Crisis in Argentina, race for internet via satellite and what matters in the market

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Argentina in crisis

The difference between the parallel dollar and the official dollar in Argentina reached more than 150% —level last seen during the country’s hyperinflation in 1989-1990, according to brokerage Portfolio Personal Inversiones.

A good part of the local products is readjusted by the “blue” dollar. The price index in the country reached 64% in the 12-month period in June and should surpass the 90% by the end of the year, according to Morgan Stanley.

What puts pressure on the parallel dollar:

• Debt: since default in 2020, the country is practically excluded from the international debt market. This makes financing very difficult, which is linked to inflation and rising local interest rates.

• Unreliable currency: as people do not trust the peso, those who receive in that currency rush to convert the currency, and those who export in dollars do not think about repatriating the resources.

• Low savings: Argentina’s net foreign currency reserves are around just $2.4 billionwhich increases the risk premium required by investors to lend money to the country.

• Subsidies: the government has been issuing more and more currency to finance the debt and subsidies, especially those related to energy prices.

Commitment to the IMF: A recent trigger for the soaring parallel dollar was the departure of the Minister of Economy, Martín Guzmán, due to differences with Vice President Cristina Kirchner.

• He was responsible for negotiating a US$44 billion debt restructuring agreement with the international body, which is based on the reduction of the fiscal deficit in three years and the reduction of the issuance of money by the central bank.

• Guzmán’s successor, Silvina Batakis, had a first conversation with Kristalina Georgieva, managing director of the IMF, who called the call “very good”.

• The problem is that the country is limited by the agreement to print 765 billion pesos ($5.8 billion) throughout the year to finance its deficit, while the central bank has printed 630 billion pesos so far.

Big techs and illegal mining

Big tech companies Apple, Microsoft, Google and Amazon have among their suppliers mining companies investigated for activities in illegal mining areas in the Amazon, according to a report by Repórter Brasil.

Understand: in 2020 and 2021, these companies bought gold – which is used in electronic components – from several refiners, including the Italian Chimet and the Brazilian Marsam, according to documents accessed by Repórter Brasil.

• The second has a supplier accused by the Federal Public Ministry of causing environmental damage due to the acquisition of illegal gold.

Other side:

• After being contacted by the Repórter Brasil agency, Apple said in a note that it had removed Marsam from the list of suppliers. Chimet, however, remains fit.

• Google, Microsoft and Amazon said they would not comment.

• CHM, a supplier to Chimet investigated by the PF, says it “never acquired gold from indigenous lands”. FD’Gold, a supplier to Marsam, declined to comment.

The Satellite Internet Race

The proposed merger between the French satellite operator Eutelsat and the British OneWeb, confirmed by the companies on Monday (25), is the latest sign of expansion in the high-speed internet market via low-orbit satellites.

Understand: this type of connection is particularly useful for remote areas, where fiber optic internet is not available, and can help take off the paper for grandiose projects on the high seas or in the desert, for example.

• It works as a “constellation” of low-altitude satellites, that is, they are in orbit up to 2,000 km away from the ground. They travel around the planet and generate connections to the ground terminals.

Who else is in the fray:

• Elon Musk: SpaceX has already sent half of the 4,400 satellites of your Starlink constellation. The businessman came to Brazil to announce a project that would connect 19 thousand schools in rural areas, which would meet only 27.2% of the country’s needs.

• Amazon: big tech said in April it had placed the largest rocket order in history to launch most of its 3,236 satellites in five years.

• Governments: China plans to deploy no less than 13 thousand satellites “Guowang”, while the European Union cites “sovereignty” as a reason to have its own constellation, starting in 2024.

The problems: these low-orbit satellites are cheaper than geostationary ones, but end up having a shorter lifespan. This could end up generating a lot of space junk in the future.

Beluga in Brazil

One of the most celebrated aircraft by aviation fans in the world landed for the first time in Brazil this weekend. The Airbus Beluga ST was at Fortaleza airport on Sunday and arrived in Campinas on Monday.

The flight, broadcast live on social media, was the most viewed in the world on the FlightRadar24 and Radarbox tracking platforms. He was accompanied by more than 8,000 people simultaneously.

What came to do: the trip was to bring an Airbus helicopter from France that will be delivered to a Brazilian customer.

Why the Beluga: the plane, which was initially used by the French manufacturer to carry aircraft parts, makes it possible to transport large loads, such as helicopters, engines and satellites, even with its capacity of only 40 tons.

In numbers: the Beluga ST that came to Brazil was developed from the Airbus A300-600 and has 39 meters of lenght, 7.1 meters wide and 6.7 meters tall.