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Héctor Giuliano - Episodio 5:La estanflación
Fuente: https://youtu.be/9gZZM888Ttk/
-La estanflación
-La inflación como impuesto recesivo y como medio de financiación del estado
https://www.bitchute.com/video/x3kYaJ5gJ50A/
Héctor Giuliano
Licenciado en Administración, egresado de la Facultad de Ciencias Económicas de la Universidad de Buenos Aires en 1964.
Orientado profesionalmente a Organización/Sistemas y Planificación Económico-Financiera, en la actividad privada.
https://hectorluisgiuliano.wixsite.com/my-site
Problemática de la deuda pública
https://hectorluisgiuliano.wixsite.com/my-site/home
The Money Masters V.O. Subtitulado Español
https://www.imdb.com/title/tt1954955/?ref_=login
https://www.bitchute.com/video/1vbj58BT04xw/
http://www.themoneymasters.com/the-money-masters/synopsischapter-headings/
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Periodismo de investigación, veraz, coherente, responsable, cooperativo, y libre necesario
https://5poder.org/
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Estilo de vidaTranscripción
00:00Good evening, Don Hector. Let's begin episode number 5.
00:15We are going to continue the topic of inflation because there are some things left, some ideas to complete.
00:19Regarding this controversial and dramatic issue for the Argentine economy, yes?
00:24Shall we get going?
00:25Yes, yes, first of all, thank you for these interviews. I hope they're educational beyond the informal nature.
00:33Because they're talks, right? Otherwise, they'd have to be classes, and they'd have to organize them.
00:41But in fact, there were some points of inflation that I would be interested in, let's say, developing.
00:49But basically this. In the last episode we focused on nature.
00:58and the extent of inflation. But there is another parallel dimension of inflation, which is how inflation
01:04It relates to public finances, to the finances of the State. That is, what, to put it in a certain way,
01:11It is the macroeconomic effect of inflation. That is, how it is received and experienced by the general population.
01:22This is the topic that I think is important to touch on now because, in reality, if you look at it,
01:27Inflation is the most powerful, most terrible tool of income redistribution.
01:35Why? Because inflation leads to a zero-sum game. It's called a zero-sum game.
01:42When what one wins another loses. And even if the quantitative pie is large
01:49due to the increased public wallpapering caused by inflation, but some win and others lose.
01:57And that implies a major redistribution of income with a problem,
02:02That this effect is regressive. That is, those who have the least suffer the most.
02:09This topic, mind you, which is in the spotlight today in Argentina, is not new,
02:14It is not new, but it is being recorded because as inflation increases,
02:19It increases that symmetry, doesn't it? It's not for nothing that the Catholic Episcopal Commission is pointing it out,
02:30They are not the only ones now, but I mean, no, it is not from a political point of view,
02:35It is from a structural analysis point of view of what is happening.
02:40So there's a problem here: The state's source of funding is being distorted.
02:47I don't know if we discussed this before, but this is text.
02:51The State has three basic and classic sources of financing.
02:56The first is tax collection, positive and social security tax collection.
03:03The second is the controlled issuance of money.
03:07Not uncontrolled emission, but controlled emission because the State has,
03:14and it is entitled to what has been called since medieval times, the right of seigniorage,
03:21which I think we've talked about. I mean, the right of seigniorage is simply
03:24the power of the State to issue currency, and to issue currency that has what technically
03:32It's called the redemption value. This must be recorded.
03:35The word, the expression, cancellation value, means that the coin is received,
03:42that the currency is used to cancel debt.
03:44If I come and want to pay you with a strange bill, you're going to say no.
03:50So, this is important.
03:53So, within this, what happens?
03:56The alternative is that the first source of financing is tax collection.
04:01The second is the controlled issuance of money.
04:04And the third is indebtedness.
04:08And since the collection is actually fixed, because the collection can go up or down,
04:13but it is already institutional.
04:15The State is financed through taxes.
04:19Taxes, fees, contributions, etc.
04:21But it is the tax collection that is called.
04:25So the alternative that remains is, when the government has a deficit,
04:31that almost all governments in the world have deficits,
04:34and Argentina in principle too, except for a recent experience,
04:39Well, if you want, we can talk about it.
04:41Let's define deficit.
04:42The fiscal deficit is the product or difference between the State's income,
04:48the total revenue and total expenditure of the State.
04:51The difference, the result, like any grocer's account
04:56or like any budget account, it gives the result.
05:00If the result is positive, it is a surplus.
05:03If the result is negative, it is a deficit.
05:05Argentina has had a deficit for decades,
05:08except for the recent experience, which we will later comment on how and why it occurs,
05:14of the first two months of this year, 2024,
05:18where a historically unusual event in financial matters occurred.
05:23The State has a surplus.
05:26Now we have to see how he had that surplus.
05:29And inflation helped him get it, precisely.
05:32There is also talk of primary deficit and secondary deficit.
05:36When you join, explain it.
05:38The difference is this, the question is good, because it needs to be clarified.
05:42The result is income less expenses, just like in a home economy.
05:50I earn so much, I have so much income from my business, I spend so much,
05:56the difference gives me the result.
05:59The first account, income less expenses, is called the primary result.
06:05not counting interest in case I am in debt.
06:08So after I do that first result, the primary result...
06:16For an individual, this would not include a credit card.
06:18Exact.
06:19Or the credit card interests, because in reality what the State does
06:25does not cancel capital, but renews.
06:28So the only concrete expense you have is interest.
06:31And that's where the difference comes in.
06:34The primary result, income less expenses, gives, when there is a deficit,
06:40When a result is given, the interest to be paid is added to that result, or subtracted from it.
06:47And that gives the financial result.
06:50Therefore, the primary result is income less expenses, not including interest.
06:57So when I discount the interest, it gives me the financial result.
07:02In Argentina, both have traditionally been negative,
07:05but the fundamental deficit is given by the interest on the debt,
07:11which is why the financial result is what matters.
07:15This is it.
07:16Now, I come back to what I was saying.
07:18The State has three sources of financing.
07:20One is, in principle it is indisputable, tax collection.
07:26But then comes the alternative.
07:30Financing by issuing money or financing with debt.
07:35I have quoted this many times.
07:37The late Professor Walter Bebera-Gialende,
07:40who was an authority on the subject.
07:42Once talking to him,
07:45I remember because I was young then,
07:47So these are the teachings that stick with you, you see?
07:51This says, although financing the fiscal deficit when it occurs
07:57It's not positive because it's a deficit, right?
08:02But between financing the deficit by issuing currency or issuing debt,
08:08always by definition to my State,
08:11It will be better for me to finance it by issuing money with monetary issuance and not with debt.
08:18Because for the money that I, the State, issue by seigniorage I do not pay interest,
08:23while for the debt, yes.
08:25And Argentina has a tragic experience.
08:28We've been stuck in that trap for 46 years.
08:31And they still don't repeat it every day.
08:34Every day.
08:34No no.
08:35Issue no.
08:35Emission is prohibited.
08:37No, no broadcast.
08:38It is inflationary.
08:39Dogma.
08:40Dogma that all emission is inflationary when this is not empirically proven.
08:45But fundamentally the deception is there.
08:48Do not issue currency.
08:50Ah, so what does that mean?
08:51Issue debt.
08:52What is this government doing?
08:54As all the previous ones did.
08:56Really?
08:56Two months of government management.
08:59Two months of management this year, January and February.
09:02The increase in debt that has occurred only at the head of the central State
09:08It is in the order of 15, 20 billion dollars.
09:13By anatocism?
09:15No, not necessarily by anatocism.
09:17Anatocism plays a part when I fail to pay interest and I capitalize it.
09:24It has its component.
09:26Indeed, a large part of the money is capitalized.
09:31This is especially true for the Central Bank's debt.
09:34One part, indeed, is anatocism.
09:37But the bulk, at this point, is being paid.
09:40And it is being paid for with the adjustment.
09:43Later, if we have time, we'll talk about it.
09:46But then, I want to make this clear.
09:48The State has three sources of financing.
09:51Collection, monetary issuance and debt.
09:54Collection is a constant.
09:58It will be more, it will be less.
09:59But it is a constant in state financing.
10:02So the big dilemma is, do we finance ourselves with monetary issuance or do we finance ourselves with debt?
10:09According to establishment economists and all government formation cadres,
10:17between issuing currency and issuing debt, they are inclined to issue debt.
10:25That is, the worst variant.
10:27Arguing that monetary issuance generates inflation,
10:32then debt must be issued.
10:35As if debt didn't generate inflation.
10:38Because it generates more public spending on interest.
10:41And then, like in Argentina, we have an unpayable debt that exceeds $400 billion.
10:47Since the debt is unpayable, what we permanently have is a secular tithe called debt interest.
10:58That's what's wearing us down.
11:01Now, all of that, so as not to stray from what we had started talking about with inflation.
11:09All of that, all that rinsing, which we will probably develop later, in more detail,
11:15makes that in the immediate future, the big problem that we have is that all this monetary emission that is being done,
11:25whether by direct issuance or by borrowing,
11:30because debt is taken on and debt is also an income of money.
11:35And, consequently, there is more inflation.
11:39Because it's more money being thrown into the market.
11:42Inflation is not necessarily a product of monetary issuance.
11:48We explained it the other time.
11:50It's not the origin, it's not that I issue money, but rather the destination I give to that money.
11:56And since the purpose of money is to pay interest,
12:00then we are in a sterile destiny of money,
12:03which is paying interest.
12:05The Milley administration's record fiscal surplus in January
12:10It was two billion pesos, something unusual.
12:15Yes, but what were those two billion pesos used for?
12:18One and a half trillion, three-quarters of that surplus,
12:22What was it for? To pay interest on the debt.
12:25So we are suffering from this, the problem of this inflation,
12:30The problem is that inflation continues, we pay more interest,
12:35We have more public spending and, consequently, we cause economic recession.
12:40But they proudly announce stagflation.
12:43Ah, yes, for them yes, with the old argument,
12:47The old argument that we have to make sacrifices today because tomorrow we'll be fine, right?
12:53What, the paradox that economist and journalist Enrique Silberstein posed decades ago, right?
13:01That said, the typical speech of the Minister of Economy, a book written in 1971,
13:08I have it, I have it, look, it's this one.
13:10Yes, this one was recommended to me by you know who?
13:15This was recommended to me by Alejandro Olmos, with whom I collaborated.
13:18He tells me, Juliano, he says, if you want to have a prediction of what happens in Argentina,
13:27Read this, he said it in a caustic but valid way, if you want, there are seven points, we read it,
13:35I don't know if we have time or if it's running out.
13:38Yes, of course, he reviews various economists.
13:40No, no, no, that's what he said in 1971, Silberstein joked in this book,
13:47how the typical speech of any Minister of Economy should be.
13:51Ah, how interesting.
13:52And then he said, he says, every Minister of Economy has to touch on seven points.
13:57These seven points are, one, the country has never been worse off economically.
14:05Look.
14:06Just like that.
14:06Well, I also believe that this comedian who passed away a long time ago and everything, Tato Bore,
14:12He paraphrased the same thing, he said it in a more humorous way, but he basically said the same thing,
14:17but I think the author was this one.
14:19So, it was never worse.
14:21Point two.
14:23You have to make all kinds of sacrifices to get ahead.
14:26Argentina, April 2024.
14:34Three.
14:35Stability is the key.
14:37Once stability is achieved, we are saved.
14:39The macro.
14:40The macro.
14:41Room.
14:42Sound currency is the objective of our government action.
14:46You have to have reserves, you have to give.
14:47Five.
14:49The fiscal deficit will be reduced beyond what is possible.
14:53That is, we must have fiscal balance.
14:58Six.
14:59We will inevitably put an end to bureaucracy, which is what causes...
15:04According to the debate.
15:05Seven.
15:06I got confused, it was eight points, not seven.
15:09Seven.
15:09The unpopular measures we must take are inevitable.
15:13And eighth.
15:16Let us suffer today, for tomorrow, and he puts the past in parentheses, we will be fine.
15:22This is today's speech.
15:23It is the discourse of 46 years of public debt, of a century,
15:29It's been a century, seven decades since Silbert's predictive book.
15:38One tells the young voters of this government that this is nothing new,
15:42that this is very old, and they don't believe it, they sincerely believe that this is something new.
15:46Yeah.
15:46Now, allow me this, so as not to lose the thread, because I am not an expert in that either.
15:54What's going on?
15:57The broadcast has not been removed.
16:01Today money is issued, but money is issued to pay interest on debt.
16:06Mind you, we don't mess around with that.
16:09External debt or local bond debt?
16:11Local bond debt and Central Bank debt.
16:15Passes and LELICs.
16:17The LELIC liquidity letters and passive passes, indeed.
16:23They constitute today the main source of monetary issuance.
16:28That is, it is not issued to cover the fiscal deficit.
16:32It is issued to pay interest on the debt.
16:35Not only from the Treasury, but from the Central Bank itself.
16:38Which is very serious.
16:41Which is what the government is said to want to eliminate.
16:44Well, yes, we already have the speech.
16:46We do it.
16:47Today we are paying usury.
16:50Pure usury.
16:51Tomorrow we hope to be better.
16:55But today we are like this.
16:56That is to say, there is no sincerity.
16:59Because first, the debate is not honest about whether the deficit is covered with debt or with issuance.
17:05That he should be honest and tell the truth.
17:07That is being covered with debt.
17:09With more debt.
17:10With more debt.
17:10What are we doing?
17:11We are asking the IMF itself for debt so that it can extend our credit.
17:17Debt to international credit agencies.
17:20Debt placed by the National Treasury through two biweekly auctions, with national and international investment funds.
17:30A debt that is constantly being renewed through debt swaps currently being organized by Minister Caputo.
17:38As was done between January and February, debt refinancing was carried out, kicking it as usual.
17:48Kicking debt forward to 2025, 2026, 2027.
17:53In other words, Minister Caputo's task is to kick things into high gear.
17:57To make water like someone who is overcome by the current and pushes the water, the water to endure.
18:03To kick forward.
18:04Because?
18:05Under the premise that today we have to make this sacrifice because tomorrow we will be better off.
18:12Debt, debt, debt.
18:13And at the same time it is issued to pay for relique and pass.
18:16They are part of the debt.
18:18Just one, the first, is the debt held by the Central State, in the National Treasury.
18:25And another is the parallel account that exists in the Central Bank.
18:29Because the Central Bank is an independent body, it has its own account.
18:36But I don't have the paperwork on hand right now, but the Central Bank has a LELIC debt of 43 billion pesos.
18:48And a debt, which is for 27 days, and a debt for passive transfers, which is for one day, of 33 billion pesos.
19:00In total, 76 billion pesos.
19:05This means that the country is paying interest only through the Central Bank, not through the Treasury.
19:14It is paying between 100 and 150 billion pesos per day in interest.
19:20And no one says a word about it.
19:23This, let's say, what you just mentioned, the LELICs and the passes, are not foreign debt.
19:30No, that's local debt.
19:32It is local debt.
19:34Let's see, local debt in pesos.
19:36In pesos.
19:37Of course, but with inflation rising to a floor interest rate of 80% per year.
19:44Which is a monthly 6.
19:47It's a tremendous drain on money due to interest that the government is paying.
19:52To pay this is issued, do we agree?
19:54Of course, it is broadcast.
19:55Now, it's broadcasting...
19:56It is issued to pay financial creditors.
19:58Is paper money printed?
20:00As?
20:01Is paper money really printed?
20:02Yes, yes, yes, yes, it prints.
20:04Do you mean that the Mint is currently operating at full capacity with what you're saying?
20:07Yes, not only at full capacity, but since it does not have the capacity to print so many bills,
20:12banknotes printed in other countries are being imported.
20:17I think Spain, Canada and Singapore are the main ones...
20:22They also came from Brazil, sorry, from Brazil.
20:25I mean, the bills we use, the bills we use...
20:28But are they bills that go to financial institutions?
20:31No, bills that go to the State because in reality who buys them, instead of printing them,
20:39Since it was not printing for a long time, he contracted with a foreign printing company.
20:45We agree.
20:46The Central Bank, in reality, or more precisely the Mint,
20:52It is not just that it issues currency, it contracts.
20:57Hence the highly controversial main contractor of the Mint
21:01which is the Chicone Associates printing company, which has always been a source of speculation.
21:08Because, of course, as a monopolistic money provider, he was in turn always interacting
21:14with the authorities of the Central Bank.
21:17And here the auctions are never transparent, and neither are foreign purchases, right?
21:23But what I know, if I'm not mistaken, is that the main providers of printed money,
21:29I mean, they get paid to print the money, right?
21:33That is, let's differentiate the face value of the ticket from the cost of the ticket.
21:39The cost of the ticket is the printer and the ink, the paper that is used,
21:43But generally the bill has a much lower value than what it represents, right?
21:50One now takes a thousand peso bill or a two thousand peso bill,
21:54Now they are going to start issuing five thousand and ten thousand dollar bills,
21:59but the value of the banknote itself, of making the banknote, is much lower.
22:05That is, because of the famous topic we talked about in the previous programs,
22:09Money has no intrinsic value, it has no value in itself.
22:15That is a representative role of value.
22:19I'll give you a thousand pesos, right?
22:21But within the cancellation that I am making to you,
22:25I'm paying you with a printed piece of paper for something that has a much greater value.
22:30It was said at one point that the mass of money that is in Lelic
22:32and in bonds it is double the amount in circulation that is on the street.
22:37Yes, much more than double.
22:39Now, too bad that, well, if I knew, I had the papers at hand,
22:43But if I'm not mistaken, the monetary base is approximately nine five hundred ten trillion pesos,
22:52while the debt for Lelic and passive transfers is seventy-six thousand.
22:57Tell me the place again.
22:58No, sorry, seventy-six billion.
23:00So, I said wrong, the monetary base I think, if I'm not mistaken,
23:06which today is about nine billion pesos.
23:11Billions.
23:11It is the money in circulation and the money in bank reserves.
23:16But in addition to the individuals who put the power of the people into circulation,
23:24banknotes and coins in circulation in the hands of the public,
23:28plus the deposits that are in savings accounts, that is, immediate money.
23:33But besides that there is the money he has borrowed.
23:40and for which the Central Bank pays interest, which are called remunerated liabilities,
23:46which are the twenty-eight-day Lelic liquidity letters, which pay one hundred and ten percent annually,
23:52and passive passes with a term of one day, means that the government is renewing every day,
23:58one day term that pays eighty percent annually.
24:01What is the cumulative value?
24:02It is clear that the interests of those who are avenged, the interests that are falling to the government
24:08Just through that mass of money, one hundred billion pesos a day in interest passes.
24:15Per day?
24:16Per day.
24:17And depending on how it is calculated, the sum reaches one hundred and fifty.
24:21In one hundred billion dollars?
24:23Yes, almost today we are at a dollar at nine hundred and six pesos, something like that.
24:32We are approaching one hundred million dollars a day.
24:37Of course, he's eating three zeros.
24:39Because one hundred billion pesos are equivalent to one hundred million dollars.
24:47This is what is being printed today that people are unaware of, that this mass of money is being printed.
24:52Yes, yes, we live in a hyperinflationary time, although the word hyperinflationary is incorrect,
24:59because hyperinflation is uncontrolled inflation.
25:02We are experiencing very high inflation, and well, 25% monthly in December, 20% in January, 15% in February.
25:10and it is speculated that in March it would be 13-15%.
25:16Getting back to this inflation thing and closing.
25:19Is it right to say, as liberals do, that inflation is a hidden tax?
25:26Well, let the liberals say that, it's a question of text.
25:32In any manual it is said and criticized that inflation acts as a tax, indeed.
25:41Why? Because instead of being a contributor by paying the tax,
25:47is one who suffers from it by lowering his purchasing power.
25:50And be careful, that is the key to everything, because the government finances itself and benefits from that fall,
25:58because the government collects more.
25:59Tax collection in one year increased by 256%,
26:06while simultaneously current expenditure rose 136-150%.
26:17What does it mean?
26:19That the government was reducing public spending thanks to inflation.
26:23And that is the policy that is being followed today.
26:26The policy of liquefying public spending.
26:29Liquidating public spending means that if I have a debt with you and I do not update it,
26:33inflation is eating away at you.
26:35So what did the government do?
26:38He delayed payments to the public administration.
26:43The most affected, among whom I am,
26:46retirees, who have had increases equivalent to half of the inflation of the period.
26:53Social plans, people who, regardless of whether the demand is correct or not,
27:00money is worth less to them.
27:02Public works that have gone unpaid and that inflation continues to eat away at.
27:07Not for nothing is the construction industry currently suffering the consequences of this effect.
27:15All of this can be summed up in one word: stagflation.
27:19Stagflation means stagnation with inflation.
27:24Normally, when there is inflation and a lot of money is issued, the economy reactivates,
27:30because there is more money in circulation and people are getting rid of money faster.
27:35But when this anomalous process of stagflation occurs, it means that there is more inflation,
27:43As we are seeing it now live and direct, today in the street, in our daily lives,
27:51But as prices have spiraled out of proportion to our resources,
27:59what's going on?
27:59A recessionary phenomenon is taking place.
28:01People buy less, consumption falls, businesses sell less,
28:07then they require less from their suppliers and the plants produce less.
28:14The auto plants are laying off staff, they are shutting down the plants,
28:20the country's main plants, General Motors, Toyota, Volkswagen,
28:25They're stopping shifts, why? Because people aren't buying.
28:30So, we are experiencing one of the worst consequences of high inflation,
28:36which is stagflation, that is, stagnation, recession with price inflation.
28:43Can we tell him this is a planned recession?
28:46Because, for example, the government does not approve salary agreements above inflation,
28:53They don't allow it, they say it explicitly, they want it to be below inflation.
28:56How do you explain that?
28:57That's exactly what I think. The inflationary phenomenon is not a spontaneous phenomenon of society,
29:05It happens. And what's driving it? The wild price hikes.
29:10Who does that depend on? Why did prices increase 25% in December?
29:16What special phenomenon occurred? Oh, the government issued a broadcast? No.
29:20Companies raised prices wildly, without control, because a government took over
29:27which already came with the Kirchnerist government with a floor of 10% monthly inflation,
29:35but Milley's anarcho-liberal government takes over and tells the businessmen,
29:42Gentlemen, free rein. There's no price control here. Prices are set by the market.
29:47And since the market is price-setting companies versus an atomized consumer
29:54which has no influence on prices, what they did was strangle
29:59people's pockets to try to partially stop this inflationary stampede
30:06that they caused. That's why I think we mentioned it before. This is not a call
30:11inherited hyperinflation, is a hyperinflation caused by price increases,
30:17increased tax pressure, increase in prices and rates of public services,
30:23delay in salary payments, that is, expenses increase but income does not keep pace.
30:32This is the phenomenon of this inflation we're experiencing. I don't know, I tried to squeeze it.
30:36because this is a bit... trying to answer this.
30:41First, inflation does indeed act as a tax, but a regressive tax.
30:48which harms those who have the least, because those who have the capacity to save
30:52They sacrifice a portion of their savings capacity. The submerged man, the guy below
30:58The level of responsiveness depends on whether he goes hungry or has to go out and do something.
31:08to survive. This is the moment we are living through, exacerbated by the measures imposed by the government.
31:17This is not neutral, that is, this does not occur as a phenomenon, a curse of nature.
31:23It is a controlled phenomenon, thus liquefying public spending.
31:29And by increasing the savings that the government compulsorily obtains, it will have more money.
31:38Why? To pay more interest on the public debt. That's why the adjustment is being made.
31:44to be able to pay more interest on the debt.
31:47Because there is a general cooling of the economy, that is, because not only
31:52It affects individuals, it also affects industry, entrepreneurs, and national SMEs.
31:56The rule is, with inflation and all the financial business that comes after it, which we will talk about
32:04Later on, with inflation and the financial business to which it opens its doors wide open
32:10to financial speculation, because this is not a matter of the real economy, it is a matter of finance,
32:16of the financial economy.
32:17Indeed, the government is benefiting from this phenomenon. Why?
32:27To allocate that money to support the interest payments on the public debt.
32:34Very well. Don Hector, do you think, taking advantage of what you said last, that we should talk?
32:39next week about the financial business that is booming, is in full swing.
32:43Of course, yes, yes. We want to give these talks something to talk about because, I insist, forgive me,
32:49Forgive me, viewers, it's an informal chat, one doesn't follow such strict mechanics,
32:58But it would indeed be appropriate to demonstrate how, apart from the direct damage
33:05that causes the inflationary scheme, how in turn that inflationary scheme produces
33:12distortions, very serious distortions, which are exploited by financial capital.
33:18And that's how finance is killing the economy.
33:23Sure. Well, then we're done. Next week we'll cover this carry trade.
33:28What is it technically called, do you think?
33:30The financial bicycle, the financial business in Argentina and the subsequent flight,
33:36which is the main drama too, isn't it?
33:38Yes, okay, okay.
33:40Well, we're bitter, Nestor. Thanks.
33:42Thank you.