Despite campaigning to abolish Argentina’s Central Bank, President Milei is now strengthening it through a new charter that limits direct monetary financing of the Treasury and aims to enhance institutional independence.

The author argues that true central bank independence is a fallacy because the institution depends on the state’s monetary monopoly for its revenues and can still indirectly finance deficits through commercial banks or other channels.

High central-bank-set interest rates, combined with elevated bank reserve requirements and taxes, contribute to expensive credit, rising household delinquencies, and ongoing economic distortions that free-market determination of rates would better avoid

Almost three years after campaigning to “blow up” the Central Bank of the Argentine Republic (BCRA), the Argentine president Javier Milei is now strengthening it, accumulating reserves and now with this new charter that relaunches it. 

Milei’s “Fiscal Shackle” bill, supposedly aimed at preventing budgets with fiscal deficits from being approved or maintained, which could have consequences for politicians, is nothing more than propaganda since deficits can be disguised with “creative accounting”.

By the way, Tyler Durden on the prestigious site ZeroHedge recalls that Warren Buffett had already launched this idea in 2011 when he said that “the deficit could be eliminated in five minutes… We simply have to pass a law that says that every time there is a deficit greater than 3% of GDP, all active members of Congress are ineligible for reelection.”

According to the presidential announcement, the results of the BCRA’s portfolio can only be transferred to the Treasury for debt cancellation, so supposedly the Non-Transferable Bills scam would be eliminated.

And all this set presented would ensure that Argentina cannot sustain a deficit budget.

Now, as Roberto Cachanosky states “the proposal… it is prohibiting the BCRA from financing the treasury with monetary issuance (but) it can do so as it did in the past. The treasury issues bonds that are........

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