JP Morgan Chase CEO Jamie Dimon landed in Buenos Aires this week to attend an occasion the Wall Road lender is holding, exactly at a time that the financial institution is in negotiations to rearrange a $20 billion mortgage for the Argentine authorities. The timing was apparently pure coincidence, given the occasion was organised lengthy earlier than discuss of a rescue package deal, studies Bloomberg:
[B]ut it means among the financial institution’s prime brass might be on the bottom simply as doubts develop that US Treasury Secretary Scott Bessent will have the ability to pull off the second half of his rescue package deal for the Javier Milei authorities: a $20 billion bank-led mortgage.
Different Wall Road banks concerned embody Goldman Sachs, Financial institution of America and Citigroup. In the event that they had been to activate credit score strains for Argentina, it might bolster the USD 20 billion foreign money swap that was formalised on Monday, notes Bloomberg. Time is of the essence, nevertheless, given the nation will vote in mid-term legislative elections on Sunday and the nation’s peso continues to sink regardless of the Trump administration’s rescue package deal.
There’s rather a lot using on the outcomes, together with that rescue package deal:
BREAKING: In a stunning second, Trump seems to interact in international election interference, saying the U.S. will solely give Argentina international assist if his pal Milei wins. “If he loses, we won’t be beneficiant with Argentina.”
Excessive corruption.pic.twitter.com/RJ1DjFMgm8
— Actually American 🇺🇸 (@ReallyAmerican1) October 14, 2025
Dimon might be joined on his go to by the present joint chairman of JP Morgan’s Worldwide Council, Tony Blair, who might be taking a number of days out from his new position as “modern-day excessive commissioner” of Gaza, and former US Secretary of State Condeleeza Rice, who additionally sits on the council. On the weekend, he’ll participate in a polo match.
Earlier than that, Dimon is predicted to fulfill with members of Milei’s senior financial workforce throughout his keep. He ought to obtain a heat welcome contemplating all 4 of them, together with Economic system Minister Luis Caputo and Central Financial institution Governor Santiago Busilli, are former JP Morgan Chase executives. The next picture has been doing the rounds in current days.
Argentina’s right-wing libertarian authorities is run by Wall Road, each not directly and straight.
President Javier Milei’s minister & vice minister of the economic system, and the president & vp of the central financial institution, all beforehand labored for JPMorgan, the biggest US financial institution. https://t.co/k9yqKikxge pic.twitter.com/1LUSXhrq3O
— Ben Norton (@BenjaminNorton) October 21, 2025
What had been the percentages of all 4 of them having beforehand labored for a similar New York-based mega lender whose operations in Argentina are apparently increasing fairly properly proper now? That very same financial institution is now serving to the Milei authorities perform a sovereign debt buyback operation ostensibly aimed toward “decreasing the nation’s value of financing and strengthening funding in schooling”?
An Oligarch’s Libertarian
It was Milei’s appointment of Caputo and Bausili again in December 2023 that was the plain inform that the repair was as soon as once more in, that Milei’s authorities was not going to honour his predominant electoral pledges to abolish Argentina’s central financial institution or undertake the greenback. As Yannis Varoufakis argues in an glorious piece for Unherd (and as we’ve been arguing for the previous two years), Milei will not be a libertarian by any means however is as a substitute beholden to Argentina’s oligarchy:
Milei by no means actually broke with Argentina’s unhappy oligarchic practices of the previous. He merely rebranded a sort of heist practised by an extended succession of his predecessors — from Peronist Carlos Menem and anti-Peronist Fernando de la Rúa to hapless Adolfo Rodríguez Saá, whose presidency lasted a mere seven days, and, extra not too long ago, neoliberal Mauricio Macri who now helps Milei. Whereas Milei used libertarian narratives efficiently to distance himself from these folks, his precise insurance policies fail crucial libertarian litmus check.
Earlier than you, pricey reader, dismiss me as a Marxist (that I admittedly am) intent on dismissing a political opponent’s success as a dismal failure (one thing I keep away from like a mortal sin), let me put it to you in easy, libertarian phrases. Should you (not like me) really consider within the markets’ superior knowledge, and wish to rid Argentina of political constraints positioned available on the market mechanism, which market do you liberate first? The cash market, certainly. Which value distortion do you drive your chainsaw by way of first? The mounted (or bounded) alternate fee, unquestionably. And what’s the final thing you do? Exactly what Milei did: borrow zillions of {dollars}, pile them up on prime of an already insufferable heap of public debt, to forestall the cash market from selecting freely the alternate fee of your foreign money.
Defending a foreign money as weak because the peso for nearly two years is, after all, a idiot’s errand, and the outcomes have been depressingly acquainted. In lower than two years, the Milei authorities has burnt by way of tens of billions of {dollars} of international alternate reserves in a futile bid to maintain the peso artificially excessive and, by extension, inflation artificially low. It has introduced distress for the person on the street whereas making a mint for monetary speculators.
Sure, Milei’s austerity has diminished inflation, however at the price of smothering financial exercise for 2 lengthy years and squandering the nation’s restricted foreign money reserves. It is usually completely unsustainable. Everybody is aware of the second the elections are over, the federal government will as soon as once more devalue the peso, sending inflation hovering as soon as once more — that’s why everyone seems to be shopping for {dollars} regardless of the US’ direct assist of the peso.
To avert an all-out foreign money collapse, the Milei authorities has wanted not one, however two, large $40 billion bailouts within the area of simply six months — the primary from the IMF, World Financial institution and InterAmerican Improvement Financial institution, the opposite from the US Treasury Division’s Change Stabilisation Fund and Wall Road Banks. The half-lives of the monetary interventions are rising dangerously brief.
From Benign Neglect to Malign Meddling
Each of those bailouts got here with large strings connected, however it’s the latter that has essentially the most onerous phrases — together with Trump’s exhortation to Argentine voters to decide on the suitable celebration in Sunday’s election. In any other case, he warns, the bailout funds might be withdrawn, tipping Argentina’s economic system over the sting.
This, lest we neglect, is going on on the identical time that the US is bombing speedboats into smithereens in each the Caribbean and the Pacific whereas beating the drums of warfare for direct army intervention in Venezuela. In current days, it has threatened “very severe actions” in opposition to Colombia’s left-leaning governments in addition to crippling tariffs in opposition to Nicaragua.
As we speak, on the course of President Trump, the Division of Struggle carried out one more deadly kinetic strike on a vessel operated by a Designated Terrorist Group (DTO). But once more, the now-deceased terrorists had been engaged in narco-trafficking within the Japanese Pacific.
The… pic.twitter.com/PEaKmakivD
— Secretary of Struggle Pete Hegseth (@SecWar) October 23, 2025
After 20 years of benign neglect of Latin America (whereas it bombed the Center East, Libya and Afghanistan to items), the US is again to its conventional apply of malign meddling in its resource-rich “yard”. The outdated coverage of plata o plomo (silver or lead) is again on the agenda because the Trump administration tries to drive a wedge between Latin America and China. Take the cash or take a bullet: that’s the choice on supply.
This isn’t a brand new factor, after all. The US has been meddling in Latin America for nigh on two centuries. As Chomsky informed the British journalist Seamus Milne again in 2009, US international coverage has lengthy been “straight out of the mafia”:
[S]ince authorities officers first formulated plans for a “grand space” technique for US world domination within the early Forties, successive administrations have been guided by a “godfather precept, straight out of the mafia: that defiance can’t be tolerated. It’s a serious characteristic of state coverage.” “Profitable defiance” must be punished, even the place it damages enterprise pursuits, as within the financial blockade of Cuba – in case “the contagion spreads”.
Will Trump’s overt election meddling and outright extortion practices focus the minds of Argentine voters, serving to to tip the steadiness in Milei’s favour this Sunday? It’s unlikely however you by no means know. Milei nonetheless has hundreds of thousands of fanboys and ladies (regardless of scamming hundreds of them in his Libra meme coin con) and the opposition continues to be broadly reviled.
Nonetheless, Trump’s meddling is simply as doubtless, if no more so, to have the alternative of the meant impact. A big majority of Argentines (60%) have already got a destructive picture of Donald J Trump whereas 56% have a destructive picture of america total, based on a ballot performed for Bloomberg in April.
What’s extra, the final six months of financial disaster and continuous scandals have taken their toll on Milei’s approval rankings. The following alternate, from a current interview of Milei on a pleasant information program by Eduardo Feinmann, a presenter with a robust pro-government bias, reveals simply how shortly Milei’s fastidiously crafted picture as an knowledgeable on financial issues is unravelling:
Presenter: Eighty % of Argentineans barely make it to the tip of the month, and 60 to 70% of them solely make it to the twentieth of the month.
Milei: How would you like me to repair that? How can I get cash to the folks?
Interviewer: You’re the economist. You’re the knowledgeable in financial progress with or with out cash.
In current days, even with make-or-break elections looming, an allegedly closely medicated Milei has refused to do any extra interviews with the media, presumably on the insistence of his marketing campaign workforce. As Luis Majul, one other pro-government information presenter put it (emphasis my very own), “Milei was going to do an interview (with us) however he took the choice to not come on in case there have been questions he couldn’t reply, which appears cheap to me.”
An analysts’ report revealed by JP Morgan notes that the markets are already discounting a foul election end result for Milei’s ruling Libertad Avanza celebration, which can make it even tougher for the federal government to manipulate. Nonetheless, the analysts don’t rule out a pointy rebound in Argentine shares from subsequent week if the end result exceeds expectations. As El País reported a month in the past, Argentina’s inventory market is the world’s worst performer in 2025.
Analysts from Wells Fargo have warned that the present alternate bands scheme “doesn’t appear sustainable” and have predicted an additional depreciation within the peso of near 30% by the tip of 2026 — the biggest amongst all rising currencies analysed. Additionally they cautioned that the US Treasury’s assist might supply a number of days of stability – and even power – for the Argentine peso, nevertheless it doesn’t represent a sustainable alternate fee coverage.
Within the meantime, the non-public sector-led rescue settlement nonetheless faces obstacles. The banks concerned — together with JPMorgan Chase, Financial institution of America, Goldman Sachs and Citigroup — are demanding clear ensures to again the mortgage, both from the US Treasury or the Argentine State itself. From Perfil (translated by yours really):
On the crux of the negotiations is the query of who will function guarantor of the mortgage: the Argentine authorities or the US Treasury itself. Banks are pushing for tangible backing, whether or not with belongings, reserves or official protection from Washington, that minimizes the chance of losses.
On this context, The Wall Road Journal factors out that Argentina might supply sovereign bonds or future tax revenues as collateral, though these choices are thought-about unviable. Native bonds are value effectively under their face worth, and compromising future collections might generate political rejection throughout the nation.
All through historical past, this kind of operation had stable collateral. In 1995, for instance, Mexico assured a $20 billion mortgage with oil exports throughout the so-called “Tequila Disaster.” In contrast, the foreign money swap between the Treasury and Argentina, which can also be a part of the $40 billion package deal, doesn’t legally require collateral, growing dangers for the U.S. Treasury.
On the identical time, the Trump administration is dealing with a gathering backlash from its MAGA base for attempting to rescue Argentina, a serious agricultural competitor, whereas the financial ache from Trump’s tariffs intensifies.
🚨 TRUMP: “We’ll purchase Argentine beef.”
Requested what he’d inform U.S. ranchers dropping their farms, he stated: “Argentina is combating for its life… they’re dying.”
So are our ranchers, 77 go underneath each single day. America First apparently ends the place the steak begins. pic.twitter.com/sbPImhQc6x
— Brian Allen (@allenanalysis) October 21, 2025
Trump’s current name to purchase beef from Argentina might be, for those who’ll excuse the pun, the ultimate straw for a few of his America-first voters, and is heaping strain on Republican lawmakers. From Fortune:
Trump proposed on Sunday that the U.S. might buy beef from Argentina as a strategy to convey down costs for American customers. Beef prices have ballooned as a lot as 12% up to now 12 months. The suggestion was met with exasperation from U.S. cattle ranchers, who argued the transfer would disrupt the free market and introduce pointless threat components to home beef provide.
“This plan solely creates chaos at a essential time of the 12 months for American cattle producers, whereas doing nothing to decrease grocery retailer costs,” Nationwide Cattlemen’s Beef Affiliation CEO Colin Woodall stated in a assertion on Monday…
A possible intervention with Argentina would come simply because the U.S. cattle business was starting to get better from a dismal 2024, during which it noticed its smallest herd since 1951, a results of extreme droughts withering pastures and climbing up livestock feed prices. U.S. beef imports have additionally shrunk because of a ban on Mexican beef in an effort to forestall the unfold of screwworm, a flesh-eating parasite present in cattle throughout the border…
Cattle ranchers be part of the refrain of soybean farmers, who’ve been outspoken in regards to the influence Trump’s ties with Argentina have on the soybean business. Amid proposals to supply monetary help to Argentina final month, the South American nation additionally dropped a number of export taxes as an effort to stabilize its economic system—together with its soybean tax. Because of this, China, which beforehand bought a few quarter U.S.’s soybean exports, ordered a number of cargoes of the crop. China has not ordered U.S. soybeans since Could.
“The frustration is overwhelming,” the American Soybean Affiliation (ASA) President Caleb Ragland stated in a assertion final month. “The farm economic system is struggling whereas our rivals supplant america within the largest soybean import market on the earth.
Jamie Dimon has a distinct take, joking that Argentina has “professionals, land, schooling… even meet.” On the political stage, he remarked that Argentina has an actual alternative to change into a strategic associate of Washington. “Argentina needs to be an ally of america; Trump and Milei are shut, and I rejoice that effort to shorten the space.”
Dimon additionally contrasted the US presence in Latin America to China’s “Belt and Highway” initiative promoted by China, expressing concern about Washington’s lack of a transparent technique to spice up financial improvement within the area. (NC: When has it ever carried out that?) In contrast, the Chinese language initiative — primarily based on free commerce, funding in infrastructure and worldwide cooperation — has massively strengthened Beijing’s affect in Latin America.
This is without doubt one of the the reason why the US is so eager to prop up the Milei authorities, even when it dangers alienating a core part of Trump’s electoral base: the potential benefits of “driving a wedge between Argentina and China” (because the WSJ places it) outweigh the political and financial prices. At the very least that’s the calculation.
Within the following interview with Democracy Now, the Argentine writer and journalist Pablo Calvi gives three potential explanations for Washington’s assist of the Milei authorities: geopolitics (eradicating China from the equation as a lot as potential); the pursuits of Trump-adjacent tech bros in Argentina, together with Peter Thiel, Elon Musk and Sam Altman; and the ideological affinity between Trump and Milei.
Trump’s $20 billion bailout for Argentina is supposed to bolster his right-wing ally President Javier Milei, however the plan “might backfire” for each leaders, says journalist @plcalvi. Argentina is holding legislative elections later this month. pic.twitter.com/Ap0L5Rtoml
— Democracy Now! (@democracynow) October 16, 2025
One different potential rationalization that Calvi doesn’t point out is the private and enterprise pursuits of US Treasury Secretary (and former hedge fund supervisor) Scott Bessent. Because the NYT reported a few weeks in the past, some hedge fund managers, together with Stanley Druckenmiller and Robert Citrone, each former colleagues of Bessent at Soros Asset Administration, wager giant on Argentina and can not directly profit from a monetary rescue of Argentine belongings.
One other main beneficiary would be the IMF, given Argentina now owes the Fund near $60 billion. One other Argentine default, which can be inevitable anyway, might trigger the establishment severe embarrassment on condition that each of the final two bailouts, in 2018 and April 2025, had been strongly opposed by senior members on the Fund, a few of whom had been even ready to sacrifice their jobs reasonably than signal alongside the dotted line.
One other supply of embarrassment for the Fund:
Only a reminder that the IMF’s market entry debt sustainability framework and in notably its medium time period evaluation does not use exterior debt or fx reserves as analytic variables — it’s an “it’s all fiscal” framework.
— Brad Setser (@Brad_Setser) October 22, 2025
Neither the folks of Argentina nor the folks of america stand to learn from this bailout. As reader Rabid Gandhi identified in a remark to Curro’s put up yesterday on Latin America, the cash will “barely even contact Argentine soil earlier than being whisked away to the Caymans accounts of varied hedgies and oligarchs, a few of them nominally Argentines, others not even that”:
When this capital flight happens, as soon as once more because it at all times has up to now, it won’t be a shock to Messers Bessent, Trump, Caputo…, as a result of it’s by design… What Argentina, the 45 million Argentines, might be getting as their ‘reward’ is a debt in USD, a central financial institution bereft of reserves and the concomitant austerity/cuts to social companies that inevitably observe. With buddies like these…
So, this leaves us with one remaining query: what’s going to the Wall Road banks be asking for as collateral for its $20 billion mortgage? Or put one other method, what does Argentina have left to plunder?
The final time the US Treasury used ESF funds to bail out one other nation, it was for Mexico throughout the 1994-5 Tequila Disaster. Not solely are the Mexican folks nonetheless paying off the debt for that bailout right now, 27 years later, however the whole quantity excellent has virtually doubled in dimension even supposing the nation has already paid $200 billion pesos greater than the principal: the magical wonders of compound curiosity.
In its bailout of Mexico, the US authorities made certain the Mexican authorities put up as collateral for the mortgage the revenues from oil exports of Mexico’s state-owned oil firm, Pemex.
Will the Wall Road banks be demanding the identical type of remedy from Argentina’s state-owned firm YPF? In its Vaca Muerta (Useless Cow) subject, Argentina boasts the world’s fourth largest reserves of shale oil and extra shale gasoline than wherever besides China.
Such a transfer might be difficult, nevertheless, by a ruling issued a number of months in the past by US federal decide Loretta Preska — sure, the identical decide who persecuted US lawyer Steven Donziger for daring to signify the folks of Ecuador in opposition to Chevron — ordering the Milei authorities at hand over 51% of YPF to companies affected by the oil agency’s 2012 nationalisation. That ruling has been placed on maintain by a US enchantment courtroom however is hanging over Argentina like a sword of Damocles.
Alternatively, the Milei authorities might be requested to place up Argentina’s huge lithium deposits, the second largest on the earth, as collateral, and even its uranium deposits. The negotiations between the Milei authorities and the US Treasury Division have reportedly included calls for to limit Chinese language entry to essential assets and prioritise agreements with U.S. firms in infrastructure and telecommunications.
The Milei authorities has already begun the method of privatising Argentina’s 4 hydroelectric energy crops, and there’ll presumably be much more of that type of factor to come back — except, after all, the folks of Argentina vote overwhelmingly in opposition to Milei’s celebration on Sunday.
If that had been to occur, Milei would successfully be stripped of the flexibility to rule by decree and veto, as he has carried out for the most effective a part of the previous two years. Wherein case, Bessent’s rescue package deal will presumably be withheld. And in that case, all bets are off.
