working on for “weeks.”
The aid is aimed at bolstering Argentina’s collapsing currency and calming economic unrest before Oct. 26 midterm elections that will determine if the country’s leader, Javier Milei, an ally of President Donald Trump, will maintain a political mandate to pursue a dramatic government cost-cutting agenda. Bessent said the U.S. bought Argentinian pesos again on Wednesday morning.
That announcement led to a “rebound” in stocks. News reports have outlined how that benefits Bessent bud, billionaire hedge fund manager Rob Citrone.
Citrone, the co-founder of Discovery Capital Management, is also a friend and former colleague of Bessent—a fact that has not been previously reported in US media outlets. Citrone, by his own account, helped make Bessent very wealthy.
Since Javier Milei, a right-wing populist, became president of Argentina in December 2023, Citrone has invested heavily in Argentina.
Argentine President Javier Mile met with President Donald Trump at the White House on Wednesday, where Trump pulled no punches on his ROI expectations.
Trump also said continued U.S. support for Argentina is contingent on Mr. Milei winning reelection later this month. If he loses, Mr. Trump said, “We are not going to be generous with Argentina.”
Trump is undoubtedly hoping that Mile’s plan of “deregulation and sharply reduced government spending” proves a successful model he can crow about.
After all, a sign of Mile’s unpopularity is mirrored in public unhappiness with Trump policies:
In early October, lawmakers resoundingly overturned two vetoes that were part of his economic reform process: Argentina’s Senate voted 59-7 to overturn Milei’s block on new funding for universities and 58-7 against his attempt to veto new money for pediatric health?care. The Chamber of Deputies, Argentina’s lower house, had already rejected Milei’s vetoes.
Just last week, Mile’s party’s top candidate for the province of Buenos Aires, José Luis Espert, “had to pull out of the race over his ties (no need for the world ‘alleged’) to Federico ‘Fred’ Machado, an Argentine businessman who is under arrest and facing extradition to the US on charges of cocaine trafficking.”
The referendum on Mile’s policies looks grim:
[A]fter the midterms, Milei will likely have to take the hugely controversial step of devaluing the Argentine peso, and for that he’ll need the full support of his base. A tepid election showing will make it more difficult. His party already holds just seven out of 72 seats in the Senate and 38 out of 257 seats in the Chamber in Argentina’s fragmented politics.
So, why Argentina? Bessent has an apparent quid pro quo of some sort going with Citrone. Trump wants external validation for extraordinary government cuts. The two seem to me to be a thin veneer cushioning a $40,000,000,000 gamble. What else is lurking in the shadows?
Related: Trump offers Argentina $20 billion lifeline (2025), The election of Javier Milei and the challenges of an impoverished Argentina (2023)
Known for gnawing at complex questions like a terrier with a bone. Digital evangelist, writer, teacher. Transplanted Southerner; teach newbies to ride motorcycles. @kegill (Twitter and Mastodon.social); wiredpen.com