The Financial Wanderings of Patricia Bullrich | Concern in the PRO about the verbal drift of the pre-candidate Juntos

The head of PRO and presidential candidate of Together for Change, Patricia Bullrich, he began to add to the external rejection of some of his propositions an internal criticism of his confused economic ideas. The chapter that confirmed all the alarms occurred in the last hours, when in a television interview he promised, if he is president, to film the Central Bank (BCRA) funds to show that “there are no more reserves”, assuming that the entity under the leadership of Miguel Pesce has a kind of gigantic vault in which he keeps all his capital. The reality is that most holdings are book entries or digital shares. At the same time, the debate about the level of reserves hides evidence that shows when and how they were most at risk.

In the aforementioned interview, Bullrich explained that, if he wins the election, his financial technicians are going to “present a model after we see what the agreement with the Fund is like and what Massa leaves you.” The first thing we will do is enter with a television camera at the Central Bank to show people what they’re leaving behind.” In the middle of the discussion, one of the reporters explained that there are no stored physical reserves, but Bullrich misunderstood the clarification and doubled down on his theory: “There are no more reserves, there are negative reserves. It is important that the people of Argentina knows it,” he said.

When their sides saw the interview live, they formed a mini phone crisis committee because they saw the criticism coming, and it was coming from their own space and environment. two cases, the denial of Martín Lousteau and the libertarian Javier Milei (“a nonsense”) in their words. Most worried about his theory were his top financial adviser, Luciano Laspina, and Patricia’s rising young point guard, Damian Arabia. A few hours later, they both came out to communicate the product of that brainstorming to cover up the pre-candidate’s delusions, both on the same premise.

Arabia talked about using transportation, while Muddy He took to his Twitter account to follow the same line: “It’s amazing how literally words are taken in this campaign. If you hear me say ‘we’re going to beat inflation’ you shouldn’t interpret that I’m suggesting tanking prices and bullets Or “the dollar today went to the clouds,” that the air got a green ticket,” he said.

This is not the first time that Bullrich has made serious financial misunderstandings. Among the immediate antecedents is the promise to make a “shield”, a controversial policy of the Alliance, a government that Patricia installed. the confusion between hyperinflation and stagflation, and the more recent plan to make public service compulsory for all Argentines who currently have social plans. All these events have taken place in the last fifteen days, and they are worrying those around them not only because of the weak content, but also because of the public reading of Bullrich’s words: in short, show that he not only knows little about finance, but that his unsubstantiated proposals reflect a campaign ineptitude that raises serious doubts about his ability to execute in a hypothetical run for office.

What’s in BCRA and Macri’s reserves

Beyond Bullrich’s fantasy of coffers full or empty of money, all the world’s central banks have in oro almost the only material stock in its coffers. Argentina is no exception and the remaining assets are deposits in institutions such as the Federal Reserve, the Bank for International Settlements (BIS) or other deposit custodians. This clarification is not trivial because central bankers thus obtain low but safe returns on their assets.

This technical explanation only sheds light on the formalities, because the BCRA reserves debate (which are undoubtedly low and extreme) falls within the context of the presidential campaign and excludes very relevant data for understanding context and myths and truths. When Alberto Fernández took office, the Macri government had left – as of December 10, 2019 – $43,785 million in reserves. But in 2018, just for the loan with the Monetary Fund (IMF), there was an obligation of 44 billion dollars.

Of this total, in addition, 17 billion had to be paid in 2022 and almost the same amount in 2023. In short, with Macri’s agreement with the IMF, the reserves had already disappeared in the maturities this year. In fact, already in 2019, according to official figures, capital flight was already very similar to $44 billion, so the negative effect on reserves would be doubly negative if they were paid FMI He said.

London gold and pesos

BCRA’s most important physical reserves are gold bullion, valued at just over $3.8 billion. This is in vaults and has a special history. When Federico Stuzenegger was president of Central in the Macri era, he made an attempt to take the gold to London. In 2017 and with the supposed intention of investing them for income, an attempt was made to migrate part of the reserves to carry out international trade and remove a myth that the former president of BCRA had in his head: that gold, which the company had bought from the management of Mercedes Marcó del Pont, was of “dubious quality”.

A year earlier, Demian Reidel, a former JP Morgan banker working at BCRA, had already sent a smaller portion of gold to London, which was bought by the current government in 2021.

On the other hand, there are also a few pesos in the BCRA coffers. Some of these correspond to banknote imports carried out by the Central Bank to support savers’ deposits and supply banks with banknotes. This act of listing is not exclusive to BCRA but is also carried out by private banks.