Core Viewpoint - Argentina's President Milei faces a significant contradiction in his free-market reforms, as he resorts to using scarce dollar reserves to support the peso's value, which contradicts his core principles of free-market economics [1][2]. Group 1: Economic Policies and Challenges - Milei's government is seeking billions in aid from the Trump administration to prevent the peso from declining, with the U.S. recently purchasing pesos and establishing a $20 billion currency swap agreement with Argentina's central bank [1][6]. - Despite successfully cutting spending and curbing inflation, maintaining a strong peso is hindering investment and limiting the export capacity of the agricultural sector, consuming foreign reserves needed for economic shocks and debt repayment [1][6]. - Economists generally believe the peso is overvalued by 20% to 35%, and the peso has depreciated by 26% this year, making it the worst-performing currency tracked by the Dow Jones [3][6]. Group 2: Political Implications - Milei's approval rating has dropped from nearly 50% last year to 35%, with unemployment now surpassing inflation as the primary concern for voters ahead of the October 26 midterm elections [1][6]. - The strong peso policy, combined with significant spending cuts, has reduced inflation from nearly 300% last year to 32% in September, but the economy has not rebounded, leading to a political crisis [6][7]. Group 3: U.S. Support and Market Reactions - Trump's meeting with Milei indicated that U.S. aid would depend on Milei's performance in the midterm elections, causing a decline in the Argentine stock market [7]. - U.S. Treasury Secretary Becerra clarified that as long as Argentina continues to implement sound economic policies, U.S. support will persist, highlighting the importance of market perception in stabilizing the peso [7].