A Sharp Right Turn for Argentina?

[antipodean]

and dollarization can happen without the government's blessing in two simple ways: either people refuse to accept payment in pesos for goods/services, or everything is priced in dollars,

Although a bit different, it is odd that Argentina has not been looking at the "recovery" of Venezuela whose monthly inflation is now lower than that of Argentina thanks to a near overnight dollarization and "liberalisation" of the economy, although it took a very painful path to get there and left a far more economically divided society than it had before in its wake.

What I see as the "extreme" possibility for the Millei-show vs. an economic reset would be essentially killing two birds with one stone, a la Venezuela today:

• Bird 1: A long bankrupt state, with liabilities left right and center that spends more than it can generate and owes more than it can repay both inside and outside the country
• Bird 2: A local currency that no one trusts and costs billions of dollars each year just to maintain a vague illusion of having value

The stone?

• Let people do business and transact in dollars or whatever currency they like. The supermarket puts a "reference price" in USD (or whatever) and you pay that either in crisp dollar bills, via Zelle or USD-USD bank transfer - or even USD denominated credit cards - or with local currency at whatever conversion rate the market thinks its worth... you "choose" how to pay depending what you have available to you.

How would it work? The state continues to pay its local obligations in local currency (pensions, planes, salaries for public employees etc.) while trying to offload as much as possible to the private sector, while the private sector immediately starts to pay everything in dollars (as the more desirable currency), including salaries and taxes. BYO syringes to public-hospitals and BYO chalk to public-schools, you bet, at least until the government has the dollars to buy them from the private sector in dollars (or a currency the private sector is willing to accept) - but at least perhaps the metro ride there priced in pesos will be effectively "free" until they dolarize fares or sell it off to the private sector.