The Peter Zeihan Podcast Series A $20 Billion Band-Aid for Argentina || Peter Zeihan
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Oct 29, 2025 The US has committed around $20 billion to support Argentina through a currency swap. This lifeline raises questions about whether it can truly save a country plagued by a history of defaults and economic mismanagement. The discussion highlights Argentina's deteriorating rule of law, erratic tariffs, and leadership failures that have stifled investment. There's also a critical look at the role of U.S. Treasury in this bailout and the potential lessons Argentina teaches the U.S. about the consequences of policy missteps.
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How Currency Swaps Work
- A currency swap lets two countries exchange reserves to defend their currencies and stabilize exchange rates during volatility.
- It works as insurance when underlying economic fundamentals are sound, but not as a cure for weak economies.
Swap Lines Are One-Way For The U.S.
- Argentina's repeated defaults follow currency collapses, making swap lines a risky one-way bet for the U.S.
- If the peso collapses, U.S. dollars become pesos that may quickly lose most of their value on black markets.
Policy Choices Hollowed Out Industry
- Argentina's policymakers have repeatedly eroded rule of law and centralized economic decisions, deterring investment.
- The result is a hollowed-out industrial base and chronic borrowing that perpetuates defaults.