The article title sounds like it's a done deal but it's just a victory in presidential primary.
Indeed, given the (IMO fairly baroque) rules about titles here, it's astounding this one made it through as is.
Argentina voted no on the Argentinian peso. USD could become its new currency
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Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#22After decades of uncontrollable inflation, I can see how relying on a foreign currency (one that is backed by the economically most powerful country) is attractive to the wider population looking for some sense of stability. But, without the ability to control the value of their own currency, how would it work for the government to manage their domestic affairs? Would they buy a boat load of USD, and circulate it wit…
several European countries (e.g. Kosovo) use the Euro as their currency despite not being part of neither the EU nor the Eurozone for exactly the same reason.
Most of those are tiny city states (e.g. Vatican, Monaco, San Marino) that would not even have the capacity to offer their own currency. So not exactly the same reason. Kosovo is also pretty tiny, with a total population roughly equivalent to Warsaw. Argentinia has like 45 million people and a GDP that is an order of magnitude bigger than all these side channel Euro countries together. It is far from obvious weather they could actually pull this off on such a scale without official endorsement and full support from the US, which in turn is highly unlikely.
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#23After decades of uncontrollable inflation, I can see how relying on a foreign currency (one that is backed by the economically most powerful country) is attractive to the wider population looking for some sense of stability. But, without the ability to control the value of their own currency, how would it work for the government to manage their domestic affairs? Would they buy a boat load of USD, and circulate it wit…
>But, without the ability to control the value of their own currency, how would it work for the government to manage their domestic affairs? The idea is that the stability the economy gains by using the US dollar, and the in ability of the Argentine government to cause inflation by putting the currency printer on overdrive, benefit the country more than the loss of self-control from no longer having its own currency.…
Interesting. Other than the lack of control(which in some cases may be argued as a good thing), are there any downsides to adopting the USD as national currency?
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#24Can somebody from Argentina here, provide some point of view?
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#25That's strange. The exact same effect could be reached by pegging the one to the other, which leaves some options open for the future.
Also the title is really misleading, it presents this as a run race when that is very much up in the air.
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#26I find it interesting that countries give up on their own currently, with all the power it brings, to use an external currency. I guess the dollar is the best option as it’s easier to adopt than gold or whatever. Perhaps the euro, but I guess the dollar is more widely used. And the dollar is less manipulated than the Yuan. I guess the efficiency of not having to run a mint and the giving up on local corruptions and m…
If your currency regularly hyperinflates then living with dollar inflation is a huge improvement.
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#27Title is misleading / totally incorrect. Should be "Far-Right Libertarian Wins Argentina’s Presidential Primary" In short, a politician who wants to replace the dollar got 30% of the votes in the primary and will now contest the general election.
I thought a far right libertarian would be pushing a crypto currency.
Libertarian, sure. Far right though?
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#28After decades of uncontrollable inflation, I can see how relying on a foreign currency (one that is backed by the economically most powerful country) is attractive to the wider population looking for some sense of stability. But, without the ability to control the value of their own currency, how would it work for the government to manage their domestic affairs? Would they buy a boat load of USD, and circulate it wit…
>But, without the ability to control the value of their own currency, how would it work for the government to manage their domestic affairs? The idea is that the stability the economy gains by using the US dollar, and the in ability of the Argentine government to cause inflation by putting the currency printer on overdrive, benefit the country more than the loss of self-control from no longer having its own currency.…
Important reference: how the peso-dollar peg ended in Argentina
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#29That's strange. The exact same effect could be reached by pegging the one to the other, which leaves some options open for the future. Also the title is really misleading, it presents this as a run race when that is very much up in the air.
No one would trust a peg set by the Argentinian government. They have zero credibility because the next administration would likely just remove the peg and devalue the currency in response to yet another manufactured crisis.
Re: Argentina voted no on the Argentinian peso. USD could become its new currency
#30In the 90's both Brazil and Argentina pegged their currencies to the Dollar in some way to control inflation. In Argentina the peg was an 1 to 1 conversion. In Brazil, the Central Bank would define a band in which the Dollar would float and the band would be periodically changed like the interest rates.
But the main difference was that in Brazil it was just a Government policy that could be removed in a whim, while in Argentina it was a law, enshrined by Congress vote. When the Mexican crisis hit in 1994, it was clear that such measure had limited effect and would become poisonous to the nation's economy. But the Argentinian middle class went balls-deep into the illusion of a cheap dollar (unlike their Brazilian counterpart) and any depegging suggestion was political suicide. Brazil eventually depegged (later than they should, also for political reasons, but it was an obvious decision). Argentina depegged too, but only after the whole nation imploded.
Nostalgia for that illusion is one of the things fueling this vote.