Argentina's President-elect Javier Milei said on Friday that the closure of the country's central bank, a signature campaign pledge, was a "non-negotiable matter", according to a statement from his office posted on social media platform X.
No it’s worse than that. How are they going to purchase enough dollars to replace their own currency? No one is going to give Argentina a loan to do this.
You don’t get it! Whenever they need Dollars, they just buy them with their old currency and without a central bank, the government can just decide how much Pesos they have.
You get dollars the same way anyone else would in the situation: You carry a trade surplus vs. the United States and then allow tax payments to be made in dollars. Prices settle as a function of dollars available, rate of circulation, and volume of goods & services available.
The policy should produce a boost in exports & employment but also produce a shortage of goods normally imported. It’ll also be a great time for Americans to visit, the dollar suddenly having a lot more purchasing power in Argentina.
The idea is that since the government can’t run a surplus by itself, he will break the capacity of running into deficit and making it so they don’t have any other choice.
It’s a nice-looking, simple idea that some countries try here and there and never work on practice.
No it’s worse than that. How are they going to purchase enough dollars to replace their own currency? No one is going to give Argentina a loan to do this.
This project is doomed before it starts.
You don’t get it! Whenever they need Dollars, they just buy them with their old currency and without a central bank, the government can just decide how much Pesos they have.
It’s a self sustaining economy!
The gang solved the Argentinian inflation… music starts
Also, Bitcoin!
Good ol’ Mac with the plan!
You get dollars the same way anyone else would in the situation: You carry a trade surplus vs. the United States and then allow tax payments to be made in dollars. Prices settle as a function of dollars available, rate of circulation, and volume of goods & services available.
The policy should produce a boost in exports & employment but also produce a shortage of goods normally imported. It’ll also be a great time for Americans to visit, the dollar suddenly having a lot more purchasing power in Argentina.
The idea is that since the government can’t run a surplus by itself, he will break the capacity of running into deficit and making it so they don’t have any other choice.
It’s a nice-looking, simple idea that some countries try here and there and never work on practice.
There are several countries that use the dollar, including, in Latin America, Ecuador and Panama. They are doing fine.
More pertinently, Zimbabwe’s famous hyperinflation was ended by dollarizing.
So it’s not an outright crazy idea. I think the doomposting is mainly due to “right-wing therefore bad”.