Molotov Cocktails
Argentines Vote in Javier Milei as President, Signaling They Want Radical Change
Argentines elect the world’s first ‘Anarcho-capitalist’ Libertarian head of state — yet another sign that many around the world are tired of the status quo and are willing to metaphorically throw a molotov cocktail via their vote in efforts to burn the current system down.
But before we dive into that, I want to throw a little kindness bomb at you, the readers of this newsletter.
It’s going to make you feel warm all over — but, like, in the good way.
It comes in the form of my interview with Reyna Chicas, a Bitcoin educator from El Salvador.
Reyna — who I wrote about in this newsletter two weeks ago — is a kind, thoughtful and gracious human being as well as a prized member of the team a Mi Primer Bitcoin, the largest Bitcoin education program in El Salvador and perhaps the world.
Her sincerity, decency and passion for what she does is both contagious and moving.
In the interview, we discussed the importance of impartial Bitcoin education and attending Bitcoin conferences as well as what life is like in the new El Salvador.
I hope you enjoy the conversation as much as I enjoyed taking part in it!
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Who Is Javier Milei?
At first glance, he looks like a zanier, more aggressive version of Austin Powers.
Alright, for real, he’s an economist from the ‘anarcho-capitalist’ libertarian school of thought. (We’ll get into the beliefs from that school of thought in just a moment.)
According to the Buenos Aires Times and the Associated Press, Milei is also:
Well-educated: He holds an undergraduate and graduate degree in economics.
Experienced in managing money: He headed a private pension fund and was the chief economist at Corporación America, one of Argentina’s biggest business conglomerates.
A rockstar: He used to play in a Rolling Stones tribute band.
A talking head: Milei became well-known for critiquing the establishment via television appearances on popular Argentinian networks. In the appearance below, he explains the “Cantillon Effect” — or how money printing hurts those furthest from the money spigot.
But let’s also touch on what he’s not.
Who Isn’t Javier Milei?
To set this section up, let’s look at the following headline about Milei’s victory from the very lazy editorial staff The New York Times.
I expected the MSM to parallel Milei to the likes of Trump or maybe Bolsonaro, the former far right president of Brazil.
However, there are notable differences between far right Conservatism and Libertarianism.
Libertarians have more in common with traditional liberals than The NY Times would have you think.
The following chart illustrates that libertarians share some values with Liberals and some with Conservatives.
Libertarians and (principled) Liberals both believe in:
Freedom of expression: Individuals should be free to express themselves as they wish. This includes sexual preference, gender identity, etc.
Ending wars: Neither liberals nor libertarians seem to be in favor of America’s endless war approach. (Corporate Democrats, on the other hand, seem to love war as much as the Neo-Cons.) Also, neither Liberals nor Libertarians tend to support the military draft.
Letting “too big to fail” institutions fail. Much of the momentum behind Occupy Wall Street came from the left (Liberals). Bitcoin (which was at first mostly embraced by Libertarians but is now starting to be embraced by Liberals, too) has been referred to as “Occupy Wall Street with teeth”.
Immigration: Both Libertarians and Liberals tend to be pro-immigrant.
Libertarians and (principled) Conservatives both believe in:
Smaller government: Both believe in the power of the free market and minimal government intervention. Anarcho-capitalist libertarians like Milei believe in basically no government at all (which is kind of silly given that he just ran for and won the most powerful position in Argentina’s federal government).
Free speech and gun ownership. Both Libertarians and Conservatives believe in the 1st and 2nd amendments to the US Constitution.
Libertarians differ from both Liberals and Conservatives in that they believe in:
De-criminalizing all drugs. Have a blast out there!
Ending central banks. Milei has stated that ending Argentina’s central bank is a non-negotiable.
While some of Milei’s policy proposals may look similar to some of what Trump promised (and didn’t deliver), the two differ in their approach to governance in many ways.
Here are just a few:
Milei wants to do away with Argentina’s central bank; Trump supported The Fed’s printing of about half the US dollars that ever existed.
Milei comes from a school of thought that wants to end wars; Trump didn’t end any wars.
Milei comes from a school of thought that encourages immigration, much like how Bukele is encouraging immigration to El Salvador; Trump had a mostly anti-immigrant stance.
Do I like Milei?
Yes and no.
As someone involved in the world of Bitcoin/crypto, yes.
It’s hard for me not to cheer for someone who wants to drastically reduce the size of the administrative state, especially while as I watched the SEC employ mafia style rent-seeking tactics against law-abiding, compliant crypto companies yet again this week.
When I see this kind of stuff happen, I get pumped when I hear the likes of Vivek Ramaswamy — a US presidential candidate familiar with the Libertarian school of thought — say he plans to reduce the federal workforce by 75%.
But as someone who’s worked in social services, I can’t say I fully agree with Milei’s approach. I think some level of a government-backed social safety net is a good thing. I know too many people who would be hurt too badly if the social safety net in the US disappeared tomorrow.
But my opinion as a non-Argentine is largely irrelevant here, though, and every Argentine I’ve spoken with since Milei won the election has told me they’re glad he won.
I wouldn’t say this translates to their being unabashed fans of his, but more that the traditional system wasn’t serving them and that both urgent and drastic change was necessary.
Post World War I, most Argentinian leaders have been proponents of socialism and have led Argentina into experiencing massive bouts of inflation time and time again, which has resulted in 40% of Argentines currently living below the poverty line.
Argentines were/are tired, so they threw there collective molotov cocktail and put Milei in power.
We’ve seen similar approaches here in the United States with Americans electing Trump and in El Salvador with Salvadorans electing Bukele.
I can only hope that the situation in Argentina ends up looking more like the situation in El Salvador under Bukele’s leadership than the one in the States did under Trump’s leadership.
Markets
Let’s go to markets, where a number of the assets we’ve been looking at rallied this week…
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