This week, JP Morgan Chase’s CEO Jamie Dimon arrived in Buenos Aires for a scheduled event while the bank simultaneously negotiates a substantial $20 billion loan to support the Argentine government. Although his arrival might seem linked to the loan discussions, it was merely coincidental as the event had been planned long before the current financial talks began, reports Bloomberg:
[B]ut it means some of the bank’s top brass will be on the ground just as doubts grow that US Treasury Secretary Scott Bessent will be able to pull off the second half of his rescue package for the Javier Milei government: a $20 billion bank-led loan.
Prominent Wall Street banks, including Goldman Sachs, Bank of America, and Citigroup, are also part of this venture. Should they activate credit lines for Argentina, it would lend support to the recent USD 20 billion currency swap established on Monday, as highlighted by Bloomberg. Time is pressing, especially with mid-term legislative elections happening this Sunday and the Argentine peso continuing to decline despite the proposed rescue package from the Trump administration.
The stakes are high, particularly concerning the success of the rescue initiative:
BREAKING: In a shocking moment, Trump appears to engage in foreign election interference, saying the U.S. will only give Argentina foreign aid if his pal Milei wins. “If he loses, we will not be generous with Argentina.”
Extreme corruption. pic.twitter.com/RJ1DjFMgm8
— Really American 🇺🇸 (@ReallyAmerican1) October 14, 2025
Joining Dimon in his visit will be Tony Blair, the current joint chairman of JP Morgan’s International Council, who is momentarily stepping away from his role as a “modern-day high commissioner” of Gaza. Former US Secretary of State Condoleezza Rice will also be in attendance, another member of the council. Dimon is also expected to participate in a polo tournament this weekend.
Before that, he plans to meet with senior members of the Milei administration’s economic team, including the Economy Minister Luis Caputo and Central Bank Governor Santiago Bausili, all of whom have past ties to JP Morgan Chase. Their prior experience with the bank should ensure a warm reception for Dimon. The following photo has sparked discussion.
Argentina’s right-wing libertarian government is run by Wall Street, both indirectly and directly.
President Javier Milei’s minister & vice minister of the economy, and the president & vice president of the central bank, all previously worked for JPMorgan, the largest US bank. https://t.co/k9yqKikxge pic.twitter.com/1LUSXhrq3O
— Ben Norton (@BenjaminNorton) October 21, 2025
The alignment of four prominent figures from Milei’s administration with a single New York-based bank raises questions about potential conflicts of interest and the motivations behind economic policies. This same bank is aiding the Milei government with a sovereign debt buyback operation ostensibly focused on “reducing the country’s financing costs and enhancing investment in education.”
An Oligarch’s Libertarian
When Milei appointed Caputo and Bausili in December 2023, it became evident that the government would likely not fulfill its primary campaign promises to abolish Argentina’s central bank or adopt the dollar as the sole currency. As Yannis Varoufakis elucidates in an insightful article for Unherd, and as we have claimed over the last two years, Milei’s actions reveal a deep allegiance to the country’s oligarchy:
Milei never truly broke from Argentina’s troubling oligarchic traditions, merely rebranding a historical heist practiced by various past leaders. Although Milei adeptly employed libertarian rhetoric to distance himself from these figures, his actual policies do not align with core libertarian principles.
If you believe in the market’s inherent wisdom and desire to eliminate political constraints on market mechanisms, which market should you liberate first? The money market is the logical choice. What fixed price distortion should you eradicate first? Obviously, the fixed exchange rate. And what comes last? Precisely what Milei did: borrowing enormous sums of money to prevent the market from freely determining the value of the currency.
Defending a frail currency like the peso for nearly two years is an ultimately futile endeavor. The results have been predictably disastrous. The Milei government has depleted billions in foreign reserves in a desperate attempt to maintain the peso’s value and control inflation. While his austerity measures have successfully reduced inflation, they have stifled economic activity for two long years, rapidly exhausting the country’s dwindling currency reserves. This approach is unsustainable; once the elections conclude, it is expected that the peso will inevitably devalue, leading to a resurgence of inflation—hence the rush to purchase dollars despite U.S. backing.
To prevent a full-blown currency collapse, the Milei administration has required not one but two colossal $40 billion bailouts within just six months—one from the IMF, World Bank, and InterAmerican Development Bank, and the other from the U.S. Treasury’s Exchange Stabilization Fund and Wall Street banks. The duration of these financial interventions is alarmingly short.
From Benign Neglect to Malign Meddling
Both bailout packages come with considerable conditions, particularly the latter, which includes Trump’s insistence that Argentine voters choose the correct party in the upcoming election. He has warned that if the right decision isn’t made, bailout funds could be withdrawn, potentially driving the Argentine economy to the brink of disaster.
These developments occur amid a backdrop of aggressive military actions by the U.S., targeting vessels in both the Caribbean and the Pacific, while also escalating tensions regarding military interventions in Venezuela and taking severe actions against Colombia’s left-leaning government, coupled with punitive tariffs against Nicaragua.
Today, at the direction of President Trump, the Department of War carried out yet another lethal kinetic strike on a vessel operated by a Designated Terrorist Organization (DTO). Yet again, the now-deceased terrorists were engaged in narco-trafficking in the Eastern Pacific.
The… pic.twitter.com/PEaKmakivD
— Secretary of War Pete Hegseth (@SecWar) October 23, 2025
After two decades of U.S. indifference towards Latin America, characterized by military interventions in the Middle East, the U.S. appears to have reverted to a history of intrusive interference in its resource-rich neighboring regions. The classic policy of plata o plomo (silver or lead) is evidently back on the agenda as the Trump administration seeks to create a rift between Latin America and China. The ultimatum of accepting monetary support or facing punitive measures is being presented.
This is not a novel approach; the U.S. has engaged in meddling within Latin America for nearly two centuries. As Noam Chomsky said in an interview back in 2009, U.S. foreign policy has often reflected a mafia-like ethos:
[S]ince the early 1940s, U.S. officials have operated under a “grand area” strategy aimed at global dominance, following a “godfather principle”: defiance cannot be tolerated, which has historically been a key feature of state policy.
Will Trump’s overt interference and coercive tactics influence Argentine voters to favor Milei in the election? It’s uncertain, but it could happen. Milei still has a significant following despite controversies, and the opposing parties remain widely unpopular.
However, Trump’s intervention may have unintended consequences, potentially leading to increased opposition. A majority of Argentines (60%) hold a negative perception of Donald Trump, while 56% feel similarly about the United States, as per a Bloomberg poll conducted in April.
The unfolding economic crisis and a series of scandals have negatively impacted Milei’s approval ratings. A recent exchange during a pro-government news interview reflects this:
Presenter: Eighty percent of Argentinians barely make it to the end of the month, and 60 to 70% of them only make it to the 20th of the month.
Milei: How do you want me to fix that? How can I get money to the people?
Interviewer: You are the economist. You are the expert in economic growth, with or without money.
Recently, as election day approaches, Milei’s campaign team advised him to refrain from further media interviews, possibly due to fears of tough questions. Pro-government presenter Luis Majul remarked, “Milei decided not to come on (the show) to avoid questions he might not be able to answer, which makes sense.”
Analysts from JP Morgan have suggested that the markets are already anticipating a disappointing election result for Milei’s Libertad Avanza party, which could create additional challenges for his administration. However, positive performance exceeding expectations could lead to a quick rebound in Argentine stocks, which have been struggling as the world’s worst-performing market in 2025, according to reports from El País.
Wells Fargo analysts have warned that the current exchange rate system appears unsustainable, predicting that the peso could depreciate by nearly 30% by the end of 2026—potentially the most significant drop among emerging market currencies examined. They indicated that while U.S. support might provide a brief period of stability for the peso, it does not establish a lasting rate policy.
Currently, the banking institutions involved, including JP Morgan, Goldman Sachs, Bank of America, and Citigroup, are insisting on clear guarantees from the Argentine government or the U.S. Treasury to facilitate the loan agreement. Referring to a report by Perfil:
The core of negotiations revolves around determining who will be the guarantor of the loan: the Argentine government or the U.S. Treasury. Banks demand solid backing, whether in assets, reserves, or official assurances from Washington, to mitigate loss risks.
The Wall Street Journal notes that Argentina might offer sovereign bonds or future tax revenues, yet these options are viewed as unfeasible. Local bonds have devalued, and compromising future tax revenues could face political backlash domestically.
Historically, such operations have had strong collateral. For instance, in 1995, Mexico backed a $20 billion loan with oil exports during the “Tequila Crisis.” In contrast, the currency swap with Argentina, part of the $40 billion package, does not legally mandate collateral, which heightens risks for the U.S. Treasury.
Simultaneously, the Trump administration is encountering growing discontent from its MAGA base concerning efforts to rescue Argentina, notably a significant agricultural competitor, while the ramifications of Trump’s tariffs intensify.
🚨 TRUMP: “We’ll buy Argentine beef.”
When asked what he would tell U.S. ranchers facing farm losses, he replied, “Argentina is fighting for its life… They’re dying.”
Our ranchers are too; 77 go under every single day. America First apparently ends where the steak begins. pic.twitter.com/sbPImhQc6x
— Brian Allen (@allenanalysis) October 21, 2025
Trump’s recent suggestion to buy Argentine beef may frustrate some “America First” voters, putting pressure on Republican lawmakers. According to Fortune:
Trump proposed that the U.S. could procure beef from Argentina as a means to reduce prices for American consumers. Beef costs have risen up to 12% over the past year. This suggestion was met with exasperation from U.S. cattle ranchers, who expressed concerns about market disruption and associated risks for domestic beef supply.
“This plan only creates chaos at a crucial time for American cattle producers, while doing little to lower grocery prices,” remarked Colin Woodall, CEO of the National Cattlemen’s Beef Association.
A possible intervention with Argentina comes as the U.S. cattle industry begins to recover from a dismal 2024, when it recorded its smallest herd since 1951 due to severe droughts.
U.S. beef imports have also declined due to a ban on Mexican beef to prevent the spread of screwworm, a harmful parasite affecting cattle across the border.
Cattle ranchers join soybean farmers, who have also expressed concern about Trump’s diplomatic actions impacting their industry, following Argentina’s decision to drop certain export taxes to stabilize its economy. This has resulted in China, which used to buy a significant portion of U.S. soybean exports, ordering various cargoes of soybeans from Argentina instead.
The frustration is overwhelming,” said the American Soybean Association President Caleb Ragland. “Agricultural economies are suffering while competitors take crucial market shares.”
Jamie Dimon, however, maintains a different perspective, humorously noting that Argentina possesses “professionals, land, education… even meat.” He adds, “Argentina has a substantial opportunity to align closely with the United States; Trump and Milei are connected, and I’ve observed these efforts with enthusiasm.”
Dimon has also underlined the need for U.S. leadership in Latin America, contrasting the American presence with China’s extensive “Belt and Road” initiative, which has significantly expanded Beijing’s influence in the region.
The U.S. eagerness to support Milei’s government, despite potential backlash from Trump’s electoral base, suggests that strategic interests—such as increasing American leverage over Argentina and diminishing Chinese influence—are deemed more significant than the immediate costs involved in the matter.
Pablo Calvi, an Argentine journalist, offers three potential reasons for Washington’s support of the Milei government: geopolitical maneuvers to reduce China’s role, interests of Trump-associated tech investors in Argentina like Peter Thiel and Elon Musk, and the ideological alignment between Trump and Milei.
Trump’s $20 billion bailout for Argentina is aimed at bolstering his right-wing ally President Javier Milei, but the plan “could backfire” for both leaders, warns journalist @plcalvi. Argentina is approaching legislative elections later this month. pic.twitter.com/Ap0L5Rtoml
— Democracy Now! (@democracynow) October 16, 2025
Calvi does not mention another angle: the personal and business connections of U.S. Treasury Secretary Scott Bessent, a former hedge fund manager. As reported by the NYT, several hedge fund managers, including Stanley Druckenmiller and Robert Citrone—who previously worked with Bessent—are heavily invested in Argentina and could benefit if a financial rescue is facilitated.
Another significant beneficiary will be the IMF, as Argentina owes the Fund nearly $60 billion. Another default—likely inevitable—could lead to serious embarrassment for the institution, especially since previous bailouts had considerable opposition from senior officials.
Another potential embarrassment for the IMF:
Just a reminder that the IMF’s market access debt sustainability framework does not rely on external debt or FX reserves—it’s fundamentally a fiscal framework.
— Brad Setser (@Brad_Setser) October 22, 2025
Ultimately, neither the Argentine nor the American populace stands to gain significantly from this bailout. As pointed out in a comment to Curro’s recent post on Latin America, the funds are likely to “barely touch Argentine soil before being funneled into the Cayman accounts of various hedge fund managers and oligarchs.”
When that capital flight happens—once again, as it has in the past—it will come as no surprise to individuals like Bessent and Trump, as it appears to be part of the plan. What will the Argentine citizens receive in terms of their ‘reward’? A debt in USD, a central bank stripped of reserves, and the inevitable austerity measures that follow.
This brings us to a crucial question: what collateral will Wall Street banks seek for the $20 billion loan? Or, to put it another way, what assets remain for Argentina to draw upon?
The last occasion the U.S. Treasury deployed ESF funds to bail out a country was during Mexico’s “Tequila Crisis” in 1994-95, a debt that remains burdensome nearly three decades later. At that time, the U.S. required the Mexican government to back the loan with oil revenues from its state-owned Pemex company.
Will Wall Street banks demand similar treatment from Argentina’s state oil company, YPF? Argentina possesses significant reserves—both shale oil and gas—but offers little collateral security.
A ruling issued months ago by U.S. federal judge Loretta Preska—which mandated the Milei government cede 51% of YPF to affected firms—further complicates this scenario. Despite an ongoing appeal, this ruling looms over Argentina like a looming threat.
Alternatively, the administration might be compelled to use Argentina’s vast lithium or uranium deposits as collateral. Reports indicate negotiations with the U.S. Treasury have included efforts to limit Chinese access to these critical resources.
If Milei’s administration continues to privatize state energy resources, further moves in this direction would likely proliferate—unless, of course, the Argentine populace decisively votes against Milei’s party on Sunday.
Should that occur, Milei could lose the ability to govern by decree, significantly undermining the structure supporting Bessent’s rescue package, which could then be restricted. In that event, all calculated assumptions would be in disarray.
